Growth of output per head determines living standards and  innovation determines the growth of output per head. So, what determines innovation?

Innovation depends on creativity,  new insights and  entrepreneurship. It’s the entrepreneurs who are central to creating  jobs. But how do  we help create more entrepreneurs? Part of the answer must lie in the education system. And ,interestingly, part of the answer may lie  too with a broader role for government .

The current education model does little, if anything, to encourage creativity, innovation, new insights or entrepreneurship. With respect to students  such are the requirements and demands of the accountability and assessment frameworks, that the system incentivises conformity and teaching to the test. It doesn’t reward creativity and innovation. Politicians will tell you that here, in England  our autonomous schools system encourages schools to innovate to improve outcomes  and gives them the freedom to   dream up new approaches to personalizing education. But  there is slender  evidence that this is the case, across the system. Nor has there been  real efforts to  design reliable  metrics to examine the relationship between educational innovation and changes in educational outcomes.   And it fails to take into account two basic factors. Firstly, schools are not nearly as autonomous as politicians would like us to believe. They have to operate within a tight regulatory framework,; they often cant invest  resources in the way they would like, and  professionals operating within the system feel dis- empowered . Secondly, the accountability and assessment regimes and the inconsistencies and lack of predictability inherent in  these systems, can act as a straitjacket when it comes to enabling  creativity, innovation, new insights as well as in  the development of the  kind of non-cognitive skills that are valued by  society and employers.

Yong Zhao, a US academic at Oregon University , is among those who argue that globally (ie its not just our problem) creativity, entrepreneurship, and global competence are the new basic skills that will bring the “coming prosperity” to the world.  But that the educational paradigm has little or no  chance of preparing the talents and citizens we need in the 21st globalized century, We are neither generating  the  necessary jobs particularly for young people   nor filling the skills gaps  that are essential for sustained  economic growth and prosperity into the future.  So, we have to change the education model .

But, what about other policies outside education? .

Mariana Mazzucato, a Sussex university professor, says in her new book – Entrepreneurial State: Debunking Public vs Private Sector Myth- that the state has an important role here. This is counter-intuitive. It’s the private sector that’s creative, risk taking and entrepreneurial, isn’t it?  However ,  Mazzucato  claims that the   entity that takes the boldest risks and achieves the biggest breakthroughs is not ,in fact,  the private sector, but  it is the State.

But how come the  bureaucratic  state has a role in fostering entrepreneurship?  One has to look at the nature of unpredictability, risks and rewards. The huge uncertainties,  long time scales  and costs associated with fundamental, science-based innovation are hugely significant . Private  sector companies, unless they are huge , (and its small and medium sized companies that dominate economies and provide the most employment),   cannot and will not bear these costs, partly because they cannot be sure to reap the returns,  and partly because the returns  may be very long term. Investors tend to seek shorter term returns and short-termism is endemic.

Mazzucato argues that the state  in fact has an  indispensable  role in  support of  both research and development but  also as  an active entrepreneur, taking risks and accepting some of the failures that inevitably follow.

What seems clear is that our education systems are far from efficient and are not doing enough to  help develop the range of skills in young people  needed in society and the job market. It is also the case that collaboration between the private and state sectors to get the best out of both is important but underdeveloped. I would also suggest that the public sector needs, if it has such an important enabling role in research and development and as an active entrepreneur, to focus more on the skills sets and competencies of its civil servants, not least in  better understanding project management,   understanding research and data  and in the workings  of the market. And there needs to be more attachments and engagement, both ways, between the sectors.



More than 50 UK university leaders  are currently   lobbying  European policymakers against possible cuts to research funding.The EU is considering plans to divert some research money to a more broadly based strategic investment fund. Universities across Europe say this would harm research and innovation.




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