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The Entrepreneurial Government

09 February 2015


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Governments should act as ‘innovation incubators’, says Prof. Mazzucato

Prof. Mariana Mazzucato, innovation economist and Professor in the Economics of Innovation from Sussex University, started her session on the role of ‘The Entrepreneurial Government’ at The Government Summit 2015, with an important question: Is the role of the public sector in the innovation process restricted to motivating corporations to innovate, or should it extend to financing innovation?

Throughout her session, Prof. Mazzucato gave many examples to prove her point that government’s role should be that of an “innovation incubator”.

Mazzucato said the public sector has always played an important role in the innovation process, especially when it comes to encouraging the private sector to think innovatively. She pointed to the Internet as an example of an innovative project funded by the US Department of Defense. A similar example is the project that resulted in the creation of the Global Positioning Satellite (GPS) system for navigation. “People tend to underestimate the importance of government’s role in supporting and financing innovation,” she said.

“There are more than 15 books on the life of Apple co-founder Steve Jobs. Not one of them mentions the support he received from the US government,” Prof. Mazzucato said. It is not just the big innovations like the Internet or GPS that have had government support. Even the small everyday aspects, such as touch screens and the voice-activation software ‘Siri’ have had a role played by government in their development, she said.

Muzzacato said a government’s role is not restricted to correcting market performance or creating new markets or increasing investment numbers. It also extends to investment in intellectual property. She pointed at the poor performance of some Eastern European countries in producing intellectual property because of the low levels of government investment in research and development.

Prof. Mazzucato also listed some of the mistakes that governments could make while supporting innovation. The most important, according to her, is for a government to create innovation investment plans based on market needs. “It is more important for government to invest in innovation that creates new opportunities to reduce unemployment rates,” she said.