The Entrepreneurial State by Mariana Mazzucato – Non-fiction Books #4

Nils Naujoks

Talking innovation Apple is considered the most innovative company in the world. But is it? Who invented the iPhone’s technology? It’s the state, stupid! 

Mariana Mazzucato – Who is she?

She is a professor of Economics at the University of Sussex. She is one of the growing future stars of Economics. That is especially noteworthy because she argues against mainstream economics. Usually that means you’re writing against windmills. Her work, though, is readable and ignites a spark of hope that we will one day listen to economists that are advocating for the many, not the few. Want to read more about her? Go here.

Content

In her 2015 book “The Entrepreneurial State” Mazzucato argues to rethink how innovation and how technological progress works. States usually religiously favor entrepreneurs who they think take society to the next level. Mazzucato simply categorizes this thinking as one of many economic myths. Instead she found that the state makes most inventions and technological revolutions. Every single technology you can find in the iPhone today comes from development in research facilities that use government funding. E.g. touch screens, GPS, mobile networks, various sensors, the list goes on. All Apple did was to put all of these technologies into one device. Her main argument is: Companies like Apple heavily rely on technology governments pushed to market. Yet, the big four (GAFA = Google, Apple, Facebook, Amazon) and others reap the profits and avoid taxes at large. Thus governments lack the funds to invest into new research ultimately leading to a lack in innovation and economic growth. 

What is her advice for innovation?

Governments deserve a much greater appreciation in the economic process in general. The perspective of state vs. private is utterly wrong. For innovation to take place it needs a strong state. It has to set the framework mainly including secure streams of long term investment into research that companies can’t afford. This security will then attract companies to investigate potential products based on that research. For governments to have free funds to do that, it needs to secure its own income streams generated from taxes, that companies refuse to pay. The companies arguing for fewer taxes so they can invest in research and development are overstating their role in the process. It thus needs a new way of thinking about the innovation process and the sources of growth of the economy.

You better get into the details reading the 213 pages yourself.

Enjoy The Entrepreneurial State: amazon.com | amazon.co.uk | english: amazon.de | german: amazon.de 

Maybe you want to read her new book “The Value of Everything” (no review yet, sorry) as well:

amazon.com | amazon.co.uk | german (2019) amazon.de | english amazon.de

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