For her book: >The Entrepreneurial State: Debunking Public vs. Private Sector Myths<
"In this sharp and controversial exposé, Mariana Mazzucato debunks the pervasive myth that the state is a laggard, bureaucratic apparatus at odds with a dynamic private sector. She reveals in detailed case studies, including a riveting chapter on the iPhone, that the opposite is true: the state is, and has been, our boldest and most valuable innovator. Denying this history is leading us down the wrong path. A select few get credit for what is an intensely collective effort, and the US government has started disinvesting from innovation. The repercussions could stunt economic growth and increase inequality. Mazzucato teaches us how to reverse this trend before it is too late."
Mariana Mazzucato (born June 16, 1968) is an economist, with dual Italian and American citizenship. She is RM Phillips Professor in the Economics of Innovation at the University of Sussex, SPRU and author of The Entrepreneurial State: debunking public vs. private sector myths.
She became assistant professor of economics at the University of Denver in 1997. Between 1998 - 1999 she was a Post-Doctoral Marie Curie Research Fellow at the London Business School where she worked and published papers with Paul Geroski (former Dean of the London Business School). In 2000 she joined the Economics Department of the Open University as a Lecturer, becoming full Professor in 2004, where she founded and directed a research centre, Innovation, Knowledge and Development. From 2007 to 2009 she was visiting Professor at Bocconi University. Mazzucato currently holds the RM Phillips Chair in the Economics of Innovation in SPRU, the University of Sussex, a chair previously held by leading innovation thinkers Christopher Freeman, Keith Pavitt and Nick Von Tunzelmann. In 2013 she published The Entrepreneurial State: debunking public vs. private sector myths (Anthem, 2013). In 2014 she was awarded the New Statesman SPERI Prize in Political Economy for her work on the entrepreneurial state and innovation in the public sector. In 2013 The New Republic called her one of "the three most important thinkers about innovation". She is a member of the Scottish Government’s Council of Economic Advisors; a member of the World Economic Forum's Council on the Economics of Innovation and a permanent member of the European Commission’s expert group on Innovation for Growth (RISE). From 2009 - 2012, Mazzucato was the Coordinator of a 3-year European Commission Framework Programmes 7 project on finance, innovation and growth, FINNOV and Economics Director of the ESRC Centre for Social and Economic Research on Innovation in Genomics (Innogen).
On September 27, 2015, Mazzucato was appointed to the Economic Advisory Committee for the Labour Party of Great Britain by the Shadow Chancellor John McDonnell MP, and will report directly to Labour leader Jeremy Corbyn MP.
Mazzucato's research focuses on the relationship between financial markets, innovation and economic growth - at the company, industry and national level.
She works within the Schumpeterian framework of evolutionary economics, studying the origin and evolution of persistent differences between firms and how these differences vary across sectors and over the industry life-cycle.
Her empirical studies have focused on the auto, PC, biotech and pharma industries. Her most recent work has analyzed the co-evolution of technological change and stock market bubbles. In this, she claims that stock price volatility tends to be highest at the firm and industry level, when technological innovation is the most "radical".
In 2013, Mazzucato published ""The Entrepreneurial State: debunking public vs. private sector myths"" (Anthem). The ideas in the book were first set out in a shorter pamphlet for the think tank Demos, called The Entrepreneurial State. The 2013 book argues that the idea of the State as a static bureaucratic organisation only needed to ‘fix’ market failures, leaving dynamic entrepreneurship and innovation to the private sector, is wrong. She outlines a number of case studies across different sectors, including biotech, pharmaceuticals and clean technology, to show that the high-risk investments are being made by the state before the private sector gets involved. In a chapter examining the iPhone, she outlines how the technologies that make it ‘smart’ – the internet, GPS, its touchscreen display and the voice-activated Siri – were all Government funded.
Two chapters in the book are dedicated to the emerging ‘green technology’ revolution. She details the public funds that she argues are laying the groundwork for this revolution in a similar way that the state invested in the most high-risk areas of biotech and nanotech. The book concludes with the author's contention that in all these examples, the risks were socialized while the rewards were privatized, and considers different ways to change this dynamic to produce more ‘inclusive growth’.
She has also focused on inequality in her work with William Lazonick (Professor and Director of the University of Massachusetts Center for Industrial Competitiveness). Their joint article, "The Risk-Reward Nexus: Who takes the risks? Who gets the rewards?" for a special issue of Corporate and Industrial Change, edited by Mazzucato, describes the tension between how value is created and how value is extracted in modern-day capitalism. The authors argue that there is a disproportionate balance between the 'collective' distribution of risk taking in the innovation process, and the increasingly narrow distribution of the rewards. The paper was first published in a 2012 paper for the think tank Policy Network.
Similarly, in another paper for the think tank Policy Network called "Rebalancing What?", Mazzucato argues that the problem is not only one of short-termism, it is also about the way in which financial activities focused on value extraction have been rewarded above activities focused on value creation – often leading to value destruction.
Critics have argued that Mazzucato offers a confused definition of "public goods," which is a "crucial point," since "the non-rivalrous and non-excludable nature [of public goods] make them difficult to profit from providing," and thus the private sector cannot, by definition, be interested in them.
Others claim that she is "too hard on business" but acknowledge that "she is right to argue that the state has played a central role in producing game-changing breakthroughs, and that its contribution to the success of technology-based businesses should not be underestimated."
Martin Wolf wrote that The Entrepreneurial State offers "a controversial thesis," but "it is basically right," and warns that the "failure to recognise the role of the government in driving innovation may well be the greatest threat to rising prosperity." Another critic stated that "it is one thing to legitimize the state as a driver of innovation and give credit where credit is due — something [Mazzucato's] book does masterfully", but "it is another thing altogether to craft effective innovation policy that deals with risk in a politically acceptable way."