6 ms·

If you think the government is efficient at contracting out for advanced technology products, I invite you to investigate the military procurement system.

rtpg 14y ago
that is heavily influenced by politicians looking to bring jobs to their districts/states.
- greedo 14y ago
  And of course, grants would never be influenced by politics. Science is pure, ask any college or university.
- TDL 14y ago
  All government procurement is heavily influenced by politicians looking to bring jobs to their districts/states.
jessaustin 14y ago
The creation of better soybean strains could be financed by prizes and contests rather than by military procurement. For example, see the Longitude Prize, the Anxari X Prize, or the crypto primitive contests that NIST regularly runs. The fact that giant corporations are involved with progress in our society is not proof that progress would cease without the involvement of giant corporations.
- rayiner 14y ago
  You can't do serious science, capital-intensive Big Science, with prizes and contests.
  - bcoates 14y ago
    Why not?
    - rayiner 14y ago
      Because the prizes are usually not even enough to recoup the cost of the R&D, much less recoup the cost of R&D once you account for the probability of not winning. The Ansari X Prize was only $10 million, which is nothing in aerospace. Actually, it somewhat ironic to use the X Prize as an example here. Burt Rutan's Scaled Composites won the X Prize, with Spaceship One. Spaceship One was a joint venture between Rutan and Microsoft's Paul Allen. The investment vehicle was Mojave Aerospace Ventures (http://en.wikipedia.org/wiki/Mojave_Aerospace_Ventures http://en.wikipedia.org/wiki/Mojave_Aerospace_Ventures) which is basically an IP holding company that controls commercialization of the patented Spaceship One technology through licensing agreements. Scaled Composites itself is actually a great example of the kind of separation of concerns that patents enable. They don't make end-user products really. They're a small engineering outfit that does mostly R&D. They make money by consulting, contracting to build specialized components, and licensing their substantial patent portfolio. The company doesn't have a ton of big factories, etc. The value of the company that Rutan spent 30 years building is engineers that could walk away at any moment and a pile of IP.
      - vidarh 14y ago
        That prizes are "usually not" enough to recoup the cost of the R&D does not means that prizes can't be raised to where they do recoup the cost. Furthermore, the probability of not winning exists in all R&D: A lot of it fails, or they're beaten to the punch by competitors. Whether the potential payoff comes from revenue from patent encumbered products, or from a government prize fund is irrelevant. Investors can further correct for the risks of the failure of any one company involved in a prize attempt like that by spreading their investments over multiple participants. It's not like these kind of investment scenarios are unfamiliar to the financial markets.
        rayiner 14y ago
        > That prizes are "usually not" enough to recoup the cost of the R&D does not means that prizes can't be raised to where they do recoup the cost. > Furthermore, the probability of not winning exists in all R&D: A lot of it fails, or they're beaten to the punch by competitors. Whether the potential payoff comes from revenue from patent encumbered products, or from a government prize fund is irrelevant. You have to read your two points in conjunction. Sure, the prizes could be raised until they were big enough to recoup the R&D costs weighted for the probability of failure. This is basically what happens anyway--a company will engage in half a dozen R&D projects with the assumption that only one or two will be successful and the revenues from that will recoup the R&D investment on the other ones. But to actually get anything done in fields like aerospace, medicine, etc, you'd be talking about billion-dollar range prizes. You'd also be talking about a very different allocation of the R&D burden. Right now, the people that use say a drug for diabetes are the ones that pay for the R&D, by virtue of their paying high prices for the patented drugs. But with government-funded projects, everyone would bear the costs of these innovations equally. Also, it puts government in the position of deciding what innovations are valuable by its choice of what to offer prizes for. People are rightfully skeptical of the idea of the government handing out billions in taxpayer dollars for "innovation" that some bureaucrat thinks is necessary. I don't think it's a clear win over the patent regime.

rtpg 14y ago

that is heavily influenced by politicians looking to bring jobs to their districts/states.

greedo 14y ago
And of course, grants would never be influenced by politics. Science is pure, ask any college or university.
TDL 14y ago
All government procurement is heavily influenced by politicians looking to bring jobs to their districts/states.

jessaustin 14y ago

The creation of better soybean strains could be financed by prizes and contests rather than by military procurement. For example, see the Longitude Prize, the Anxari X Prize, or the crypto primitive contests that NIST regularly runs. The fact that giant corporations are involved with progress in our society is not proof that progress would cease without the involvement of giant corporations.

rayiner 14y ago
You can't do serious science, capital-intensive Big Science, with prizes and contests.
- bcoates 14y ago
  Why not?
  - rayiner 14y ago
    Because the prizes are usually not even enough to recoup the cost of the R&D, much less recoup the cost of R&D once you account for the probability of not winning. The Ansari X Prize was only $10 million, which is nothing in aerospace. Actually, it somewhat ironic to use the X Prize as an example here. Burt Rutan's Scaled Composites won the X Prize, with Spaceship One. Spaceship One was a joint venture between Rutan and Microsoft's Paul Allen. The investment vehicle was Mojave Aerospace Ventures (http://en.wikipedia.org/wiki/Mojave_Aerospace_Ventures http://en.wikipedia.org/wiki/Mojave_Aerospace_Ventures) which is basically an IP holding company that controls commercialization of the patented Spaceship One technology through licensing agreements. Scaled Composites itself is actually a great example of the kind of separation of concerns that patents enable. They don't make end-user products really. They're a small engineering outfit that does mostly R&D. They make money by consulting, contracting to build specialized components, and licensing their substantial patent portfolio. The company doesn't have a ton of big factories, etc. The value of the company that Rutan spent 30 years building is engineers that could walk away at any moment and a pile of IP.
    - vidarh 14y ago
      That prizes are "usually not" enough to recoup the cost of the R&D does not means that prizes can't be raised to where they do recoup the cost. Furthermore, the probability of not winning exists in all R&D: A lot of it fails, or they're beaten to the punch by competitors. Whether the potential payoff comes from revenue from patent encumbered products, or from a government prize fund is irrelevant. Investors can further correct for the risks of the failure of any one company involved in a prize attempt like that by spreading their investments over multiple participants. It's not like these kind of investment scenarios are unfamiliar to the financial markets.
      - rayiner 14y ago
        > That prizes are "usually not" enough to recoup the cost of the R&D does not means that prizes can't be raised to where they do recoup the cost. > Furthermore, the probability of not winning exists in all R&D: A lot of it fails, or they're beaten to the punch by competitors. Whether the potential payoff comes from revenue from patent encumbered products, or from a government prize fund is irrelevant. You have to read your two points in conjunction. Sure, the prizes could be raised until they were big enough to recoup the R&D costs weighted for the probability of failure. This is basically what happens anyway--a company will engage in half a dozen R&D projects with the assumption that only one or two will be successful and the revenues from that will recoup the R&D investment on the other ones. But to actually get anything done in fields like aerospace, medicine, etc, you'd be talking about billion-dollar range prizes. You'd also be talking about a very different allocation of the R&D burden. Right now, the people that use say a drug for diabetes are the ones that pay for the R&D, by virtue of their paying high prices for the patented drugs. But with government-funded projects, everyone would bear the costs of these innovations equally. Also, it puts government in the position of deciding what innovations are valuable by its choice of what to offer prizes for. People are rightfully skeptical of the idea of the government handing out billions in taxpayer dollars for "innovation" that some bureaucrat thinks is necessary. I don't think it's a clear win over the patent regime.