Mariana Mazzucato argues in The Entrepreneurial Statethat government financing and research has been crucial to the technology booms of recent decades. Jeff Madrick summarizes part of her argument in his NYRB review:
“private firms often invest after innovations have already come a long way under government’s much more daring basic research and patient investment of capital. The obvious case is the development of the technology for the Internet, but the process is much the same in the pharmaceutical industry.
“Mazzucato observes that less and less basic research is being done by companies today. Rather, they focus on the commercial development of the research already done by the government. One shouldn’t underestimate the degree of imagination and funding necessary to transform a major scientific idea into a product that can be used by millions of consumers. The money paid by investors for some young unproven companies can be astounding, even when they are only beginning to make profits.”