From market fixing to market-creating: a new framework for innovation policy

Article English OPEN
Mazzucato, Mariana (2016)
  • Journal: volume 23, issue 2, pages 140-156 (issn: 1366-2716, eissn: 1469-8390)
  • Related identifiers: doi: 10.1080/13662716.2016.1146124
  • Subject: HJ | Innovation policy, mission-oriented policy, market failures, system failures, directionality, smart growth, inclusive growth

Many countries are pursuing innovation-led “smart” growth, which requires long-run strategic investments and public policies that aim to create and shape markets, rather than just “fixing” markets or systems. Market creation has characterized the kind of mission-oriented investments that led to putting a man on the moon and are currently galvanizing green innovation. Mission-oriented innovation has required public agencies to not only “de-risk” the private sector, but also to lead the direct creation of new technological opportunities and market landscapes. This paper considers four key issues that arise from a market-creating framework for policy: (1) decision-making on the direction of change; (2) the nature of (public and private) organizations that can welcome the underlying uncertainty and discovery process; (3) the evaluation of mission-oriented and market- creation policies; and (4) the ways in which both risks and rewards can be shared so that smart growth can also result in inclusive growth.
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