#353 – Problem based innovation
Expørt: Mariana Mazzucato
Professor in the economics of innovation and public values
Med lørner Silvija Seres
How is data driven economy different from knowledge driven economy? And what should we really know about the capability of taking risks and innovating in the public and private sectors? In this episode of LØRN, Silvija talks to professor in the economics of innovation and public values at UCL, Mariana Mazzucato, about why we must optimize stakeholder value and not just shareholder value.
Noen kjappe med ekspørt Mariana Mazzucato
Mariana Mazzucato (born June 16, 1968) is an economist with dual Italian and United States citizenship. She is a professor in the Economics of Innovation and Public Value and the director of the Institute for Innovation and Public Purpose (IIPP) at University College London (UCL). She is also a member of the Scottish Government’s Council of Economic Advisers.
Mazzucato is the author of The Entrepreneurial State: debunking public vs. private sector myths and The Value of Everything: making and taking in the global economy. In 2016, Mazzucato co-edited a book, Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth with Michael Jacobs. In 2013 The New Republic called her one of “the three most important thinkers about innovation”.
For øvrig er e-posten til Mazzucatos agent: [email protected]
Mazzucato’s Italian parents, Ernesto and Alessandra, moved to Princeton, New Jersey in 1972, with their three young children, Valentina, Mariana and Jacopo, after Ernesto accepted a position as a physicist at Princeton University‘s Plasma Physics Laboratory. Mariana Mazzucato spent most of her life in the United States before returning to Europe in 2000.
Mazzucato obtained a Bachelor of Arts in history and international relations from Tufts University in 1990, a Masters in economics from the New School for Social Research in 1994, and a PhD in economics, also from the New School in 1999.
She graduated from Princeton High School in 1986.
Mazzucato became assistant professor of economics at the University of Denver in 1997. Between 1998 and 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 was the RM Phillips Chair in the Economics of Innovation in SPRU, the University of Sussex, a chair previously held by the 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, a member of the UN Sustainable Development Solutions Network Leadership Council and SITRA’s Advisory Panel in Finland and, until 2015, she was a member of the European Commission’s expert group on Innovation for Growth (RISE). From 2009 to 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, it was announced that she had been appointed to the British Labour Party’s Economic Advisory Committee, convened by Shadow Chancellor John McDonnell and reporting to Labour Party Leader Jeremy Corbyn.
In 2016 she gave the first of a series of lectures organised by John McDonnell intended to “broaden the debate around economics” in the UK.
In 2015 Mazzucato was commissioned to write a report for the Brazilian Government’s Ministry for Science, Technology & Innovation on Brazil’s innovation policy which was published on April 6, 2016.
Mazzucato became the first woman to give the Raúl Prebisch Lecture organised by the United Nations Economic Commission for Latin America and the Caribbean in Santiago, Chile, in April 2016. She is also a regular contributor to Project Syndicate since 2015.
She is currently a Special Advisor for the EC Commissioner for Research, Science and Innovation, Carlos Moedas, and has recently authored a high impact EC report Mission-Oriented Research & Innovation in the European Union. She is also a Special Advisor to the Secretary General of the OECD, Angel Gurría, for the OECD’s New Growth Narrative.
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 automobile, 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’.
In 2015 a US edition was published by PublicAffairs that included a new introduction. Her 2015 article in Foreign Affairs provides a summary of the book and outlines its implications for the public sector sharing not only risks, but also rewards.
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.
In her recent work, since 2014, Mazzucato has developed her critique of “market failure theory” and her concept of the state’s role in the economy as one of “creating and shaping new markets” rather than just fixing them. Her work with Carlota Perez has considered how such a view can enable a new understanding of ‘green’ as a redirection of the entire economy. Her work with Caetano Penna has focussed on the way in which a mission oriented market shaping framework can provide a new understanding of the role of state investment banks.
Her new book The Value of Everything: making and taking in the global economy was published in April 2018 in the UK by Penguin (Allen Lane), and was launched in the USA in September 2018 by Public Affairs. It has been shortlisted for this year’s Financial Times and McKinsey Business Book of the Year prize.
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.”
Dette lørner du:
Data driven economy