These are the prepared remarks from David Sandalow, Assistant Secretary for Policy & International Affairs at the U.S. Department of Energy, presented at Yale University on October 21, 2011.
My topic today is government's role in innovation. Let's start with three stories.
In 1965, a U.S. government employee named Bob Taylor had an idea about how computers could communicate. He took the idea to his boss Charles Herzfeld, head of the Defense Advanced Research Projects Agency (DARPA), who invested government funds in exploring it. That led to the ARPAnet and, in turn, to the Internet, changing the world.
In 1980, two U.S. government employees named Leo Schrider and Robert Wise published a paper in which they described work by the Department of Energy to extract natural gas from shale rock. Noting "declining gas reserves" in the U.S., the two argued that U.S. shale formations "contain a vast, essentially unexplored volume of natural gas" and highlighted a "DOE-industry partnership ... that will produce the technology required to stimulate commercial development" of shale gas.
Last year, shale provided roughly 23 percent of U.S. natural gas -- a figure that's expected to grow. A leading U.S. natural gas producer recently said: "Early DOE R&D in ... gas shales ... helped to catalyze the development of technologies that we are applying today. The Department of Energy was there with research funding when no one else was interested and today we are all reaping the benefits."
In 1998, two Stanford graduate students named Sergey Brin and Larry Page published a paper that begins: "In this paper, we present Google, a prototype of a large-scale search engine ... " The paper says that Google is "designed to crawl and index the Web efficiently and produce much more satisfying search results than existing systems."
The two students succeeded: yesterday there were more than a billion searches on the Google search engine. At page 16 of their paper, Brin and Page write that their research was "supported by the National Science Foundation," with funding "also provided by DARPA and NASA."
So the Internet, shale gas technologies and Google search engine all had their origins in research funded by the U.S. government. Are these isolated examples? Hardly. Among the other innovations that grew directly from U.S. government funding are GPS devices, DNA mapping and inexpensive mass data storage.
Today the U.S. government continues to invest in innovation. Among the most promising programs is the Advanced Research Projects Agency -- Energy (ARPA-E), established under the America COMPETES Act of 2007. In the words of ARPA-E Director Arun Majumdar, the program helps "the nation's pioneers and entrepreneurs to innovate breakthrough technologies that do not exist yet today -- but if they did, would make today's technologies obsolete and create large commercial markets."
Among the projects funded by ARPA-E are those to convert carbon dioxide into liquid fuels, create a new generation of rechargeable battery technologies and develop substitutes for rare earth metals. As Dr. Majumdar has said, "[t]he portfolio of ideas that ARPA-E funds are too risky for the private sector to invest in at this time. However, if one of the ARPA-E ideas is shown to be practical, it could indeed change the world."
Other Department of Energy investments in innovation include our 46 Energy Frontier Research Centers, a research hub for creating fuels from sunlight and much more.
Standing back a bit -- today we are in the midst of a national debate on the role of government. The debate reprises others since the birth of our nation. James Madison and Alexander Hamilton wrote eloquently about role of government in the Federalist Papers.
Thomas Jefferson and Alexander Hamilton then debated the topic vigorously as members of President George Washington's Cabinet. In the early part of the 20th century, social legislation was struck down by a Supreme Court that insisted the U.S. government had no right to dictate the length of a work week or regulate safety of working conditions. Social Security and Medicare were opposed by those who believed they exceed the proper role of our federal government.
Next page: What the Constitution says about government's role
@Anonymous: I believe
@Anonymous: I believe Sandalow does explain potential failure to the American taxpayer: Investments in innovation are inherently more risky than other investments. We can argue about the specific economic numbers, but there is no doubt about a need of government spending to spurn tech innovation - look at China and tell me otherwise.
The one flaw I see in his reasoning is the constitutional protection of intellectual property as an importance to innovation. The US constitution guarantees these protections within US borders, but foreign governments and companies have no similar obligation. What's to stop a foreign entity from blatantly infringing patent protections at the cost of American investment?
Someone should inform Mr.
Someone should inform Mr. Sandalow that the role of government is not to take tax payer dollars to support private enterprise ideas. The thought of taking 3 solid ideas that formed profitable businesses is rather presumptuous without including how many failed and only goes to prove that you take us all for statistical dummies. Would you like to share with us how many ideas that the government invested in that generated $0 return? I'll start with 3 of the most recent: Solyndra, Light Squared and Fisker. How would you like to explain that to the American Taxpayer? Why don't you stick to the roles of government that The Constitution clearly outlines, give start ups the incentives to try and live the American Dream and simply stay out of the way? Regulations are what's killing the Green Industry and the economy in general. Please take your bigger government, more burden on the taxpayer ideas elsewhere.