11. Mazzucato-1

Question 1

Explain why ‘entrepreneurship isn’t always good’

Answer 1

1) Danger of unproductive entrepreneurship
2) Private profit without public contribution

Question 2

Explain rent-seeking behavior and give an example

Answer 2

All entrepreneurship deploys monopoly rents (Schumpeter), but some hinder future innovation
-> Strategic patenting and patent-trolling

Question 3

What is unproductive entrepreneurship?

Answer 3

Exploiting public goods where private companies benefit from

Question 4

How does uber exemplify unproductive entrepreneurship?

Answer 4

Uber benefits from public infrastructure (roads) while minimizing its tax contributions

Question 5

What does Mazzucato critique about Schumpeter’s story of innovation?

Answer 5

• Neglects the role of the State in financing innovation
• Wrongfully equates entrepreneurs with single individuals
• Neglects how inventors need adequate public support

Question 6

What is the second point of public approach to innovation (Mazzucato)? And give an example

Answer 6

Innovation is often a slow and collective process
-> The rise of the personal computer

Question 7

Why is public investment important for innovation?

Answer 7

The public sector invests when profits are uncertain, bearing responsibility and control over future uncertainties

Question 8

What is an example of public sector innovation?

Answer 8

US military innovation, like GPS

Question 9

What are the consequences of public approach to innovation?

Answer 9

1) State should get more benefits from innovation
2) Protection of positive externalities
3) State should take the lead in innovation

Question 10

How does apple benefit from public investments?

Answer 10

Apple profits from public R&D and military-funded innovation