There is a widespread belief that the driving force of innovation is competition between companies. The government is viewed as an obstacle holding back the full potential of entrepreneurs with outdated regulation. However, practically all tech start-ups that are poster-boys for innovation are built on two profound inventions, both of which are born out of publicly funded research: the digital computer and the internet. These inventions were not born from profit driven competition, but instead cooperation between scientists. This can be seen in other areas as well: the private sector spends much more on medical research and development, but three out of four break-through medicines in the US are developed by the publicly funded National Institute Of Health. Mariana Mazzucato’s book The Entrepreneurial State makes these and other convincing arguments about the key role of public funding plays in fostering innovation.
There is also another undervalued contributor to innovation: cooperatives. Cooperatives are often risk-averse which is why they have a lower risk of bankruptcy than other businesses. This risk-aversion has lead many to think that they are less capable of innovating. However, cooperatives are often spearheading innovation, as three examples from three different sectors below show.
Read the rest at Coop Exchange
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