Legendary economist Hyman Minsky identified author William H. Janeway as a "theorist-practitioner" of financial economics; this book is an expression of that double life. Interweaving his unique professional perspective with political and financial history, Janeway narrates the dynamics of the Innovation Economy from the standpoint of a seasoned practitioner of venture capital, operating on the frontier where financial speculation intersects with novel technology. In this fully revised and updated edition, Janeway develops his theory that asset bubbles play a central role in financing technological innovation and that state investment in national goals enable the innovation process. Now, the digital revolution, sponsored by the state and funded by speculation, has matured to attack the authority, and even the legitimacy, of governments. The populist response in the west, especially in the United States, opens the door for China to seize leadership of the innovation economy from America.