| In the United States, Congress approved,
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| | conduits of government involvement in
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| last month, increases in the 2003 budgets
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| | research, the universities, are only
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| of both the National Institutes of Health
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| | weakly correlated with growing
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| and National Science Foundation. America
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| | prosperity. As Alison Wolf, professor of
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| is not alone in - vainly - trying to
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| | education at the University of London
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| compensate for imploding capital markets
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| | elucidates in her seminal tome "Does
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| and risk-averse financiers.In 1999,
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| | Education Matter? Myths about Education
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| chancellor Gordon Brown inaugurated a
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| | and Economic Growth", published last
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| $1.6 billion program of "upgrading
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| | year, extra years of schooling and wider
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| British science" and commercializing its
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| | access to university do not necessarily
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| products. This was on top of $1 billion
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| | translate to enhanced growth (though
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| invested between 1998-2002. The budgets
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| | technological innovation clearly
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| of the Medical Research Council and the
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| | does).Terence Kealey, a clinical
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| Biotechnology and Biological Sciences
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| | biochemist, vice-chancellor of the
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| Research Council were quadrupled
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| | University of Buckingham in England and
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| overnight.The University Challenge Fund
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| | author of "The Economic Laws of
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| was set to provide $100 million in seed
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| | Scientific Research", is one of a growing
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| money to cover costs related to the
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| | band of scholars who dispute the
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| hiring of managerial skills, securing
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| | intuitive linkage between state-propped
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| intellectual property, constructing a
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| | science and economic progress. In an
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| prototype or preparing a business plan.
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| | interview published last week by
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| Another $30 million went to start-up
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| | Scientific American, he recounted how he
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| funding of high-tech, high-risk companies
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| | discovered that:"Of all the lead
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| in the UK.According to the United Nations
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| | industrial countries, Japan - the country
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| Development Programme (UNDP), the top 29
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| | investing least in science - was growing
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| industrialized nations invest in R&D more
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| | fastest. Japanese science grew
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| than $600 billion a year. The bulk of
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| | spectacularly under laissez-faire. Its
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| this capital is provided by the private
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| | science was actually purer than that of
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| sector. In the United Kingdom, for
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| | the U.K. or the U.S. The countries with
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| instance, government funds are dwarfed by
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| | the next least investment were France and
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| private financing, according to the
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| | Germany, and were growing next fastest.
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| British Venture Capital Association. More
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| | And the countries with the maximum
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| than $80 billion have been ploughed into
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| | investment were the U.S., Canada and
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| 23,000 companies since 1983, about half
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| | U.K., all of which were doing very badly
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| of them in the hi-tech sector. Three
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| | at the time."The Economist concurs: "it
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| million people are employed in these
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| | is hard for governments to pick winners
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| firms. Investments surged by 36 percent
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| | in technology." Innovation and science
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| in 2001 to $18 billion.But this British
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| | sprout in - or migrate to - locations
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| exuberance is a global exception.Even the
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| | with tough laws regarding intellectual
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| - white hot - life sciences field
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| | property rights, a functioning financial
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| suffered an 11 percent drop in venture
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| | system, a culture of "thinking outside
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| capital investments last year, reports
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| | the box" and a tradition of
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| the MoneyTree Survey. According to the
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| | excellence.Government can only remove
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| Ernst & Young 2002 Alberta Technology
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| | obstacles - especially red tape and trade
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| Report released on Wednesday, the
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| | tariffs - and nudge things in the right
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| Canadian hi-tech sector is languishing
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| | direction by investing in infrastructure
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| with less than $3 billion invested in
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| | and institutions. Tax incentives are
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| 2002 in seed capital - this despite
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| | essential initially. But if the
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| generous matching funds and tax credits
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| | authorities meddle, they are bound to
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| proffered by many of the provinces as
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| | ruin science and be rued by
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| well as the federal government.In Israel,
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| | scientists.Still, all forms of science
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| venture capital plunged to $600 million
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| | funding - both public and private - are
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| last year - one fifth its level in 2000.
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| | lacking.State largesse is ideologically
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| Aware of this cataclysmic reversal in
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| | constrained, oft-misallocated,
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| investor sentiment, the Israeli
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| | inefficient and erratic. In the United
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| government set up 24 hi-tech incubators.
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| | States, mega projects, such as the
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| But these are able merely to partly cater
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| | Superconducting Super Collider, with
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| to the pecuniary needs of less than 20
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| | billions already sunk in, have been
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| percent of the projects submitted.As
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| | abruptly discontinued as were numerous
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| governments pick up the monumental slack
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| | other defense-related schemes.
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| created by the withdrawal of private
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| | Additionally, some knowledge gleaned in
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| funding, they attempt to rationalize and
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| | government-funded research is barred from
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| economize.The New Jersey Commission of
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| | the public domain.But industrial money
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| Health Science Education and Training
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| | can be worse. It comes with strings
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| recently proposed to merge the state's
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| | attached. The commercially detrimental
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| three public research universities.
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| | results of drug studies have been
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| Soaring federal and state budget deficits
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| | suppressed by corporate donors on more
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| are likely to exert added pressure on the
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| | than one occasion, for instance.
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| already strained relationship between
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| | Commercial entities are unlikely to
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| academe and state - especially with
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| | support basic research as a public good,
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| regards to research priorities and the
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| | ultimately made available to their
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| allocation of ever-scarcer resources.This
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| | competitors as a "spillover benefit".
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| friction is inevitable because the
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| | This understandable reluctance stifles
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| interaction between technology and
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| | innovation.There is no lack of
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| science is complex and ill-understood.
