American Innovation Reads

Some materials about successful industrial/applied research labs. I recommend all of them.

Dealers of Lightning. The definitive book about PARC.

Inside PARC: the ‘information’ architects (IEEE Spectrum, Oct 1985). Good article about PARC.

Interview with Bob Taylor (and another), who ran the PARC CS Lab.

The Idea Factory. The definitive book about Bell Labs. (There should be more…)

The Art of Doing Science and Engineering. Only indirectly about Bell Labs but so good that you should read it anyway.

Tuxedo Park. Book about the MIT Rad Lab, among other things. (Also worth reading Endless Frontier. Broader influence of NDRC is underestimated, as far as I can tell.)

MIT’s Building 20: “The Magical Incubator”. Transcript of a talk about Building 20.

Funding Breakthrough Research: Promises and Challenges of the “ARPA Model”. An analysis of what the ARPA model is and why it might work.

The Dream Machine. Book about ARPA, Licklider, and the creation of the internet.

The Power of the Context. Alan Kay’s reflections on ARPA and PARC.

The Making of the Atomic Bomb. Book about the Manhattan Project.

Skunk Works. The Lockheed Martin facility behind the U-2, SR-71, etc. (See also: Kelly Johnson’s 14 Rules, Kelly Johnson’s own memoir, Augustine’s Laws, Boyd, and National Defense.)

Organizing Genius: an exploration of commonalities across the Manhattan Project, Black Mountain College, Skunk Works, etc. Demis from DeepMind commented that it accords with how he manages the company.

Sidewinder. A history of the development of the Sidewinder missile and of the China Lake Navy research lab.

Scene of Change. Personal account from Rockefeller Foundation’s Warren Weaver. (Worked with Bush at NDRC during WWII; helped fund Green Revolution; funded most of the Nobel-winning molecular biologists.) Worth a quick skim—some good passages.

Alvarez: Adventures Of A Physicist. Luis Alvarez’s first-hand account of participating in the development of GCA, radar, and the Manhattan Project.

Doing the Impossible. How George Mueller managed the Apollo Program

The Booz Allen Hamilton’s Innovation Strategy

A few years ago, I was lucky to have attended a session at the State Department Day of Networking, where you get to meet contractors and outside vendors who offer in-house “innovation” services. I peeked into a few programs offered by Booz Allen Hamilton. Here I did my own analysis.

Booz Allen Hamilton is a leading consulting firm for business, government, and military in analytics, digital, engineering and cyber. They also have an innovation hub in Austin, in the DMV area, and provides a steady source of personnel to the government who hold active security clearances.

WAR GAMES AND EXERCISES

This one is called “War Games and Exercises” mainly for military services. Looking at the list of activities, it really looks like a whole design thinking exercises for military personnel. According to Booz, the “wargames and exercises empower creativity, simulate and test ideas in a safe environment, and discover the solutions that help organizations survive and thrive.” It worked with joint staff, military services in acquisition approaches, intel in “simulating future environments, civil agencies for …organizational resiliency and …risk management on a range of events and exercises to build preparedness, increase resilience, and sustain performance.”

Wargames

  • Alternative Futures and Scenario Planning
  • Wargame: A scenario based simulation with moves and countermoves in a controlled and competitive setting with team play and role playing
  • Red teaming/red cell: An independent adversarial group that challenges an organization

Exercises

  • Workshop: A discussion with focused group activities to develop strategy
  • Tabletop: A scenario-based discussion to test strategies, policies, plans, and approaches
  • Drill: aAn exercise with coordinated activities to validate a specific function or capability
  • Functional/Command Post: An exercise to validate and evaluate the synchronization of management with various operational capabilities (logistics, communications, command & control, coordination)
  • Full-Scale/Field Training: An exercise with high-stress, multiagency activities infvolving actual deployment of resources in a coordinated response.

Analysis

  • Wargame/Exercise After-action report analysis: analysis and subsequent improvement planning in accordance to existing plans
  • Real World Event Analysis: An After-action analysis and subsequent improvement planning of a real world or planned event in accordance to existing plans.

