SPRU professor cited by Finnish Prime Minister
Finnish Prime Minister, Juha Sipilä, cited the work of SPRU Professor Mariana Mazzucato on the importance of patient finance for fostering innovation-led growth, in a speech he gave to the Nordic Investment Bank on 2 November.
Professor Mazzucato also gave a keynote speech at the event on 'Innovation Policy as Market Shaping and Creating'. The 'Financing the Future' event was hosted by the Nordic Investment Bank to celebrate its 40th anniversary.
In his opening address, Prime Minister Sipilä emphasised the value of the NIB’s long-term lending:
“‘Patient capital’ is a good phrase, since many long-term investments need long-term money. The commercial sector is often ‘impatient’, and innovations that move society forward often require a push from the state. In an ideal situation, ‘the state’ and the ‘commercial sector’ work together. As Professor Mazzucato will show us, we are facing many unprecedented challenges in terms of smart, sustainable and inclusive growth.”
In her keynote speech, Professor Mazzucato argued that “growth doesn’t just have a rate, it has a direction” and public institutions are critical in steering that growth in ‘mission oriented’ ways, using innovation policy to address grand societal challenges.
The state, according to Professor Mazzucato, needs to move away from thinking it’s only relevant for fixing market failures - it needs to actively co-create and shape markets. This means also acknowledging that the state is key to the 'wealth creation' process, not only wealth distribution.
In her view, this means also rethinking the way in which both risks and rewards can be socialised, through a reinvigoration of the concept of public value. In particular, she argued that state investment banks were well-structured to create a “revolving fund” through which wealth can be plugged back in for future investments that will benefit future generations. She highlighted this issue of risks and rewards in a recent Harvard Business Review article.
The leading financial newspaper in Denmark, Børsen, featured an interview with Professor Mazzucato on the day of her speech, as a sneak preview to her thinking on innovation-led growth.