The risk-reward nexus in the innovation-inequality relationship: who takes the risks? Who gets the rewards?

By William Lazonick, Mariana Mazzucato. 2013

239 citations recorded by the source corpus.

We present a framework, called the Risk-Reward Nexus, to study the relationship between innovation and inequality. We ask the following question: What types of economic actors (workers, taxpayers, shareholders) make contributions of effort and money to the innovation process for the sake of future, inherently uncertain, returns? Are these the same types of economic actors who are able to appropriate returns from the innovation process if and when they appear? That is, who takes the risks and who gets the rewards? We argue that it is the collective, cumulative, and uncertain characteristics of the innovation process that make this disconnect between risks and rewards possible. We conclude by sketching out key policy implications of the Risk-Reward Nexus approach. Copyright 2013 The Author 2013. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/324d705c71936fe6184c3b149da9e68ec9f0864a

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Citations in the corpus

Financing innovation: creative destruction vs. destructive creation (2013, background): “…which prevents banks from fostering investment in R&D and technological progress. at Sussex L anguage Institute on A ugust 2, 2013 http://icc.oxfordjournals.org/ D ow nloaded from Lazonick and Mazzucato (2013), ‘The Risk-Reward Nexus in the InnovationInequality Relationship Who Takes the Risks?”
Challenge-Driven Innovation Policy: Towards a New Policy Toolkit (2019, background): “In such an approach, the success of a few projects can cover the losses from many projects, and the public organisation in question also learns from its lossmaking investments (Mazzucato 2013).”
Twenty challenges to innovation studies (2015, background): “It is not clear whether IS scholars will ultimately have anything significant to contribute to reducing the 'winner take all' phenomenon and ameliorating its economic and social consequences, although work by Lazonick and Mazzucato (2013) represents a promising start.”
The Entrepreneurial State (2013, unknown): “…risk-takers implies that combatting shorttermism (Haldane, 2016) and speculative forms of corporate governance (Kay, 2012) requires not only reforming finance and corporate governance, but also rethinking the models of wealth creation upon which they are based (Lazonick and Mazzucato, 2012).”
Public financing of innovation: new questions (2017, methodology): “An Entrepreneurial State does not only ‘de-risk’, but envisages the risk space and operates boldly and effectively within it (Mazzucato, 2013a).”
New models of inclusive innovation for development (2014, background): “…into this focus on ‘inclusive development’ (UNDP 2014) or ‘shared prosperity’ (World Bank 2013a) because, as noted, mainstream innovation is associated with increasing inequality while inclusive innovation is associated with reduced inequality (Cozzens et al. 2007; Lazonick and Mazzucato 2013).”