Italian-American economist Mariana Mazzucato has issued a stark warning about the dangers of innovation policies that may exacerbate inequality, during her address at the 27th TCI Network Conference held in Chihuahua, Mexico. Mazzucato, a professor at University College London, contended that some of the “stupidest fiscal policies” have been enacted in the name of entrepreneurship, undermining the very goals they intend to support.
In her speech, Mazzucato highlighted how the current global financial framework often fails to promote inclusive growth, instead contributing to a concentration of wealth and economic stagnation for significant segments of the population. She noted that the narrative surrounding innovation and entrepreneurship is frequently manipulated to justify fiscal and financial policies that deepen inequality, citing the reduction of the capital gains tax in the United States as a prominent example.
“Some of the stupidest fiscal policies have been made in the name of innovation and entrepreneurship,” she declared, emphasising the detrimental effects these policies have had on society.
Mazzucato’s visit to Mexico included a meeting with the country’s new president, Claudia Sheinbaum, where they discussed projects related to innovation, regional development, and industrialisation. She also held discussions with key cabinet members, including Economy Minister Marcelo Ebrard and Environment Minister Alicia Bárcena.
In her remarks, Mazzucato stressed the necessity of ensuring a fair distribution of the benefits derived from innovation. She argued that the existing model has been ineffective because it neglects the importance of shaping markets to foster inclusive and sustainable growth. “The growth that so many countries need is not the mission; it’s the outcome of how we actually design our public policies,” she stated.
The award-winning economist, recently appointed to the Pontifical Academy by Pope Francis, advocated for a “better design of industrial policy.” She urged for an active role from the public sector in financing innovation and promoting policies aimed at addressing specific social challenges and combating inequality, rather than inadvertently perpetuating it.
Mazzucato also underlined the crucial role governments play in creating frameworks that stimulate sustained investment in research and development. This requires not only an increase in public spending in essential areas but also the cultivation of an ecosystem conducive to collaboration among various stakeholders.
Her comments come at a time when growing inequality is increasingly linked to the rise of populism around the world. “I’m very interested in inequality because I think it’s reaching a point that is closely tied to much of the populism we are seeing globally,” Mazzucato remarked, highlighting the urgent need for policy reform to address these pressing issues.
As the conference continues, Mazzucato’s insights have sparked conversations about the need for innovative strategies that prioritise social equity and sustainable economic development, underscoring the responsibility of policymakers to ensure that the benefits of innovation reach all segments of society.