Here are some more familiar names like hackathons also dearly known as “Diplomacy Lab”, creating a platform to submit ideas, and a crowdsourcing platform. Without seeing the crowdsourcing platforms myself, I couldn’t really tell how effective the programs were. I wasn’t sure from based off the language for both Accelerators and Incubators the exact type of support they offered.

Hackathons

US Navy: Hack the Machine

The primary objective of the hackathon was build a robust community of maritime cybersecurity talent from among a diverse pool of candidates in Austin, Texas.

Delivered 10 solutions Navy could develop to improve the safety and efficiency of the maritime cybersecurity, data science for safer oceans and next-generation design for PNT alternatives.

Diplomacy Lab

As a follow-on to the Silicon Valley Tech Challenge hosted at UC Berkeley in 2016, Booz Allen partnered with the Bureau of Energy Resource to identify ways that technology and innovation could help improve energy access through a three-day Data Science Challenge in San Francisco. The challenge was to build a community and test how geospatial analysis could increase visibility into renewable energy development potential and help expand access to the two billion people who lack electricity or lack reliable electricity around the world.

Department of State: Silicon Valley Tech Challenge

  • Engaged 144 onsite attendees (117 participants and 27 subject matter expert mentors) and nearly 300 online registrants.
  • Built a crowd of industry experts, data scientists, designers, and those who are engaged in a follow-up crowdsourcing challenge
  • Booz Allen and the State Dept. jointly presented findings at UNSEE4ALL conference in NYC

Crowdsourcing

Booz Allen’s crowdsourcing approach is a methodology for assessing problem spaces in order to design both one-off and related series of crowdsourcing challenges for organizations across multiple sectors and industries. Our focus on every step of the challenge process, from problem space deconstruction to challenge communications to awards disbursement, helps organizations leverage crowdsourcing as a unique problem solving tool in their innovation toolkit.

Intelligence Community Client: Crowdsourcing and Innovation Management Platform

  • Launched flagship crowdsourcing platform, which led to increased speed to mission and saved over $2M collectively.
  • Generated new cross-team collaborative efforts and received recognition at an event with over 200 attendees and 5 agencies
  • Reached over ten thousand active participants spanning several government agencies

Challenges, Competitions, Prizes

Each organization has unique requirements and we emphasize understanding those details during the challenge design process, including facilitating communications, marketing, compliance, engagement analysis, and various other challenge facilitations. The right preparation in deconstructing the client problem space is critical to selecting the right tool to complete the job.

National Science Foundation: Challenge Platform Revitalization

  • NSF Chief Technology Officer sponsored a challenge and selected three idea to include as flagship initiative in NSF’s 2014 Open Government Plan (delivered to the White House in June 2014).
  • In the three months following re-launch, IDeaShare experienced the following results: 43 challenges launched, 4,136 new users, 451 new ideas, 43 ideas selected to be flagship initiative in the Open Government Plan out of the NSF potential user pool (2,300 staff and contractors.)

Accelerators

Accelerators can be achieved with effective program design and governance utilizing their existing assets and resource to achieve internal innovation results.

NASA: Internal Technology Accelerator

This effort is assessing the effectiveness of the current NASA accelerator model and the leadership team through observation and the stakeholder research.

  • Conducting a tailored innovation assessment in order to establish a baseline of the organization’s innovation maturity
  • Conducting external innovation accelerator market research through interviews with members of similar innovation efforts going on at federal, commercial and academic institutions
  • Assessing the potential benefits, cost savings, time savings, skills acquired, reputation, employee engagement, network size, associated with adopting innovative methods, tools, processes, and practices within NASA’s larger organizational context

Incubators

Incubators creates a space where new ideas can flourish and become a reality. Booz Allen iHubs are geographic concentration of accelerated ideation and entrepreneurship. Each iHub has a formal an informal network of investors, entrepreneurs, patents, and cutting-edge companies. Booz Allen’s physical presence in leading innovation ecosystems around the country accelerates our ability to source targeted capabilities and new thinking.

