The state and innovation

It common cause to proclaim the uselessness of governments worldwide, particularly in innovating new ideas for the betterment of, well, just about anything.

A argument then often follows (as I have sometimes done), the that only free marketplace of ideas will solve climate change, health, food, cheap energy, education, etc.

But this, from a Wired article on economist Mariana Mazzucato has given me pause:

'Mazzucato traced the provenance of every technology that made the iPhone. The HTTP protocol, of course, had been developed by British scientist Tim Berners-Lee and implemented on the computers at CERN, in Geneva. The internet began as a network of computers called Arpanet, funded by the US Department of Defense (DoD) in the 60s to solve the problem of satellite communication. The DoD was also behind the development of GPS during the 70s, initially to determine the location of military equipment. The hard disk drive, microprocessors, memory chips and LCD display had also been funded by the DoD. Siri was the outcome of a Stanford Research Institute project to develop a virtual assistant for military staff, commissioned by the Defense Advanced Research Projects Agency (DARPA). The touchscreen was the result of graduate research at the University of Delaware, funded by the National Science Foundation and the CIA'.

Others she mentions - 'The development of Google’s search algorithm, for instance, had been supported by a grant from the National Science Foundation, a US public grant-awarding body. Electric car company Tesla initially struggled to secure investment until it received a $465 million (￡380 million) loan from the US Department of Energy'

DARPA (the US defense research agency) 'pumped billions of dollars into the development of prototypes that preceded commercial technology such as Microsoft Windows, videoconferencing, Google Maps, Linux and the cloud. In Israel, Yozma, a government-backed venture capital fund that ran between 1993 and 1998, supported more than 40 companies. In the UK, the Government Digital Service, launched in 2010, was behind the award-winning .gov.uk domain, saving the government ￡1.7bn in IT procurement.'

She goes on to forcefully argue the role of the state in funding/mentoring basic research and innovation and the fostering of wealth creation. I have long believed that many of our most pressing problem will be sorted out by private enterprise. I am no longer sure they can do that alone (even if they are fantastically rich). WIthout the guiding hand of a mission-oriented state, profits are often funnelled into share-price enhancing initiatives, like share buybacks. (It is, of course, reasonable to be skeptical about that guiding hand here in SA, or under Trump in the US).

For those you interested in reading the whole article, Google 'Mariana Mazzucato Wired article'. It is something new and important to think about.