Bureaucrats or Markets in Innovation Policy?

Abstract

How can innovation best be promoted? Based on a major interdisciplinary research program
with a special focus on Sweden, paired with international research, this book shows that targeted
interventions and firm subsidies do not have the intended effects but instead creates policy failures,
government waste and rent-seeking.

Instead, innovation policy should focus on supplying the right competencies and on improving the
institutions of the market economy and the general
conditions for enterprise.

Markets rather than bureaucrats are decisive for
innovation, industrial development and growth.

Directionality in Innovation Policy and The Ongoing Failure of Green Deals

Book chapterPublication

Sandström, C., & Alm, C.

Publication year

2022

Published in

Questioning the Entrepreneurial State, 251.

Abstract

Environmental policy is no longer only about imposing regulations onindustry. It is increasingly regarded as industrial policy. Both the European Union and national governments are taking more active roles in initiating green deals and various technologies aiming at sustainable development. In this chapter, we describe and discuss some recent experiences of green innovation policies. Historical examples concerning efforts in both biogas and ethanol are combined with a more contemporary description of fossil-free steel, i.e., steel made using hydrogen instead of coal. We argue that the presence of large public funds from different funding bodies such as the European Union, various government agencies, and municipalities has distorted incentives, making it rational for firms to pursue technologies without long-term potential. The result has been an absence of sustainable development, mounting debt, and financial problems for the actors involved. We explain these results and draw policy conclusions concerning the risks related to green deals. Relatedly, we argue that the European Union’s current efforts in hydrogen gas face similar challenges.

The chapter can be accessed here.

Absolute income mobility and the effect of parent generation inequality: An extended decomposition approach

Article (with peer review)Publication

Liss, E., Korpi, M., & Wennberg, K.

Publication year

2023

Published in

European Economic Review, 152, 104359.

Abstract

We use full-population data to study trends in intergenerational absolute income mobility, measured as the ratio of children earning more than their parents, for 11 Swedish cohorts born 1972-1983. Absolute mobility during this period increases from 72% to 84% for men and from 76% to 86% for women-higher figures than in most other countries studied. To explain these results, we outline a novel decomposition strategy that accounts for cohort variation in parent-generation income inequality. All else equal, if income inequality is higher in the parent generation, more economic growth is required to achieve any given level of absolute mobility. We discuss implications for comparative research in intergenerational income mobility.

The Entrepreneurial Story and its Implications for Research

Article (with peer review)Publication

Brattström, A., & Wennberg, K.

Publication year

2022

Published in

Entrepreneurship theory and practice, 46(6), 1443-1468.

Abstract

Research is not merely report-writing; it also involves elements of storytelling. In this essay, we reflect on two narrative archetypes in entrepreneurship research: the stories of entrepreneurship as a road to salvation and means to emancipation. We outline a framework to analyze research from a storytelling perspective, apply this framework to identify implicit assumptions and methodological biases in mainstream research, and discuss how a storytelling framework can be used to generate alternative stories. We argue for a more empirically grounded research agenda that continues the development of entrepreneurship research into a rich and diverse field.

Bureaucrats or Markets in Innovation

Abstract

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