Economist Mazzucato warns of risks from uncontrolled innovation at TCI Network Conference

CHIHUAHUA, Mexico, Oct. 16, 2024 /PRNewswire/ -- Italian-American economist Mariana Mazzucato has warned in Mexico about the risks of innovation driven by policies that exacerbate inequality, noting that some of the "stupidest fiscal policies have been implemented in the name of entrepreneurship."

During her speech at the 27th TCI Network Conference, held in Chihuahua, northern Mexico, Mazzucato pointed out that the current global financial structure, rather than fostering inclusive growth, has contributed to wealth concentration and economic stagnation for large segments of the population.

The University College London professor argued that the narrative around innovation and entrepreneurship has been used to justify fiscal and financial policies that have actually increased inequality, such as the reduction in the capital gains tax in the United States.

"Some of the stupidest fiscal policies have been made in the name of innovation and entrepreneurship," she stressed.

Mazzucato met with Mexico's new president, Claudia Sheinbaum, to discuss projects related to innovation, regional development, and industrialization. She also held meetings with other cabinet members, including Economy Minister Marcelo Ebrard and Environment Minister Alicia Bárcena.

The renowned economist defended the need to ensure a fair distribution of the benefits of innovation, arguing that the current model has proven ineffective by ignoring the need to shape markets toward 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 said.

In this regard, the award-winning economist, who has been appointed to the Pontifical Academy by Pope Francis, advocated for a "better design of industrial policy."

She emphasized the need for the public sector to take an active role in financing innovation, promoting policies aimed at solving specific social problems and addressing inequality, rather than perpetuating it.

Mazzucato also noted the importance of governments creating frameworks that encourage sustained investment in research and development, which involves not only increasing public spending in key areas but also fostering an ecosystem that promotes collaboration.

Finally, Mazzucato expressed concern over growing inequality and its connection to populism: "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 around the world."