In “The Wealth of Nations”, published in 1776, Adam Smith a very learned economist of the time stated that innovation lies in private entrepreneurship. Ask any Republican and they will probably agree with that statement. 1776 was a long time ago. Is it possible that things have changed?
The state is presumed to be inefficient. They are much maligned as an engine of innovation. They get in the way. They pass unreasonable laws. Really?
Innovation depends on bold risks, with lots and lots of money. Sure, there will still people that come up with “game changers” in their garage – a Henry Ford, Steve Jobs, etc., but that really doesn’t happen much any more. It takes money and lots of very smart people.
A good writer on this subject is Mariana Mazzucato, a Sussex University (England) Professor of Economics. She wrote that all of the technology which made the iPhone so smart was state funded, as was the internet, wireless networks, the global positioning system, microelectronics, touchscreen displays, and even SIRI – the sexy female voice on the iPhone.
The US department of Defense created the Advanced Research Projects Agency (ARPA). ARPA is, alone, responsible for the internet. GPS was the brainchild of the CIA and the US military. The Israelis actually own a lot of patents for cell phone technology. Those Israeli companies were successful because they worked in a partnership with the Israeli government. We all love and use Wi-Fi don’t we? I hope you have thanked Australian GOVERNMENT engineers for that.
If the Arabs really wanted to boycott Israeli products, the first thing they should do is to throw away their cell phones!
Apple took these innovations and did a beautiful job of assembling them into a very attractive iPhone, iPad, and maybe lots of other “i” things. Apple never claimed to have invented the stuff inside.
The funding for the algorithm that drives Google’s search engine was provided by the US National Science Foundations. They didn’t just stumble on it, they had lots and lots of very bright government mathematicians doing the research.
The fact is, private companies cannot handle the huge uncertainties, costs, and time spans associated with fundamental research. Their stockholders would never stand for that. They cannot and will not bear these costs. It is up to the state to do the research and pick up the check, or the job won’t get done!
In view of what the corporations get from the governments, it seems quite fair to raise their taxes and have them pay for it. The Republicans want to cut funding from government research, as well as from University research. At the same time, they want to lower taxes. Over the past few years, they have been very successful. One thing that they haven’t been able to do is to come up with a new source for American innovation. We didn’t get where we are today because we are a superior people, because we have god looking down favorable on us, or we have the “right stuff”. We got here because both Republicans and Democrats recognized what we needed to do.
That was then. Now? Now we have a bunch of right wing fanatics in the Republican party who have declared war on knowledge. One survey shows that nearly 20% of American scientists are contemplating leaving the US and continuing their work elsewhere. I don’t blame them.
The current Republican party is a group of willfully ignorant people eager to bring us down to the level of a 3rd world theocracy. How bad could that be? Just ask the Pakistanis, Iranians, Saudis, or Afghans. The sad thing is that so many Americans are their “useful idiots”. Ignorance is alive and well in the United States of America.
Marcos Da Silva, “Myth Dispelled: The Real “Engine of Innovation” is the State, not the Private Sector
Mariana Mazzucato: How the State Drives Innovation