The Entrepreneurial State: An Ownership Competence Perspective

Samuele Murtinu*, Nicolai J. Foss, Peter G. Klein

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review


Academics, pundits, and policymakers have recently called for a stronger governmental role in the economy to tackle social issues such as inequality and grand challenges like global warming. Despite a general recognition among economists and management scholars that government efforts to guide and control innovation or subsidize private entrepreneurs have failed to yield results, these calls also describe an entrepreneurial state in which bureaucrats, not entrepreneurs, direct not only basic research but also applied technological development. Building on the notions of economic competence and ownership competence we argue that even well-intentioned and strongly motivated public actors lack the ability to manage the process of innovation, especially under Knightian uncertainty. As stewards of resources owned by the public, government bureaucrats do not exercise the ultimate responsibility that comes with ownership. Moreover, government ownership of firms and labs and government intervention in the management of privately owned assets hampers the competitive process of putting ownership of innovative firms and projects in the hands of individuals and groups with higher levels of ownership ability. We suggest that ownership competence differs systematically between public and private actors, particularly around innovation, with important implications for innovation policy.
Original languageEnglish
Title of host publicationQuestioning the Entrepreneurial State : Status-quo, Pitfalls, and the Need for Credible Innovation Policy
EditorsKarl Wennberg, Christian Sandström
Number of pages19
Place of PublicationCham
Publication date2022
ISBN (Print)9783030942724
ISBN (Electronic)9783030942731
Publication statusPublished - 2022
SeriesInternational Studies in Entrepreneurship


  • Ownership
  • Competence
  • Innovation
  • Knightian uncertainty
  • Market for corporate control: public choice

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