Market driven innovation

Posted on | October 5, 2009 | No Comments

The market is a perfect instrument for the achievement of many things.

According to Ruttan in his book Is War Necessary for Economic Growth? (find a lecture about the subject using the link provided http://www.csbsju.edu/clemens/images/HistoricallySpeaking-Issues%20merged%201%2016%2007_2_.pdf he argues that large scale and long term government investment, not war, is necessary for the development of general purpose technologies.

However, I thought, there must be a reason why economists and politicians want us to believe that market driven technology development could develop and perfect the technologies we need for energy transformation. Maybe this is because the Internet and related technologies seem to have been developed out of the blue by market forces? (If you know the reason, post a comment!)

I thought about this and realized that the implementation of the Internet and broad band landline communication seems to have been driven by the market. Except for all the technologies involved, that have mostly been developed in different military, space and other government financed research projects, largely in the US, the less costly implementation of these technologies, has been financed by the market to a large extent.

I looked up fibre optics, to find out if this has a history from government projects. From the entry at Wikipedia, the origin of the different technolgies is not entirely clear. Laser, a military technology, plays a central role. A central role is also played by large public customers for transatlantic and probably also transcontinental cables. Maybe fibre optics was first applied in the ARPA net or other government programmes? Well, a large share of the technology development behind the Internet, fibre optics and related developments has been funded by government projects and driven by large government customers. Here’s the fibre optics posting where I tried to find out about the possible government history of this technology: http://en.wikipedia.org/wiki/Fiber-optic_communication. The issue of fibre optical cables is referred to, but not deeply covered in Ruttan’s book.

How about mobile telecommunications?

Sunday, June 14, 2009 by Mats Larsson

Bookmark It