Private innovation bad will focus on profit alone instead of social goods. Solves none of the case.
West 22, Senior Fellow – Center for Technology Innovation, Douglas Dillon Chair in Governmental Studies (Darell, “R&D for the public good: Ways to strengthen societal innovation in the United States,” Brookings, https://www.brookings.edu/articles/rd-for-the-public-good-ways-to-strengthen-societal-innovation-in-the-united-states/)//BB
But at another level, there are problems with the bulk of R&D coming from the business community. First, vital national interests may get overlooked to the detriment of the overall country. Second, profitable consumer products likely will get advantaged over unprofitable societal innovations, even if the latter are important for public health and national security. Third, innovations that need to get financed in order to promote longterm public goods may receive short shrift over items that promise a quick payoff. Corporate leaders are under enormous pressure to meet quarterly revenue projections and that can skew their R&D allocation decisions.
In an era of globalization, for instance, we have seen a number of cases where business leaders made decisions to outsource key products and components to other nations, such as China, India, and South Korea. As an example, semiconductor manufacturing largely was outsourced to Taiwan and South Korea despite the vitality of chips to the digital economy. When COVID upended global supply chains, our chip dependency on other countries limited growth in key sectors such as automotives and electronics.
The same thing happened in regard to medical supplies and drugs. Many of these items were made in India and China due to their cheaper production costs, and during the pandemic, it was hard to get personal protective equipment and pharmaceuticals. This harmed our public health responses and made it difficult for health professionals and patients to get the materials needed to safeguard their health.
These are just a few of the reasons why having relatively high business and low government R&D investments can be problematic. It may skew priorities in ways that make complete sense from a business perspective but harm national objectives. Business decisions generally emphasize profitable innovations and major consumer items that will generate corporate value as opposed to R&D investments for the public good designed to fight hunger, deal with income inequality, further national security, or improve public health.