Entrepreneurs and Innovation
“Today, it is truer than ever that basic research is the pacemaker of technological progress”. This sentence was written in 1945 by Vannevar Bush in A Report to the President entitled Science the Endless Frontier. Bush lays out an argument for why and how the US Government can foster research activities by public and private institutions to maintain and enhance its competitive position. Bush did not want to conduct research just for the pursuit of knowledge he knew that it would lead to new products, practical usages and bolster our competitive position on the world stage — “New products and new processes do not appear full grown. They are founded on new principles and new conceptions, which in turn are painstakingly developed by researching the purest reals of science”. I read this report while I was in grad school and thinking about working in the public or private sector and I had this in mind while I was reading Mariana Mazzucato’s book The Entrepreneurial State.
Mazzucato reminds us of the importance of Vannevar Bush’s idea of government investment in R&D but she pushes beyond the notion of the government as a behind the scenes deep pocketed investor funding basic research but she advocates for governments to be recognized for their risk taking entrepreneurial market making activities they engage in. She provides some very interesting and compelling examples from domains such computing, Pharma, bio-tech, and clean energy to demonstrate that “innovations” from the private sector were really built on top of the hard work and investments done by and/or funded by the State, Mazzucato takes nothing away from the success of Apple but spends a chapter discussing the iPhone and how it was built based on technologies pioneered by the US government - see diagram below from The Entrepreneurial State.
Taking nothing away from Apple’s technical, design and business success Mazzucato demonstrate the State’s role in the critical underpinnings that make the iPhone possible.
The US government in particular seems to suffer from an inferiority complex and thus has a marketing problem. The State has ceded the narrative to others and allowed the tax payers to forget how some major technologies were developed. Mazzucato goes on to discuss fiscal/tax policies that could allow the government to become more of an active investor in technologies it develops to fund the next ventures and recoup some expenses and who knows, maybe have some money left over. She does have her critics for sure, but she also has supports on both ends of the political spectrum. It is definitely something to think about.
I have started a number of technology businesses over the years and must admit I continue to love the idea of the lone genius inventor out to change the world … maybe we have been taking too much credit?