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Business Title: The Proper Role of Government in Science and Technology America's economic might has always rested on our ability to innovate. The cotton gin, light bulb, air plane, assembly line, microprocessor, internet, e-commerce... America has thrived because our system supported an environment of both technological and business innovation. For the last several decades, there has been a lot of debate in this country about the proper role of government in science and technology. The debate crosses ideological lines. For the purposes of our discussion, let's define three terms: 1.) Basic research focuses on creating and testing fundamental theories. 2.) Applied research examines those fundamental theories in the context of a specific set of circumstances. 3.) Commercial product development uses the findings of applied research to create specific products for market consumption. In my view, the government has a role to play in basic research. By definition, the goal of basic research is to understand the world around us. While the discoveries that result from basic research will hopefully lead to a better understanding of the world in which we live, there are no direct commercial goals or immediate benefits that are being pursued by the research. Knowledge is the only goal. While there are some large companies who invest in basic research, most enterprises that do research at all focus on applied research -- how basic knowledge applies to a certain set of scenarios. Conversely, the government shouldn't have any role at all in commercial product development. The success of commercial products is best left to market mechanisms, including the all important mechanism of trial and error. The history of the world is clear -- top down government planning of markets only leads to stagnation and impoverishment, while freedom and competition in delivering products and services leads to innovation and growth. What about applied research? It's an area that is open for debate. The closer an applied research project is to basic science, the more justified the government is in being involved. The closer the project is to commercial product development, the less justified the government is in being involved. It should be noted that many companies have broad, deep, and successful applied research programs. Not all companies benefit from their own applied research. Look at Xerox, whose Parc Research Labs invented much of the foundation for modern computing, yet Xerox never commercially benefited from this research at all. So, the government's involvement in applied research programs should be viewed with some skepticism, because the market already does a great job. So, what is the Obama administration's score on this? It's actually mixed. The one good thing the Obama administration did was to dock the Space Shuttle, which at this point was mostly a commercial venture involved in launching satellites and resupplying the international space station. In other words, it was a delivery truck. The result is that a plethora of companies (like SpaceX) are jumping into the satellite launch market. The new open commercial market for satellite launches has also spurred companies into pursuing a new space tourism market as well. NASA monopolized space launches 10 years longer than it needed to. The one good thing the Obama Administration has done is put an end to NASA's monopoly of the commercialization of space. Unfortunately, among the worst things the Obama Administration has done is try to pick winning and losing technologies (e.g., plug-in electric cars vs. hydrogen fuel cell cars) and technology companies (e.g., Solyndra, Fisker Automotive, etc.) in the alternative energy market. Predictably, their record has been a miserable failure, with political payoffs and bankruptcies as the immediate outcome. In the long run, it will take us longer to move to green energy sources because companies are improperly allocating resources chasing tax dollars rather than figuring out what the real future of energy might be. Here is the lesson that we should all learn from the government's successes and failures in science and technology over the last several decades: The government should spend money on pursuing the big, basic scientific questions of the day. But they should stay away from influencing the directions of the commercial market.
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#1. To: jwpegler (#0)
I would disagree with this point. That was another bad thing Obama did. He did it because Americans were proud of it. He doesn't like Americans having anything to be proud of. It isn't one of us.
The Space Shuttle was a source of American pride 25 years ago. Today, it's a delivery vehicle. The government's taxpayer subsidized space delivery business caused entrepreneurs to shy away from the business. This has stalled progress in space. Regardless of the motives Obama may or may not have had, he did the right thing for once.
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