MARIANA MAZZUCATO AND COLLEAGUES have laid out a clear vision for a new role for government in the economy, and I agree with their principal argument. I see support for it in the literature on innovation systems, in the empirical data on successful past innovations, and in the work of my graduate students wrestling with how to perform policy analysis. I would like to expand on the role innovation, in particular, should play in a mission-oriented response to deep social problems. Three essential themes stand out in the developing body of policy advice for stimulating more innovation, faster.
First, expectations are central to stimulating innovation. A mission orientation can help to reduce risk and stimulate investment by aligning expectations about future conditions. This “guidance of the search” is one of the basic functions in the innovation systems literature. Moore’s Law, the doubling of computer processing power every two years, has provided exactly this sort of guidance for decades. It makes the future more predictable and has thus enabled significant and stable investment and innovation in computational technologies—not only in computer hardware, but also in software, as well as devices that rely on both. Such guidance can also be provided by the state, as Japan’s Ministry of International Trade and Industry (MITI) did so successfully for decades and Germany’s Energiewende is currently doing for climate change.