If we look at the past, we can analyze the role of states in order to preserve innovation. Science and culture has been always protected by the aristocracy. Today aristocracy is the reminiscence of the state apparatus of the middle ages. Thinking that innovation can be done far from the state could be considered an innovation itself from the latest centuries. Capitalism has provided a way to distribute the power in the hands of ruling class among a larger number of people. Then the power required supporting science and culture is in the hands of a large number of people too.
Innovation is not science. Innovation is more directly related to the economic activity. Little product (or process) innovations can be done by a single artisan as in the previous centuries and in the same way, however, great changes due to new technologies than proceed from scientific knowledge cannot be got by a self-employed worker. This is a great error of many current politicians. Great innovations are not a matter of self-employed workers or SME’s, they are a matter of large organizations as the states. The difference between our century and the previous ones is that today, there are a lot of private organizations far from the states with the required resources to support science and technology development.
If we look at the IT sector we could think that my assumption is wrong because there is a lot of innovation production by SME’s. All of us know Apple’s beginnings, for instance. However, we should look back and recognize that Apple could not exist without integrated circuits, and Google could not exist without the TCP/IP protocols developed by DARPA.
In the Renascence, science was a matter of individuals as Galileo. Today, research activity is mostly a matter of large groups of multidisciplinary people. The task is much more complex, required much more funds and it must be supported by large and powerful organizations. We cannot think that a self-employed worker can put a man on the moon. Even, in Europe, the Space Agency is supported by several countries. In a similar way, there are many technology development activities that cannot be accomplished by the economic resources that a single state can assign for some innovations.
When you are an innovation manager, you must know well the pros and cons of little and large innovations in order to define a portfolio of activities to be developed. You must know the resources of your organization, the competences of the staff for technology development, and the funds that can be dedicated to higher risk activities without affecting the normal performance of the organization. The higher the complexity of the organization is, the lower our capability to know well all this factors, and the lower our capability to control them.
In my humble opinion the current level of innovation in the world is a result of the cold war. Google exists because the US government needed a way to preserve a system of decentralized communications that could be reconfigured fast and easily to launch its nuclear weapons in the case of a soviet attack, and not simply due to a happy idea of a self-employed worker to make money.
This is not an odd fact. The danger of a war has produced always more innovation than the interest of mankind to increase the knowledge and the welfare of the society. There is an important reason for this. States only assign resources enough for an innovation when the decisions of governments are not questioned and driven to the welfare of all the citizens. In a war, all the decisions to improve the defense of the country benefit all the citizens. This is not common in a peaceful time.
In a peaceful time, political parties try to assign resources thinking in the benefit of their own voters. As different parties have different voters, all the investment decisions (for innovation or for other activities) can be questioned always by somebody from its own viewpoint.
This discussion has two important consequences: First of all, competition provides a higher level of innovation in a market because organizations will assign more resources to important innovation activities with less internal resistance. And at last but not least, the role of the states should be only to assign funds to those activities that provide value for all the citizens, as fundamental research or technology development for defense, to support the development of horizontal technologies that can benefit all the economic sectors, to make scientific knowledge and technology more accessible to SMEs, and to make simpler the innovation at the private sector with less taxes and bureaucracy, instead of assigning funds for the benefit of a majority than can change every four years while important technology developments for the welfare of the whole society can require much more time.