Mazzucato writes, “Not only has government funded the riskiest research, whether applied or basic, but it has indeed often been the source of the most radical, path-breaking types of innovation. To this extent it has actively created markets, not just fixed them.”
There is no question that there will be waste in research and development, just as private corporations sometimes veer onto the wrong track. All you need do is think back to 2012 and the scandal surrounding
Solyndra, the Silicon Valley-based solar panel manufacturer that collapsed, leaving taxpayers on the hook for $535 million in federal loan guarantees.
Opponents of public spending often seize on cases like this to make their point, conveniently forgetting that Apple, too, benefited not just from the government research that created many of the technologies it uses, but from early support from the Small Business Investment Company program.
The point is not that government investment in research and development is better or worse than private-sector investment, but that collaboration between government and industry puts us in a stronger position competitively than either sector acting alone. Both are needed to solve big problems.
Which is why the cuts we’re seeing in federal R&D spending are so alarming. We’re already down to a level of funding last seen over a decade ago, and a study last year by the American Association for the Advancement of Science sees some $53 billion in federal R&D investment at risk if the sequester remains in place for another three years. It is impossible to know how many new products and even new
industries won’t get developed as a result, but it’s certainly safe to say that the U.S. economy and we as Americans will bear the cost of these unspent dollars well into the future.