Booz Allen Innovation Center and iHub Network

  • Interdisciplinary teams work side-by-side with the clients, partners, and the innovation community to create integrated solutions.
  • Project teams provided with the customized curricula, mentorships, and technologies
  • The space serves as a working laboratory to test, showcase and measure how space and technology and promote collaboration, wellness, and productivity – while reducing the time to market for new products and services.
  • The space features in-person and virtual platforms to connect diverse stakeholders from the larger innovation community to help solve the world’s toughest problems. “

So my take on the Booz Allen innovation programs for government is that they took on a few projects as they came and had some resources to offer, but did not have a streamlined set of programming offices could lay on top of. I think when you’re approaching BAH, you do have to have a set objective as well as KPIs. I’m very interested to see how the Booz Allen’s presence in Austin, Texas might envelop along with SXSW.

Accelerating Impact from Strategic Partnerships to Policy Entrepreneurship

Where are we at?

How to accelerate innovation nationally

How to engage the world.

Digital Diplomacy: Conversations on Innovation in Foreign Policy

Digital Diplomacy is a series of interviews compiled by a public affairs officer at the Italian Embassy. I will never forget the first time I met him. He hosted an all-women panel with the coolest social impact pioneers in DC – Frances Holuba from the Obama White House, Nicole Isaac from LinkedIn and Anastasia Dellaccio of WeWork Creator Awards at the time. I remember this was one of my most favorite events to this day..

This is an important book of our time for many reasons. There are not many books told from the perspective of a public diplomacy practitioner of how to navigate the waters of the changing time today. He cherry-picked the innovation leaders across the administration and those at the front seat in Washington DC from the World Economic Forum, United Nations, TEDx, and the New America Foundation. His questions are well-researched and poignant. He pulls from history and covers different perspective specific for each interviewee for what it means to innovate, what conditions create the culture to innovate from respective organizations, and how to conduct it with vision, strategy and for good.

It is a guidebook to treasure for all thinkers and practitioners in government, business, and private partners interested in working at an international level. I am still a fan of his Medium, and I recommend you all to check it out, if you haven’t done so already. 🙂

The Chessboard and the Web: Strategies of Connection in a Networked World

Anne-Marie Slaughter was the former Director of Policy Planning Staff at the Office of Secretary at the State Department. She starts off the book by challenging the reader on the traditional notions of statecraft and standard foreign policy procedures, which is mainly in person – holding conferences or convening task forces.

This book is a call upon global leaders to respond to differently to the threats today whether you are fighting disinformation, assembling an army against Al-Qaeda, or bringing concerted mayors for climate change.

She provides three main frameworks: resilience, task, and scale. She employs theories from psychology, economics, and of course, foreign policy. The tools were on “how to pursue its interest and affect the behavior of others….how to assemble coalition of nations [and] how, when, where to advance specific types of goals.”

In this era of remote work and staying connected online, her strategies made me think about how I was utilizing my own network – if I could employ some of her strategies to effectively use it to my own.

I think this book is what it does to the readers – it gives us thought experiments. As she finishes off with the section on the grand network power, she writes those who can garner the strategies in today’s world can unlock innovation and sustainable growth and can nurture our own power in the networked age.

Collaboration Between Start-Ups and Federal Agencies

The Information Technology and Innovation Foundation (ITIF) is led by its president and founder, Robert D. Atkinson, Washingtonian Magazine has called a “tech titan,” and it is a nonprofit think tank. “Its mission is to formulate, evaluate, and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.”

It’s august research publication produced recommendations on accelerating “Collaboration Between Start-Ups and Federal Agencies”

Collaboration Between Start-Ups and Federal Agencies: A Surprising Solution for Energy Innovation

The climate-tech start-ups take more “patient capital,” and this report aims to identify “approaches that help ease barriers faced by climate-tech start-ups can ultimately catalyze their role in accelerating clean energy innovation.” The report claims collaboration with federal agencies and laboratories, such as co-development and technology-licensing agreements to yield better results than their collaborations with universities or other firms, as measured by patents received and follow-on financing.

