I am currently reading The Value of Everything by Mariana Mazzucato, and one of the great insights she provides in the book is the key role that the public sector plays in innovation. It busts the stereotype of innovation being driven by the lone inventor toiling away in his or her garage or dorm room. I believe she has written a book on this very topic, which I have not read, yet, but it is high on the reading list. I think the following passages summarize this insight pretty well.
Understanding both the role of the public sector in providing strategic finance, and the contribution of employees inside companies, means understanding that innovation is collective: the interactions between different people in different roles and sectors (private, public, third sectors) are a critical part of the process. Those who might otherwise be seen as lone entrepreneurs in fact benefit from such collectivity; moreover, they stand on the shoulders of both previous entrepreneurs and taxpayers who, as we will see, often contribute to the underlying infrastructure and technologies on which innovation builds (p.194).
Examples she provides include:
- The smartphones many of us depend on these days are driven by technologies created with public funding.
- The internet and SIRI were developed with funding from the U.S. Department of Defense.
- Touchscreen display was developed with funding from the CIA.
- GPS was developed with funding from the U.S. Navy.
- The U.S. National Institutes of Health has funded the research supporting the development of two-thirds of the most innovative pharmaceuticals.
- U.S. Department of Energy has funded many of the greatest breakthroughs in energy (p. 194).
As she then goes on to point out, “In the very early days it is often public R&D agencies or universities that fund the science base, and only when innovation is close to having a commercial application do private actors enter” (p. 195).
Mazzucato, M. (2018). The Value of Everything. New York, NY: PublicAffairs.