I keep hearing people complain about how China is kicking our butt. But all I hear is we should punish them. Why shouldn't we just get better at competing with them? With the talk about infrastructure I thought about one idea I think might work. Obama tried to spur innovation but the government wasn't very good at it. My idea would be to enlist venture capital firms to find and fund new ventures. The thought being that the government could match the VC money and the venture capitalists would operate as normal returning only a small percentage to the government. This could double the investment in new business while keeping government out of picking winners and losers. Thoughts or other ideas.
You do realize that China pretty much copied or stole their technology from the US? It's interesting then that you would suggest development of new technology as a way to try to compete with China. As for the subject of infrastructure, that is something that is long overdue in the US. A lot of the infrastructure in the US was built decades ago, like in the late 40s to 60s. Now it is crumbling and beginning to fall apart. This is something that has been talked about for a long time, and everyone agrees the US needs to put money into infrastructure, but it just never gets done, never seems to be a big priority. But I'm not sure that infrastructure will really help the US compete in the world marketplace much.
The government is inherently bad at doing many things, but I don't think developing technology is one of them. I don't see any real reason why big private corporations would really be any more efficient at developing new technological breakthroughs than publicly-funded research institutions. Either way it involves huge levels of bureaucracy, and it is typically a longer-term indeterminate investment - something private business ventures don't tend to be so good at. The issue is, of course, once those improved technologies are developed, how to protect them from just getting moved to China. And that's something that's a lot more difficult in practice than theory.
VC companies are normally start ups, not big corporate entities. Yes. many fail yet somehow most venture capital firms make money. The advantage I see is the VC has skin in the game - government, not so much. But you bring up another one. Private research. The old R&D tax credits might need a dusting off. But of course for that to work corporations need to pay taxes.
It depends what type of "technology". For bringing technologies to market, or finding a use for them, VC may be a good way to go. But for developing fundamental underlying new technologies, that is normally much more of a long-term thing, and probably not the best area for VC to try to invest in. Look, it's not like the government has a bad record when it comes to developing new technologies and research.
I run a research lab in academia, federally funded. Biden said recently he wants to boost federal spending for science to 2% of the budget (currently at 0.7%). I think it is great to have a president who thinks about investing in the future again. However, it has to be done in a slow and sustainable, and thoughtful way, not like a big boost under Biden, and then the next president takes it all away again. We already have too much whiplash in economic policy, tax cuts in one year, and four years later a tax increase. Uncertainty is the name of the game as the economic and innovation killer. The last time we had a president who gave a big boost to science was Clinton. He almost doubled the budget of the NIH. Unfortunately, the increase was too fast, so the research labs were not prepared to take advantage of it (too many poor projects were funded), and a lot of the money just went to bloated budgets of medical schools (many of them private), instead of research. If it is done again, we have to make sure the money goes to actual good research, not hospital administrators.
That's where I was coming from by having the VC's do the oversite. But @kazenatsu is right most research is done either in corporations or academia. Any ideas on how to get the best bang for the buck for grants?
Well, maybe send a message to those in charge of distributing grant money that they should be focusing on research that is likely to lead to economically valuable new technologies.