The authors also note the willingness of the policymakers and the wealth of federal research expertise, infrastructures, and technologies to mandate more effective technology transfer policies for federal agencies and laboratories. “But present practices have not fully capitalized on the synergies between start-up potential, federal resources, and the technology transfer mandate.

Here are the summarized recommendations.

Most start-ups don’t have access to federal experts or laboratories because they lack networks and knowledge, or they confront bureaucratic barriers and high costs. Federal agencies have weak incentives to work with start-ups, with no metrics to reward collaborations and few ways to cover costs. Finally, there is a lack of coordination on climate and energy technology transfer within DOE and its laboratories and across other agencies.

Scale-up mechanisms for start-ups to collaborate with federal agencies and laboratories.

  • DOE should partner with incubators to organize annual climate-tech start-up challenges involving federal agencies, industry partners, and private investors focused on specific topic areas. These peer-reviewed competitions should be fast and streamlined. Finalists should win awards to use laboratory infrastructures, and be assigned a federal expert to serve as a consistent point of contact. Such challenges would be scaled-up versions of individual lab-linked incubators and one-off programs.
  • Congress should appropriate increases in funding for federal lab-linked incubator programs to scale them up. In parallel, Congress should authorize federal agencies to award grants for the creation of new lab-embedded entrepreneurship and lab-linked incubator programs. These programs would provide more innovators with access to laboratory facilities as well as expertise and mentorship. Programs such as Cyclotron Road, Chain Reaction Innovation, and IN2 that work with DOE national laboratories have shown great promise.
  • The DOE OTT should invest more in start-up-centered communication and convenings, building on existing models such as NREL’s Industry Growth Forum. Such convenings bring together diverse stakeholders, build awareness about federal technologies and experts, and lay the groundwork for future collaborations.
  • Congress should authorize the extension and expansion of the DOE SBV program across the entire federal government. Competition for these vouchers could be administered by DOE with the participation of other relevant agencies. The vouchers should be available to any start-up or small business working on climate-tech commercialization. The SBV program can help reduce costs and red tape for start-ups and was recommended by ITIF and others before it was piloted in 2015.50
  • Building on NASA’s model for start-ups, Congress should authorize agencies to waive fees for start-ups that seek to license federal clean energy technologies.

Incentivize federal agencies and laboratories to work with start-ups.

  • Congress should provide DOE OTT a budget line outside department administration and increase funding to laboratory technology transfer offices. Most of the labs today are funded out of overhead, which imposes strict limits. With greater resources, these offices would be able to more actively evaluate whether technologies are ready for commercialization, and market them to start-ups.
  • Congress should authorize entrepreneurial-leave programs for federal experts in agencies and laboratories. These programs allow government employees to explore entrepreneurship without giving up their positions for a fixed period of time. Entrepreneurial leave reduces the risk of taking the leap into a start-up by providing job security. These programs would build on experiences from the ESTT program at Sandia National Laboratory, among others.
  • Congress should authorize the Energy I-Corps program, which connects laboratory researchers with industry mentors, to also involve experienced climate-tech entrepreneurs.
  • DOE should incorporate metrics on technology transfer in the national labs’ PEMPs that capture collaboration with start-ups. These metrics should include measures of both codified knowledge transfer, such as licensing to start-ups and co-development contracts, and tacit knowledge transfer, such as the number and frequency of informal interactions with start-ups. ITIF and others have previously recommended similar improvements to these metrics.

Improve coordination between federal agencies, laboratories, and other entities in support of climate-tech start-ups.

