Risky research is no longer funded by the U.S. government, which is sad.
The day before a breakthrough occurs, it is a crazy idea… and if you are not funding crazy ideas, then you are stuck with linear (incremental) thinking.
In this post, I’ll explain why entrepreneurs (or ‘exponential CEOs’) can solve our problems instead of the government.
In this article, we explain why government R&D funding is declining, why this is a bad thing, and how innovative entrepreneurs are now keeping the U.S. competitive.
From a historical perspective…
As a result of government funding, many of the technologies that are now a large part of our global infrastructure have been accelerated: microchips, GPS, wind power, cancer therapies, touch screens, the internet, etc.
A government-funded company like Google might not exist today. The Digital Library Initiative was established in 1994 by NASA, DARPA, and the National Science Foundation to index and classify the growing number of websites.
Two Stanford graduate students – Larry Page and Sergey Brin – received one of the six grants from the Digital Library Initiative.
Governments no longer fund crazy ideas…
According to a recent NIH report, more innovative concepts receive lower funding.
Can you tell me why this happens?
As a result of government (and large corporations) fearing (public) failure, Congressional investigations and low stock prices occur. When failure is not an option, it’s really costly to succeed, “
I would like to share one of my favorite stories with you. This year, the $2.5 billion Curiosity Rover landed on Mars and is running a 1993-built PowerPC processor.
The reason why?
NASA knows it works, so they don’t “want to take a risk” with an unproven new processor.
In 2021, when the Mars Rover 2020 touches down on the surface of Mars, what processor will be used?
That’s right, it’s a 1993 PowerPC.
Over the last 50 years, the amount of federal R&D dollars has shrunk by more than 60% as a percentage of the federal budget as the government has become more risk averse.
It is truly sad to see how things are going.
How will the U.S. remain a world leader in innovation?
The entrepreneur.
It is now possible for entrepreneurs to access technologies once only available to governments and the largest corporations: the world’s information on Google, enormous computing power on Amazon Web Services (AWS), and access to capital and expertise from the crowd.
In recent years, we’ve seen a dramatic increase in startups created and, concomitantly, the number of innovative solutions to problems we couldn’t solve (or even think of) before.
The private sector has steadily increased more than six-fold over the past 80 years instead of shrinking (as we’ve seen in government R&D funding).
Global startups such as Google, SpaceX, IBM, Facebook, Qualcomm, and countless others are developing technology that solves key issues. The world’s biggest problems offer the world’s biggest business opportunities.
A report by the Kauffman Foundation a few years ago concluded that “new businesses (i.e., startups) are responsible for nearly all of the net new jobs created in the country and almost 20 percent of the gross jobs created.”