Fausto Gernone
Fausto Gernone is a policy economist whose collaboration with Mazzucato produced the most direct applications of her analytical framework to AI-specific policy questions. Working primarily at IIPP and in policy advisory roles, Gernone co-authored the March 2024 analysis of AI governance that argued while regulation is necessary, it is insufficient. Beyond imposing restrictions on private AI companies, governments must assume an active role in AI development by designing systems and shaping markets for the common good. His July 2025 collaboration with Mazzucato on generative AI and creative labor extended the framework to the specific question of how AI systems extract value from artists, journalists, and developers while eroding the income streams that sustain their work. The proposed levy on AI firm revenues to fund creative production is Gernone and Mazzucato's signature policy contribution to the AI compensation debate.
In the AI Story
Gernone's work with Mazzucato applied the creation-extraction framework to dimensions of the AI economy that had received less analytical attention — particularly the relationship between generative AI and creative labor. Their argument that generative AI models are trained on publicly accessible creative content yet offer little to the artists, journalists, coders, and others who produce it named a specific structural injustice with policy implications.
The July 2025 analysis proposed that a levy on AI firm revenues fund creative production — treating creative knowledge explicitly as a public good that requires collective funding, and recognizing that extraction, if unchecked, destroys the base on which future value creation rests. The levy proposal became part of the broader windfall taxation framework Mazzucato has advanced for the AI economy.
Gernone's contribution to the collaboration has been the policy-specification dimension — translating Mazzucato's analytical framework into concrete policy mechanisms that governments could implement. This work sits at the interface between academic analysis and operational policy design, a boundary IIPP was explicitly founded to bridge.
Origin
Gernone's academic training and policy career have centered on applied innovation economics and the political economy of technological change. His collaboration with Mazzucato began through IIPP and has focused primarily on the AI-specific applications of her framework that intensified in 2024–2025.
Key Ideas
Creative labor extraction. The specific application of the creation-extraction framework to the relationship between AI and human creative work.
Policy specification. Translating analytical frameworks into operational policy mechanisms.
Levy on AI revenues. The specific policy instrument proposed for funding creative production sustained by AI training data.
Incentive alignment. The argument that current AI incentives are aligned for rent extraction rather than value creation.
Appears in the Orange Pill Cycle
Further reading
- Mazzucato, Mariana and Fausto Gernone. Generative AI Runs on a Paradox. LinkedIn, July 2025.
- Mazzucato, Mariana and Fausto Gernone. AI Governance Beyond Regulation. IIPP Policy Brief, March 2024.