Smart specialisation and the
“entrepreneurial state” thesis
Kevin Morgan
Cardiff University
CIRCLE Seminar Series
University of Lund
4 June 2014
Overview
• Debating the state in innovation
– the neo-liberal critique
– critiques of the critique
• Place-based innovation
– territorial/relational conceptions of place
– triple challenge of smart specialisation
• Regional policy repertoires
– state-centric v network-based repertoires
Debating the state: the neo-liberal
critique
• Politically based on a zero-sum conception
(less state = more market)
• Theoretically based on Hayekian insights:
– Industrial policy will induce rent-seeking, so states
should not engage in “picking winners”
– Informational: the state cannot be a surrogate for
the decentralised information processing capacity
of markets
Debating the state: the
“entrepreneurial state” thesis
• A recent critique of the neo-liberal critique is The
Entrepreneurial State, which aims to:
– change the way we talk about the state
– claims the state is innovative and risk-taking
– shows how the smart technologies of the iPhone
(Internet, GPS, touchscreen display, SIRI etc) were all
funded by the state
• But it uses DARPA to illustrate the thesis (ie. a
unique mission-driven US defence agency)
• Big problems with mission-driven innovation
policy (see Morgan & Sayer)
Debating the state: the experimentalist
state
• A more persuasive critique of the neo-liberal
critique is the social learning approach (eg
Rodrik; Sabel; Gertler/Wolfe):
– the state lacks information, but so does the private
sector!
– firms and states need to collaborate to learn together
in a trial-and-error process of experimentation (the
process being more important than the policy)
– the aim is to elicit information, find joint solutions,
and evaluate outcomes as they emerge (drawing on
the “embedded autonomy” thesis of Peter Evans)
Place-based innovation
• The “relational turn” in geography has enriched
our understanding of the constitution of “place”
• But it does not help to juxtapose relational and
territorial conceptions - places are bounded and
porous, shaped by local and trans-local forces
• Spatial fetishism can be a problem in territorial
conceptions of place - but regional governments
act in and for their regions (ie. spaces are not
agents but some agents act for their spaces)
Smart specialisation
• Smart specialisation concept has been heavily
influenced by certain theories –
– the experimental state thesis (eg Foray draws on
Rodrik et al for the self-discovery process)
– evolutionary economic geography (eg path
dependence and related variety etc)
– relational turn (eg the role of trans-local factors
and networks)
The triple challenge
• The challenge of smart specialisation is threefold:
• Conceptual challenge – do the core theoretical
arguments stack up?
• Operational challenge – is the six-step approach
feasible for poor state-centric regions?
• Political challenge - can the multi-level polity be
synchronised for an integrated place-based
approach to innovation and development?
Regional policy repertoires
• Too much variability to speak of “the region”
or “the regional state”
• In politically constituted regions (where there
is a mandated agency to act on behalf of the
region) there are contrasting repertoires even
in apparently similar regions:
– state centric repertoire (Wales)
– network-based repertoire (Basque Country)
State-centric repertoires
• Wales has fashioned a state-centric repertoire for
two very different reasons:
– by default - because it has a weak indigenous business
class and a dependent civil society, so economy and
society looks to the state for a lead in a country which
is a de facto one-party state
– by design - because it abolished its regional
development agency (WDA) and absorbed its
functions within the state, a move that reduced
diversity, pluralism and the capacity for robust
feedback (“speaking truth to power”)
State-centric repertoires
• State-centricity in a one-party state, combined
with weak feedback mechanisms, led to very
expensive disasters (eg the Technium Centres
which cost more than £100 million)
• The big question is whether this state-centric
system can rise to the S3 challenge, where
non-state actors – business and universities have been allotted a major role in the process
of entrepreneurial discovery?
Network-based repertoires
• The Basque Country has a strong state system
but the state is pervasive but not invasive (ie
it respects subsidiarity)
• The BC has a stronger indigenous business
community and a much stronger regional
innovation system
• Intermediate institutions (technology centres
and cluster organisations etc) co-design policy
with the regional state and enhance diversity
Network-based repertoires
• But the BC regional innovation system has its
own challenges in the S3 era
• Designed in an age of plenty, the RIS is now
threatened by the age of austerity
• Already signs of institutional cannibalism as
RIS bodies vie for funds and functions
• Other problems include a weak university
system and an under-developed M&E system
Conclusions
• Conceptions of the state need to move beyond
the caricatures of right and left
• The “entrepreneurial state” is a smart state (not
the shrunken state of neo-liberalism) but it is not
the public sector norm
• Place-based innovation needs to address new
models of innovation - like social innovation and
sustainability transitions etc
• The politics of regional innovation policy is poorly
understood...the RIS literature remains very
technocratic
References
• Foray, D. et al (2012) Guide to Research and Innovation
Strategies for Smart Specialisation, European Commission
• Gertler, M. and Wolfe, D. (2002) (eds) Innovation and Social
Learning, Palgrave
• Mazzucato, M. (2013) The Entrepreneurial State, Anthem Press
• Morgan, K. (2013) The Regional State in the Era of Smart
Specialisation, Economiaz, 83(2)
• Morgan, K. and Sayer, A. (1988) Microcircuits of Capital, Polity
Press
• Rodrik, D. (2004) Industrial Policy for the Twenty-First Century,
UNIDO
• Sabel, C. and S. Reddy (2007) Learning to Learn, Challenge, 50 (5)