The Entrepreneurial State: Debunking Public vs. Private Sector Myths — Mariana Mazzucato, 2013
This book challenges the belief that innovation is driven primarily by private firms. It argues that the state has historically taken the biggest risks in developing new technologies, shaping markets and enabling breakthroughs—from the internet to smartphones—while private companies often build on publicly funded foundations.
1. The state is not just a fixer—it is a risk-taking economic actor
2. Standard theories of innovation misunderstand how growth happens
3. The state leads in the most radical and uncertain innovations
4. The U.S. is a prime example of an “entrepreneurial state”
5. Major private-sector successes rely on state-funded technology
6. The state is essential for driving the green technology revolution
7. Public investment has been critical in renewable energy success
8. Innovation requires a coordinated ecosystem, not isolated actors
9. Risk is socialized but rewards are privatized ⭐
10. The state should share in the rewards of innovation
11. Rethinking the role of the state is essential for future growth
⭐ Star Facts (The Entrepreneurial State)
- The internet itself was funded by the U.S. government, primarily through agencies like DARPA, before being commercialized by private firms.
- Every major technology inside the iPhone—GPS, the internet, touchscreen displays, and voice recognition (Siri)—originated from publicly funded research, not private invention.
- The National Institutes of Health (NIH) has spent tens of billions annually (around $30+ billion per year) funding biomedical research that private pharmaceutical companies later build on.
- Venture capital is not as risk-taking as commonly believed—it often enters after the most uncertain stages are completed with public funding.
- Programs like SBIR (Small Business Innovation Research) provided early funding to companies like Apple, helping them survive early stages before becoming major firms.
- The U.S. government funded the entire infrastructure of the IT revolution, from early computing to the internet, long before private markets saw profit potential.