Customer Reviews


17 Reviews
5 star:
 (10)
4 star:
 (4)
3 star:
 (2)
2 star:
 (1)
1 star:    (0)
 
 
 
 
 
Average Customer Review
Share your thoughts with other customers
Create your own review
 
 

The most helpful favourable review
The most helpful critical review


10 of 11 people found the following review helpful
5.0 out of 5 stars The state as an essential partner in innovation
This well researched book proves that most important innovations are based on financing from government. Apple's iPods, iPhones and iPads are presented as one of the examples. The author describes in detail how the government has financed all essential technological innovations used. The author recognizes the genius of Steve Jobs by visualizing an attractive product that...
Published 15 months ago by laurens van den muyzenberg

versus
7 of 9 people found the following review helpful
3.0 out of 5 stars Takes an interesting angle on the State's place in the economy
Mazzucato makes a good argument for the role of the State in funding, stimulating and supporting research, and the benefits that can bring to growth and innovation in an economy. She also carefully differentiates between productive investment and wasted forms of government incentives, but the arguments can seem a bit laborious as she re-uses the same phrases and makes the...
Published 15 months ago by BS


‹ Previous | 1 2 | Next ›
Most Helpful First | Newest First

10 of 11 people found the following review helpful
5.0 out of 5 stars The state as an essential partner in innovation, 18 Aug 2013
By 
laurens van den muyzenberg "laurens" (Villa Lama, Super Cannes, 06220 Vallauris Golfe-Juan.) - See all my reviews
This well researched book proves that most important innovations are based on financing from government. Apple's iPods, iPhones and iPads are presented as one of the examples. The author describes in detail how the government has financed all essential technological innovations used. The author recognizes the genius of Steve Jobs by visualizing an attractive product that people would buy, selecting technologies, and putting them together in a compact beautiful package.

At first sight this appears the way it should be. The government finances technological breakthroughs that are picked up by business. The problem she sees is financing by the government. Governments are pressured to reduce costs and furthermore are accused to be highly inefficient in everything they do. She describes how for example the governments the US, Germany and Denmark invest heavily and effectively in research and development. They act as entrepreneurs taking the highest risks.

She shows that businesses, in the medical electronic and other fields have radically reduced their funding of the more longer term research and development on which breakthroughs depend. Business and venture capitalists are short term orientated. When "innovative" companies are hugely profitable they buy back shares and/or raise dividends but do not invest it in the longer-term future. She presents a lot of statistics to prove this point.

She considers that it is very important for the people at large to recognize the essential role government plays as the fundamental force in innovation. This role goes beyond developing new knowledge. The state in many cases also has to finance the development of a new technology to the point where it is applied and achieve critical mass. The governments is involved in the supply side but in important cases also on the demand side. The government chooses, has to choose, the winners.

The United States is by far the most effective and largest investor in innovation. Many people believe that the free market and entrepreneurs are the driving force in innovation. She refers to this as a "myth" presenting many examples.

Companies in general but especially highly profitable global companies go out of their way to reduce their taxes. Statistics show that these global companies are highly successful on this point. The tax income in addition to being reduced is also not going to the countries that have financed the new technologies that played an important role in generating the profits. She believes it is naive to believe that national governments can enforce tax regulations on global companies and therefore proposes other solutions.

One suggestion is to attach a royalty obligation to a technological innovation. The first buyer, as the public at large financed the innovation, should after a few years of exclusive rights, license other companies to use the innovation. She also refers to government financed development banks that provide financing for the early sages of development. A good example is such a bank in Germany the KfW (www.KFW.de).

She considers the present system as "dysfunctional", where governments take the highest risks and businesses take all the profits being an example where risks are socialized and the profits privatized.

I have worked extensively in this field, both in business and for government. I found this book stimulating to read and recommend it to others. I am however not sure, to what extent, the suggestions can be implemented. I do not doubt the importance and essential role the government plays in financing R&D. That kind of financing and managing, early stage innovation even including the creation of demand can also be seen as a logical task of government. I do agree that it is important that people at large should become more aware of the entrepreneurial role of government in innovation, and the necessity to organize and finance it.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


