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Comparing Technology Innovation in the Private and Public Sectors

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Comparing Technology Innovation in the Private and Public Sectors

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The following paper evaluates the websites of leading U.S. corporations with state and national governments, grades their overall performance, and examines nearly two dozen features of innovation.
They found that many government websites lacked multimedia, interactivity. On the other hand, public sector agencies websites also offered stronger consumer protections than commercial sites.

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Comparing Technology Innovation in the Private and Public Sectors

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Technology can be a tool for making government better and democracy stronger. However, the public sector has continued to fall behind the private sector in technology innovation, writes Darrell West. Evaluating the web sites of leading U.S.

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Falcon Heavy Rocket GIF - Find & Share on GIPHY

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Discover & share this Rocket GIF with everyone you know. GIPHY is how you search, share, discover, and create GIFs.

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Falcon Launches GIF - Find & Share on GIPHY

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Discover & share this Spacex GIF with everyone you know. GIPHY is how you search, share, discover, and create GIFs.

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Why are private sectors more developed and better than public sectors?

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Why are private sectors more developed and better than public sectors?

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The private sector answers to just one thing : profit motive to sustain itself.

Imagine you are a hungry person stuck in a jungle without any means of food. You dont have any cooking stove or even a matchstick to light a fire. All you have is a magnifying glass and a few dried twigs and leaves on the ground. Now how will you start a fire to cook food?. Obviously you will use the magnifying glass to focus the rays of the Sun on the leaves and start a fire!!. Thats the spirit of innovation. You are starved with nothing in the middle of the forest. You make do with what you have to get yourself going.

Private sector companies- dont have government funding, dont have government patronage (except for some big shots) , they survive on one thing - innovation and excellence. Thats why they are efficient.

Now why cant public sector- with government patronage and funding be more efficient, when the private sector- without that - can be ?. Thats because- public sector companies is more about social service. In India- for instance- in any government offices, the people will behave as they are the Supreme Lord of the Universe. Its the typical- ' I- am- the- government- servant ' attitude. This attitude stems from the fact that public sector companies cannot lay off or kick out slackers and lazy workers like a private sector company. Because the main aim of the government office is to provide employment to poor people. Kicking them out just because they are lazy slackivists would go against the principles of social justice.
A public sector company provides employment for the sake of providing employment, not all the companies produce any economic value.

Image from Google Images
That is why any country where its government has a larger say in the business and economy, that country ranks high in the corruption Index. See Corruption Index 2015.

However, this does not mean that private sector run the whole country. In an ideal country, areas which impact the larger society - at a more grassroot level- like education, health-care, police force should have the government control over them. Pretty much everything else can be left to the private.

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Why are private sectors more developed and better than public sectors?

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Answer (1 of 6): The private sector answers to just one thing : profit motive to sustain itself. Imagine you are a hungry person stuck in a jungle without any means of food. You dont have any cooking stove or even a matchstick to light a fire.

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“Figure 3.18. Sectors Presenting Clear Business Opportunities Attract More Private Investment than Those Traditionally Serviced by the Public Sector.” doi:10.1787/888933855637.
Lu, Jenny, and Darrell M. West. “Comparing Technology Innovation in the Private and Public Sectors.” Brookings, Brookings, 28 July 2016, www.brookings.edu/research/comparing-technology-innovation-in-the-private-and-public-sectors/.
Mazzucato, Mariana. “State of Innovation: Busting the Private-Sector Myth.” New Scientist, www.newscientist.com/article/mg21929310-200-state-of-innovation-busting-the-private-sector-myth/.
Souetre, Loic. “SpaceX, or How to Disrupt the Space Exploration Industry.” Medium, Medium, 14 July 2016, medium.com/@loicsou/spacex-or-how-to-disrupt-the-space-exploration-industry-f2545f1bd166.
“SpaceX: Most Innovative Company.” Fast Company, 1 Jan. 2000, www.fastcompany.com/company/spacex.

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SpaceX is the innovative and ambitious private aerospace manufacturer founded in 2002 by Elon Musk. As for 2017, SpaceX delivered 48 satellites into orbit and 22,700 pounds of supplies to the International Space Station, and now holds more than 60% of the global share of commercial launch contracts. But SpaceX truly earned its place among the aeronautical elite—and changed the economics of space flight—by making its reusable rocket system extremely reliable .

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SpaceX: Most Innovative Company | Fast Company

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State of innovation: Busting the private-sector myth

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State of innovation: Busting the private-sector myth

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Countries such as the US, China, Singapore and Denmark the state has provided the kind of patient and long-term finance new technologies need to get off the ground. Investments of this kind have often been driven by big missions, from putting a human on the moon, to solving climate change.

