The non-entrpreneurial state: HBR on China

3 May

I’ve blogged before on the role of the state in economic development  – see my posts of 3rd and 9th of October last year. Specifically, I’ve referred to Mariano Mazzucato’s book on The Entrepreneurial State. It has some good stuff, but I’ve always had this nagging doubt that the case studies it uses are too US-centric – too US military spend-centric in particular. It certainly doesn’t seem to work so well in the UK – across the pond, they get (and the world gets) the iPhone; we get Concorde and British Leyland.

My unease is beefed up by an article in the March HBR (“Why China can’t innovate” – see http://hbr.org/2014/03/why-china-cant-innovate/ar/1). The authors point out that the role of the state in enterprises (“scour the company’s board for the real boss”) is a real brake on innovation. Their last sentence is worth quoting in full: “The problem, we think, is not the innovative or intellectual capacity of the Chinese people, which is boundless, but the political world, in which their schools, universities, and businesses need to operate, which is very much bounded”.

I hear that Mariano Mazzucato is adviser here to both government and opposition. I hope, as they look at her ideas, they consider why The Entrepreneurial State works better in some institutional contexts than in others.

 

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