The inclusive entrepreneurial state: collective wealth creation and distribution

I argue that a better understanding of the role that the state has and can play in the wealth- creation process is the starting point for policy solutions that can increase the rate of wealth creation, while directing the process to achieve growth that is more inclusive and sustainable. [...] This is the way to create innovation-led growth, which is also more inclusive growth; in so doing, this allows government to be less in the position of having to pick up the mess afterwards, and more in the position of directing growth to achieve the right outcomes in the first place (Palma, 2019). [...] At the same time, the recognition of the entrepreneurial role of the state as lead investor and risk-taker and the potential of the mission-oriented approach to shape public–private partnerships means that the public sector must not just set the background conditions, but also actively ensure the socialisation of rewards. [...] Socialising risks and rewards In ignoring the entrepreneurial role of the state as lead investor and risk-taker, and focusing only on the role of the public sector as setting the background (horizontal) conditions, orthodox economic theory has also ignored the way in which the socialisation of risks should be accompanied by the socialisation of rewards. [...] In fact, the inception of Bell Labs resulted from the Department of Justice’s implementation of antitrust laws (Brumfiel, 2008): in 1925, among the conditions imposed on AT&T in order for it to be able to retain its monopoly over the phone system, the US government required the company to reinvest a share of its profits in research.