The concept of financialization grasps the increasingly hegemonic position of financial markets and their actors in the economic, political and social affairs across the national and regional varieties of global capitalism. In this context, financialization also affects the nexus between finance and innovation, which constitutes a significant component of the growth dynamics of modern capitalism. The proposed research paper takes on the institutional transformation of the corresponding nexus of finance and innovation while accounting for the diverse institutional settings of capitalist market economies. In particular, it explores the persistent impact of government in shaping the institutional, financial and technological infrastructures of new markets and industries. Indeed, in coordinated market economies like Germany, the phenomenon of venture capital is still characterised by major aspects of public venture capital operations. Furthermore, governmental activities in moulding venture capital structures have also been observed in the domain of liberal market economies. This holds particularly well in the case of promising new industries such as biotechnology. Accordingly, the paper argues that the governmental influence on the modifications of the finance-innovation nexus is well expressed by the notion of an ‘entrepreneurial state’, which is an inherent part of the process of financialization.
