This NYT article provides an interesting discussion on if the government should receive returns on the successful R&D it funds. Would it increase or decrease innovation? How does this effect inequality?
On the one hand, the article argues:
“’We must change the distribution of rewards to innovation,’ Professor Mazzucato told me. ‘We socialize the risks but privatize the rewards.’ This not only contributes to our persistently widening inequality, it undercuts support for scientific discovery.
Had the government received an equity share in Tesla in exchange for taxpayers’ financial support, for example, it might have paid for the government’s failed investment in Solyndra.
Had it gotten even a minute stake in Google — whose search algorithm was financed by the National Science Foundation — or in GPS, rocket development, touch-screen technology or the many drugs that flowed from its investment in basic science, the government might have a stable, richer pot to finance the next generation of scientific discovery.”
Of course, there are also concerns with governments receiving returns on investments in R&D. What if governments were to become too concerned with getting high returns? How would what R&D they invest in change? Especially if governments patented innovations resulting from their investment, there is evidence to say that related discoveries will substantially slow.
I think that at the end, the author makes a good point: “At a minimum, why not embed rules into federally funded discoveries to ensure that companies that profit from these ideas reinvest some share of their profits into additional research, rather than use it for stock buybacks?”
What do you think? Should the government be rewarded for investing in R&D that is successful If so, how? Through direct repayment? Through agreeing to invest a certain amount of profits in R&D? Other thoughts?