Have one to sell?

Flip to back Flip to front

Listen Playing... Paused You're listening to a sample of the Audible audio edition.
Learn more

See all 2 images

Follow the author

Mariana Mazzucato

The Entrepreneurial State: Debunking Public vs. Private Sector Myths (Anthem Other Canon Economics) Paperback – 15 Nov. 2015

by Mariana Mazzucato (Author)

5 ratings

See all formats and editions Hide other formats and editions

Amazon Price

New from

Used from

Paperback

"Please retry"

—

£38.44

£29.89

Paperback
from £29.89

5 Used from £29.89 1 New from £38.44

This bestseller from leading economist Mariana Mazzucato ï¿½ named by the ï¿½New Republicï¿½ as one of the ï¿½most important innovation thinkersï¿½ today ï¿½ is stirring up much-needed debates worldwide about the role of the State in innovation. Debunking the myth of a laggard State at odds with a dynamic private sector, Mazzucato reveals in case study after case study that in fact the opposite situation is true, with the private sector only finding the courage to invest after the entrepreneurial State has made the high-risk investments. Case studies include examples of the Stateï¿½s role in the ï¿½green revolutionï¿½, in biotech and pharmaceuticals, as well as several detailed examples from Silicon Valley. In an intensely researched chapter, she reveals that every technology that makes the iPhone so ï¿½smartï¿½ was government funded: the Internet, GPS, its touch-screen display and the voice-activated Siri. Mazzucato also controversially argues that in the history of modern capitalism the State has not only fixed market failures, but has also shaped and created markets, paving the way for new technologies and sectors that the private sector only ventures into once the initial risk has been assumed. And yet by not admitting the Stateï¿½s role we are socializing only the risks, while privatizing the rewards in fewer hands. This, she argues, hurts both future innovation and equity in modern-day capitalism. Named one of the ï¿½2013 Books of the Yearï¿½ by the ï¿½Financial Timesï¿½ and recommended by ï¿½Forbesï¿½ in its 2013 ï¿½creative leadersï¿½ list, this book is a must-read for those interested in a refreshing and long-awaited take on the public vs. private sector debate.

The Learning Store

Shop books, stationery, devices and other learning essentials. Click here to access the store.

Customers who viewed this item also viewed

Page 1 of 1 Start overPage 1 of 1

This shopping feature will continue to load items when the Enter key is pressed. In order to navigate out of this carousel please use your heading shortcut key to navigate to the next or previous heading.

What other items do customers buy after viewing this item?

Page 1 of 1 Start overPage 1 of 1

Product details

Paperback : 284 pages
ISBN-10 : 1783085207
ISBN-13 : 978-1783085200
Product Dimensions : 13.97 x 2.54 x 21.59 cm
Publisher : Anthem Press (15 Nov. 2015)
Language: : English

Best-sellers rank 656,698 in Books (See Top 100 in Books)
355 in Professional Public Finance
1,704 in Economic Policy & Development
4,076 in Entrepreneurship (Books)

Customer reviews:
5 ratings

Product description

Review

It is one of the most incisive economic books in years. --Jeffery Madrick, New York Review of Books

Mazzucato argues that long-term, patient government funding is an absolute prerequisite for breakthrough innovation. [...] Even if you disagree with Mazzucato s argument, you should read her book. It will challenge your thinking. --Bruce Upbin, Forbes

[A] meticulously argued treatise that shows how unwise our conventional wisdom has become. --Christopher Dickey, Newsweek

Review

'This is a book whose time has come. Mariana Mazzucato documents how the state played a crucial role behind some of the landmark innovations of our time. For many, the "entrepreneurial state" is a contradiction in terms. For Mazzucato, it is both a reality and a requirement for future prosperity.'―Dani Rodrik, Rafiq Hariri Professor of International Political Economy, John F. Kennedy School of Government, Harvard University

'The principal entrepreneurial drive that has given us many of today's most important technologies has come from the state. Most thinking and arguing regarding how to energize our sluggish economies is blind to this fact. Mariana Mazzucato's book aims to get us to understand better the sources of entrepreneurship, and to reflect more positively on the role aggressive technology policies can play in getting our economies moving again.'―Richard Nelson, George Blumenthal Professor of International and Public Affairs, Columbia University