  • The National Science and Technology Council, under the White House Office of Science and Technology Policy, should lead an interagency effort to develop a repository of collaboration opportunities across major federal R&D agencies that is targeted to climate-tech start-ups. The repository should be made available through an online portal, which could be housed and managed by DOE or the Small Business Administration.
  • Technology transfer offices of federal agencies should encourage laboratories, federal research facilities, and regional offices to maintain active relationships with regional economic development agencies, incubators, and nonprofit industry networks that work with clean energy start-ups. For instance, technology-transfer offices can invite regional entities to participate in federal convenings focused on technology transfer, or represent their agencies in regional innovation convenings. When federal programs engage with regional innovation ecosystems, they can become more relevant to economic advancement and develop a larger network of start-ups across the United States.
  • Congress should establish a nonprofit Energy Technology Commercialization Foundation to would work closely with the DOE and entrepreneurs to help bring clean energy technologies to market. By catalyzing its connections with DOE, entrepreneurs, regional partners, and incubators, this foundation would foster collaborations among start-ups and federal entities.

America’s Top Smooth Talkers: The Public Diplomacy Officers

Public diplomacy is where I began at the State Department. My first boss was the Public Diplomacy Officer for Japan and Korea at the East Asian and Pacific Affairs. I remember he carried two name cards – one that had Japan come first and the other that had Korea come first like “Public Diplomacy Officer for Japan and Korea” and “Public Diplomacy Officer for Korea and Japan,” because the order of the name of the country mattered to the recipient.

I remember the PD meetings were the most upbeat and the most delightful out of all the meetings at State. Others tended to be more uptight more stiff.

U.S. Public Diplomacy is one of the five cones of the Foreign Service Officer career tracks, that attempt to “promote mutual understanding and support for U.S. policy goals.”

One thing to clarify is the difference between Public Affairs and Public Diplomacy. Public Affairs focuses on the news and delivering information on the policy issues and engages with domestic and international media to communicate its talking points. Public Diplomacy can involve PA, but it frequently involves exchanges and cultural activities. Those out at the posts or the embassies engage with the programs directly with the support of other bureaus, Education and Cultural Affairs and Center for Analytics. They engage with the international public via a variety of digital platforms and programs.

Some of their daily duties include writing speeches for Deputy Assistant Secretaries and above, writing Presidential notes for national holidays, hosting a delegation of exchange students, to creating programs like Food Diplomacy with top culinary chefs. PD practitioners have to think about how to present the U.S. position in nuanced and eloquent ways orally, writing, and digitally. An interesting event I was involved in was where high ranking U.S. official had handed over an artifact to Korea – an artifact a veteran had uncovered years ago.

One of my favorite PD leading thinkers is Joe Nye. Check out the Aspen report on reforming American Public Diplomacy in the tech world and the American Security Project report on communicating digitally strategically.

Other Public diplomacy website and blogs include:

For more PD resources consult:

Leading Today with Hyper-Disruptors

The government hearings with tech leaders led me to thinking about how to lead out of confusion, complexities, and challenges of a hyper-connected today.

Citizens are better informed, networked, organized, and demanding with enormous influence.

Businesses, in this case, Facebook, struggle with the speed in which companies’ reputations, consumer values, and expectations evolve with greater transparency.

Governments face greater constraint to solve a whole set of problems without much room for maneuvering – missing the mark for effective leadership or judgment. By struggling to strike the right tone to please-all, they feel insecure about adapting to the speed of ideas to lead and govern.

I think it starts from having enough insight, vision, and humility to recognize that what they offer from a business or the government standpoint is to meet the needs of consumers, citizens, and the environment in a collaborative working sense.

When a disruption is so large, it is more about changes in the method of implementation than political rhetoric or vision.

Be both a visionary and a realist. Create the conditions for tackling those problems within and in partnership with implementation strategies that are feasible, practical, and operational.

Government officials need to work with business or non-profit not only as a way to reduce cost but also for innovative and long-term solutions to manage multi-dimensional public policies.

Business leaders will need to balance responding to short-term solutions and long-term strategic policies part of the larger political reality by anticipating risk, clear social goals with flexibility and independent expert advice.

Leaders with responsibility towards the community working across sectors with empathy for humanity and trusted relationships will help bring innovation and delivery skills to the work of government, nonprofits, and citizens for profit, growth, and societal benefit.

9 Ways State Dept. Engages With Startups

*This summary with my own additions is drawn from my own experiences as well as those of my colleagues’ during the Obama Administration. They are results of the Secretary’s efforts to connect the capacity of U.S. startups to solve problems of interest to the USG. Results from many of these mechanisms have been transferred into functional bureaus, embassies, and into other offices.


