Mazzucato, M;
Semieniuk, G;
(2017)
Public financing of innovation: new questions.
Oxford Review of Economic Policy
, 33
(1)
pp. 24-48.
10.1093/oxrep/grw036.
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Abstract
Economic theory justifies policy when there are concrete market failures. The article shows how in the case of innovation, successful policies that have led to radical innovations have been more about market shaping and creating through direct and pervasive public financing, rather than market fixing. The paper reviews and discusses evidence for this in three key areas: (i) the presence of finance from public sources across the entire innovation chain; (ii) the concept of ‘mission-oriented’ policies that have created new technological and industrial landscapes; and (iii) the entrepreneurial and lead investor role of public actors, willing and able to take on extreme risks, independent of the business cycle. We further illustrate these three characteristics for the case of clean technology, and discuss how a market-creating and -shaping perspective may be useful for understanding the financing of transformative innovation needed for confronting contemporary societal challenges.
| Type: | Article |
|---|---|
| Title: | Public financing of innovation: new questions |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1093/oxrep/grw036 |
| Publisher version: | http://doi.org/10.1093/oxrep/grw036 |
| Language: | English |
| Additional information: | © The Authors 2017. Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. |
| Keywords: | Financing innovation, innovation policy, market failure theory, renewable energy finance, direction of innovation |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose |
| URI: | https://discovery.ucl.ac.uk/id/eprint/1553082 |
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