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Letters: Entrepreneurial state key to innovation

The state is being cut back in the UK to make space for entrepreneurship and private-sector innovation (Report, 8 September). But how many people know that the algorithm that led to Google’s success was funded by a public-sector National Science Foundation grant? Or that molecular antibodies, which provided the foundation for biotechnology, before venture capital moved into the sector, were discovered in public Medical Research Council labs in the UK? Or that the most innovative new medicines in the last decade were invented not by private pharma, but by public National Institute of Health laboratories? And that many of the most innovative young companies in the US, including Apple, Intel and Compaq, were funded not by private-venture capital, but by public funds, including the Small Business Innovation Research programme?

Lessons from these experiences are important. They force the debate to go beyond the role of the state in only regulating or stimulating the economy. Instead, as I argue in The Entrepreneurial State, it is a case for a targeted, proactive, entrepreneurial state, able to take risks when the private sector is still too scared, creating a highly networked system of actors, harnessing the best of the private sector for the national good over a medium- to long-term horizon. It is the state as catalyst and lead investor sparking the initial reaction in a network that will then cause knowledge to spread. The state as creator of the knowledge economy. China has learned this lesson quickly. Why has the UK forgotten it?
Professor Mariana Mazzucato
Chair in the economics of innovation, Open University © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds