15 January 2008

Driving the Future: Market vs. Incentive Prizes vs. Government Funding

A better world is waiting for some important breakthroughs in science and technology. Take the space program: NASA is neglecting its space programs, and building a bureaucratic infrastructure devoted to climate change. It is up to private entrepreneurs, X Prizes, venture capitalists, and well-endowed visionaries to push space technology out of its government-financed dead end.

What about medical research?
More than two-thirds of Nobel Prizes in medicine have been awarded to scientists who conceived their award-winning ideas when they were younger than 40. In contrast, the average investigator is now 42 years old when she receives her first independent NIH grant, and NIH grants are typically given to safe, incremental research. This year, only a few million dollars out of the NIH’s $29 Billion budget will be directed to young investigators pursuing high risk, high reward research.

Funding young people to pursue high risk, high reward, opportunities is the basis of venture capital. Over many decades, venture capitalists have learned that the only way to successfully fund potentially game changing ideas is to ignore the percentage of attempts that succeed (“batting average”) and rather focus on trying to hit home runs to optimize portfolio value. Similarly the best way to fund research that has the potential to truly make a difference is to be willing to see the vast majority of funded projects not succeed.

Establishment science--government and foundation supported science, increasingly lacks the home-run potential that is needed. Clone-mind thinking dominates government bureaucracies like the NIH, and large foundations. That is not the type of thinking that is capable of leading. It is strictly a clone-committe-mind. We need better.

Venture capitalists, incentive prizes, and other non-governmental forms of financing allow funds to get to the dark horse candidates, the sleepers. Government and foundation grants and contracts typically go to the "committee-conservative" ideas. Government and foundation bureaucratic decision making has created the climate change monstrosity that diverts huge chunks of the world's resources to chase phantoms residing in the minds of a few powerful but deluded men.

Trillions of dollars are going to waste worldwide, mired in the futile and destructive residue of human power-seeking. The US, in its self-proclaimed role as the world's hegemon and guaranteer of trade routes, is trying to take care of the entire world's needs, as they are perceived, and wastes many hundreds of billions. China and Russia are mired in their own dreams of hegemony and corruption--and waste many hundreds of billions there.

The future of humanity depends upon a clearer vision than appears to exist at the upper levels of governmental, intergovernmental, and non-governmental organisations.

Free markets are not perfect, but compared to decisions made by bureaucratic drones, the market performs well.

The Manhattan Project was a desperate, wartime throw of the dice. It worked. It had to work quickly, and no expense was spared. That kind of power to manipulate resources is far more likely to be misused and abused, than used well, in almost all circumstances. Far more breakthroughs have come from the solitary thinker or researcher, or a small group of collaborators, than from government sponsored mega-projects.

Labels: ,

Bookmark and Share


Post a Comment

“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

<< Home

Newer Posts Older Posts