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As The Original Moonshot Turns 50, We Still Need Public Support For Innovation

2019 July 21
by Greg Satell

We tend to think of innovation as an individual effort. It’s much easier to visualize someone like Thomas Edison, Steve Jobs or Elon Musk, in a flash of inspiration, coming up with a brilliant idea than it is to imagine a vast, collective effort. Yet make no mistake. Innovation is a team sport and great innovators are great collaborators.

This year marks the 50th anniversary of the Apollo mission which put a man on the moon, one of the most vast collective efforts in history. It involved 400,000 scientists, engineers and technicians working across government, academia and private industry. It was, above all, a public effort that mobilized resources across all facets of society.

Today, the moonshot seems like a relic from another era, when we expected, and often welcomed, government to play a bigger role in our lives. Yet the challenges we face now, such as climate change, energy, manufacturing and healthcare are, in many ways, far more complex than going to the moon and government needs to play a role in solving them.

Driving Basic Research

In 1945, President Roosevelt asked Vannevar Bush, who managed America’s scientific effort during the war, to write a report about how America could continue that success in peacetime. The report, titled Science, The Endless Frontier, would set the stage for America’s technological dominance during the second half of the century.

The crux of Bush’s argument was that we need government to create “scientific capital” through basic research and pointed out that “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 research in the purest realms of science.”

Bush’s report led to the development of America’s scientific infrastructure, including agencies such as the National Science Foundation (NSF), National Institutes of Health (NIH) and DARPA. Others, such as the National Labs and science programs at the Department of Agriculture, also contribute significantly to our scientific capital.

Many simply assume that, if these programs were ended or cut back significantly, the private sector would be able to make up the difference. Yet that is hardly the case.  One reason is what economists call the appropriability principle. Private companies focus their investments on projects that they can appropriate to create a competitive advantage. That’s why the vast majority of basic research is publicly funded.

In any case, the results speak for themselves and returns on public research investment have been shown to surpass those in private industry. To take just one example, it has been estimated that the $3.8 billion invested in the Human Genome Project resulted in nearly $800 billion in economic impact and created over 300,000 jobs in just its first decade.

Creating New Industries In The Valley Of Death

Another reason that public investment is so important is that while private companies tend to be very good at assessing financial and market risk, they tend to be much less proficient at assessing technical risk. In other words, it is very hard to find private investment for new technologies in a market that doesn’t exist yet.

The gap between discovery and commercialization is so notorious and fraught with danger that it’s been unaffectionately called the “Valley of Death.” Part of the problem is that you can’t really commercialize a discovery, you can only commercialize a product and those are two very different things.”

The US government has several programs to help bring discoveries to market. The biggest and most well known is the SBIR program which provides grants to entrepreneurs looking to build businesses based on new discoveries. Qualcomm, to take just one example, started out with an SBIR grant. More recently, the I-Corps program has tripled the effectiveness of these grants.

The success of the SBIR grants has led to other programs to help create new industries. For example, ARPA-e extends grants to advanced energy projects that are considered too high-risk for private investors. The Lab Embedded Entrepreneurship Programs (LEEP), brings in entrepreneurs to incubate their companies at National Labs for two years, getting access to top minds,  state-of-the-art facilities and entrepreneurship training.

Convening Collaboration

Besides technical support, the US government has incredible power to marshal the resources of government labs, academic scientists and companies in the private sector. In fact, a big part of NASA’s success was its ability to instill collaboration across government, research universities and private contractors to achieve what many considered to be impossible.

For example, in the 1980s the Japanese had begun to dominate microchips and the American semiconductor industry was in peril. Seeing the matter as critical to national security, the US government set up a public-private consortium, SEMATECH, to regain dominance. Within a decade, American companies were back on top.

Today, there are a number of programs that take a similar approach. JCESR is developing the next generation of battery technologies. The Manufacturing Institutes are driving innovation in everything from advanced fabrics and wide-gap semiconductors to 3D printing and composite materials. The Critical Materials Institute helps to find alternatives to materials, such as rare earth elements, that are subject to supply disruptions

What makes these programs so effective is that while the science is driven by government and academic labs, the agenda is largely shaped by private businesses who are far more intimately aware of market needs and realities.

Building An Economy For The 21st Century

Since the success of the Apollo Missions, public support for large science and technology programs has waned. Part of this is due to shifts in the political winds, but the perceived success of Silicon Valley’s venture backed model has also played a part. If private entrepreneurs and investors can create a high-technology economy in California, then why not everywhere else?

The myth of Silicon Valley is that venture-funded entrepreneurship is a generalizable model that can be applied to every type of business. It is not. In fact, it is a specific model that was conceived in a specific place at a specific time to fund mature technologies for specific markets. It’s not a solution that fits every problem.

The truth is that the venture-backed model works best in markets that are already well defined, technologies that are well understood and have an investment horizon of 3-5 years. Many of the most important technologies of the new century, however, will be far more complex and take longer to develop.

In other words, we are entering a new era of innovation and to win in the new century we will need to revive the public appetite for discovery that made the moon landing such a rousing success. As I noted above, innovation is a team sport and we need collective action across government, academia and the private sector if we are going to continue to compete effectively on the global stage.

– Greg


Image: Pixabay


2 Responses leave one →
  1. Martynas permalink
    July 23, 2019

    What I tend to notice is that for innovation to happen – everyone has to collaborate. Not just the structure that You mentioned in the article. When one looks at scientific revolutions that brought us so many wonderful improvements, one can see that science disciplines have to collaborate too. A lot of innovative thinking comes from people applying their experience in a different field but a situation that they are familiar with from their “official” subject. I guess everything overlaps and the idea of specialization seems to me to be a completely foolish idea in the context of innovation and progress. Innovation is a collaborative discipline. We need different POVs to be able to uncover the full picture.

    Awesome article Greg! Good food for thought.

  2. July 23, 2019

    Great points! Thanks Martynas.

    – Greg

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