The social imagination needed for an innovation-led recovery

In response to critical comments by Bengt-Åke Lundvall and Edward Steinmueller, I argue that we need to understand why the economic crisis has been so long, so deep and so wide. Even though it originated in the financial sector, a recovery has not yet materialised because existing and potential technological opportunities have not been exploited. An innovation-based recovery will need to take advantage of these opportunities and will also require a favourable institutional environment. Pro-active public intervention in science and technology will additionally be required, combined with new social imagination.