Green economy for sustainable growth

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here. 

Dates of the project: 2017

The Challenge 

While innovation is essential for economic growth, its direction is often shaped passively by market forces leading to suboptimal outcomes for society and the environment. In the face of climate change and ecological degradation, the challenge is to actively steer innovation toward green, inclusive, and sustainable goals. This requires aligning financial systems with long-term public purpose and rethinking how value is defined and created in the green economy. 

Our Approach 

UCL IIPP’s research focuses on the relationship between sources of finance and the direction of innovation in the green economy. Led by Professor Mariana Mazzucato and Research Fellow Gregor Semieniuk, the project explores: 

• How different types of finance (e.g. public banks, venture capital, state-owned enterprises) shape innovation in renewable energy.
• The role of mission-oriented policies in directing innovation toward sustainability, drawing parallels with past breakthroughs in ICT and biotech.
• How public finance—such as ARPA-E in the US or KfW in Germany—can lead high-risk, long-term investment in green technologies.
• The need to align green policies with the risk profiles and portfolios of different financial actors to accelerate the energy transition. 

Key activities include workshops with Bloomberg New Energy Finance, policy briefs following the Paris Agreement, and contributions to UK industrial strategy debates. 

Why This Matters 

To achieve a green transformation, innovation must be deliberately directed toward solving societal challenges. IIPP’s work helps policymakers understand how finance can be used not just to support innovation, but to shape its trajectory. By embedding public purpose into financial and innovation systems, this project supports the development of a green economy that is inclusive, resilient, and future-focused. 

Resources

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here.