'"The Entrepreneurial State" delivers a well-researched and elegantly (even entertainingly) written knock-out to the belief across most of the political spectrum and the economics profession that (with some qualifications) "the market knows best". As many governments wonder how to boost the productivity and innovativeness of their industrial sectors, this book provides guidelines ― based on successful and unsuccessful cases ― on how to do industrial policy well. Above all, it shows why the common presumption that the state "crowds out" the private sector ― as though the private sector is a lion caged by a smothering state ― is contradicted by what governments of economies from the United States to Brazil and China actually do to "crowd in" innovations in the private sector.'―Robert Wade, Professor of Political Economy and Development, London School of Economics

5 star		47%
4 star		26%
3 star 0% (0%)		0%
2 star		27%
1 star 0% (0%)		0%

How are ratings calculated?

Top reviews from United Kingdom

There was a problem filtering reviews right now. Please try again later.

Mandrake

Presents a strong argument that the government should fund innovation, but is limited in scope and jargon-filled

Reviewed in the United Kingdom on 20 June 2016

Verified Purchase

This was an economic book club choice. Here are my notes:

Overall
This book succeeds in arguing that government is uniquely placed to invest in potentially transformative technologies with uncertain prospects, and that doing so promotes the long term welfare of the economy. However, it is also rather limited in scope, repetitive, and lapses into a turgid academic style in places that can make it a slow read.

Synopsis
The argument of this book is that contrary to popular belief the government has a central role in funding innovation, which is a key support for future economic growth. Main points:
• Governments are uniquely placed to invest in speculative technologies with uncertain prospects. The government can focus on the uncertain but probable long term aggregate gains from technological innovation whereas the private sector focuses on short term financial gains. As a result the private sector, despite its protestations, is poor at funding truly innovative technologies with an uncertain, long term payoff.
• The public sector has a strong record of funding successful innovation, but a poor record of publicising and monetising its successes. For instance, the internet, touch-screen technology, Lithium-ion batteries, GPS, micro-processors, DRAM chips, and cellular technology are some the government developed technologies used in the iPhone.
• The private sector successfully exploits the technologies developed by government research institutes, but fails to acknowledge this or to repay the government by paying its taxes fairly.
• The “shareholder value” culture in the stock markets of the Western world has created a focus on quarterly earnings, and immediate returns. This has led to the neglect of Research & Development (R&D).
• Government investment in R&D is best done directly rather than via subsidies or tax incentives, which merely subsidise research which would have been done anyway.
• According to a 2008 study by the National Science Foundation in the US, in that year only 18% of basic research was funded by business, 57% was funded by the government, with the remainder funded by universities and colleges (15) or non-profits (11%).
• Venture capital does not fund speculative technologies because of its need to generate short term financial gains. Instead it concentrates on bringing technologies developed by public institutions to market, and, in doing so, earns rewards that are disproportionate to the risks that it takes.

