Savior? Or Soma vendor?

What to make of the news that Right Hemisphere is the recipient of New Zealand government largess?

At least one blog I've been reading from NZ is, as you might expect, all for government funding of technology companies.

I'm not so sure, however. Make no mistake about it, having funding is the life-blood of any startup. And I do understand that many countries outside the US have, as a matter of policy, industrial policies that encourage high-technology with direct government support.

But (and those of you who are reading this outside the USA can now roll your eyes), I believe that real innovation in technology comes from the brutality of the marketplace. And part of that brutality is the discipline that commerically-motivated investors bring to their funding decisions.

I am not saying that all government support is soma. I do believe in the very early stages of a company, when cash is tight, government support in the form of incubators, etc. can be very helpful. But if a loan, grant or other instrument of industrial policy simply serves to keep something going that the market isn't buying…well you get the idea.

One comment to Savior? Or Soma vendor?

  • Steve  says:

    “real innovation in technology comes from the brutality of the marketplace”

    That argument might fly in larger market, bt for a tiny domestic market like NZ’s, the propensity for market failure is much higher, and govt intervention encourages the optimal use of incredibly limited resources by your standards.

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