To coincide with the publication this week of her latest book, The Entrepreneurial State, which debunks myths about the role of the state in innovation, economist Professor Mariana Mazzucato gave a TEDGlobal Talk in Edinburgh on Wednesday (12 June).

Both her book and the talk tackle the same critical issues: how state investment in the past has made innovation possible for the private sector, and how governments need to continue doing this to revitalise economies.

Citing the success of Google, Apple and big pharma companies, Professor Mazzucato of SPRU - Science and Technology Policy Research argues that governments have been the big cats, generating economic activity through investment. As a consequence, they have opened up new technologies and markets that private investors can later move into.

But, while private companies have been able to capitalise on government-funded research, governments have received little reward for taking the initial risks.  Professor Mazzucato suggests there should be a return-generating mechanism more direct than taxes, such as equity stakes of the sort that helped Finland’s government to use returns from the success of Nokia to support new start-ups.

Professor Mazzucato, a regular guest on BBC Two’s 'Newsnight' and global news channels such as Bloomberg, also points out that governments need to invest in green technologies as a long-term solution to the current global economic crisis.