ABSTRACT
The purpose of this chapter is to investigate and discuss the role played by the state in enhancing technological progress, creating knowledge and fostering radical innovation. This catalyst function may take place in different ways. The authors focus on two channels: (a) R&D of traditional state-owned or state-invested enterprises and (b) public procurement for innovation (PPI) through research infrastructures (RIs), which according to the authors are a new form of knowledge-based public enterprise. Public enterprises and public organizations in general may in fact produce innovation even more intensively than their private peers (Sterlacchini, 2012; Lazzarini et al., 2016). This is because government can act as a long-term investor while private firms are more likely to have a short-term view and be financially constrained. Moreover, the public sector adopts a more positive attitude to risk taking, engaging in more risky research (see Mazzucato, 2016).
A second relevant role for government is to stimulate innovation via public procurement. This is considered an important demand-side innovation policy (see Aschhoff & Sofka, 2009; Edquist et al., 2015). Empirical studies have shown that PPI has a positive effect on firms’ R&D investment, with a greater demand-pull effect than that of other private contracts (Guerzoni & Raiteri, 2015). Particularly interesting is the case of procurement contracts for large-scale RIs like CERN (Autio, 2014; Florio et al., 2017), NASA (Chapman et al., 1989; Hertzfeld, 2002) and ESA (Schmied, 1982; Bach et al., 2002). The authors critically review existing contributions and summarize their main findings.
