BoatBanter.com - View Single Post - Does the private sector create wealth anymore?

Harry[_2_]

wrote:
On Tue, 05 Jan 2010 15:47:04 -0500, Harry
wrote:

Does the private sector create wealth anymore?
By Bob Lewis
Created 2010-01-05 10:20AM

Let's start the year wrong. Instead of useful advice, I'm going to
indulge myself by asking a question here that I posed in Keep the Joint
Running [1] this week: Does the private sector create wealth anymore
("Creating wealth for fun and profit [2]")?

Wealth -- real wealth -- isn't measured by money. If it were, printing
more money wouldn't cause inflation. It would result in more wealth.
Thus, neither money itself nor any of the financial instruments that
wreaked havoc last year have anything to do with creating wealth.

Wealth is what you can buy that you value, whether it's a ticket to
"Avatar," a piece of artwork, or a beer, not the money itself.

The column points out that no matter where you look, many or most of the
foundations of innovation came from government investment, not private
research and development. That's significantly true of our own industry
-- NASA fostered microprocessor technology; Admiral Grace Hopper
invented Cobol; the federal government created the Internet; an employee
at CERN, Tim Berners-Lee, invented HTML; and the National Center for
Supercomputing Applications developed Mosaic, the first Web browser to
gain enough visibility to matter.

Foundational research in health care is funded by the National
Institutes of Heath. The private sector does spend quite a bit to
commercialize, but relatively little at the core of things.

Other industries? Agribusiness depends heavily on government-funded
research. Energy? Nuclear comes from the Manhattan Project, fossil-fuel
generation depends on 19th-century innovations, and nobody seriously
expects the private sector to fund much green-energy R&D.

Only the entertainment business funds its own R&D, and even there,
professional sports teams expect the public sector to build stadiums for
them.

This matters, because whatever else is true of the economy, if we don't
create wealth, we won't be able to create well-paying jobs, and we'll
all suffer the consequences of that.

So here are my questions, and please post your answers as comments:

1. Am I missing something, and private-sector research and
development is actually alive, strong, and ready to carry our economy
into the future?
2. If you think I'm right, what do you think should happen next to
improve things?

- Bob

This story, "Does the private sector create wealth anymore? [4]," was
originally published at InfoWorld.com [5].

The government may have contracted out the internet, integrated
circuits and Tang but it was a private corporation that actually
figured out how to make consumer products that turned them into
wealth.
On the other hand if you look at the human genome project you will see
the NIH duncing around with this for 10 years and $3 billion dollars
with no real progress and a private company breaking the code in 24
months at a tenth the cost.

The government may spur innovation but they do not translate that into
wealth by promoting it.

We're talking basic research here...not products for sale.