risks of competing in diversified and global energy markets. When difficulty has
arisen in the past, such as when wind or solar markets faltered following retraction
of US support for renewables in the late 1980s, the tendency has been to focus on
how government investment is flawed, while the role of business in contributing
to that failure is ignored or written off as part of the ‘natural’ behaviour of
competitive markets. Worse, some interpret difficulties as proof that a technology
‘can’t compete’ or will never compete with incumbent technology and should
be shelved rather than exploited. This would go against the historical record,
which suggests that all energy technologies have needed and benefited from
lengthy development periods and long-term government support. What matters
more is that the effort continues as if the future of the planet depended on it –
because it does.
Conclusion
In seeking to promote innovation-led green transformations, it is fundamental to
understand the important roles that both the public and private sector can play and
the political dynamics involved. This requires not only understanding the
importance of the innovation ‘ecosystem’ but especially what it is that each actor
brings. The assumption that the public sector can at best incentivize private sectorled innovation (through subsidies, tax reductions, carbon pricing, technical
standards, and so on) fails to account for the many examples in which the leading
entrepreneurial force came from the State rather than from the private sector.
Ignoring this role has had an impact on the types of public–private partnerships
that are created and has wasted money on ineffective incentives that could have
been spent more effectively.
To understand the fundamental role of the State in taking on the risks present
in modern capitalism, it is important to recognize the ‘collective’ character of
innovation. Different types of firms (large and small), different types of finance and
different types of State policies, institutions and departments interact sometimes in
unpredictable ways, but surely in ways we can help shape to meet the desired ends.
For years we have known that innovation is not just a result of R&D spending,
but about the set of institutions that allow new knowledge to diffuse throughout
the economy.
What distinguishes the State is, of course, not only its mission but also the different
tools and means that it has to deploy the mission. Polanyi argued that the State
created – pushing, not only nudging – the most ‘capitalist’ of all markets, the ‘national
market’, while local and international ones have predated capitalism. The capitalist
economy will always be embedded in social, cultural and political institutions and
therefore subordinate to the State and subject to its changes (Evans, 1995). Such
embeddedness in fact renders meaningless the usual static state vs. market juxta -
position, because, as Polanyi (2001 [1944], p144) has demonstrated, the State shapes
and creates: ‘[t]he road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism’.
The green entrepreneurial state 151
arisen in the past, such as when wind or solar markets faltered following retraction
of US support for renewables in the late 1980s, the tendency has been to focus on
how government investment is flawed, while the role of business in contributing
to that failure is ignored or written off as part of the ‘natural’ behaviour of
competitive markets. Worse, some interpret difficulties as proof that a technology
‘can’t compete’ or will never compete with incumbent technology and should
be shelved rather than exploited. This would go against the historical record,
which suggests that all energy technologies have needed and benefited from
lengthy development periods and long-term government support. What matters
more is that the effort continues as if the future of the planet depended on it –
because it does.
Conclusion
In seeking to promote innovation-led green transformations, it is fundamental to
understand the important roles that both the public and private sector can play and
the political dynamics involved. This requires not only understanding the
importance of the innovation ‘ecosystem’ but especially what it is that each actor
brings. The assumption that the public sector can at best incentivize private sectorled innovation (through subsidies, tax reductions, carbon pricing, technical
standards, and so on) fails to account for the many examples in which the leading
entrepreneurial force came from the State rather than from the private sector.
Ignoring this role has had an impact on the types of public–private partnerships
that are created and has wasted money on ineffective incentives that could have
been spent more effectively.
To understand the fundamental role of the State in taking on the risks present
in modern capitalism, it is important to recognize the ‘collective’ character of
innovation. Different types of firms (large and small), different types of finance and
different types of State policies, institutions and departments interact sometimes in
unpredictable ways, but surely in ways we can help shape to meet the desired ends.
For years we have known that innovation is not just a result of R&D spending,
but about the set of institutions that allow new knowledge to diffuse throughout
the economy.
What distinguishes the State is, of course, not only its mission but also the different
tools and means that it has to deploy the mission. Polanyi argued that the State
created – pushing, not only nudging – the most ‘capitalist’ of all markets, the ‘national
market’, while local and international ones have predated capitalism. The capitalist
economy will always be embedded in social, cultural and political institutions and
therefore subordinate to the State and subject to its changes (Evans, 1995). Such
embeddedness in fact renders meaningless the usual static state vs. market juxta -
position, because, as Polanyi (2001 [1944], p144) has demonstrated, the State shapes
and creates: ‘[t]he road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism’.
The green entrepreneurial state 151