States and governments are often depicted as slow, bureaucratic, risk-averse. That argument is used in support of making states smaller and the private sector bigger. In her latest book, The Entrepreneurial State: Debunking Private vs. Public Myths in Innovation and in her research, Mariana Mazzucato offers a bold contrarian view: States aren't only market regulators and fixers, but "market makers" -- actively creating a vision for innovation and investing in risky and uncertain areas where private capital may not see the ROI. Yes: Private venture capital is much less risk-taking than generally thought. As an example, the technology behind the iPhone and Google exists because the U.S. government has been very interventionist in funding innovation. Private investors jumped in only later. The same is true today of what promises to be the next big thing after the Internet: the green revolution.

Mazzucato, a professor of economics at the Science and Technology Policy Research Unit (SPRU, University of Sussex), argues that Europe needs today to rediscover that role -- that what the continent needs is not austerity but strategic investments (and new instruments such as public investments banks) towards an "innovation Union."