A Review of Mariana Mazzucato’s “The Entrepreneurial State”

July 14, 2017

In her renowned publication, Mariana Mazzucato moves to debunk the common perception of the state as a bureaucratic, inefficient hindrance to innovation. The celebrated economist examines the role government-funded programmes have played in fostering entrepreneurial activity and eviscerates the notion that enhancing competitiveness and innovation requires a sharp reduction in state-run programmes. Her book argues that many technologies considered indispensable nowadays, and commonly viewed as an achievement of the private sector, in fact resulted from government-funded initiatives. Challenging reigning discursive practices in relation to the state, this publication tackles a series of what she considers misrepresentations regarding the role that a confident government can play in dynamising a country’s economic growth. Mazzucato asserts that the idea of the state as a cumbersome antagonist to entrepreneurship is based on false premises, and that it may be better regarded as a fellow entrepreneurial agent and partner to the private sector, a more able and willing risk-taker than the latter.

 

 

 Photo: João Silas on Unsplash 

 

A number of companies now considered corporate titans have in fact relied on the massive scale of public investment flowing into key technologies utilized by the industry. The government has the ability to create markets by investing in certain areas, funding knowledge bases and facilitating resource access. These areas are subsequently considered more lucrative, secure, and thus attractive to the private sector. Those of you pressed for time, fast-forward to Chapter 5, in which Mazzucato illustrates her case via Apple, outlining how state-funding of key technologies shaped the competitive landscape which provided the company with fertile ground to thrive on. The innovative spirit ascribed to the brand name is mainly reflected in its product design, and merit is certainly due to the creative forces behind these ideas. However, the technologies featured in the consumer electronics which are now inextricably associated with the company, and to which it shifted away from personal computers under a decade ago, are the result of public investment and research.

 

Apple’s research and development expenditure is marginal, due to the company’s reliance on technologies developed externally which are then simply integrated into innovative designs. Often the Department of Defense funded research efforts for technologies which would later become indispensable components of handheld electronic devices, elsewhere the government provided subsidies and created strategic domestic partnerships to advance the country’s expertise above that of its overseas competitors. Evidently, the state promotes innovation not by retiring from the market, as conventional economics would have us believe, but by providing a solid knowledge base for any given competitive sector. Private entrepreneurs may well redefine the market and use their innovative spirit to gain a competitive edge, but they have consistently proven more effective at doing so in areas receiving generous public investment, less risk-prone than market sectors disregarded by the state.

 

Let us take a leaf out of Mazzucato’s book (no pun intended!) and remain ever skeptical of longstanding narratives which permeate our society and ingrain themselves as irrefutable truths in the fabric of public knowledge.

 

Kim is a political science graduate with a focus on international relations and an interest in gender and social issues. Currently she is completing a postgraduate thesis in the field of international drug policy. She loves food, natural history, and thrift bookshops. Writing has been a favourite pastime since childhood as well as a means of marshalling thoughts, views and observations. 

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