Sbsp affirmative- arl lab- ndi 2011

AT: Goals CP

Government can pick winners

Milford 4/26/11 – President and founder of the Clean Energy Group (CEG) and Executive Director of the Clean Energy States Alliance (CESA) (Lewis, “Picking Winners or Losers,” Clean Energy Group, http://www.cleanegroup.org/blog/picking-winners-or-losers/)

Some arguments never die. Recently, some members of Congress criticized Energy Secretary Chu for “picking winners’ through his research and development programs like ARPA-E. This is an old canard that often comes from people who really think that the private sector alone, without government help, creates products and services. The evidence is so overwhelming to the contrary that the debate seems almost one sided by now. Everything from computer chips to cars is a result of long-term government research and development—as well illustrated in a recent Breakthrough Institute report. The argument against picking winners is especially wrong for emerging technologies that require deep and persistent public support. In the late 1990s, two Harvard professors in a book titled “Investing in Innovation: Creating Research and Innovation Policy that Works” demolished the myth that government should not be in the business of “picking winners.” And they came up with some surprising conclusions about the role of government in technology innovation. Branscomb and Keller describe how this bias against a government technology role can lead to two incorrect conclusions: …First, that markets do that most effectively; and second, that pork barrel politics is more likely to support the losers anyway. This neat two-step eliminates from the role of technology policy everything for which government is institutionally well-suited, from infrastructure building and investment incentives to support of skills training. It then notes that what is left is, of course, institutionally more appropriate for the market. The argument is legitimated simultaneously by our ancient faith in markets and our recent cynicism about politics. They admitted that the “picking winners and losers argument” might apply to some government efforts but not to the development of new technologies. Here’s why: Private markets often under-investment in new technologies; “empirical evidence suggests that as a result of spillovers of all kinds, the social returns to R&D spending on new technologies far exceed the private returns, perhaps by as much as 50 to 100 percent.” Private rates of return may not equal social rates of return—companies often cannot appropriate all the social benefits of an innovation and so fail to invest in what could be socially optimal technology. Because innovation is highly contingent—the actions of developers, governments and users are highly uncertain, making good information hard to come by, leading to great risks for investment—there is an inevitable misallocation of resources. “Some bets will pay off; some not at all. Winners and losers can only be positively identified in the revealing gaze of hindsight.” And finally, “…there is absolutely no evidence, beyond the economist’s leap of faith, that private investment is any more capable than public investment of separating the winners from the losers before the fact. The major difference is that private losers exit the market, while publicly backed losers are held to the higher standard of wasting taxpayers’ money.” Further, they confront another myth about government technology policy—that the federal government has in the past and in the future should only focus on R&D rather than commercial diffusion and use. Instead, they point out, in those areas where success has occurred, government has in fact played a much more expansive role than simply research and development. The most unlikely proof is in the defense area. Referring to the post-World War Two period in the U.S. regarding defense industry support as the most obvious time when many government policy tools were used, they note: Public spending supported the enormous development costs of relevant new technologies…In these cases, government underwrote the basic science research at universities and labs; direct R&D contracts accelerated the development of the technology; and defense procurement at premium prices constituted a highly effective initial launch market…A variety of mechanisms, ranging from patent pooling and hardware leasing (such as machine tool pools) to loan guarantees for building production facilities, helped to lower entry costs, diffused technology widely among competitors and set the stage for commercial market penetration. Aspects of this support model were adapted for government investment in other sectors, notably for public health, and produced similarly beneficial results… In the defense area, the U.S. government did not limit its role to only R&D, the typical critic’s myth, but “to the successful launch and diffusion of a technology development path—a trajectory—whose characteristics corresponded to the requirements of the commercial marketplace.” So to those who say, don’t pick winners, say it has always been so, and the country is better off for it. The alternative is to let losers win, and who wants that.

Picking winners key to innovation—empirically proven.

Atkinson ’10 – President of the Information Technology and Innovation Foundation (Robert D, “For Once and for All, Let's Agree the Government Can and Should Pick Winners,” April 22, Huffington Post, http://www.huffingtonpost.com/robert-d-atkinson-phd/for-once-and-for-all-lets_b_548145.html)

