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Apple is a perfect example. In its early stages the company received government cash support via a $500,000 small business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the internet, GPS, touchscreen displays and even the voice-activated smartphone assistant Siri all received state cash.
The US Defence Advanced Research Projects Agency (DARPA) bankrolled the internet, and the CIA and the military funded GPS. So, although the US is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.
“Every technology that makes the iPhone a smartphone owes its vision and funding to the state”
The examples don’t just come from the military arena, either. The
US National Institutes of Health spends around $30 billion every year on pharmaceutical and biotechnology research and is responsible for 75 per cent of the most innovative new drugs annually. Even the
algorithm behind Google benefited from US National Science Foundation (NSF) funding.
Across the world we see state investment banks financing innovation. Green energy is a great example. From Germany’s KfW state bank to the Chinese and Brazilian development banks, state-run finance is playing an increasing role in the development of the next big thing: green tech.
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