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The 2013 publication of Professor Mazzucato’s The Entrepreneurial State: debunking public vs. private sector myths brought new attention to the historical success and future potential of mission-oriented innovation policy, both as a means to tackle difficult challenges facing societies and as the basis for a new approach to growth policy.

It was mission-oriented strategic investments – made right across the entire innovation chain by a decentralised network of public agencies, simulating both supply and demand – that lay behind major technological breakthroughs like the internet, new sectors like biotech, nanotech, and emerging green tech.

In these examples, public agencies went well beyond the strictures of the traditional ‘market failure’ approach to policy-making.  These agencies not only fixed markets. They actively created and shaped them too, giving new direction to innovation and growth. The same has been true in areas as diverse as broadcasting where agencies like the BBC have used mission-oriented policies, such as the ‘learning programme’ in the 80s, which fuelled investments in the private sector.

Indeed, business investment follows where investors see the opportunity to profit from new technological and market opportunities. The 'animal spirits' of business investment are not simply assumed but actively created by such strategic public investments. Applied systematically, such an approach can bring new focus to solving complex societal problems, stimulating innovation and private investment, and giving direction to growth across economies.

The RSA is collaborating with the UCL Institute for Innovation and Public Purpose to develop a pilot project at the city level. The project will build on the work of Professor Mazzucato and the Institute for Innovation and Public Purpose in this area and draw lessons from mission-oriented policies of the past, which solved big problems, shaped and created markets and stimulated innovation across many sectors.

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