Debunking Myths About Public and Private Innovation

[LongTomH]

From Slate.com: Entrepreneurs or the state: Innovation comes from Public Investment.

Images of tech entrepreneurs such as Mark Zuckerberg and Steve Jobs are continually thrown at us by politicians, economists, and the media. The message is that innovation is best left in the hands of these individuals and the wider private sector, and that the state—bureaucratic and sluggish—should keep out. A telling 2012 article in the Economist claimed that, to be innovative, governments must "stick to the basics" such as spending on infrastructure, education, and skills, leaving the rest to the revolutionary garage tinkerers.

Yet it is ideology, not evidence, that fuels this image. A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game.

Whether an innovation will be a success is uncertain, and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the United States, China, Singapore, and Denmark, the state has provided the kind of patient and long-term finance new technologies need to get off the ground. Investments of this kind have often been driven by big missions, from putting a human on the moon to solving climate change. This has required not only funding basic research—the typical "public good" that most economists admit needs state help—but applied research and seed funding too.

Apple is a perfect example. In its early stages, the company received government cash support via a $500,000 small-business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the Internet, GPS, touch-screen displays, and even the voice-activated smartphone assistant Siri all received state cash. The U.S. Defense Advanced Research Projects Agency bankrolled the Internet, and the CIA and the military funded GPS. So, although the United States is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.

Read more at Slate.com: http://www.slate.com/articles/health_and_science/new_scientist/2013/09/entrepreneurs_or_the_state_innovation_comes_from_public_investment.html

[scooter rider]

1. Well thank DOG for military spending then.

Where would we be without it?

[LongTomH]

2. Read the article......

Right after the fourth paragraph, where this post ends, it talks about the other departments of government who fund innovative R&D.

And, yeah, DARPA and DOD have funded a lot of innovative research!

[bemildred]

3. Innovation is never done by herds.

Last edited Tue Sep 3, 2013, 03:19 PM - Edit history (1)

The best stuff comes from small groups of obsessed people, less than one hand. The herds come later, if it works. Companies that really do innovation know that. They don't always get it right, but they know it's not about how many people you put on it.

[BlueJazz]

4. I think using Mark Zuckerberg is a bad example of great innovation.

The idea was thought of long before Mark came along. Others just perceived the problems with such a system and didn't
think the idea was worth it.
"You REALLY want strangers and perspective employers to know just about everything in your past life...HA "

They were wrong but only because they over-estimated the intelligence of the populace.

Remember the "Pet Rock" ....oh yeah..THAT'S a good idea..snicker..snicker...

[Doctor_J]

5. GlenBeckistan never hears these truths

they also never hear that Medicare covers ALL seniors, and that 97% of the funds go to health care, whereas less 80% of your "health insurance" dollar go to care.

One more thing. The reason the 20th century was the American Century is that we spent most of it on government-backed innovation - roads, public schools, rural electrification, train tracks, airplanes, and so on. The reason this century will belong to the Chinese is because they're investing tax money in innovation.