5.0 out of 5 stars Economic decisions about the best allocation of resources must be based on the truth, 16 Nov 2014
Verified Purchase(What is this?)
This book is an absolute must! Economic decisions about the best allocation of resources must be based on the truth. To base economic decisions on half-truths and deception is to waste resources and leads to the ineffeciencies that all rational people wish to avoid. The Soviet Empire collapsed because it made economic decisions based on half-truths and deception. Western economies should not follow the Soviet example but should embrace the truth to achieve maximum efficiency and the best allocation of resources. And that is why this book is so important, because it rejects the superficial dogma put forward by neoliberal fundamentalists, that governments can never pick winners, only markets can. This very well researched book should be read by all political decision-makers, especially by neoliberals. It is a sign of robust and honest thinking to dare confront yourself with points of view that challenge your beliefs. Let the neoliberals show us that they are robust and honest thinkers by reading his book and then telling us where this book is wrong, if that is still what they truly believe after reading it.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


7 of 9 people found the following review helpful
3.0 out of 5 stars Takes an interesting angle on the State's place in the economy, 23 Aug 2013
By 
BS (Winchester, England) - See all my reviews
Verified Purchase(What is this?)
This review is from: The Entrepreneurial State: Debunking Public vs. Private Myths in Risk and Innovation (Anthem Other Canon Economics) (Kindle Edition)
Mazzucato makes a good argument for the role of the State in funding, stimulating and supporting research, and the benefits that can bring to growth and innovation in an economy. She also carefully differentiates between productive investment and wasted forms of government incentives, but the arguments can seem a bit laborious as she re-uses the same phrases and makes the same points again and again. At times it feels like she is padding out the book and encourages the reader to skips pages, but for all that it does make some very interesting arguments and has made me look at the role of the state in the economy differently.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


3 of 4 people found the following review helpful
4.0 out of 5 stars An overlooked truth, 28 Sep 2013
By 
Verified Purchase(What is this?)
This book shows in detail how most of the West's economic success since World War Two has been based on massive state investment in new technologies. Private enterprise mostly takes up things that state spending has pioneered.

Carefully referenced and with many detailed examples.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


2 of 3 people found the following review helpful
4.0 out of 5 stars Detailed argument, 12 Nov 2013
By 
O. McGonagle (Ireland) - See all my reviews
(REAL NAME)   
Verified Purchase(What is this?)
This is a well researched and argued case. Many aspects of our current economic/fiscal troubles become clear in the presentation of the facts. Anyone who is afraid of the "state" should read this book to learn how a partnership can work, and already has in many cases that are not sufficiently recognised. Highly recommended to anyone interested in current problems with capitalism and the cliched responses to our troubles.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


4 of 6 people found the following review helpful
5.0 out of 5 stars Refreshingly counterintuitive, 2 Aug 2013
Thoroughly enjoyed reading this. Counter-intuitive take on the role the state can and should play in promoting innovation and enterprise. Nicely written, punchy thinking and great research particularly the case study on Apple.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


12 of 19 people found the following review helpful
2.0 out of 5 stars Mostly nonsense, 12 Mar 2014
Verified Purchase(What is this?)
This is a very confused and confusing book. To begin with, contrary to what the blurb on the back of the book says, Mazzucato does not debunk the myth of the State as a bureaucratic organisation, since she only deals with one aspect of government policy namely R&D spend. Moreover as I will come on to argue her arguments are on the whole anything but convincing. However the book is not wholly without merit as will be seen.

The main problems with the book can be grouped into five main areas. Firstly, Mazzucato is a unabashed statist. She states (p.197) that "As anyone who has worked in the private sector knows, there are plenty of 'bureaucratic' and inertial businesses. There is nothing in the DNA of the public sector that makes it less innovative than the private sector." These are two of the most absurd statements I have heard from an economist. It is of course true that some businesses are bureaucratic, inefficient and suffer from poor decision making. However it is exactly these businesses that tend to get undermined by less bureaucratic, more efficient and better managed companies. A number of factors may slow this process down (market concentration, barriers to entry, etc) but occur it does in industry after industry. There are simply too many examples to choose from. So in food retail we had Sainsbury undermined by Tesco (lower prices) who in turn are undermined by Waitrose (better products at a similar price) and the discounters (similar products at an even lower price). In technology Microsoft/IBM's duolopy was gradually eroded by Apple, etc while Apple's dominance in smartphones is now being underminded by Samsung et al. The problem with the public sector is that there is no obvious mechanism to erode or keep in check bureaucracy - there is no market mechanism, no profit motive and no market in M&A to bring in fresh management with fresh ideas. All we have are periodic government reviews which appear (on the face of it) to make little progress. Numerous studies have demonstrated how management practices in the private sector have evolved (better management qualifications, better information systems, ERP, etc) whereas those in the public sector have lagged behind.

