Lack of evaluation metrics means the CP fails – there’s no accountability to determine optimal investment

That mission-oriented innovation policy must be evaluated is uncontroversial. Nelson (2011, p. 684) noted that “one cannot learn from experiments if one does not have ability to identify, control, and replicate effective practice.” At present, there does not appear to exist a solution to this problem.

One source of several problems with state entrepreneurship is that a state departs from issues that it thinks need solving, whereas entrepreneurs in the innovation machine generally depart from issues they think they can solve. The former issues are subject to substantially more uncertainty. Most entrepreneurs are ultimately forced to be realistic, at least in terms of large investments. When they have attempted to solve a problem for too long, they run out of investors. When they fail at solving actual problems, or when they succeed at solving immaterial problems, they are broken by markets.

With state entrepreneurship, there are no such mechanisms. Taxpayers are not investors because they do not have equity. They do not know what is going on and even if they did, collective action problems would almost invariably stop them from showing up outside the board room. To the extent that there is a market, and often there will not be, a loss does not really mean anything if the politicians choose to remain committed to the enterprise. In democratic states, state entrepreneurship is venture without meaningful risk.

These issues clearly call for other mechanisms to evaluate the progress of state entrepreneurship and its missions. Mazzucato (2016, p. 141) calls for missions to be “concrete enough to translate into specific problems to solve, so that progress toward the mission can be evaluated on a continual basis.” It is not controversial to say that such evaluation methods are still missing, and that is even if we disregard opportunity cost.

Is there any reason to be hopeful that credible evaluation methods may emerge? To begin with, it is of course correct that missions must at the very least be concrete; they cannot simply consist of making the world better. But even in the case of something concrete, like cutting carbon emissions by 50% in ten years, a myriad of problems remains to be dealt with. Even if this is a national target, for an accurate evaluation, we would need to know the direct effect of the policy, the indirect effects of the policy, including opportunity costs imposed on seemingly unrelated sectors, and whether the policy was achieved or not achieved through acceptable means. The latter point is important because the state’s powers are so far-reaching. Simply regulating all carbon-heavy firms out of business would not seem like success to most people, although it could certainly achieve the goal.

Taken together, these points can be summarized to mean that it is not enough for the goal to be concrete and measurable. The indirect outcomes must be clear and quantifiable as well. And even when they are, there can be no one and nothing else to blame for failure. In the end, state entrepreneurs are often not accountable to anyone, whereas the Apollo and Manhattan projects, for example, were notable exceptions since the goals were perfectly defined and there were formidable competitors. Even when someone is accountable, one of the main tenets in the mission-oriented innovation literature is that we should be prepared for the state to fail in these high-risk and large-scale endeavors. Indeed, the state should experiment, and we should often expect failure, although to what extent is not clear. It seems as an entity, the entrepreneurial state cannot fail. Whatever we are to call this process, it is not entrepreneurship.