There are those who reduce economics to a football match, and who see government or the public sector as a rival to their beloved Club for Growth (if we are to use the US conservative group as a namesake for our analogy). They have their icons, or top goal scorers if you will, such as Jobs, Elon Musk, Zuckerberg et al. Yet what they fail to see is that these players, geniuses as they may be, are not involved in a game against the government - for this is no game at all. This is a partnership or, dare we suggest it, a dependency on the state, and a good one at that. Without taxpayer-funded schemes that enhance our understanding of electronics, engineering and science, there could never be Apple. Without green subsidies, where would Tesla be? Sticking with the football analogy for just a moment, if Club for Growth is indeed a team, then the government is more of a youth academy that supplies the talent, rather than a title rival.
Mariana Mazzucato picks this up in an interview for Salon:
"From the Internet that allows you to surf the Web, to GPS that lets you use Google Maps, to touchscreen display and even the SIRI voice activated system —all of these things were funded by Uncle Sam through the Defense Advanced Research Projects Agency (DARPA), NASA, the Navy, and even the CI... If we look at what governments have done around the world, they have not just stepped in to address failures. They have actually actively shaped and created markets. This is the case in IT, biotech, nanotech and in today’s emerging green economy. Public sector funds have not only supported basic research, but also applied research and even early-stage, high-risk company finance. This is important because most venture capital funds are too short-termist and exit-driven to deal with the highly uncertain and lengthy innovation process."
Mazzucato, a professor in the Economics of Innovation programme at the Science Policy Research Unit of the University of Sussex, and author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, expresses concern that governments have locked themselves into an austerity path that will put government-sponsored research at risk, thus denying us the innovation that post-recession, low-growth economies so desperately need. The Club for Growth mantra of private good, public bad, will ultimately harm its own team, and the rest of us to boot.