We should be investing where the public returns are greatest - that is in innovation.

Unfortunately, simplistic framing of problems leads to simplistic answers.

Government support is not only investing in upstream areas like basic research, but also in downstream areas like applied research and early-stage financing for the companies themselves. This means there are great risks.

Brexit and Trump's election are forcing countries to come up with new radical ideas.

What is needed is both a New Deal in terms of mission-oriented investments but also a new deal in terms of a modern social compact - one that allows the state to socialize not only risks but also rewards. Maybe then innovation-led growth will also become growth that includes all of us.

Green is not just about renewable energy. It's also about creating a new direction for the whole economy. This requires government to step up, not step back, creating the kinds of mission-oriented public organizations that will enable us to tackle climate change - as ambitious as those that got us to the moon. It also requires the financial sector to be less short-term since we know that short-term finance has distorted incentives and directions in areas like biotechnology.

An interesting attribute of public banks is that they don't only de-risk the downside, but also get a share of the upside.