RafaelFajardo

All the most important technologies that have driven growth — what economists call general purpose technologies — trace their funding back to government. These are the technologies whose effects permeate across large parts of the economy, not just a single sector, and nurture decades of growth. These include aviation technologies; space technologies; semiconductors, the Internet; nuclear power; and nanotechnology. So we’re not talking just gadgets here, but revolutionary technologies that drive innovation led-growth — and it’s these technologies that are embedded inside the gadgets.

All basic technologies that make our mobile phones “smart” can be traced back to governmental initiative and funding. Just a few: microprocessors; RAM memory; hard disk drives; liquid-crystal displays; lithium batteries; the Internet; cellular technology and networks; global positioning system (GPS); multi-touch screens.

Public sector agencies have been needed to provide the patient, long-term, committed finance that uncertain innovation with long-time horizons requires. Both Compaq and Intel got started with SBIR grants, and Apple also received $500K (which is the equivalent of about $1.8 million nowadays) from an SBIC grant.

The government got it right with the Internet, GPS, touchscreen display and the SIRI voice activated system, which make the iPhone so smart. To make these good decisions, you of course need serious expertise within government. And this is the most challenging bit: how to attract the brightest scientists into government agencies. DARPA, which was a key funder of the Internet, has thought about this dilemma and has been able to set up an intellectual environment where exploration of the uncertain future is welcomed rather than feared.

This also holds today in ARPA-E, which is trying to do for energy what DARPA did for the Internet. I just visited ARPA-E last week and it feels like a Google campus when you walk in: open space, tech geeks, white boards everywhere, and lots of expertise riveting with dynamic energy. This shows that there is nothing in the DNA of the public sector that is going to make it less exciting or smart than the private sector, or less able to pick successes.