Mission-Oriented Finance for Innovation by Mazzucato Mariana;Penna Caetano C. R.;

Author:Mazzucato, Mariana;Penna, Caetano C. R.;
Language: eng
Format: epub
Tags: undefined
Publisher: Policy Network
Published: 2012-08-15T00:00:00+00:00

The Coalition’s Record

Our mission is to establish the UK as a leading knowledge economy. But critical as it is to have a healthy, profitable private sector, it will not, on its own, generate large-scale innovation in areas where there are higher risks and wider benefits. That requires a commitment to public investment in science and innovation, albeit with the caveat I have set out above. We need mechanisms to ensure that public investment is properly evaluated for its prospective returns. A new Department for Business, Innovation and Skills report[2] analysed traditional and emerging barriers to innovation in those sectors with dedicated industrial strategies, to better help us understand where public investment can make a difference.

There is much common ground between Mazuccato’s position and the one staked out by my team in BIS. We have given considerable thought to the processes through which innovation occurs in practice – which prompted me to launch the Catapult centres early in our administration, funding a practical link between new science and commercial innovation and drawing on the German Fraunhofer model.

Common ground is also evident in our emphasis on planning for the long term, epitomised by the industrial strategy – a partnership with business whose commitments go much further than narrowly ‘addressing market failures’. Here it is vital that we look beyond party point-scoring and beyond the time frame of single parliaments, so that business has the confidence to innovate on the back of the technology push we are giving.

This administration has done much in recognition of the role of public funding. In last year’s spending round we committed to increasing science capital funding in real terms from £0.6bn in 2012–2013 to £1.1bn in 2015–2016. We are protecting the £4.6bn per annum funding for science and research programmes in cash terms during the current spending review period. We also set a long-term capital budget for science into the next parliament, which will grow in line with inflation to 2020–2021, and we increased the budget of Innovate UK (formerly the Technology Strategy Board) in the last spending round by £185m for 2015–2016, taking it to over £500m.

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