It's not just conservatives who worry about government being too active, many moderates and liberals who abide by the so-called Washington Consensus hold as an article of faith that while it's okay for the government to do things like fund basic research and improve education, by all means it should not "pick winners." On this matter (as on many), the Washington Consensus is wrong. Let's be clear about what "picking winners" means. It means government identifying industries and technologies where the country needs to be competitive globally, (i.e. health IT, nanotechnology, green energy, biotech, robotics, broadband) and then developing and implementing policies to work with the private sector to ensure that we grow and retain high-end jobs at home in these key sectors. Picking winners is not simply another name for an "industrial policy" in which the government selects specific firms or extremely narrow technologies, nationalizes industries, or impedes beneficial market forces. There's a clear reason why we need to put the rhetoric about socialism aside and start picking winners: we are starting to slip in terms of innovation and competitiveness. In a 2009 report examining innovation-based competitiveness among 40 nations, ITIF found that the United States has slipped from first to sixth place in the last decade, behind Singapore, Sweden, South Korea and others. In fact, the U.S. ranked dead last in progress in innovation and competitiveness over the last decade. Other countries are making more progress in developing the capacity to innovate and lead in key sectors. Unless we are willing to live with high unemployment, chronic trade deficits and relatively lower standards are living, we need to act. Creating the right market conditions for our companies and workers, (i.e. sound tax, trade, and fiscal policies) and investing in basic research are necessary but not sufficient conditions to keep pace with the nations around the world competing vigorously for innovation and related jobs. But we are kidding ourselves if we think that will be enough. Instead of the hodgepodge of policies from an array of complex tax laws to wasteful farm subsidies to a dizzying jumble of state incentives, we need a coordinated and comprehensive approach to making sure we not only come up with the next "big thing" but also that we do not have it snatched away from us. (Remember the VCR?) And that means picking key technologies and industries to focus on. But the free market opponents will say how can Washington outsmart the market? Is this the same market that through its infinite wisdom invested hundreds of billions of subprime mortgages? In fact, the government has a pretty good track record of picking winners. Just look at the technologies that the government had a key role in developing: the Internet, the web browser, the search engine, computer graphics, semiconductors, and a host of others. There are many other examples of success stories made possible not because government anointed a particular young entrepreneur but because the government made a conscious choice to open new pathways into which young innovators could embark. In the 1980s, we responded to Japan's economic ascendance by picking winners with the research and development tax credit, creating programs like the Advanced Technology Program and the Manufacturing Extension Partnership, and aggressively taking on unfair trade policies. We need to do the same today. It's time to break free of neo-classical economic orthodoxy that preaches that markets acting on their own optimize economic well-being and that low taxes, minimal regulation, and free trade alone can guarantee long-term U.S. leadership on the growth engines of the future. These ingredients work best when the government develops a strategy for correcting systemic "market failures" that limit innovation. We need to come to recognize that our country and not just our companies are competing and begin to think and act more like a country.

