For years, the economic analysis of science and technology policy consisted
of little more than a syllogism. The major premise was that the government
should provide public goods and the private sector should provide private
goods. The minor premise was that basic research is a public good and applied
research is a private good. Once you think carefully about nonrivalry and
excludability, it is clear that the major premise is misleading because it understates
the possible role for collective action. Governments can usefully provide
goods that are nonrival but are not true public goods, because they are
potentially excludable. The minor premise is simply wrong. Applied research is
not an ordinary private good. Discussion in policy circles is now taking place
using new terms-critical technologies, generic research, and pre-competitive
research-that are only vaguely defined but that take the discussion outside of
the simple dichotomy between public goods and private goods. This is probably
useful, but it would lend needed structure to this discussion if participants paid
more attention to the distinction between the two different aspects of publicness
(nonrivalry and nonexcludability) and looked more formally at the different
kinds of policy challenges that nonrivalry and nonexcludability present.
For years, the economic analysis of science and technology policy consistedof little more than a syllogism. The major premise was that the governmentshould provide public goods and the private sector should provide privategoods. The minor premise was that basic research is a public good and appliedresearch is a private good. Once you think carefully about nonrivalry andexcludability, it is clear that the major premise is misleading because it understatesthe possible role for collective action. Governments can usefully providegoods that are nonrival but are not true public goods, because they arepotentially excludable. The minor premise is simply wrong. Applied research isnot an ordinary private good. Discussion in policy circles is now taking placeusing new terms-critical technologies, generic research, and pre-competitiveresearch-that are only vaguely defined but that take the discussion outside ofthe simple dichotomy between public goods and private goods. This is probablyuseful, but it would lend needed structure to this discussion if participants paidmore attention to the distinction between the two different aspects of publicness(nonrivalry and nonexcludability) and looked more formally at the differentkinds of policy challenges that nonrivalry and nonexcludability present.
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