It is generally thought that innovation is lead mainly by private enterprises. This is true to some extent, but only in the direction that they are incentivised.
Many established businesses innovate in a way to evolve or grow an existing product rather than to replace, especially if that product is a cash cow. We’ve often heard the story of Kodak and they holding off the digital camera because they feared it would cut into their film sales.
Most disruptive innovations will come from small startups hoping to change the world, and then probably get gobbled up by some large enterprise for integration, or to be killed off.
But one place that people have pointed to saying that innovation does not exist is the Government. This given that many innovations that we depend on heavily was brought to us by government spending, more specifically through the Military.
Military spending has brought us such innovations as duct tape, microwave ovens, GPS, and let’s not forget the Internet. Nuclear energy is also a by-product of military investment, which is a bit unfortunate as it led to research using Plutonium rather than Thorium, which is a much safer fissile material.
And because the motives for the Government is different from the private sector, what they choose to invest in may have more benefits to the people. Now I say this at risk of showing my naivete in believing that people will generally do the right things, including Governments. So let’s ignore cases of corruption and nepotism right now.
We could look at the entire COVID-19 situation right now and see why we need more Government intervention. Many pharmaceutical companies don’t like to produce vaccines as the ROI is small and generates little recurring income; hence the efforts on nail fungus and restless leg syndrome. So Governments had to step in to get development in that area.
The same could go for other areas such as healthcare, transportation, AI, communications, etc. So we won’t end up with a mobile phone with just incremental updates over the last, but pushing to render older models incompatible.
The best approach would be to partner with private institutions and institutions of learning, such as defined by the Triple Helix model of innovation. Incentives would need to be given to the private institutions for R&D work, and investments and grants given to Universities for theirs.
Of course, work would have to be done to ensure proper accountability and monitoring for inefficiencies and “unusual” activities. But we could make this happen.
For a small island developing states like Trinidad and Tobago, this is imperative for us. The Government needs to spend less on infrastructural capital investments where the returns are vague as best, and more to innovation work where there may be many failures, but successes that will bring many returns.