the financial crisis, lecture 8 : social democratic alternatives

A key element to get an energy breakthrough is more basic research. And that requires the

government to take the lead. Only when that research is pointing towards a product then we can

expect the private sector to kick in.

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What makes the iPhone so ‘smart’?

source: Mazzucato (2013), p. 109, Fig. 13

Microchips powering the iPhone owe their emergence to the U.S. military and space programs, which made up almost the entire early market for the breakthrough technology. In the 1960s, the government bought enough of the initially costly chips to drive down their price 50x in a few short years, enabling numerous new applications.

The early foundation of cellular communication lies in radiotelephony capabilities advanced throughout the 20th century with support from the U.S. military.

The technologies underpinning the Internet, which gives the “smart phone” its smarts, were developed and funded by the Defense Department’s Advanced Research Projects Agency in the 1960s and 70s.

GPS was created/deployed in 1980s/90s by the military’s NAVSTAR satellite program and still today maintained via public funds

The multi-touch display that makes using an iPhone so intuitive has the government’s fingerprints all over it. The revolutionary interface was first developed by a brilliant pair of University of Delaware researchers supported by NSF and CIA grants

SIRI, iPhone 5’s personal assistant, developed initially in DARPA.

Source: Mazzucato (2013) and The Breakthrough Institute: Where Good Technologies Come From? , 2011

China Development BankCDB key in China’s 2020 goal of producing 20% energy from renewables. 5 year plan includes $1.7 trillion dollars in 5 new (green) sectors. CDB founded CDB Capital, a ‘public equity’ fund with $US 5.76 bn to finance innovative start-ups from the energy and telecom sectors. Yingli Green Energy received $1.7 bn from 2008 through 2012 with a $5.3 bn line of credit opened for it. Since 2010, CDB has made available $47.3 bn in credit lines for Chinese wind and solar energy companies and other $30.6 bn for clean energy transmission, distribution and efficiency investments. In 2010, the list of Chinese alternative energy technology companies receiving CDB lines of credits included LDK Solar ($9.1 bn); Sinovel Wind ($6.5 bn); Suntech Power ($7.6 bn); and Trina Solar ($4.6 bn), which “allowed Chinese companies to further ramp up production and drive down costs” of renewable energy technologies  (source: Sanderson and Forsythe, 2013)