States of innovation: how the state shapes production transformation

Historically, state formation and industrialisation have been linked by a mutually constitutive relationship. Industrialisation has been shaped by the state (or lack thereof) via industrial and innovation policy. The formation of state institutions, governance and bureaucracy structures have played a key role. By designing, implementing and enforcing state policies, these structures have constructed and mediated the continuously evolving relationship between state, industry and markets. Equally, industrialisation and the formation of new powerful organisations and interests have shaped the political economy of the state and policymaking. In this chapter we discuss three historical forms of the state - 'developmental', 'entrepreneurial' and 'innovation-driven' state and focus on the evolution of this state-industrialisation relationship. Comparative historical cases from early to late and late-late industrialisers - i.e., Germany, US, China, Vietnam, and Ethiopia - are used to flash out different configurations of "states of innovation", as well as evolution in policy framing, instruments and challenges.