Apple is a perfect example. In its early stages the company received government cash support via a $500,000 small business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the internet, GPS, touchscreen displays and even the voice-activated smartphone assistant Siri all received state cash. The US Defence Advanced Research Projects Agency (DARPA) bankrolled the internet, and the CIA and the military funded GPS. So, although the US is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.

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Forget Silicon Valley entrepreneurs. It is government that should be credited for backing wealth-creating technology

IMAGES of tech entrepreneurs such as Mark Zuckerberg and Steve Jobs are continually thrown at us by politicians, economists and the media. The message is that innovation is best left in the hands of these individuals and the wider private sector, and that the state - bureaucratic and sluggish - should keep out. A telling 2012 article in The Economist claimed that, to be innovative, governments must "stick to the basics" such as spending on infrastructure, education and skills, leaving the rest to the revolutionary garage tinkerers.

Yet it is ideology, not evidence, that fuels this image. A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game.

Whether an innovation will be a success is uncertain and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the US, China, Singapore and Denmark the state has provided the kind of patient and long-term finance new technologies need to get off the ground. Investments of this kind have often been driven by big missions, from putting a human on the moon, to solving climate change. This has required not only funding basic research - the typical "public good" that most economists admit needs state help - but applied research and seed funding too.

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Apple is a perfect example. In its early stages the company received government cash support via a &dollar;500,000 small business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state&colon; the internet, GPS, touchscreen displays and even the voice-activated smartphone assistant Siri all received state cash. The US Defence Advanced Research Projects Agency (DARPA) bankrolled the internet, and the CIA and the military funded GPS. So, although the US is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.

"Every technology that makes the iPhone a smartphone owes its vision and funding to the state"

The examples don't just come from the military arena, either. The US National Institutes of Health spends around &dollar;30 billion every year on pharmaceutical and biotechnology research and is responsible for 75 per cent of the most innovative new drugs annually. Even the algorithm behind Google benefited from US National Science Foundation (NSF) funding.

Across the world we see state investment banks financing innovation. Green energy is a great example. From Germany's KfW state bank to the Chinese and Brazilian development banks, state-run finance is playing an increasing role in the development of the next big thing&colon; green tech.

In this era of obsession with reducing public debt - and the size of the state more generally - it is vital to dispel the myth that the public sector will be less innovative than the private sector. If not, the state's ability to continue to play its enterprising role will be weakened. Stories about how progress is led by entrepreneurs and venture capitalists have aided lobbyists for the US venture capital industry in negotiating lower capital gains and corporate income taxes - hurting the ability of the state to refill its innovation fund.

The fact that companies like Apple and Google pay hardly any tax - relative to their massive profits - is all the more problematic, given the significant contributions they have had from the government. Thus, the "real" economy (made up of goods and services) has experienced a shift similar to that of the "financial" economy&colon; the risk has been increasingly moved to the public sector while the private sector keeps the rewards. Indeed, one of the most perverse trends in recent years is that while the state has increased its funding of R&D and innovation, the private sector is apparently de-committing itself. In the name of "open innovation" big pharma is closing down its R&D labs, relying more on small biotech companies and public funds to do the hard stuff. Is this a symbiotic public-private partnership or a parasitic one?

It is time for the state to get something back for its investments. How? First, this requires an admission that the state does more than just fix market failures - the usual way economists justify state spending. The state has shaped and created markets and, in doing so, took on great risks. Second, we must ask where the reward is for such risk-taking and admit that it is no longer coming from the tax systems. Third, we must think creatively about how that reward can come back.

There are many ways for this to happen. The repayment of some loans for students depends on income, so why not do this for companies? When Google's future owners received a grant from the NSF, the contract should have said&colon; if/when the beneficiaries of the grant make &dollar;X billion, a contribution will be made back to the NSF.

Other ways include giving the state bank or agency that invested a stake in the company. A good example is Finland, where the government-backed innovation fund SITRA retained equity when it invested in Nokia. There is also the possibility of keeping a share of the intellectual property rights, which are almost totally given away in the current system.

Recognising the state as a lead risk-taker, and enabling it to reap a reward, will not only make the innovation system stronger, it will also spread the profits of growth more fairly. This will ensure that education, health and transport can benefit from state investments in innovation, instead of just the small number of people who see themselves as wealth creators, while relying increasingly on the courageous, entrepreneurial state.

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State of innovation: Busting the private-sector myth

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Forget Silicon Valley entrepreneurs. It is government that should be credited for backing wealth-creating technology IMAGES of tech entrepreneurs such as Mark Zuckerberg and Steve Jobs are continually thrown at us by politicians, economists and the media.