Doing Capitalism in the Innovation Economy : Markets, Speculation and the State
The innovation economy begins with discovery and culminates in speculation. Over some 250 years, economic growth has been driven by successive processes of trial and error: upstream exercises in research and invention and downstream experiments in exploiting the new economic space opened by innovation. Drawing on his professional experiences, William H. Janeway provides an accessible pathway for readers to appreciate the dynamics of the innovation economy. He combines personal reflections from a career spanning forty years in venture capital, with the development of an original theory of the role of asset bubbles in financing technological innovation and of the role of the state in playing an enabling role in the innovation process. Today, with the state frozen as an economic actor and access to the public equity markets only open to a minority, the innovation economy is stalled; learning the lessons from this book will contribute to its renewal.
- Electronic book text
- 24 Oct 2012
- CAMBRIDGE UNIVERSITY PRESS
- Cambridge University Press (Virtual Publishing)
- Cambridge, United Kingdom
- 2 b/w illus. 1 table
Table of contents
Introduction; Part I. Learning the Game: 1. Apprenticeship; 2. Discovering computers; 3. Investing in ignorance; Part II. Playing the Game: 4. The financial agent; 5. The road to BEA; 6. Apotheosis; Part III. Understanding the Game: The Role of Bubbles: 7. The banality of bubbles; 8. Explaining bubbles; 9. The necessity of bubbles; Part IV. Understanding the Game: The Role of the State: 10. Where is the state?; 11. 'The failure of market failure'; 12. Tolerating waste.
'William H. Janeway, a key creator of modern venture capital, tells the amazing story of the intersection of economics and innovation. This book is essential to anyone who wants to understand technology and how its creation will be financed for decades to come.' Marc Andreessen, co-creator of the Internet browser and co-founder of Netscape and Andreessen Horowitz 'This is a masterful historical and conceptual analysis of the Three Player Game between the state, private entrepreneurial innovation and financial capitalism. The state has a key role in funding scientific research that leads to innovation. Amply funded by financial capitalism, innovation is a source of long term growth. But speculative funding of innovation is also associated with asset and credit bubbles that end up in financial crashes. A Minsky-inspired synthesis of the financial excesses of Schumpeterian creative destruction, this book should be required reading for all.' Nouriel Roubini, New York University and Chairman of Roubini Global Economics 'A revelatory exploration of the complex dynamics underlying the innovation economy and the inherent roles of speculation and waste as experienced by one of the great venture capitalists and political/economic thinkers of our age. This book provides a powerful framework for dealing with the economic challenges we are facing today. It couldn't have come at a better time!' John Seely Brown, Former Chief Scientist, Xerox Corp and Former Director, Palo Alto Research Center (PARC) 'Janeway applies keen insights from his experience as a venture capitalist and creates a vision of the interaction between governments, financiers, and firms that shows what institutions society must develop to foster innovation. I believe that Doing Capitalism in the Innovation Economy will help all of us, whether academics, private sector leaders, or government officials, to see beyond shallow political dogma and move to a deeper understanding of challenges of technological advance.' George Soros, Chairman, Soros Fund Management 'An original analysis ... entertaining.' Management Today 'Doing Capitalism is a magnificent chronicle of how technology combined with economics to forge the beast that is today's financial environment ... A bravura literary debut.' Cambridge Business Online 'Janeway, who built the technology investment team of Warburg Pincus, has a powerful message: an innovative economy 'begins with discovery and culminates in speculation'.' Martin Wolf, Financial Times (online), 'Best Books of 2012' '... self-recommending ...' Stian Westlake, National Endowment for Science, Technology and the Arts blog (nesta.org.uk) '... a tour de force with a solid thesis, excellent writing and exposition, and a history that too many have forgotten ... or never knew. Brilliant!' John C. Bogle, founder of Vanguard 'I highly recommend Doing Capitalism in the Innovation Economy by William H. Janeway. The author is a venture capital veteran who provides a fascinating glimpse into a rarified niche of the financial world, especially as to how VC firms funded the first modern technology start-ups of the 1970s and '80s.' Simon Towers, Associate Vice President and Group Manager, Center of Innovation for Tomorrow's Enterprise, Infosys Labs '... [an] original and thought-provoking book.' John Cassidy, The New Yorker 'If you have ever wondered what the interplay of government, bubbles and venture capital have to do with innovation, this is the book for you ... Doing Capitalism in the Innovation Economy is rich in historical references and stories, wise in its philosophy, deep in its evaluation and observation; and a tribute to the life's work of an important investor and constructive thinker. This book is outstanding and deserves your time.' Wall Street Oasis (wallstreetoasis.com) ''Some books', said Sir Francis Bacon, 'are to be tasted, others to be swallowed and some few to be chewed and digested'. From a lifetime of reflection and experience, Janeway has produced a book that should be chewed and digested thoroughly.' Sanjay Unni, Quantitative Finance
About William H. Janeway
William H. Janeway has been an active venture capital investor for forty years. In particular, he built and led the Warburg Pincus Technology Investment team that provided the financial backing to a series of companies which made critical contributions to building the internet economy. He received his PhD in Economics from the University of Cambridge, where he founded the Cambridge Endowment for Research in Finance, and is a Teaching Visitor in the Princeton University Economics Department. He is a member of the Board of the Social Science Research Council and of the Institute for New Economic Thinking. In September 2012 he was granted the honorary honour of Commander of the Order of the British Empire (CBE) by HM the Queen 'for services to education in support of Cambridge University and to UK/US relations'.