Working Paper no. 331: Bureaucrats or Markets in Innovation Policy? – A critique of the entrepreneurial state

PublikationWorking paper
Christian Sandström, Financing of Innovations, Innovation, Innovationspolitik, Karl Wennberg, Nils Karlson
Wokring Paper no 331 Bureaucracies or Markets in Innovation
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Sammanfattning

This paper takes stock of recent suggestions that the state apparatus is a central and underappreciated actor in the generation, diffusion and exploitation of innovations enhancing growth and social welfare. We contrast such a view of “the entrepreneurial state” with theories and empirical evidence of the microeconomic processes of innovation in the modern economy which focus on well-functioning markets, free entry and competition among firms, and independent entrepreneurship as central mechanisms in the creation and dissemination of innovations. In doing so, we identify several deficiencies in the notion of an entrepreneurial state by showing that (i) there is weak empirical support in the many hundreds empirical studies and related meta analyses evaluating the effectiveness of active industrial and innovative policies, that (ii) these policies do not take account of the presence of information and incentive problems which together explain why attempts to address purported market failures often result in policy failures, and that (iii) the exclusive focus on knowledge creation through R&D and different forms of firm subsidies ignores the equally important mechanisms of knowledge dissemination and creation through commercial exploitation in markets. We discuss how a more theoretically well-founded focus on the state as investing in knowledge generation and securing the conditions of free and competitive markets will lead to a more innovative economy.

Karlson, N., Sandström, C. & Wennberg, K. (2020). Bureaucrats or Markets in Innovation Policy? – A critique of the entrepreneurial state. Working Paper no. 331. Stockholm: Ratio.


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Statskonst på Utbildningsdepartementet
BokkapitelPublikation
Karlson, N.
Publiceringsår

2024

Publicerat i

Per Unckel – Den pragmatiske visionären som förändrade Sverige

Sammanfattning

Nils Karlson, professor i statsvetenskap och Ratios grundare, skriver om tidigare utbildnings- och forskningsminister Per Unckels (M) omstöpning av det svenska universitets- och högskolesystemet i början av 1990-talet, i antologin Per Unckel – Den pragmatiske visionären som förändrade Sverige (Förlagsaktiebolaget Svensk Tidskrift).

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Learning from Overrated Mission-Oriented Innovation Policies: Seven Takeaways
BokkapitelPublikation
Henrekson, M., Sandström, C., & Stenkula, M.
Publiceringsår

2024

Publicerat i

Springer Nature.

Sammanfattning

This chapter integrates findings from several different case studies on mission-oriented innovation policies (MOIPs) and makes use of the existing literature to briefly describe three other missions: The War on Cancer, homeownership in the United States, and the Swedish Million Program. Together with the analyses in the other chapters of this volume, seven takeaways regarding mission-oriented innovation policies are developed and described: (1) wicked problems cannot be solved through missions, (2) politicians and government agencies are not exempt from self-interest, (3) MOIPs are subject to rent seeking and mission capture, (4) policymakers lack information to design MOIPs efficiently, (5) MOIPs distort competition, (6) government support programs distort incentives and result in moral hazard, and (7) MOIPs ignore opportunity costs. These seven takeaways are illustrated using the cases described in this chapter and elsewhere in this volume.

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