Secondly, Mazzucato seems to think the Keynesian approach to macroeconomic policy has been a great success. Any perusal of the empirical evidence will show that it has been largely an unmitigated disaster resulting in rampant public and private sector debt. Each recession requires a greater fiscal and monetary stimulus to prevent catastrophe. Capital has long been mispriced by the manipulation of interest rates (holding them below nominal GDP growth) while the scale of waste in public sector spending (benefits, procurement, etc) has been well documented. Theoretically Keynes was naiive. He ignored evidence over rent seeking activity capturing the benefits of public spending. He also assumed a closed economy (in the General Theory) thus precluding the application of his theory from most economies. He also, and this is the biggest irony, named his theory "General" after Einstein's theory of general relativity. In effect, Keynes saw himself as providing laws of economics that would operate through all time and space - in effect he ignored the important institutional changes i.e. in labour markets that actually often determine which polices have greater impact. The pioneering work of economic historians such as Douglass North is worth reading on this subject. Mazzucato's eulogisation of Keynes is, in this regard, particularly ironic as she frequently criticises mainstream economists for their belief in models.

Thirdly, I was also taken aback with how dismissive Mazzucato is of the empirical research on government debt. On p.17 she writes,"Reinhart and Rogoff (2010) shows just how heated the debate is [on fiscal policy/government debt]. What was most shocking, however, from that recent debate was not only the finding that their statistical work published in what is deemed the top economics journal was done incorrectly (and recklessly) but how quickly people had believed the core result: that debt above 90% of GDP will necessarily bring down growth." This is complete bunk. Mazzucato obviously did not read Reinhart and Roggoff's book (This Time is Different: Eight Centuries of Financial Folly). Nor did she apparently read Reinhart and Roggoff's precise and highly effective refutation of Herndon, Ash and Pollin. R&R's full response is on Carmen Reinhart's website. To cut a long story short R&R always emphasised the mean number in their result not the median (which had been skewed by an excel error spotted by Herndon). The mean result is simply that countries with public debt to GDP above 90% (R&R grouped countries into three - 30%-60%, 60%-90% and 90%+ public debt/GDP levels) experienced 1ppt less GDP growth on average than those in the 30%+ and 60%+ buckets. They also did not selectively exclude data or unconventionally weight data. It is also important to note that R&R's conclusion that very high levels of public debt to GDP is associated with lower economic growth is not controversial supported as it is by hundreds of other economic studies. Should we be surprised that very high levels of debt might be a hindrance to growth?

Fourthly, and to come to the nub of Mazzucato's thesis, the arguments presented in the book do not convince me that industrial policies have been succesful. Mazzucato is highly selective in which industries she writes on. She largely tells stories about what happened with little systematic collation of data. She also ignores the most egregious industrial policy calamities (aside from mentioning Concorde repeatedly as though this was the only failure of British industrial policy. Incidentally she tries to explain this away by saying it was an obvious mistake to target a mature industry. This really baffled me as the project originated in the early 1950s less than a decade after the invention of the jet engine). She also follows in the tradition (which she acknowledges and indeed advocates as supportive of her arguments) of industrial policy advocates like Chalmers Johnson ("Developmental State"). Johnson argued (MITI and the Japanese Miracle, 1982) that Japanese bureaucrats and in particular the Ministry of International trade and Industry (MITI) drove Japan's economic growth by targeting and shifting investment into new industries. Such writers urged President Regan to copy this `Japanese model'. In fact the empirical evidence is overwhelming against Johnson's thesis. The sector of the Japanese economy that received the greatest level of public spending was also the most inefficient (agriculture/rice). One of the most successful industries received the least level of support (electronics). In another famous example, in the early 1960s MITI tried to force Japanese auto producers to merge into one company in order to create a national champion (think British Leyland!). The companies successfully resisted MITI (that in itself is a common thread through Japanese post war economic history) and it was partly the strong competition between them helped spur efficiency and innovation leading Japanese auto companies to rapidly expand exports to the US and Europe in the 1970s. What is also amusing about Johnson is that his eulogy to the 'Japanese model' came less than a decade before the start of the extreme economic stagnation that has afflicted Japan since 1990. In addition, the US is no longer seen as the basket case it was seen as during the 1980s (by the pro-industrial policy folk who raved about Regan ignoring lessons from Japan). Mazzucato tries to square this circle by saying that the US has long had a secret industrial policy! Seriously, you could not make this up.

