Mazzucato is quickly becoming on the most influential economists in the Western world with her thesis that the classical economic paradigm is inadequate for the 21st century because it fails to account for the pivotal role government funding plays in fundamental scientific research which belies the technological breakthroughs that are critical for an advanced economy to keep growing. In her book, she not only deconstructs the narrative that government funding of research and entrepreneurship is bad, but she also outlines the profound connection between government-funded science and tech entrepreneurship, including and especially Silicon Valley. In her view, we need to let go of a mechanistic understanding of the economy to embrace a more biology-centered model of the economy where the government plays a pivotal role in the evolutionary process of markets, firms, and academia. My only criticism is that I didn't feel that the book had substantially much more information than she presents in her various talks about the subject, so i'd def categorize this as one of those books that you can skip if you watch her 1h talks on YouTube.

While I agree with much, if not most of her thesis this book is repetitive, dated and a bit strident. A fully updated and condensed version, using current examples, would be appreciated.

Solid presentation of the facts surrounding the mass privatization and commodification of paranoid Cold War war-hawking gadgets by corporations. There is a continual glaring omission (particularly in the green energy sections) of the negative impacts these technological innovations have had on the global south. In natural Keynesian fashion, there is scant a mention of international exploitation of resources and cheap labor that goes into the production of more or less all of the modern age’s products (rare earth mining and abusive labor practices are touched on only at the end of the book).

There are rather glaring blinders when it comes to typical business practices and behaviors that have been present in Marxian economic analysis for over 150 years. For a scholar that is well versed in the plundering of public coffers for the benefit of a select few, there seems to be little objection made to this act. It is passively described for the most part and briefly condemned in a vague, abstract way the conclusion. The conclusion also highlights the fatal flaws in Keynesian supposed “third way” types of thinking, with toothless appeals to capital and governance to get better in some nebulous way. While communism is mentioned as a great boogie man used to attack Keynesian policy, China is mentioned often in the green energy section. While the policies referred to largely come out of the economic reforms of Deng Xiaoping, and the results praised, function of the Chinese government in contrast to capitalist states is never addressed. To a Western audience (especially from so-called leftists) these policies are Keynesian and not Marxist, but the historical and material conditions that led China to pursue this economic direction are very different than post-New Deal America. The introduction of markets to stimulate economic dynamism saved China from the stagnation that was the death of the USSR and the Keynesian economic order in the USA. The government of China occupies a fundamentally different role in economic development than other countries, like the USA. China is not a triumph of Keynesian policy, it is a reassessment of Socialist economic planning. The guardian of development that is argued for in the conclusion is to emulate that of China (although a Capital-sympathetic economic scholar may think that is too far). Even rejecting Deng Xiaopeng theory’s level of state control and involvement requires a political will and concrete economic vision that non-Marxists just don’t have. Taxing US corporations more would be fine, but American politics are structured in a way that grants out-sized influence to those who control large reserves of capital. Those political bodies would never act against their patrons economic interests, in fact that have personal economic incentive not to. The author seems unwilling to address the economic reality of Western politics, which is evident throughout.

Don’t get me wrong, the case study of the iPhone’s technologies are honestly wonderful! They don’t dwell too long on nuts-and-bolts of functionality and the author frames genuinely complicated technology into layman’s terms without sacrificing nuance. The conclusion and ideological biases throughout the book, unfortunately diminish that research and any outlook for a sustainable economic future.

Interesting concept but the author does not go hard enough to the core issues (in my opinion). The author wants the state to reap the benefits of capitalism while failing to scrutinize capitalism itself as a viable option. she also treats the state as a single actor with homogenous interests. The writing style was hard to get through. Very detailed case studies, and lots of repetition.

In The Entrepreneurial State, Mazzucato sets out to debunk the notion of the state being "bureaucratic, inertial, heavy-handed". That it should basically get out of the way and let the dynamic private sector do its thing to create growth.

She starts by debunking what she terms the myths or false assumptions underpinning much of innovation policy:
Myth #1: Innovation is about R&D. Mazzucato argues that the research does not show that innovation carried out by large or small firms increases their growth performance. As such, identifying the company specific conditions that must be present to allow R&D spending to lead to growth is key. Merely incentivising R&D spending is ineffective.

Myth #2: Small is beautiful. Mazzucato observes that while many high-growth firms are small, many small firms are not high growth. This is problematic since many government policies focus on tax breaks and benefits to SMEs, hoping to making the economy more productive and innovative as a result. She argues that "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."

