Markets are not static entities that are 'intervened' in (for good or bad) but are outcomes of public and private interactions.

Companies prefer to put money in the pockets of shareholders or to hoard cash rather than to raise wages or invest.

Too many politicians seem to reach for 'infrastructure' as the default answer to investment, as if roads and bridges were the answer to everything. Even the IMF and the World Bank seem to mainly offer infrastructure spending as an alternative to austerity, although they are right to focus on the need for investment.

Germany is using its Energiewende policy as a way of envisioning a green transformation and innovation across many sectors.

The globalized nature of production and innovation means that the benefits don't necessarily stay in the country where the investments are made.

I often use the iPhone as an example of how governments shape markets, because what makes the iPhone ‘smart’ and not stupid is what you can do with it. And yes, everything you can do with an iPhone was government-funded. From the Internet that allows you to surf the Web, to GPS that lets you use Google Maps, to touch screen display and even the SIRI voice activated system - all of these things were funded by Uncle Sam through the Defense Advanced Research Projects Agency (DARPA), NASA, the Navy, and even the CIA!

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