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  • Writer's pictureCambridge Society For Economic Pluralism

Rainer Kattel: How to Make an Entrepreneurial State: Why Innovation Needs Bureaucracy




Date and time

Wednesday (31st January, 2024) at 6.30pm


Location

Lightfoot Room, Old Divinity School, St John's College

Dear all, 

  

We are excited to announce our first event of the term with Rainer Kattel, who will be leading a talk on 'How to Make an Entrepreneurial State: Why Innovation Needs Bureaucracy'.


Rainer Kattel is a renowned thinker who collaborates closely with Mariana Mazzucato, and this talk promises to redefine your understanding of the entrepreneurial ecosystem and its interplay with public policy. It is a must for aspiring entrepreneurs, policymakers, and anyone passionate about the future of innovation. 


The event is taking place next Wednesday (31st January) at 6.30pm in the Lightfoot Room, Old Divinity School, St John's College. 


We are looking forward to seeing many of you there!


CSEP Committee 2023-24



Event Review


Rainer Kattel - How to Make an Entrepreneurial State & Why Innovation Needs Bureaucracy


- Frances Archibald



Why are innovation agencies not innovating?


o   A long term issue of agencies sticking to their mandated job, but having no flexibility or creative thought to do other things - hard to move into the agile space to take on technological changes

o   The constant pressure of society means they need both 'fox' (good at many things) and 'hedgehog' (good at one thing) capabilities in order to adapt

o   His book looks at this from a historical perspective

o   Public bureaucrats are focused on stabilisation and keeping things running - which may inadvertedly lead to great innovation in these efforts to keep things stable

o   Germany and UK have very different structures



Development stages


Routine tasks -> Missions -> Experimentation(spirit) Camel -> Lion -> Child

How are organisations built and how do they deal with these stages? What sort of civil servants do they need to hire in order to achieve these goals?



Examples


Weber I


Example includes: Singaporean Housing management

o   The high quality and large volume of public housing managed is an excellent example of successful bureaucracy

o   a 'camel' kind of bureaucracy, keeping the structure in place - this also requires lots of expertise, so is needed


Weber II


Example includes: American Defence/Military

o   the lion kind of organisation

o   doing something new, a very entrepreneurial sense

o   doesn't require expertise, but adaptiveness


Weber III (i) Activist


Example includes: Swedish Innovation Agency - one case being ensuring the streets are healthy, sustainable and vibrant

o   An activist type of organisation

o   Often features bottom-up innovation

o   Use artsy and creative skills

o   Often imitated by agencies in food, as in western countries these have high carbon prints


Weber III (ii) Hacker


Example includes: govt UK website - lots of money was spent on agencies that didn't work, but changed the website to bring public sector services together to imitate private sector experience

o   make use what people already successfully interact with

o   an overview approach - what works, what doesn't

o   characterised by quick learning

 


A Neo-Weberian State/Agency?


o   We should focus on societal challenges and translate them into policy portfolios.

o   Encouragement of agile learning within portfolios

o   Incorporation of ecosystem awareness

o   Mixing of Webers I, II, III to make government agencies as efficient as possible



Question Section


Q: In your book, you mention examples from different parts of the world and how innovation is different. Does government need to be different in order to meet these challenges?


A:

  • Countries have different understandings of what is governments, so this changes their ability to respond

  • e.g. UK is able to reshuffle quickly in cabinet, whereas Germany is very rigid and constitutional - a moral entity of law unlike in UK

  • As a result the role of civil servants is very different, and hence their Weber styl


Q: How to pursue the funding?


A:

  • In the US, Biden very strong in supporting technology (e.g. chip developments) and energy

  • Industrial power is being triggered by competitiveness with other nations rather than looking at the web of systems as a whole

  • Now looking at changing perspectives and mindsets

  • Changing mindsets - can the perception that there is over-regulation by government limit their abilities?

  • Lots of the government services we use are routine

  • We only want to innovate in very specific areas of government, so keeping the rest the same is critical


Q: How can nations move from historical inefficient bureaucracy to agile stability. How would Germany, for example, be more agile in its needed changes for innovation?


A:

  • Private companies have been fostered by the government in order to utilise their flexible capabilities

  • They would require a constitutional reform

  • Argument that some countries (largely Anglo type systems) are too flexible - they follow whatever is fashionable at the time


Q: As the governments change over, there is often an issue in retainment of innovative plans that haven't completely been absorbed into the civil service (for example Behavioural Insights Team in the UK government) - how do you think bureaucracy could change in order to have constant fostering of innovations?


A:

  • The BIT may be privatised now, but have left some impressions on the state of public services.

  • The GDS is also another service, and have then also become privatised now - they are in charge of 17k civil servants and they can help make sure this is trained into the governments

  • Hiring designers in order to build this into the civil service is a useful way to do this.


Q: How does your conception of the state respond to hardcore public choice critiques that would suggest even an agile bureaucracy would descend into rent seeking?


A:

  • Public choice- critique of routine bureaucracy

  • Public choice doesn't offer what can be done instead.

  • Driven by creating market like conditions in public sector- competing public agencies etc.

  • GPs and schools- Ofsted, public service providers are competing.

  • But from a user perspective it doesn't make sense.

  • Privatising, quangos they did not really work that well, creating more opportunities for rent seeking and value extraction.

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