Jun

26

McCain innovates on innovation policy

June 26, 2008 | 3 Comments | Joshua Gans

John McCain has proposed a $300 million prize for car batteries:

“I further propose we inspire the ingenuity and resolve of the American people,” Mr. McCain said, “by offering a $300 million prize for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.”

He said the winner should deliver power at 30 percent of current costs. “That’s one dollar, one dollar, for every man, woman and child in the U.S. — a small price to pay for helping to break the back of our oil dependency,” he said.

It is hard not to applaud a political leader at long last taking prizes seriously as a way to drive innovation. But there is discussion as to whether this was really the right target. For me it is hard to tell. Environmentally friendly technologies have external benefits and are leading edge. But this is also a realm in which there is plenty of global competitive pressure to do the same thing so I am not sure whether a prize will do much. But it could spur US researchers to greater effort and action.

But there is an externality to all of this. One real possiblility is that someone outside of the US invents this (perhaps quicker because they have to race with US based researchers who get a prize kick). In that case, the US can send whomever does it a thank you card. They have put competitive pressure on them and haven’t spent a cent!


Comments

3 Responses to “McCain innovates on innovation policy”

  1. kymbos on June 26th, 2008 9:20 am

    If someone outside the US delivers, won’t the American car industry go further into decline? I can’t see a thank you card for that…

  2. NPOV on June 27th, 2008 10:54 am

    I suppose the value of the prize is the degree to which it might inspire a specialist company (or startup) to take on a project of just perfecting a better car battery and nothing else. While such a company would obviously profit reasonably well from selling such technology to an auto manufacturer, it’s likely peants compared to the profit that the auto manufacturer itself would end up out of successfully integrating such technology into a consumer product. At any rate, it’s far preferable to simply handing out millions of dollars existing highly profitable companys like, oh I don’t know, Toyota.

    Obama would do well to match McCain on this, even at the risk of policy plagiarism accusations.

  3. car dvd Manufacturer on June 30th, 2008 3:32 pm

    it’s likely peants compared to the profit that the auto manufacturer itself would end up out of successfully integrating such technology into a consumer product.