Reflections on the entrepreneurial state, innovation and social justice

Abstract

The state and its role in technological innovation and social justice have become, once again, fashionable topics of political and economic debate. A number of innovation theorists argue that never more than today, it is necessary to rethink the state's entrepreneurial role in society and welfare. Their argument provides justification for the existence of the state, going beyond classical political theory and especially contractarian accounts of legitimacy and obligation. It emphasises the ability and willingness of the state to take risks and reduce uncertainty of economic agents for the sake of innovation that can make everyone better off. This paper insists that although the risk-taking argument of innovation theorists deserves further attention and analysis, it should not be abstracted from a holistic politico-theoretical approach to the state. Such an approach is necessary for a critical understanding of the complex set of predominantly political institutions which compose the state and which have been historically developed to guarantee social evolution. Any risk-taking for innovative enterprise and mission-oriented investment ought to be justified and legitimised on the grounds of principled democratic procedures. This implies that innovation itself is a value-laden political process, requiring participation in the decision-making and standards of fairness.

Innovation and social welfare: A new research agenda

“…66In a recent critical appraisal of the mission‐oriented approach, Papaioannou (2020) points out that this view lacks a proper foundation and theory of the State. The approach does not clarify the theoretical foundation that provides justification for having an entrepreneurial State, and whether and how different forms of State (e.g., welfare State, liberal) would be able to implement and sustain the mission‐oriented role.…”