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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

Centre Director, Creative Industries Policy and Evidence Centre (PEC); and Executive Director, Creative Economy and Data Analytics, Nesta

Hasan oversees Nesta's creative economy policy, research and practical work.

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