need to re-underline. WAY too long as is

Ezell ’10 – Senior Analyst with the Information Technology and Innovation Foundation (ITIF), with a focus on innovation policy, international information technology competitiveness, trade, and manufacturing and services issues (Stephen, “The Economist’s Strange Attack on Industrial Policy,” August 25, Progressive Fix, http://progressivefix.com/the-economist%E2%80%99s-strange-attack-on-industrial-policy)
It would be more constructive to envision a continuum of government-market engagement, increasing from left to right in four steps from a “laissez faire, leave it to the market” approach to “supporting factor conditions for innovation (such as education)” (which The Economist endorses, as, certainly, does ITIF) to going further by “supporting key technologies/industries” to at the most extreme “picking specific national champion companies”, that is, “picking winners.” And while it is generally inadvisable for governments to intervene in markets to support specific national champion companies, ITIF believes there is an appropriate role for government in placing strategic bets to support potentially breakthrough nascent technologies and industries. Ironically, The Economist asserts that, “Industrial policy may be designed to support or restructure old struggling sectors, such as steel or textiles, or to try to construct new industries, such as robotics or nanotechnology. Neither track has met with much success. Governments rarely evaluate the costs and benefits properly.” Yet, seconds later, the authors admit, “America can claim the most important industrial-policy successes, in the early development of the internet and Silicon Valley.” In one sentence, the article glosses over the point that the government, in this case the Defense Advanced Research Projects Agency (DARPA), “supported creation of ARPANET, the predecessor of the Internet, despite a lack of interest from the private sector.” (Italics mine.) But this point, as economists are wont to say, is “non-trivial.” In fact, it is the precisely the point. Early on, companies were reticent to invest in the nascent field of computer networking because the sums required were enormous and the technology was so far from potential commercialization that companies were unable to foresee how to monetize potential investments. Moreover, such basic research often results in knowledge spillovers, meaning the company cannot capture all the benefits of its R&D investment (in economist’s terms, the social rate of return from R&D is higher than the private rate of return), and thus companies tend to underinvest in R&D to societally optimal levels. Of course, this dynamic pertained not just to the Internet, but applies today to a range of emerging infrastructure technologies such as biotechnology, nanotechnology, robotics, etc. As Greg Tassey, Senior Economist at the National Institute of Standards and Technology (NIST), explains it, “the complex multidisciplinary basis for new technologies demands the availability of technology “platforms” before efficient applied R&D leading to commercial innovation can occur.” In other words, the levels of investment required to research and develop emerging technologies is so great that the private sector cannot support it alone, and thus, “government must increasingly assume the role of partner with industry in managing technology research projects.” Such was the case with the initial development of the Internet, as government stepped in and provided initial R&D funding, helped coordinate research between the military, universities, and industry, and thus seeded development of a breakthrough digital infrastructure platform, making the Internet a reality decades before the free market ever would have (if ever) if left to its own devices. And this admittedly-successful industrial policy has indeed been a spectacular success. As ITIF documented in a recent report, The Internet Economy 25 Years After.com, the commercial Internet now adds $1.5 trillion to the global economy each year—that’s the equivalent of adding South Korea’s entire economy annually. Moreover, the list of technologies in which government funding or performance of research and development (R&D) has played a fundamental role in bringing the technology to realization is long and compelling. It includes: the cotton gin, the manufacturing assembly line, the microwave, the calculator, the transistor and semiconductor, the relational database, the laser beam, the graphical user interface, and the global positioning system (GPS), amongst many others. The National Institute of Health (NIH) practically created the biotechnology industry in this country. And yes, even Google, the Web search darling, isn’t a pure-bred creature of the free market; the search algorithm it uses was developed as part of the National Science Foundation (NSF)-funded Digital Library Initiative. (But Google hasn’t done much to spur economic growth!) The point is that companies like IBM, Google, Oracle, Akamai, Hewlett-Packard, and many others may not have even come into existence─and certainly would not have prospered to the extent they have─if the U.S. government was not either an early funder of R&D for the technologies they were developing or a leading procurer of the products they were producing. And if you don’t get Intel developing the semiconductors, or Cisco building out the Internet, or Akamai securing it, or Google making it accessible, then you don’t get the downstream companies like the Amazons or eBays, the latter of which 724,000 Americans rely on as their primary or secondary source of income. Thus, while governments shouldn’t be creating and running such companies itself—that is for the free market to do—the government has a role to play in thoughtfully, strategically, and intentionally placing strategic bets on nascent and emerging technologies—as the United States did with information and communications technologies in the 1960s and 1970s—that have the potential to turn into the industries, companies, and jobs that drive an economy two to three decades hence. We call this innovation policy, as opposed to industrial policy. Today, this augurs the need for smart policies and investments in industries such as robotics, nanotechnology, clean energy, biotechnology, synthetic biology, high-performance computing, and digital platforms such as the smart grid, intelligent transportation systems, broadband, and Health IT. Explicit in this approach is a recognition that some technologies and industries are in fact more important than others in driving economic growth—that “$100 of potato chips does not equal $100 of computer chips.” Indeed, they are not because some industries, such as semiconductor microprocessors (computer chips) experience very rapid growth and reductions in cost, spark the development of subsequent industries, and increase the productivity of other sectors of the economy—not to mention support higher wage jobs. Yet The Economist frets that governments aren’t very good at identifying and investing in strategic emerging technologies. In impugning governments’ ability to pick winning technologies, the article cites failures such as France’s Minitel (a case of a country picking a national champion company) and argues that “Even supposed masters of industrial policy {like Japan’s MITI, or Ministry of International Trade and Industry} have made embarrassing mistakes.” But this would be tantamount to pointing to the spectacular failure of Apple’s Newton and arguing that Apple’s no good at innovation. The Economist seems to suggest that if governments failed 80-90% of the time in picking technology winners (and ITIF actually thinks their success rates are much higher), then they must be pretty incompetent at the effort and should stop trying altogether. But if private corporations followed that advice, then we would have no innovation whatsoever. Indeed, research by Larry Keeley of Doblin, Inc. finds that, in the corporate world, only 4 percent of innovation initiatives meet their internally defined success criteria. More than ninety percent of products fail in the first two years. Other research has found that only 8 percent of innovation projects exceed their expected return on investment, and only 12 percent their cost of capital. Yet companies have to continue to try to innovate, even in the face of these long odds, because research finds that firms that don’t replace at least 10 percent of their revenue stream annually are likely to be out of business within five years. The point is that just because innovation is difficult and success rates are low, this does not mean that corporations, or governments, should quit trying—or that their successes, like the Internet, can’t be spectacularly successful and have a profound impact on driving economic growth. But The Economist laments that industrial or innovation policies are subject to capture by industries. What this neglects is that all countries, including the United States, already have de facto industrial policies that favor some industries over others. In the United States, for example, our regulatory and tax system favors agribusiness through farm subsidies, the oil industry through oil subsidies, airlines and highways at the expense of rail, and mortgage and financial industries. In fact, it is precisely because the United States has historically lacked an ability, or willingness, to have a clearly defined innovation strategy and an open dialogue about “making strategic decisions about strategic industries” that we’ve ended up with a de facto industrial policy ill-suited to supporting industries that will drive economic growth in the future. The Economist notes that “there is no accepted framework for “vertical” policy, favoring specific sectors or companies.” True. So let’s make one. Finally, while The Economist criticizes President Obama’s new Strategy for American Innovation (released in 2009), it fails to come up with compelling evidence that breakthroughs such as mapping the human genome, unlocking nanotechnology’s potential, or achieving the technology-enabled transformations that need to occur in sectors from energy to transportation will occur solely because of the market’s ability to allocate capital efficiently. In this, it discounts the need for effective, intentional public-private partnerships to invest in and collaborate in the development and diffusion of these industries and technologies. This critique is not meant to pick on The Economist, which is usually chock full of solid reporting and informed commentary. Rather it is take on the myth of America’s purely free market capitalist system and make the case for an informed innovation policy. It is also to note that countries (like the United States) find themselves desperately turning to industrial policy in a last ditch effort to save stumbling sectors such as automobiles because they have failed to make adequate investments in innovation policies that would support science and technology, R&D, and the development and diffusion of innovative processes and technologies that could have helped keep old sectors like automobiles at the technology frontier while supporting the development of new sectors to drive the economy forward. Finally, it seeks to rebut the ideological and highly politicized assault on the idea the governments cannot make prudent, targeted bets on the industries of tomorrow. As Greg Tassey has noted, competition among governments has become a critical factor in determining global market share among nations. Indeed, the role of government is now a critical factor in determining which economies win and which lose in the increasingly intense process of creative destruction. There are appropriate and inappropriate roles for governments to play in this competition. Supporting education, removing barriers to competition, supporting free and fair global trade, opening countries to high-skill immigration, and targeting strategic R&D investments towards the technologies and industries of the future are appropriate roles for governments to play in this competition. Other government policies, such as mercantilist ones which deny foreign countries’ corporations access to domestic markets, pilfer intellectual property by stealing it outright or making it a condition of market access, creating indigenous or proprietary IT standards, failing to adhere to trade agreements, or directly subsidizing domestic companies or their exports, are illegitimate forms of global economic competition. The United States—and The Economist—must abandon its fanciful, stylized neoclassical notion of a purely free global economic marketplace unfettered by any form of government intervention whatsoever, and recognize that governments play a legitimate and crucial role in shaping the innovation capabilities of national economies. As between corporations, it’s a competition; and, as with companies, the ones that develop the best strategies and skills at fostering, developing, and delivering innovation are the ones most likely to win.

