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State of Uncertainty

This paper proposes a new model for innovation policy, which supports the generation and exploitation of new ideas.

This paper proposes a new model for innovation policy, which supports the generation and exploitation of new ideas.

Key findings:

  • Innovation policy would work better if it were modelled on experimental science, and focused on minimising the uncertainty entrepreneurs face in discovering opportunities and constraints.
  • Innovation should be conceived as a process of discovery – the creation and exploitation of new ideas by entrepreneurs is by nature radically uncertain.
  • The paper proposes a new model for innovation policy that clearly distinguishes it from industrial policy.

Innovation policy has become a major preoccupation of modern government.

However, this paper argues, it requires a fundamental shift in the role of the state. Innovation policy has desirable effects distinct from those sought by industrial policy: most notably the discovery of knowledge. The authors therefore suggest institutional changes that shift innovation policy towards a more experimental conception of the role of the state in facilitating entrepreneurship, and thereby innovation.

Authors:
Hasan Bakhshi, Alan Freeman and Jason Potts

Authors

Hasan Bakhshi

Hasan Bakhshi

Hasan Bakhshi

Executive Director, Creative Economy and Data Analytics

Hasan leads Nesta's creative and digital economy policy and research.

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