Stewart Brand’s Summary of Mariana Mazzucato’s Recent Seminar at Long Now Foundation

Date: Tue, 25 Mar 2014

Subject: [SALT] Government as radical, patient VC (Mariana Mazzucato talk)

“The iPhone, Mazzucato pointed out, is held up as a classic example of world-changing innovation coming from business.

   Yet every feature of the iPhone was created, originally, by multi-decade government-funded research.  From DARPA came the microchip, the Internet, the micro hard drive, the DRAM cache, and Siri.  From the Department of Defense came GPS, cellular technology, signal compression, and parts of the liquid crystal display and multi-touch screen (joining funding from the CIA, the National Science Foundation, and the Department of Energy, which, by the way, developed the lithium-ion battery.)  CERN in Europe created the Web.  Steve Jobs’ contribution was to integrate all of them beautifully.

   Venture Capitalists (VCs) in business expect a return in 3 to 5 years, and they count on no more than one in ten companies to succeed.  The time frame for government research and investment embraces a whole innovation cycle of 15 to 20 years, supporting the full chain from basic research through to viable companies. That means they can develop entire new fields such as space technology, aviation technology, nanotechnology, and, hopefully, Green technology.

   But compare the reward structure.  Government takes the greater risk with no prospect of great reward, while VCs and businesses take less risk and can reap enormous rewards.  ‘We socialize the risks and privatize the rewards.’

Mazzucato proposes mechanisms for the eventual rewards of deep innovation to cycle back into a government ‘innovation fund’—perhaps by owning equity in the advantaged companies, or retaining a controlling ‘golden share’ of intellectual property rights, or through income-contingent loans (such as are made to students).  ‘After Google made billions in profits, shouldn’t a small percentage have gone back to fund the public agency (National Science Foundation) that funded its algorithm?’  In Brazil, China, and Germany, state development banks get direct returns from their investments.

   The standard narrative about government in the US is that it stifles innovation, whereas the truth is that it enables innovation at a depth that business cannot reach, and the entire society, including business, gains as a result.  ‘We have to change the way we think about the state,’ Mazzucato concludes.

   —Stewart Brand (”

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About Lloyd Kahn

Lloyd Kahn started building his own home in the early '60s and went on to publish books showing homeowners how they could build their own homes with their own hands. He got his start in publishing by working as the shelter editor of the Whole Earth Catalog with Stewart Brand in the late '60s. He has since authored six highly-graphic books on homemade building, all of which are interrelated. The books, "The Shelter Library Of Building Books," include Shelter, Shelter II (1978), Home Work (2004), Builders of the Pacific Coast (2008), Tiny Homes (2012), and Tiny Homes on the Move (2014). Lloyd operates from Northern California studio built of recycled lumber, set in the midst of a vegetable garden, and hooked into the world via five Mac computers. You can check out videos (one with over 450,000 views) on Lloyd by doing a search on YouTube:

3 Responses to Stewart Brand’s Summary of Mariana Mazzucato’s Recent Seminar at Long Now Foundation

  1. Once again Stewart Brand has an astonishingly fresh viewpoint. At a time when crucial government research funding is shrinking, wealthy companies like Google should be paying something back.

  2. WOW!

    After TRILLIONS WASTED on government research, we're rewarded with shit like Tang, and annoying cellphones.

    Way to Go! Yay!

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