Reply to post: Subsidizing specific technology fails

Tesla share crash amid Republican bid to kill off electric car tax break

John 209

Subsidizing specific technology fails

This kind of subsidy, of commercial products embodying a specific technology, always fails in that it retards further development. It creates a high barrier to alternative better technology being developed in the research sector, as basic and applied research are by their nature expensive and risky. That is, most modern technology flows from basic and applied research, but with existing technologies being subsidized, the ability to realize a return sufficient to justify the cost and risk of new research is substantially hampered by the subsidies being offered for existing technology products.

It would be better for the government, in consultation with basic and applied researchers, to offer substantial prizes for substantial improvements in specific areas of technology. The criteria for such "substantial improvement" would have to be well thought out and concise, but researchers are up to that. Winning ideas would be the property of all who wished to implement it, with compensation for the winning effort covered by the size of the prize.

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