9
THE GREEN ENTREPRENEURIAL
STATE
Mariana Mazzucato
Introduction
Never more than today is it necessary to question the way in which we discuss
the role of the State in the economy. This is because in most parts of the world
we are witnessing a massive withdrawal of the State, one that has been justified in
terms of debt reduction and – perhaps more systematically – in terms of rendering
the economy more ‘dynamic’, ‘competitive’ and ‘innovative’. Business is accepted
as the innovative force, while the State is cast as inertial – necessary for the ‘basics’,
but too large and heavy to be the dynamic engine.
This chapter is committed to dismantling this false image and in particular
looks at ‘green’ technology and innovation. Unsurprisingly, we find that across
the globe the countries that are leading in green transformations (solar and wind
energy are the paradigmatic examples explored) are those where the State is
playing an active role. And the public sector organizations involved, such as develop -
ment banks
1 in Germany, Brazil and China, are not just providing countercyclical
lending (as Keynes would have asked for), but are even ‘directing’ that lending
towards the most innovative, risky and uncertain parts of the ‘green’ economy.
Questions about whether such ‘directionality’ should raise the usual worries about
the State’s inability to ‘pick winners’ are confronted head on, demystifying old
assumptions.
Green entrepreneurship – what every policy-maker today seems to want to
encourage – is not (just) about start-ups, venture capital and ‘garage tinkerers’. It
is about the willingness and ability of economic agents to take on risk and uncer -
tainty: what is genuinely unknown. Most of the radical, revolutionary innovations
that have fuelled the dynamics of capitalism – from railroads to the Internet, to
modern-day nanotechnology and pharmaceuticals – trace the most courageous, early
and capital-intensive ‘entrepreneurial’ investments back to the State. Such radical
DOI: 10.4324/9781315747378-9
THE GREEN ENTREPRENEURIAL
STATE
Mariana Mazzucato
Introduction
Never more than today is it necessary to question the way in which we discuss
the role of the State in the economy. This is because in most parts of the world
we are witnessing a massive withdrawal of the State, one that has been justified in
terms of debt reduction and – perhaps more systematically – in terms of rendering
the economy more ‘dynamic’, ‘competitive’ and ‘innovative’. Business is accepted
as the innovative force, while the State is cast as inertial – necessary for the ‘basics’,
but too large and heavy to be the dynamic engine.
This chapter is committed to dismantling this false image and in particular
looks at ‘green’ technology and innovation. Unsurprisingly, we find that across
the globe the countries that are leading in green transformations (solar and wind
energy are the paradigmatic examples explored) are those where the State is
playing an active role. And the public sector organizations involved, such as develop -
ment banks
1 in Germany, Brazil and China, are not just providing countercyclical
lending (as Keynes would have asked for), but are even ‘directing’ that lending
towards the most innovative, risky and uncertain parts of the ‘green’ economy.
Questions about whether such ‘directionality’ should raise the usual worries about
the State’s inability to ‘pick winners’ are confronted head on, demystifying old
assumptions.
Green entrepreneurship – what every policy-maker today seems to want to
encourage – is not (just) about start-ups, venture capital and ‘garage tinkerers’. It
is about the willingness and ability of economic agents to take on risk and uncer -
tainty: what is genuinely unknown. Most of the radical, revolutionary innovations
that have fuelled the dynamics of capitalism – from railroads to the Internet, to
modern-day nanotechnology and pharmaceuticals – trace the most courageous, early
and capital-intensive ‘entrepreneurial’ investments back to the State. Such radical
DOI: 10.4324/9781315747378-9