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Mazzucato provides no real evidence the government is good at funding commercially viable innovation. If you look into the details the two examples she offers w

by spikels 12y ago

Mazzucato provides no real evidence the government is good at funding commercially viable innovation. If you look into the details the two examples she offers were more blind luck than thoughtful investment. While it's easier to make the case for basic research the governments attempts to sponsor commercial innovation have almost always ended in failure or turned into subsidies for politically connected companies and industries. A good case study was the $600 Flat Panel Display Initative in the 1990s. It's a good bet something similar is currently happening in the various green initiatives. She is actually correct about these programs socializing risk and privatizing reward. Stanford got the Google shares from research funded by NSF and Continental Illinois got the Apple shares from the SBIC investment guaranteed by SBA.* However this is the one role government has a unique advantage. And this is a good thing - think NIH, NASA, NSF, etc but also pretty much every social safety net program. Of course she (being quite left) is actually making the case for increase government ownership of public companies or at least greater taxation and license fees. *-You could argue the U.S. got some this back when that bank failed a few year later in the largest bank failure in US history - until WaMu surpassed it in 2008. Although the $44 million from Apple shares was insignificant compared to the billions in bankruptcy costs. BTW-The Continental Illinois failure is where "too big to fail" was coined.

proveanegative 12y ago
>Mazzucato provides no real evidence the government is good at funding commercially viable innovation. Without disagreeing with your point I have to point out that beyond basic research the government has also successfully provided infrastructure for commercial innovation with things like the Internet, GPS and nuclear power. It tends to accomplish this without really trying.
EliRivers 12y ago
Mazzucato provides no real evidence the government is good at funding commercially viable innovation. She does. Just not here. The piece is called "Five minutes with..."; her arguments that government funds commercially viable innovation are easily found. I suppose the most obvious commercially viable innovation funded by governments (both directly and through various defence department funds) was computing.
nl 12y ago
Mazzucato provides no real evidence the government is good at funding commercially viable innovation. I don't think this is her point. Either way, I agree with you. I also agree that private enterprise is much, much better at commercialising research. I think her point is that basic research - which the governments are generally pretty good at funding - doesn't provide a good return on investment. I have some sympathy with this argument, but at the same time I don't think she provides a viable solution for the problem. As a specific example: DARPA kick-started the entire set driverless car technologies with their well-funded competitions in the early 2000s. This involved both prizes, and direct funding of robotics labs. One can argue that this was done to seed a solution in the 20-year timeframe, and the fact that we'll probably see a decrease in combat deaths from IEDs in a future war in 10 years as driverless trucks come online is reward enough. One can also argue that society should see some financial return on that - very risky - seed investment. Both arguments have merit, and I remain unconvinced either way.

by spikels 12y ago

proveanegative 12y ago

>Mazzucato provides no real evidence the government is good at funding commercially viable innovation. Without disagreeing with your point I have to point out that beyond basic research the government has also successfully provided infrastructure for commercial innovation with things like the Internet, GPS and nuclear power. It tends to accomplish this without really trying.

EliRivers 12y ago

Mazzucato provides no real evidence the government is good at funding commercially viable innovation. She does. Just not here. The piece is called "Five minutes with..."; her arguments that government funds commercially viable innovation are easily found. I suppose the most obvious commercially viable innovation funded by governments (both directly and through various defence department funds) was computing.

nl 12y ago

Mazzucato provides no real evidence the government is good at funding commercially viable innovation. I don't think this is her point. Either way, I agree with you. I also agree that private enterprise is much, much better at commercialising research. I think her point is that basic research - which the governments are generally pretty good at funding - doesn't provide a good return on investment. I have some sympathy with this argument, but at the same time I don't think she provides a viable solution for the problem. As a specific example: DARPA kick-started the entire set driverless car technologies with their well-funded competitions in the early 2000s. This involved both prizes, and direct funding of robotics labs. One can argue that this was done to seed a solution in the 20-year timeframe, and the fact that we'll probably see a decrease in combat deaths from IEDs in a future war in 10 years as driverless trucks come online is reward enough. One can also argue that society should see some financial return on that - very risky - seed investment. Both arguments have merit, and I remain unconvinced either way.