Winehole23
03-24-2014, 11:02 AM
Imagine a world in which the United States government — not the private sector — is the economy’s indispensable entrepreneur, innovating at the frontiers of science and technology, able and willing to take risks and to persevere through uncertainty.
That is the world depicted in “The Entrepreneurial State,” a recent book by Mariana Mazzucato (http://entrepreneurialstate.anthempressblog.com/), an economist at the University of Sussex (http://www.sussex.ac.uk/spru/) who specializes in innovation. And it is, in fact, the way the United States has operated since World War II. Through the National Institutes of Health, the Defense Advanced Research Projects Agency and other agencies and departments, the government has for decades gone beyond financing research and creating the conditions for innovation to occur; it has also envisioned the future, engaged in the riskiest experimentation and overseen the commercialization process.
Professor Mazzucato documents the leading role of the government in, for example, “all the technologies which make the iPhone smart,” including the Internet, wireless systems, global positioning, voice activation and touch-screen displays. That is not to detract from Apple’s role, but to put it into context. Without government, the technological revolution that has allowed iProducts to exist would not have happened.
Ditto the leading role of government in aviation and space technologies, pharmaceuticals and biotechnology, and more recently, in nanotechnology, which could be the next “general purpose” breakthrough, akin to electricity or computers.
The private sector never has been and never will be up to tasks like that. Even in the bygone heyday of Bell Labs, corporate investment was alongside, not in place of, government investment. Today, the scope, duration and cost of breakthrough research is either beyond the private sector’s corporate and philanthropic resources or outside its profit model. A salient point in “The Entrepreneurial State,” amplified in a review (http://www.ft.com/intl/cms/s/2/32ba9b92-efd4-11e2-a237-00144feabdc0.html#axzz2wd7uaqcO) by Martin Wolf, the chief economics commentator of The Financial Times, is that corporations today often spend surplus cash on share buybacks rather than on fundamental innovation.
In brief then, it is an essential role of the federal government — in the interest of tomorrow’s prosperity — to invest and engage in scientific and technological discovery. And it is a role the government has played well, until now. After rising steadily for decades, federal financing for research and development peaked in 2009, at $165.5 billion, bolstered by that year’s stimulus spending. It has since sunk to levels last seen almost a decade ago, falling to $133.7 billion this fiscal year.
That roughly $32 billion drop is even greater when adjusted for inflation, and it encompasses both defense- and nondefense fields, including health, energy, the environment, climate, technology and electronics. One key area, basic science, received about $40 billion in the peak year 2009. Since then, it has fallen, to $30 billion last year, one of the sharpest declines ever. The future does not look much brighter. Constrained by austerity-induced budget caps, the research and development budget recently proposed by President Obama for fiscal year 2015 was only $135.4 billion, the lowest request of his presidency. Chances for more money on top of the budget caps, as Mr. Obama has called for, are virtually nil. And given that Congress invariably enacts less than the president asks for, the trend is all downhill.
http://www.nytimes.com/2014/03/24/opinion/americas-underappreciated-entrepreneur-the-federal-government.html?_r=0
That is the world depicted in “The Entrepreneurial State,” a recent book by Mariana Mazzucato (http://entrepreneurialstate.anthempressblog.com/), an economist at the University of Sussex (http://www.sussex.ac.uk/spru/) who specializes in innovation. And it is, in fact, the way the United States has operated since World War II. Through the National Institutes of Health, the Defense Advanced Research Projects Agency and other agencies and departments, the government has for decades gone beyond financing research and creating the conditions for innovation to occur; it has also envisioned the future, engaged in the riskiest experimentation and overseen the commercialization process.
Professor Mazzucato documents the leading role of the government in, for example, “all the technologies which make the iPhone smart,” including the Internet, wireless systems, global positioning, voice activation and touch-screen displays. That is not to detract from Apple’s role, but to put it into context. Without government, the technological revolution that has allowed iProducts to exist would not have happened.
Ditto the leading role of government in aviation and space technologies, pharmaceuticals and biotechnology, and more recently, in nanotechnology, which could be the next “general purpose” breakthrough, akin to electricity or computers.
The private sector never has been and never will be up to tasks like that. Even in the bygone heyday of Bell Labs, corporate investment was alongside, not in place of, government investment. Today, the scope, duration and cost of breakthrough research is either beyond the private sector’s corporate and philanthropic resources or outside its profit model. A salient point in “The Entrepreneurial State,” amplified in a review (http://www.ft.com/intl/cms/s/2/32ba9b92-efd4-11e2-a237-00144feabdc0.html#axzz2wd7uaqcO) by Martin Wolf, the chief economics commentator of The Financial Times, is that corporations today often spend surplus cash on share buybacks rather than on fundamental innovation.
In brief then, it is an essential role of the federal government — in the interest of tomorrow’s prosperity — to invest and engage in scientific and technological discovery. And it is a role the government has played well, until now. After rising steadily for decades, federal financing for research and development peaked in 2009, at $165.5 billion, bolstered by that year’s stimulus spending. It has since sunk to levels last seen almost a decade ago, falling to $133.7 billion this fiscal year.
That roughly $32 billion drop is even greater when adjusted for inflation, and it encompasses both defense- and nondefense fields, including health, energy, the environment, climate, technology and electronics. One key area, basic science, received about $40 billion in the peak year 2009. Since then, it has fallen, to $30 billion last year, one of the sharpest declines ever. The future does not look much brighter. Constrained by austerity-induced budget caps, the research and development budget recently proposed by President Obama for fiscal year 2015 was only $135.4 billion, the lowest request of his presidency. Chances for more money on top of the budget caps, as Mr. Obama has called for, are virtually nil. And given that Congress invariably enacts less than the president asks for, the trend is all downhill.
http://www.nytimes.com/2014/03/24/opinion/americas-underappreciated-entrepreneur-the-federal-government.html?_r=0