Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration

Giovanni Dosi, Francesco Lamperti (), Mariana Mazzucato, Mauro Napoletano () and Andrea Roventini
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Francesco Lamperti: RFF-CMCC European Institute on Economics and the Environment (Milan)
Mariana Mazzucato: UCL - University College of London [London]
Mauro Napoletano: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa]

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Abstract: We study the impact of alternative innovation policies on the short- and long-run performance of the economy, as well as on public finances, extending the Schumpeter meeting Keynes agent-based model (Dosi et al., 2010). In particular, we consider market-based innovation policies such as R&D subsidies to firms, tax discount on investment, and direct policies akin to the "Entrepreneurial State" (Mazzucato, 2013), involving the creation of public research-oriented firms diffusing technologies along specific trajectories, and funding a Public Research Lab conducting basic research to achieve radical innovations that enlarge the technological opportunities of the economy. Simulation results show that all policies improve productivity and GDP growth, but the best outcomes are achieved by active discretionary State policies, which are also able to crowd-in private investment and have positive hysteresis effects on growth dynamics. For the same size of public resources allocated to market-based interventions, "Mission" innovation policies deliver significantly better aggregate performance if the government is patient enough and willing to bear the intrinsic risks related to innovative activities.

Keywords: Innovation policy; Mission-oriented R&D; Entrepreneurial state; Agent-based modelling (search for similar items in EconPapers)
Date: 2023-06
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04530983v1
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Published in Journal of Economic Dynamics and Control, 2023, 151 (issue C), pp.104650. ⟨10.1016/j.jedc.2023.104650⟩

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Related works:
Journal Article: Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration (2023)
Working Paper: Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration (2023)
Working Paper: Mission-Oriented Policies and the "Entrepreneurial State" at Work: An Agent-Based Exploration (2021)
Working Paper: Mission-Oriented Policies and the “Entrepreneurial State” at Work: An Agent-Based Exploration (2021)
Working Paper: Mission-Oriented Policies and the “Entrepreneurial State” at Work: An Agent-Based Exploration (2021)
Working Paper: Mission-Oriented Policies and the "Entrepreneurial State" at Work: An Agent-Based Exploration (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-04530983

DOI: 10.1016/j.jedc.2023.104650

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