U.S. small businesses and startups find it difficult and confusing to interact with the USG. Startups often do not have the revenue, funding runway, nor staffing capacity to understand or reach out to government that larger businesses do. Often the dynamic enterprises that develop the cutting-edge technologies that could enable the USG to achieve policy goals more effectively, but the interfaces between startups and the federal government can be weak.

Opportunities to apply the technical knowledge of U.S. startups to USG foreign policy goals cover the Presidential priorities, such as nuclear disarmament, food security, global health, and climate change. Sourcing innovative solutions from U.S. startups to support USG policy goals, such as the National Export Initiative, by providing more U.S. small businesses exposure to international markets at early stages in their lifecycle. These efforts implement various priorities of the Quadrennial Diplomacy and Development Review (printed every four years, it sets institutional priorities and provides strategic guidance as a framework for the most efficient allocation of resources. It provides a blueprint for advancing America’s interests in global security, inclusive economic growth, climate change, accountable governance and freedom for all) and the Secretary’s emphasis on utilizing “smart power,” economic statecraft,” and “whole of society” approaches.

  1. University Student Engineering Team Competitions: The fellowships is a low-cost way to bring expertise into the Department. It can start with expanding direct contact with student teams at universities across the U.S. Direct DoS participation, either as judges or participations, in competition such as the Idea to Products Global Competition and the Annenberg Innovation Lab conference to put DoS issues in direct contact with enthusiastic engineering student teams working on solutions we need. These teams align very well with the Grand Challenge interests in clean water, energy, food, and food security. The “First Way” has already led to the deployment of a multi-lingual Twitter traffic analysis tool called r-Shief (Arabic for “archive”) that has enabled Embassy Islamabad staff to differentiate between sentiment online and in the general media.
  2. Open Challenges: Based on the concept of crowd sourcing, open challenges involve a carefully constructed question that is put before the entire internet community to solicit ideas and solutions to the articulated problem.E/STAS has worked in close partnership with the Bureau of Arms on an “open challenge” workshop called “Can AVC use open challenges to derive ideas that can address arms control transparency regimes, despite the classified and sensitive nature of so much of the information? The challenge was together with Innocentive.
  3. RRTO’s Defense Venture Catalyst Initiative (DeVenCI): RRTO or DoD’s Rapid Reaction Technology’s Office administers this program to identify U.S. startups with capabilities that are highly desired by different offices. This program expanded into NASA and into the State Department that have worked from the Office of Geographer and Global Issues to Overseas Building Operations, Diplomatic Security. They selected companies to proceed to an evaluation and to the test phase. Embassies that provided direct input and involvement of the companies proceeded with implementation, which improved energy efficiency of the buildings.
  4. LAUNCH: Office of the Science and Technology Adviser to the Secretary of State (E/STAS) increased State Department involvement in partnership with NASA, USAID, and Nike with the addition of the Office of Naval Research as a Resource Partner. LAUNCH fostered rapid development of a mix of U.S. and foreign innovators targeting grand challenges of interest. One of the LAUNCH cycle – Beyond Waste sourced innovators around the world with unique and innovative approaches to reducing, converting, and otherwise transforming the mountains of waste produced globally into useful products.
  5. Technology Startup Engagement: E/STAS had established an informal relationship with In-Q-Tel, an organization that forms a bridge with U.S. startups and various USG agencies, which brought numerous startups to the attention of a variety of State Department offices. One interesting startup was Recorded Futures, a startup with capabilities of interest to the Office of the Geographer and Global Issues through the relationship with In-Q-Tel.
  6. S2S (Startups 2 State) Gateway: E/STAS partnership with Startup America connected U.S. startups with embassy officers to searching for solutions to problems identified as strategic to embassy’s goals. Startup America is an independent private-sector alliance intended to dramatically increase the development, prevalence, and success of innovative, high-growth U.S. firms. Startup America’s leadership includes CEO Scott Case, previous founder and CTO of Priceline, and board member Michael Dell, CEo of Dell, inc.
  7. Entrepreneur-In-Residence: Dr. E. William Golglazier, Science and Technology Adviser to the Secretary, created the role of Entreprneur-In-Residence (EIR) in his office to manage the continued engagement with the U.S. startup to serve as a focal point for innovation discussion that progress beyond the preliminary how-to discussions concrete implementation.
  8. Presidential Management Fellows: The Presidential Management Fellows (PMF) Program is administered by the U.S. Office of Personnel Management (OPM) to serve for two years in the following agencies. In 2018, one of the PMFs designed a “Better Government Movement” and appointed “Ad Hoc Sherpas” to lead a series of design thinking initiatives and open studio sessions to offer specific subject matter expertise in areas like Human-Centered Design, Lean Startup, Agile, change management, and pitch coaching to Design Challenge teams.
  9. The Office of Global Partnership: The Office of Global Partnerships is previously a Secretary’s Office is main portal to which each and every office of the State Dept. conducts partnerships with. They used to hold hackathons, Blockchain Central event, and thinking exercises. Certainly one of the few offices at State using the word “impact” and has an active partnership with Concordia Summit and USAID for public-private partnership for social impact. Every partnership and gift also is vetted through this office. They offer trainings, events, and solutions to which each office and leverage the public-private partnerships solutions creatively to each of the foreign policy priorities.