Myth #3: Venture capital is risk loving. Rather, Mazzucato notes, venture capital tends to be concentrated in areas of high potential growth, low technological complexity and low capital intensity, since the latter raises costs significantly. Venture capital isn't long term; they want to exit as early as possible to earn returns.

Myth #4: We live in a knowledge economy - look at all the patents! Mazzucato cites researchers' arguments that most patents have little worth, not being cited by other patents, nor do they lead to new innovations. Indeed, they have "caused the rate of innovation to fall...as it blocks the ability of science to move forward in an open exploratory way"

Myth #5: Business investment requires 'less tax and red tape'. Mazzucato argues that it is unclear that tax incentives lead to R&D activity that would otherwise have not occurred without the incentives.

Mazzucato argues that the narrative of the bureaucratic government and the innovative private sector is a misleading one. Many of the technologies and discoveries underpinning the success of major conglomerates - the various technologies in the universe of Apple products (GPS, touch screens, Siri, LCD, to name a few), Google's search algorithm - were supported or developed by the State. Yet, in failing to pay their fair share of taxes (e.g. by incorporating offshore and booking the profits outside the US) and lobbying for lower taxes generally, these companies are undermining the State's ability to continue funding and investing in new technologies. Moreover, the "current US tax system [is obsolete]... designed for an industrial age where the nature of the production model and process required some degree of stickiness or embedded ness to the physical location of business. In today's terms, capital moves much faster, much farther, and is even virtual." Consequently, "while the efforts [to support innovation] are collective, the returns remain private".

So what should the state do? Mazzucato advocates the state being unapologetic about its role as a major player in the innovation eco-system. Apart from subsidies, the state can use its "procurement, commissioning and regulatory functions to shape markets and drive technological advance". DARPA, for instance, has targeted "resources in specific areas and directions; ...opening new windows of opportunities; brokering the interactions between public and private agents involved in technological development, including those between private and public venture capital; and facilitating commercialisation".

Second, to extract its fair share of the rewards from taking on the risk of investing in new technologies with uncertain outcomes, the state should be able to extract a royalty from the application of breakthrough technologies it has supported. Mazzucato advocates for returns from the royalties, earned across sectors and technologies, to be paid into a national innovation fund that can be used to fund future innovations.

This, loans and guarantees handed out by the state to business should come with strings attached! If and when a company makes profits above a certain threshold, after it has received a loan or grant from the state, it should be required to pay back a portion.

Mazzucato stresses that the innovation ecosystem should be one that results in a symbiotic relationship between the private sector and public sector - one that increases "the stake, commitment and return of all players investing in the innovation game" - rather than a parasitic one.

Mazzucato notes that her book had its beginnings as a report she wrote for DEMOS, a UK-based think tank, which had a style similar to the political pamphlets of the 1800s. Presumably, this book is supposed to have more refined and rigorous arguments, backed up by substantive research and case studies. Alas, I fear that it should have remained as a pamphlet; Mazzucato spends most of the 400 plus pages making the same points repeatedly. Apparently the point she is making is so revolutionary, the reader will only be convinced the fifth time she makes her argument. The examples she cites from the pharmaceuticals industry, Apple and Google, DARPA are fascinating but less so when she cites them for the nth time in the book.

Three stars for the thesis, two stars for the actual writing.

An interesting and quite academic look at how venture capitalists and private companies have convinced many that they are the catalyst of innovation, despite the fact the state is the one making most of the investment.

The good: detailed case study of Apple and iPhone. Almost every element of the iPhone has come from state funded innovation, from the Internet, to touchscreen technology. Apple put it all together but the real innovation came from state funded research, quite often military funded.

Strong arguments for the state to get more money back for its investments, and some suggestion on how. The state should, in the current system, get RoI from tax revenue but so many of these larger companies (tech and pharma in particular) avoid paying as much tax as possible, so the state (and tax payers) are getting little return.

There's an excellent point made about certain sectors and venture capitalists lobbying government for lower taxes, not realising that most of the innovative technologies and risky investment come from government spending, so this is actually shooting themselves in the foot.

Not so good: Quite dry and economic at times (unsurprisingly), as well as academic.

The chapter on renewable I skipped most of, as by 2024 much of the data has changed, as have many countries policies so I felt like it would be a bit of a waste for me to dwell on those aspects beyond the core concepts.