A clear evidence of Intellectual Failure (IF):
“A reason why markets as co-ordination and communication mechanisms may not function very well regarding innovation is related to the uncertainties attached to predicting the future. The market may fail to predict the economic value of new technologies, new products, new resources, new firms or new entrepreneurial capabilities. Typically, the market will, for instance, not be able to value a start-up. Although policy makers also have difficulties in predicting the future, this kind of market failure is a widely accepted justification for public intervention.”
“The idea that there is a role for policy makers, if markets fail, does not imply that policy makers are perfect, but that the above-mentioned general or structural market failures may very well be effectively and efficiently addressed by generic policy instruments, designed and delivered at the national policy level.”
This represents the current intellectual mainstream, at least in Europe.
From Innovating SMEs and Regions: The Need for Policy Intelligence and Interactive Policies. C. Nauwelaers & R. Wintjes (Technology Analysis & Strategic Management, Vol. 14, No. 2, , 201-215)