The Private Sector Or Government Supported Research?
The answer is both... in partnership
I found this presentation a bit hard to digest. What Mariana Mazzucato is trying to explain is that innovation begins with high risk huge investment dollars that only government can provide. She also goes on to explain that the government should retain a portion of ownership. Relying on taxes alone for a return on investment is a losing proposition. Government, by retaining a portion of ownership, could then profit which in return could provide future funding for additional research projects.
Let me clarify further with an example
Let us suppose government provides a grant for developing solar panels since few if any companies are willing to make the highly speculative investment into researching the science to develop them. Let us further suppose a design is successful. Current policy is that a company could then patent them and be allowed to manufacture them profiting 100% at the taxpayers' expense. Under Mariana's plan, the government would provide a grant with the understanding it retains a portion of the patent.
In the past and up to now, the United States government spends enormous amounts of money for research grants. She suggests the United States organize a special department for the funding of research. That this department be funded by retaining ownership at least in part. At the present time the Congress hands out all kinds of grants with no strings attached. If instead the grant was issued to the private sector with the understanding that government retained a 10% or 20% ownership with all the profits derived thereof, it would not only save taxpayer dollars, but provide future funding for research projects such as these.
Let me give you another example. In 2003 the government spent $34.3 billion on medical research. Most of which benefited the pharmaceutical companies which retailed the resultant drugs. Some of which outsourced the manufacture of them to foreign nations. In 2012 11 Major Drug Companies Raked in $85 billion in NET PROFITS. Had the government retained as a little as a 10% ownership this would have made $8.5 billion more available for further medical research.
There is not an investor group crazy enough to invest $34.3 billion doing medical research without expecting some sort of return for their investment. Government should be no different.
One would think whether it be a conservative who places their faith in the private sector or a liberal who supports larger government involvement, both would be onboard with this idea.