<table width="600" align="center" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2"><a href="http://www.thedailybeast.com/articles/2011/09/14/bill-gates-jeff-immelt-chad-holliday-urge-taxpayer-funded-innovation.html" target="_blank"><b>CEOs Urge Taxpayer-Funded Innovation</b></a><br>
</font></font></td></tr><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2">DANIEL STONE - The Daily Beast</font></font></td></tr><tr><td><br></td></tr><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2"><i>One of the big lies of the Randian Right is that government
cannot create jobs or foster innovation. It has been repeated so many
times that like all big lies repeated often enough, it is now believed
by a large percentage of the population. That belief does not make it
any less of a lie, as the public statements of these mega CEOs and other
business leaders make clear.</i></font></font></td></tr><tr><td><br></td></tr>
<tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2"><b>As Washington debates the country’s economic
future, America’s top CEOs say the government needs to get serious
about finding the next big idea in energy-by providing money for
long-term research.<br>
<br>
Bill Gates and several of his closest friends-CEOs and top executives
from Bank of America, Lockheed Martin, and Kleiner Perkins-are in
Washington discussing their latest uphill battle.<br>
<br>
Most of the executives are used to success. Yet sitting around a
conference table a few blocks from the White House, they acknowledge
their next pursuit is a bigger ask, and substantially longer term. In a
town talking about tightening the government’s belt, the group is urging
more government money to be spent on finding the next game-changing
idea on energy. They say energy is the biggest economic frontier over
the next decade as fossil fuels dwindle, prices fluctuate, and renewable
energies become more viable.</b><br>
<br>
Last year, Gates and the group pulled themselves together with a common
goal of using their profiles as top business leaders to push Washington
on ways to help them compete globally. It was a nebulous goal, but they
decided on innovation, an area of historic U.S dominance that has, with
the rise of industrializing countries like China, an uncertain future. A
year later, they’ve produced a stark report, titled Catalyzing American
Ingenuity, calling on Washington to take the lead on research
innovation, just as lawmakers debate how slim the nation’s long-term
budget landscape should be.<br>
<br>
It’s a strange sight, America’s top business leaders arguing they’re ill
equipped to innovate when Washington gives them substantial leeway,
even lower tax obligations. But that’s sort of the point. With companies
burdened by obligations to grow and create jobs in the short term,
industry research doesn’t always make business sense. 'Every economist
will tell you that you cannot count on the private sector to come in and
fill in that piece,” Gates told a group of journalists skimming the
report at Washington’s Bipartisan Policy Center, which helped facilitate
the study. 'The idea is long-term research funded by the government.”
His colleagues sit around nodding.<br>
<br>
At the moment, three major arguments are usually made against industry
innovation funded by taxpayers. One is that the government moves too
slowly and can’t pivot toward new market trends or research advances.
Another is that it’s simply too expensive, especially now. And the third
is that corporations have the biggest incentive-the lure of sky-high
profits-to find the next game-changing idea. When President Obama
dismissively noted in his jobs speech Thursday to Congress that
Republicans think the government should just get out of the way and let
private companies do the work of moving the economy forward, Republicans
awkwardly cut him off with applause and cheers.<br>
<br>
Yet American business leaders are now arguing that U.S.companies don’t
research enough because they simply can't. Demands of shareholders don’t
reward long-term planning, especially in a sector like energy, with
unpredictable price shifts and volatile geopolitics. The result, then,
is that companies tend more toward slight advancements in order to box
out a rival. But they shy away from massive shifts because of what’s
known as the spillover effect, when a company can’t monetize all of the
benefits of its idea and ends up helping competitors.<br>
<br>
According to an industry study by the National Science Foundation,
private firms spend a strikingly small amount of money-about 3.5 percent
of revenues-on looking for the next big thing. Energy utility companies
spend even less, in the realm of a 10th of a percent, on new technology
research. Advocates of further research point to the Internet, the
advent of GPS, or America’s highway system as examples of what the
government can do that a private company simply wouldn’t. That’s because
private markets don’t exist for some markets, like building a military
or protecting the environment.<br>
<br>
Spillover in government is common and can be mutually beneficial. Take,
for example, gas turbine engines. The idea came from a project of the
Defense Advanced Research Projects Agency (DARPA), a division of the
Pentagon, back in the 1980s and 1990s. The original goal was to make
military jets fly faster and farther. But the burgeoning wind-energy
industry caught hold of the same technology. It’s unlikely that start-up
wind developers would have pumped billions of dollars into a new
generation of turbines, but the combined cycle gas turbine is now what
powers America’s largest wind farms.<br>
<br>
There is, in fact, a sizable union between defense and energy
technology. Back in 1958, the Pentagon started DARPA to keep U.S.
military technology ahead of other countries, especially Russia, which
had just launched Sputnik. Researchers developed aerospace technologies
to make aircraft more resilient, and even stealth. A prototype of an
internal network, dubbed DARPA-NET, eventually became the foundation of
the modern Internet.<br>
<br>
Harnessing DARPA’s success, the Bush administration created an offshoot
in 2007 devoted solely to energy. Labeled the Advanced Research Projects
Agency-Energy (ARPA-E), the program got the bulk of its funding in the
2009 stimulus bill. Since then, the agency’s researchers have partnered
with some companies to probe advances in battery storage, efficiency
research, and even new energy technology, like nuclear fusion.<br>
<br>
The program hasn’t discovered something on the magnitude of the next
World Wide Web quite yet, but it vows to keep looking. 'These are very
risky programs, but you have to take some shots,” says Arun Majumdar,
the head of the ARPA-E program, who used to lead the Lawrence Berkeley
National Lab.<br>
<br>
Late last month, Vice President Joe Biden visited Las Vegas to give a
speech at the National Clean Energy Summit announcing a $100 million
joint funding venture between the public and private sector to research
semiconductors, biodiesel efficiency, and battery storage. Speaking to
the roomful of engineers and start-up executives, Biden said it was
America that invented the photovoltaic solar panel, and it was Uncle Sam
who installed the first megawatt-size wind turbines. The implicit
message was that America had fallen behind.<br>
<br>
'China leads in installed wind capacity, while Germany leads in
installed solar capacity,” he told the convention. Both countries have
outspent the U.S. on clean-energy research projects-China by almost
double. Those small disparities can get much bigger when advances enter
the $5 trillion annual energy market.<br>
<br>
The key problem, however, may be the null hypothesis-explaining what
would be lost over the next decade if the U.S. turned its back on energy
R&D. Hal Harvey, head of the ClimateWorks Foundation, points to
Detroit as a case study in how poor research investment ceded battles
over auto innovation to companies in Japan and Korea. The American auto
industry is bouncing back, but only after being rescued by Washington,
and now with a substantial disadvantage.<br>
<br>
Yet the battle over energy may still be winnable. Last year, Bank of
America chairman Chad Holliday visited Shanghai. He was overheard openly
dismissing China’s research acumen at a dinner one evening until the
vice mayor of the city, clearly peeved, invited him to tour one of the
government’s research laboratories. When Holliday arrived at 7 a.m. the
next morning, top scientists had been working around the clock. They had
advanced machines and the place was buzzing with activity. 'That’s the
kind of thing we’re competing against,” said Holliday. 'We need the same
thing.”</font></font></td></tr></tbody></table><br clear="all"><br>-- <br>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br>
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