If you’re interested in reading more, feel free to check out the innovation forum.

The Entrepreneurial State: Debunking Public vs. Private Myths

link here.

Now this is one of my favorite books.

It was not an easy read. It is a little more dense and challenging. But as a former recovering govie, it is speaking my language. Her book is written to debunk the public opinion of a “lumbering, bureaucratic state versus a dynamic, innovative private sector.” She writes on a series of recognizable case studies – Apple, Tesla, the Internet, and dissects how every tech invention we have in our hands came from the high-risk investments the government had initially had made. This also bled into other sectors in biotech and nanotech.

She also goes into comparing different models in China and the UK of their public-private approaches. She writes that the necessary movements and the tech advancements we need to see in this world, including the green revolution, needs to be backed by “patient capital” – the kind VCs do not always have the time for, and public sector and de-financialized private sector, that got the IT revolution off the ground.

To me though, it does seem like historical and observational accounts than experiential. As someone who had been in government and had seen innovation and partnerships firsthand, I am not as optimistic.

I did enjoy the in-depth examples and the case studies.

In clean tech, VC funding is focused on some of the safer bets rather than radical innovation for the sector to transform society. The public sector money is currently funding the riskiest and the most capital intensive projects in clean tech -in the upper right corner.

Clean tech companies can face a number of challenges transitioning from R&D to commercial production and the amount of capital require to reach economies of scale is typically higher than in the IT sectors where VC wealth is originated in the first place. 

Climate change could not be a primary justification for investing in energy technologies, as it could be partially be “solved” with other non-renewable technologies like nuclear power.

Given the risk aversion nature of businesses, government need to sustain funding for the radical ideas to push the green industrial revolution to support the research and development of clean technologies to their commercial viability. VCs provide the capital to bridge the transition into commercialized production, but cannot provide the capital into IPO, merger, or acquisition. Commercial banks perceive clean tech firms or renewable energy projects as too risky. Public finance firms or State development banks may foster such innovation, as they are committed to be patient. Businesses and State has been historical partners in the process of economic and technological development.

There are different types of firms and types of policies that interact to shape to meet the desired ends. It is important to be innovative about the process and to  understand the division of labor between the actors in the system, the role and commitment of each actor in the context in which they all operate.

Mazzucato shows that in modern capitalism the State has also actively shaped and created markets. This required financing not only basic research but also applied research and early stage financing of companies. In doing so, the State sometimes wins and sometimes fails. This book considers how to change this dysfunctional dynamic so that economic growth can be not only ‘smart’ but also ‘inclusive’. It is a conversation the U.S. desperately needs to have.