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Call for mission-oriented investment

SPRU Professor in the Economics of Innovation calls for mission-oriented investment in innovation to create long-term growth

Mariana Mazzucato, RM Phillips Professor in the Economics of Innovation, has published a report today, Monday 29th March, that calls for innovation to be put at the heart of economic policy in a “mission-oriented” approach to investment. 

In her independent report, A mission-oriented approach to building the Entrepreneurial State, commissioned by Innovate UK, Mazzucato argues that policymakers need to look beyond the current economic framework which she views as focused on fixing market failures.

Specifically, Mazzucato urges governments to do more than just ‘levelling the playing field’ and letting the market decide the direction of change. Instead she calls for a new framework that recognizes the Government’s role in creating and shaping new markets, with the potential to transform economic growth, making it more innovation-led, as well as more inclusive and sustainable.

Professor Mazzucato said: "By limiting our understanding of the role of the public sector to one that simply ‘administers’ and ‘regulates’, or ‘fixes market failures’, we are unable to think creatively about how vision, risk-taking and investment by the public sector can lead to transformational economic change.” 

Mazzucato argues that public policy could set the direction and route of change. She says “we cannot consider the deficit without also considering what it is being spent on. Wrangling over the size of the deficit has deterred focus from more fundamental questions about the composition of public spending and the type of dynamic institutions that must be built to guide it.” Indeed, a key aspect of the report is the need for more emphasis on building the kind of public institutions that can both guide change but also adapt to it dynamically. She believes the current trend towards outsourcing such capacity, or relying on ‘arms length’ think tanks, is dangerous.

Commenting on the report, Director of Strategy at Innovate UK Mark Glover said: “This independent report raises interesting points that policy makers and those of us involved in developing the innovation ecosystem should consider. The UK has a rich innovation system, but it is complex for the businesses trying to navigate it. We agree with Mariana that Government has a role in not just helping to simplify that system, but also to align it around important challenges”. 

The report was commissioned by Innovate UK, the Government's innovation agency, as a  ‘think piece’ discussion- document.

Read the executive summary on gov.uk

Read the full report

Read more about Professor Mazzucato’s research projects related to this report