A mission-oriented approach to building the entrepreneurial state

Countries around the world are seeking smart, sustainable growth. This paper argues that if they are to succeed they must put innovation at the heart of growth policy. However, the current debate is hampered by a limited economic framework - Market Failure Theory - traditionally used by policy makers worldwide. According to this theory, government should take a back seat and simply create the ‘conditions’ for innovation - establishing a playing field but allowing the playing itself to be done by the dynamic business community. The state may be permitted to invest in limited areas that are characterised by ‘market failures’, but should not get too involved in the direction of change itself. This is summed up by the overused phrase -“Governments can’t pick winners”.