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| | suggestions on how to square this
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| Some technological advances spawn new
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| | circle.Quoted in the Philadelphia
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| scientific fields - the steel industry
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| | Business Journal, Donald Drakeman, CEO of
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| gave birth to metallurgy, computers to
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| | the Princeton biotech company Medarex,
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| computer science and the transistor to
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| | proposed last month to encourage
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| solid state physics. The discoveries of
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| | pharmaceutical companies to shed
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| science also lead, though usually
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| | technologies they have chosen to shelve:
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| circuitously, to technological
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| | "Just like you see little companies
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| breakthroughs - consider the examples of
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| | coming out of the research being
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| semiconductors and biotechnology.Thus, it
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| | conducted at Harvard and MIT in
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| is safe to generalize and say that the
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| | Massachusetts and Stanford and Berkley in
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| technology sector is only the more
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| | California, we could do it out of Johnson
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| visible and alluring tip of the drabber
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| | & Johnson and Merck."This would be the
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| iceberg of research and development. The
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| | corporate equivalent of the Bayh-Dole Act
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| military, universities, institutes and
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| | of 1980. The statute made both academic
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| industry all over the world plough
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| | institutions and researchers the owners
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| hundreds of billions annually into both
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| | of inventions or discoveries financed by
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| basic and applied studies. But
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| | government agencies. This unleashed a
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| governments are the most important
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| | wave of unprecedented self-financing
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| sponsors of pure scientific pursuits by a
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| | entrepreneurship.In the two decades that
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| long shot.Science is widely perceived as
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| | followed, the number of patents
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| a public good - its benefits are shared.
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| | registered to universities increased
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| Rational individuals would do well to sit
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| | tenfold and they spun off more than 2200
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| back and copy the outcomes of research -
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| | firms to commercialize the fruits of
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| rather than produce widely replicated
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| | research. In the process, they generated
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| discoveries themselves. The government
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| | $40 billion in gross national product and
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| has to step in to provide them with
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| | created 260,000 jobs.None of this was
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| incentives to innovate.Thus, in the minds
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| | government financed - though, according
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| of most laymen and many economists,
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| | to The Economist's Technology Quarterly,
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| science is associated exclusively with
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| | $1 in research usually requires up to
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| publicly-funded universities and the
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| | $10,000 in capital to get to market. This
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| defense establishment. Inventions such as
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| | suggests a clear and mutually profitable
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| the jet aircraft and the Internet are
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| | division of labor - governments should
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| often touted as examples of the civilian
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| | picks up the tab for basic research,
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| benefits of publicly funded military
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| | private capital should do the rest,
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| research. The pharmaceutical, biomedical,
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| | stimulated by the transfer of
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| information technology and space
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| | intellectual property from state to
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| industries, for instance - though largely
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| | entrepreneurs.But this raises a host of
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| private - rely heavily on the fruits of
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| | contentious issues.Such a scheme may
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| nonrivalrous (i.e. public domain) science
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| | condition industry to depend on the state
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| sponsored by the state.The majority of
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| | for advances in pure science, as a kind
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| 501 corporations surveyed by the
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| | of hidden subsidy. Research priorities
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| Department of Finance and Revenue Canada
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| | are bound to be politicized and lead to
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| in 1995-6 reported that government
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| | massive misallocation of scarce economic
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| funding improved their internal cash flow
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| | resources through pork barrel politics
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| - an important consideration in the
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| | and the imposition of "national goals".
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| decision to undertake research and
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| | NASA, with its "let's put a man on the
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| development. Most beneficiaries claimed
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| | moon (before the Soviets do)" and the
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| the tax incentives for seven years and
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| | inane International Space Station is a
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| recorded employment growth.In the absence
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| | sad manifestation of such dangers.Science
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| of efficient capital markets and
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| | is the only public good that is produced
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| adventuresome capitalists, some
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| | by individuals rather than collectives.
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| developing countries have taken this
| |
| | This inner conflict is difficult to
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| propensity to extremes. In the
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| | resolve. On the one hand, why should the
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| Philippines, close to 100 percent of all
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| | public purse enrich entrepreneurs? On the
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| R&D is government-financed. The meltdown
| |
| | other hand, profit-driven investors seek
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| of foreign direct investment flows - they
| |
| | temporary monopolies in the form of
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| declined by nearly three fifths since
| |
| | intellectual property rights. Why would
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| 2000 - only rendered state involvement
| |
| | they share this cornucopia with others,
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| more indispensable.But this is not a
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| | as pure scientists are compelled to
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| universal trend. South Korea, for
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| | do?The partnership between basic research
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| instance, effected a successful
| |
| | and applied science has always been an
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| transition to private venture capital
| |
| | uneasy one. It has grown more so as
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| which now - even after the Asian turmoil
| |
| | monetary returns on scientific insight
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| of 1997 and the global downturn of 2001 -
| |
| | have soared and as capital available for
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| amounts to four fifths of all spending on
| |
| | commercialization multiplied. The future
|
| R&D.Thus, supporting ubiquitous
| |
| | of science itself is at stake.Were
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| government entanglement in science is
| |
| | governments to exit the field, basic
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| overdoing it. Most applied R&D is still
| |
| | research would likely crumble. Were they
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| conducted by privately owned industrial
| |
| | to micromanage it - applied science and
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| outfits. Even "pure" science -
| |
| | entrepreneurship would suffer. It is a
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| unadulterated by greed and commerce - is
| |
| | fine balancing act and, judging by the
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| sometimes bankrolled by private
| |
| | state of both universities and startups,
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| endowments and foundations.Moreover, the
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| | a precarious one as well.
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