Mariana Mazzucato on Industrial Policy

European Straits #26

Dear all,

A recent Vox article makes the case that we’re witnessing the end of Internet startups. In the past, the likes of Google, Facebook, and Amazon benefitted from relatively little resistance while conquering industries such as content, advertising and retail. But today the ease with which startup entrepreneurs once harnessed the power of technology and entered new markets seems to have come to an end.

The reason is that the giants of the day didn’t simply secure dominant positions on their original market. They also did what it took to sustain the continuous innovation and diversification that is so critical for large companies to stay dominant in the Entrepreneurial Age, thus making things harder for new entrants. And by the way, every past technological revolution has seen the rise of a first generation of companies that come to dominate the entire economy for a very long time.

Could industrial policy be a remedy to this apparent drying up of entrepreneurial opportunities? This …