Critique
I thought that Mariana Mazzucato was successful in arguing her main point, that governments have a central role in funding innovation. I would make the following points:
• The title of this book was “The Entrepreneurial State,” but the book actually focuses just on government funding of innovation, and not, as the title implies, government attempts to foster successful industries. Governments may also have a role in surmounting barriers to entry, and thereby creating industries that would not otherwise exist. Strategic trade theory explains why industries form geographic clusters in which expertise becomes concentrated. These clusters then represent high barriers to entry. Governments can add value by funding the long term development of industries, creating stable industrial clusters and thereby surmounting the barriers to entry. For instance, the governments of Europe successfully created Airbus to compete with Boeing, by providing sufficient long term investment to get this huge industrial behemoth off-the ground. Many successful economies went through a period in which domestic industry was nurtured behind a tariff barrier until it was strong enough to compete successfully in the international market, Japan and South Korea spring to mind.
• Mazzucato argues that the private sector cannot fund radical innovation (with its uncertain, long-term returns), because it requires short term financial payoffs from its investments. I would argue that the fundamental problem is one of incentives. The government is interested in creating long term growth and jobs, while the private sector is interested in generating profits, preferably as quickly as it can. Only the government is therefore interested in funding research which does not have a clearly defined commercial payoff, but which may yield interesting commercial applications at some date in an uncertain future.
• Her argument that private companies commercialise technologies developed by the state, but then act unethically by not paying their fair share of taxes, is naive. The government cannot force private companies to act in a “moral” fashion, and private companies will always seek to minimise their tax liabilities. Instead, the state must act to earn a return on its innovations by both demanding commercial terms for the exploitation of its patents, and take equity stakes in those companies that it funds. One example she gives that shows how the US government has been exploited by the private sector is the drug Taxol, which was discovered by the US National Institute of Health and they licensed to Bristol, Myers Squibb who charge $20,000 for a year’s dose, 20x its manufacturing cost, while the government earns a royalty of just 0.5%. The government must surely develop a department whose sole aim is to negotiate competitive commercial terms for its technologies, and thereby avoid such blatantly exploitative contracts. Similarly, the development of Google’s search algorithm was originally funded by the National Science Foundation. Why did it fail to take an equity stake and share in the success of the technology that it helped fund?
However, there is a contradiction here. If the state becomes more like the private sector in attempting to monetise the innovations that it has developed, then it too will tend to concentrate on its financial returns and so focus on technologies with visible and immediate commercial possibilities. Long term research would then be neglected. It would then be important to separate the departments for innovation and commercial exploitation, so that one does not interfere with the other.
• In places her style is jargon-filled academic-speak: “What is needed today is a ‘systems’ perspective, but one that is more realistic on the actual – rather than mythological – role of the individual actors, and the linkages between actors, within and along the risk landscape.” (p.210) A book aimed at a mainstream audience should have more regard for its readers.

Overall
I think that she succeeds in arguing her main point that governments have a central role in funding innovation, and that they should be better at earning a return on their investment. A generally rewarding read marred by its limited scope, and some turgid passages of jargon.

9 people found this helpful

Helpful

Comment

L. Ridsdale

Five Stars

Reviewed in the United Kingdom on 29 July 2016

Verified Purchase

Really educational, opened my eyes.

Helpful

Comment

Martin Alma Azul

that clarified everything nicely then. It seems like something out of Monty ...

Reviewed in the United Kingdom on 20 October 2016

Verified Purchase

I bought this book because the author Mariana Mazzucato had become a member of the British Labour party’s Economic Advisory Committee.

This book is a difficult read as it largely lacks context and examples for the arguments and ideas it puts forward. This makes it difficult both for the reader to concentrate when reading and to apply the content to the real world. By way of an example the following is an excerpt from page 41:

“In this approach there is no assumption of ‘representative agents’ (as in standard growth theory) but rather a constant process of differentiation among firms, based on their different abilities to innovate because of different internal routines and competencies. Competition in this perspective is about the co-evolution of those processes that create constant differences between firms and the processes of competitive selection that winnow in on those differences, allowing only some firms to survive and grow.
Rather than relying on laws of ‘diminishing returns’, which lead to a unique equilibrium, and assumptions about the ‘average’ firm, this approach focuses on dynamic increasing returns to scale (from the dynamics of learning by doing, as well as the kind of ‘path dependent’ dynamics described by David 2004), and on different types of processes that lead to persistent differences between firms that do not dissappear in the long run.”

Well, that clarified everything nicely then. It seems like something out of Monty Python.

4 people found this helpful

Helpful

Comment

William Podmore

Fine study of the bankruptcy of capitalism

Reviewed in the United Kingdom on 16 December 2015

Mariana Mazzucato is professor of economics at the University of Sussex. In this superb study, she shows how the US state made the key high-risk investments in biotechnology, nanotechnology and the Internet 15-20 years before the private sector moved in.

US government investments were key to creating the mass production system, the aviation industry, the space programme, IT, Internet, nuclear power and nanotechnology. 77 of the 88 most important innovations fully depended on federal support.

Brazil’s state investment bank’s return - on its productive, not speculative, investments - was 21.2 per cent in 2012, which Brazil reinvested in health and education. KfW, Germany’s state investment bank, made $3 billion profits in 2012.

