Does the private sector create wealth anymore?
 

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].

Does the private sector create wealth anymore?
 

Does the private sector create wealth anymore?
 

On Tue, 05 Jan 2010 18:35:34 -0500, wrote:

On Tue, 05 Jan 2010 18:13:31 -0500, Harry
wrote:

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.

There is plenty of research going on at Intel, IBM and the various
phone/PDA/gaming companies that translate into wealth.

i dunno that there is. i used to work for bell labs. they don't exist
any more. i used to work for texas instruments. they laid off all
their researchers and decided to buy what they need from the chinese.

Does the private sector create wealth anymore?
 

bpuharic wrote:
On Tue, 05 Jan 2010 18:35:34 -0500, wrote:

On Tue, 05 Jan 2010 18:13:31 -0500, Harry
wrote:

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.
There is plenty of research going on at Intel, IBM and the various
phone/PDA/gaming companies that translate into wealth.

i dunno that there is. i used to work for bell labs. they don't exist
any more. i used to work for texas instruments. they laid off all
their researchers and decided to buy what they need from the chinese.


Bell Labs exists under different names. I also used to work for the Labs.

Does the private sector create wealth anymore?
 

On 05/01/2010 1:47 PM, Harry wrote:

Does the private sector create wealth anymore?

What is left of it does. It is an Obamanation, everybody works for the
government, banks and corporations like GM now.

Does the private sector create wealth anymore?
 

On 05/01/2010 5:17 PM, bpuharic wrote:
On Tue, 05 Jan 2010 18:35:34 -0500, wrote:

On Tue, 05 Jan 2010 18:13:31 -0500,
wrote:

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.

There is plenty of research going on at Intel, IBM and the various
phone/PDA/gaming companies that translate into wealth.

i dunno that there is. i used to work for bell labs. they don't exist
any more. i used to work for texas instruments. they laid off all
their researchers and decided to buy what they need from the chinese.

And the Chinese are ramping up their R & D as are the Indians.

American moves statist left and the economy tanks.

China moves libertarian right and the economy is growing.

Go figure. What did the American voters miss?

Does the private sector create wealth anymore?
 

On 05/01/2010 5:53 PM, D.Duck wrote:
bpuharic wrote:
On Tue, 05 Jan 2010 18:35:34 -0500, wrote:

On Tue, 05 Jan 2010 18:13:31 -0500, Harry
wrote:

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.
There is plenty of research going on at Intel, IBM and the various
phone/PDA/gaming companies that translate into wealth.

i dunno that there is. i used to work for bell labs. they don't exist
any more. i used to work for texas instruments. they laid off all
their researchers and decided to buy what they need from the chinese.


Bell Labs exists under different names. I also used to work for the Labs.

I did too. But in 1995 I opened my eyes and could see it wasn't going
to have a future and left. Too much disfunctional management. Hell,
one technical researcher for 25 admin/management with general
incompetance. Someone inverted the oraganization pyramid so they could
more people to crap on the few people at the bottom doing the work.
Glad I left. But sure was good in it's hay days.

Does the private sector create wealth anymore?
 

On Tue, 05 Jan 2010 18:05:07 -0500, 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.

My bet is the human genome breakthroughs were based on the foundation
of research that had been laid. I do agree that entreprenurial
ventures are more likely to complete the same task in a shorter period
due to the need to create revenue.

Does the private sector create wealth anymore?
 

On Tue, 05 Jan 2010 18:35:34 -0500, wrote:

On Tue, 05 Jan 2010 18:13:31 -0500, Harry
wrote:

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.

There is plenty of research going on at Intel, IBM and the various
phone/PDA/gaming companies that translate into wealth.
That is one of the few bright spots in America's wealth building
industries even though most of the manufacturing is in Asia.
The companies in silicon valley are still searching for the holy grail
of a photo voltaic cell that makes economic sense over it's life.

So, even with a profit motive, those breakthroughs (as well as
regrowing hair) remain elusive. That does argue against enterprise
being the better of the research arms. If profit isn't within reach,
an enterprise may choose to curtail development whereas a government
funded research effort is more likely to be driven by academic
acheivement and treat products as a by-product.

Does the private sector create wealth anymore?
 

On Tue, 05 Jan 2010 23:55:06 -0500, wrote:

The current solar cell situation is just an extension of that.

I am still being courted by a solar outfit that wants to sell me a
2300 watt system for about $20,000. With all the rebates and tax
credits that gets cut by almost 2/3ds but they also say that 2300
watts only ends up being about 11 kwh a day. That is about a buck and
a half a day. Under perfect conditions that pays me back in 10-11
years assuming the money is free, nothing ever breaks and the cells
don't degrade in performance. Unfortunately they also say the cells
may be operating at 50-60% by that time. One decent hurricane and you
are wiped out.
I do give them credit for their honesty but it probably talked me out
of doing it.

As you point out, it just doesn't make sense yet for people who are
"on grid" at half way reasonable rates. At an installed system cost
of $1/watt I'll be the first to sign up however.