Government picks winners as well as the free market

Phillips 7/28/10 – Senior Fellow of the IC2 Institute of the University of Texas at Austin (Fred, “Picking Winners: Is Government Technology Strategy Good Or Bad? (Or, Say “Thai Baht” Three Times Really Fast),” http://www.science20.com/machines_organizations_and_us_sociotechnical_systems/picking_winners_government_technology_strategy_good_or_bad_or_say_%E2%80%9Cthai_ba_)
But can the private sector really do it better? There has been, I believe, no rigorous study of this question. The US federal government has difficulty dismantling a bureaucracy, once built. So I would concede, on the opinion level, that government may pick beneficial technological directions less efficiently than the private sector, because when the government is wrong, it’s expensive to recover. But I see no reason to believe corporations can pick winners more consistently. That is, out of ten chances to pick winners, I’d bet governments and corporations would be right about the same number of times.

AT: Agent CPs

Agent counterplans fail – no jurisdiction

NSSO, ‘7 – National Security Space Office [10/10/07, “Space-Based Solar Power as an Opportunity for Strategic Security: Report to the Director, National Security Space office Interim Assessment Release 0.1,” http://www.nss.org/settlement/ssp/library/final-sbsp-interim-assessment-release-01.pdf, DS]
FINDING: The SBSP Study Group found that SBSP development over the past 30 years has made little progress because it “falls between the cracks” of currently‐defined responsibilities of federal bureaucracies, and has lacked an organizational advocate within the US Government. The current bureaucratic lanes are drawn in such a way to exclude the likelihood of SBSP development. NASA’s charter and focus is clearly on robotic and human exploration to execute the Moon‐Mars Vision for Space Exploration, and is cognizant that it is not America’s Department of Energy (DOE). DOE rightly recognizes that the hard challenges to SBSP all lie in spacefaring activities such as space access, and space‐to‐Earth power‐beaming, none of which are its core competencies, and would make it dependent upon a space‐capable agency. The Office of Space Commercialization in the Department of Commerce is not sufficiently resourced for this mission, and no dedicated Space Development Agency exists as of yet. DoD has much of the necessary development expertise in‐house, and clearly has a responsibility to look to the long term security of the United States, but it is also not the country’s Department of Energy, and must focus itself on war prevention and warfighting concerns.

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