Fifthly, where Mazzucato has some serious points she still overplays her hand. In the chapter on Apple/tech companies she shows how several of the key technologies were originally developed for military use and that Apple paid a pittance to use them in the private sector. But this is really the point about the private sector - it takes an entrepreneur of the calibre of Steve Jobs to see the potential of these technologies - to envisage a product that consumers would want to buy (before the protoype has even been built). Another example is the internet which came out of a 'small ARPANET [US defence department] project'. The point is that the most useful technologies (for consumers) are often not those that have the most money spent on them. I won't even go into detail on the daft chapter on green technologies. Wind and solar energy is a market created by governments and completely distorted by subsidies, guaranteed prices, etc. I fail to see what general lessons can be learned from this area.

Having said all of this, Mazzucato's book is not without merit. I share her criticism of R&D tax credits as these merely subsidise spending that would have taken place anyway (this point at least is empirically grounded). Likewise she is right to criticise current tax regimes that allow corporates to minimise their tax contributions. However I do not blame the companies (management after all have a fidicuary duty to maximise shareholder value and I do not agree with her criticism of the private sector for this) as she does. To deal with this issue there needs to be greater global co-ordination of tax regimes. If companies go global so too must the framework they operate in. This will, however, require a greater degree of international co-operation than has hitherto been possible.

Finally I fully accept Mazzucato's argument that the private sector will not engage heavily in fundamental research as they cannot appropriate the rewards. In this respect the State's contribution to economic growth is underplayed and her suggestions for a national innovation fund, funded from royalties from the technologies that the private sector ends up utilising (but which were developed by the State) seems worth exploring. However I am very sceptical of state involvement in the economy based on all the empirical evidence. For this reason I would suggest (along the lines of Popper's small social experiments) that this idea be initially trialled in one industry (Pharmaceuticals seems a good idea as Mazzucato makes some valid points about the level of public vs private innovation in that industry). This could be reviewed periodically and if after 5-10 years it was conclusively proved to be a successful measure it could be quickly rolled out to other industries.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


3 of 5 people found the following review helpful
5.0 out of 5 stars Let's hear it for the state!, 16 Dec 2013
By 
Steve Keen "therealus" (Herts, UK) - See all my reviews
(TOP 1000 REVIEWER)   
Verified Purchase(What is this?)
Reading The Economist is one of life's pleasures. Well-written, knowledgeable, and with a certain dash of the unconventional to spice it up, as in the paper's views on the so-called War on Drugs. But there's no denying that some of their pronouncements have an ex cathedra feel about them, as if the editorial team has been imbued with a certain infallibility.

So it is with their framing of the role of the state in business, that is, that its role is to keep out, to not "pick winners".

But as Mariana Mazzucato shows in The Entrepreneurial State, it has been, and should ever be, the role of the state to kick start the kind of research that private business is unwilling to finance. Without the state there would be no Internet, no GPS, no touch-screen technology to power Apple's iPod, iPad or iPhone. The irony, as she points out, is that Apple, beneficiary of a whole raft of state-sponsored technologies which she meticulously lists, is often used as the poster child of market fundamentalists. Mazzucato does not deny the role the firm has played in putting all of the technologies together in an aesthetically and ergonomically pleasing package, and praises Steve Jobs for his role in that respect. She also praises Jobs for his long-termist view, remembering that he always avoided the fashionable but short-termist stock-repurchase and profit-disbursement schemes advocated by exemplary citizens such as Carl Icahn. But the fact is that Apple is a prime example of where socialised risk has been parlayed into privatised return, albeit probably less egregious than banks in that respect.

To compound the insult, Apple is one of the firms - she also cites Google, Amazon and Oracle - actively engaged in "tax-shuffling" activities which guarantee that some of the positive externalities of state-sponsored development are not realised, although she is perhaps somewhat overharsh in her assessment of other such externalities such as the number of people Apple claim to be employed as a result of their success. But as a result of some of this tax chicanery, she says as an example, the UK "tax gap" - the difference between actual tax collected and potential - is £120bn, at a time when the national deficit is £126bn.

