RNS received a grant from Soros-funded think tank
The Institute of New Economic Thinking (INET), a non-profit think tank funded and chaired by philanthropist George Soros, has awarded RNS a grant to conduct research on the role of government in innovation policy.
Research for the grant “Innovation and the state: How should government finance and implement innovation policy?” will be conducted by RNS Professors Rainer Kattel and Wolfgang Drechsler and by Research Fellow Dr. Erkki Karo. The grant will last for two years, the main findings are intended to be published in book form.
INET was created in 2009 “to broaden and accelerate the development of new economic thinking that can lead to solutions for the great challenges of the 21st century.” Its advisory board includes several Nobel Prize winners in Economics (George A. Akerlof, James Heckman, Amartya Sen, Joseph E. Stiglitz).
“Innovation and the state: How should government finance and implement innovation policy?” (2014-2015) - grant summary:
“In a typical modern economy, government not only finances significant part of R&D spending, runs some sort of public venture capital funds, but also procures massive amounts of goods and services and does so increasingly with innovation in mind; together these outlays can come to as high as 20% of GDP, annually. If we add to these increasing attempts to use innovation in public sector activities, governments have come to play a very important role in funding innovations. In academic literature on innovation and innovation policy, governments figure mostly as policy makers; accordingly, academic debate centers on questions of policy choices. In essence, academic literature assumes that governments possess capabilities and capacities to act upon whatever is deemed the right policy choice; capacity to implement, in other words, is assumed to be exogenous. Intriguingly, state as innovation policy actor and funder has not been researched from the perspective of organizational infrastructure and capacity to implement policies. This proposal rests on the assumption, first, that the question of what works in public financing of innovation is mostly a question about how public organizations function, what kind of capacity they possess and how this capacity evolves; and second, public sector’s capacity and effectiveness in funding innovations is a key determinant in innovation dynamics evolving in private enterprises.
The question about what kind of organizational set-up and framework governments use to fund and implement innovation policy has received in academic research sporadic attention. There is almost a knee-jerk answer to this question, especially among evolutionary economists: emulate Japan’s MITI, that is set up high level Weberian agency manned with highly qualified engineers and managers able to coordinate and implement various innovation policy efforts. However, governments have successfully used and are still using variety of other ways how to fund and implement their industrial and innovation policies: from direct ministerial departments engaging in industrial production to state-owned enterprises to complex prolonged public procurement processes to develop new innovative solutions, to public development banks and venture funds; from government led cartels and industry associations to technology transfer centers and specialized innovation agencies. Yet, there is no unifying research agenda and framework that tries to look at these implementation set-ups in a systematic way. This proposal is aimed at filling this research gap.“