For too long, economic policy in the U.S. and Commonwealth nations has been guided by the “market efficiency” school. The result has been a widespread unwillingness to view government roles as critical to boosting innovation, growth, and competitiveness. It’s time for a new approach, which Lord David Sainsbury, author of Windows of Opportunity: How Nations Make Wealth, calls the “production capability” school. Under this school, the key question for economic policy is how well it enables enterprises to be more innovative and efficient. Rejecting the old doctrine in favor of the new is perhaps the most economic important task for our time. Rob and Jackie discuss this and the role for government in “picking winners” at the level of technologies and industries with Sainsbury.

Mentioned:

• Lord David Sainsbury, Windows of Opportunity: How Nations Make Wealth (Profile Books, 2019).
• Robert D. Atkinson and Stephen J. Ezell, Innovation Economics: The Race for Global Advantage (Yale University Press, 2014).