Three reasons why public sector has important role in new technologies

Public decision-making has an important role also in creating new technologies and innovations. It should not limit or slow technological development but instead try and make sure that it leads to the solutions that are beneficial to society. That can mean implementing the perspective of vision-driven development into industrial and innovation policies. We listed three reasons why public sector has an important role in technological development: 

1. Technology is not developed separately from other societal contexts. The political decisions and social investments affect the direction for technological development. Hence the chosen direction for developing and using new potential technologies across the economy is a result of a socio-political choice. For example, in the industrial era, the development and usage of technologies was based on issues such as cheap energy, standardised consumption patterns and the creation of social security systems

2. Governmental innovation and R&D funding has played crucial role in most of the major breakthrough innovations. The public sector role is specially important in creating new inventions, which can be defined as the creation of a product for the first time. Innovation on the other hand, occurs if someone create products processes or services for markets, in which the private companies are the best. Economist Mariana Mazzucato argues that areas of the world that have indeed experienced innovation-led growth, such as Silicon Valley in the past or China today, are characterised by mission-oriented investments, with direct public spending in a wide host of different areas. For example, all of the technologies behind the iPhone were directly funded by government-led investments. In Finland the success of Nokia was also affected by public investments, especially r&d funding of Finnish Funding  Agency for Innovation, Tekes.

3. Technological progress provides often applications and things that are nice to have, but do not necessarily solve significant  problems. In addition the combination of low-cost cloud computing, a renaissance in machine learning and rapid advances in genomics have opened up new classes of problems for computers to try to solve. The public sector should aim to ensure that hyperconnected technologies play its part in solving the grand challenges of our time and solves more problem than it creates. 

 

Sources:  Mazzucato and Perez (2014) Innovation as Growth Policy:' the challenge for Europe' - University of Sussex." 10 Jul. 2014, http://m.sussex.ac.uk/spru/documents/2014-13-swps-mazzucato-perez.pdf. Accessed 10 Jan. 2018.