Pfizer did not leave Sandwich in Kent to go to Boston USA because of lower US taxes, but because the USA’s public sector National Institutes of Health spend $30 billion a year ($624 billion since 1976) building the knowledge base on which private pharmaceutical firms thrive. The NIHs support 325,000 researchers in 3,000 universities, medical schools and other research bodies. NIH laboratories, not private firms, produced 75 per cent of new drugs.

The Internet, the global positioning system, touch-screen displays, and communications technology underpinned Apple’s iPhone and iPad. Apple did not develop any of these; it integrated them into a new architecture.

Cutting investment in R&D and in higher education cuts growth, witness Italy. It has cut its R&D and higher education, so its economy has shrunk since 2000. British companies’ spending on R&D is falling. Thatcher’s tax cuts did not increase investment.

Mazzucato writes, “rather than giving handouts to small companies in the hope that they will grow, it is better to give contracts to young companies that have already demonstrated ambition. It is more effective to commission the technologies that require innovation than to hand out subsidies in the hope that innovation will follow.”

In the innovation process, bankers and shareholders are not the only risk-takers; workers and taxpayers are too. Financial services in fact extract value from the economy. She writes, “an increasing number of researchers have criticized the venture capital model of science, indicating that significant investor speculation has a detrimental effect on the underlying innovation. The fact that so many venture capital backed biotech companies end up producing nothing, yet make millions for the venture capital firms that sell them on the open market is highly problematic.”

She cites Philip Mirowski, who described the venture capital model as: “… commercialized scientific research in the absence of any product lines, heavily dependent upon early-stage venture capital and a later IPO [Initial Public Offering on the stock market] launch, deriving from or displacing academic research, with mergers and acquisitions as the most common terminal state, pitched to facilitate the outsourcing of R&D from large corporations bent upon shedding their previous in-house capacity.”

In 2012 the top nine Apple executives got an average of $45.72 million. The average Chinese worker at Foxconn, which assembles Apple’s products, got $4,622. So the employer/worker pay ratio was 9,892/1. She asks, “Where is the future in such a system of socialized risk and privatized rewards?”

US companies lobby for yet more tax breaks and for lower rates of tax on incomes, corporate incomes and capital gains. Apple uses corporate tax havens - the Netherlands, Ireland, the British Virgin Islands and Luxembourg - as do Google, Amazon and Microsoft. The 30 top US companies pay almost no tax in the USA. GE [General Electric] paid tax at a rate of 1.8 per cent between 2002 and 2011, when the US corporate tax rate was 35.1 per cent. GE has 1,000 workers organising their use of tax benefits and havens.

The laissez-faire approach has proved to be useless. It offers us nothing. We need a state that actively develops our skills and our industries.

4 people found this helpful

Helpful

Comment

Amazon Music Stream millions of songs	AbeBooks Books, art & collectables	ACX Audiobook Publishing Made Easy	Amazon Web Services Scalable Cloud Computing Services

Audible Download Audiobooks	Book Depository Books With Free Delivery Worldwide	DPReview Digital Photography	Goodreads Book reviews & recommendations

Amazon Home Services Experienced pros Happiness Guarantee	IMDb Movies, TV & Celebrities	Kindle Direct Publishing Indie Digital Publishing Made Easy	Prime Now 2-Hour Delivery on Everyday Essentials

Shopbop Designer Fashion Brands	Amazon Warehouse Deep Discounts Open-Box Products	Amazon Business Service for business customers	Whole Foods Market We Believe in Real Food

	Amazon Second Chance Pass it on, trade it in, give it a second life

Select Your Cookie Preferences

Follow the author

Similar authors to follow

The Entrepreneurial State: Debunking Public vs. Private Sector Myths (Anthem Other Canon Economics) Paperback – 15 Nov. 2015

Customers who viewed this item also viewed

What other items do customers buy after viewing this item?

Product details

Product description

Review

Review

Book Description

About the Author

Customer reviews

Top reviews from United Kingdom

There was a problem filtering reviews right now. Please try again later.