One of the problems with business, as she says, is its relatively short, and ever-shortening time horizons. In what she labels the Old Economy Business Model (OEBM), which was responsible for creating the golden age of the mass-production, Fordist technological revolution, capital, labour and the state shared the benefits, with job stability and real-income growth deemed important. These were the days of establishments like Bell Labs, Xerox PARC and the Alcoa Research Lab. These have now largely disappeared as a part of the New Economy Business Model (NEBM), in which constant job-hopping and insecurity are the norm, especially in the ICT arena.

One of the problems with the attack on the state is that it becomes self-fulfilling, with state institutions hesitant in sponsoring research in the fear of failure and further attack. But if not the state, then whom? The usual suspects in this respect, Venture Capitalists and "entrepreneurs", she characterises (and here I paraphrases only slightly) as a bunch of pussies, nowadays particularly overly tied to the NEBM and highly risk-averse; and large, price-dependent corporations have massive sunk costs which make them path dependent, averse to anything which may disrupt their cosy business models. (In analysis I conducted a couple of years ago I attempted to establish a statistical correlation between large corporates, particularly in concentrated markets, and R&D expenditure . Whilst not particularly happy with some of the data available, I nevertheless expected to be able to demonstrate some correlation. After all, part of the pay-off for being allowed to operate as a large firm in a concentrated sector, able to set one's own prices and earn supernormal profits, is investment in ongoing R&D. But the correlation I found was very weak.)

There is, then, a danger that the state will withdraw so much from research that much of the ability to develop breakthrough innovations is lost, with private firms reduced to making largely incremental changes to their product offerings. (In the west, at least. China, as Mazzucato points out, is not so shy when it comes to state-sponsored development.) What is needed, she says, is an application of the principles of Keynes and Schumpeter, with a recognition of the key role of the state in creative destruction. Together with that the state needs to work out how it may socialise the benefits of the outputs of this process, as well as being able to tell a better story about its achievements. We hear plenty about the failures, but who, she asks, has ever performed a thorough analysis of, say, the costs and benefits of Concorde, or rather the Concorde programme? Sometimes learning from "failure" is as important as learning from success.

In presenting her case, Mazzucato has kept it concise and readable. Her examples are robust and sufficiently high profile that most people will be aware of them (which goes a long way to proving her point!). She is sometimes scathing of private business but never wholly dismissive: as with the case of Steve Jobs, private business has a key role to play as an entrepreneur in the Schumpeterian sense, of someone who adopts an invention and converts it into a saleable innovation. And as a coda to my opening about The Economist, when the paper reviewed the book (August 31st 2013), appropriately enough in its Schumpeter spot, it opined, ex cathedra, that "Quibbles aside, Ms Mazzucato is right to argue that the state has played a central role in producing game-changing breakthroughs". So that settles that, then.

With regard to production of the book itself, the editing could have been a little better, although it's not by any means dire. In the Foreword, by Carlota Perez, "led" is spelt "lead", and then again in the early stages of Mazzucato's text, suggesting it is the editor, not the authors, at fault. The Foreword itself becomes the "forward" later on. As common as the error is, it should be noted that "quote" is not a noun, "quotation" is. Similarly, at one point "both" is followed by three things where "both" suggests two. Where we are told about "the Japanese electronics giant Sony" I think "Sony" would have done. But my greatest irritation is this now increasingly common inability to add "apostrophe s" to create singular possessives when the root noun itself ends with an "s". Instead we are given Jobs' instead of Jobs's, and on one occasion Job's. Unfortunately your (and my) spellchecker is wrong, here, and is even now indicating that Jobs's is incorrect and offers the other two as alternatives.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


1 of 2 people found the following review helpful
5.0 out of 5 stars Extremely informative book on the public sector, 20 Mar 2014
Verified Purchase(What is this?)
This review is from: The Entrepreneurial State: Debunking Public vs. Private Myths in Risk and Innovation (Anthem Other Canon Economics) (Kindle Edition)
Excellent analysis of the role of the state in innovation. Highly recommended to anyone wanting a serious understanding of the role of the private and public sector in modern economies.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


1 of 2 people found the following review helpful
5.0 out of 5 stars Short, clear and useful, 12 Feb 2014
Verified Purchase(What is this?)
The author states hard truths that mainstream economics try to erase from debate. She also backs up her claims with current examples, making her argument even more compelling for modern-day policy makers.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


‹ Previous | 1 2 | Next ›
Most Helpful First | Newest First

This product

Only search this product's reviews