Industry Voice: Private wants, public needs

Creating better incentives for technology, pharma and infrastructure

Industry Voice:  Private wants, public needs

With society facing many urgent and complex challenges, deciding who is best-placed to deliver solutions has become an emotive and often political subject. We assess whether there is a better way to utilise the skills and resources of the public, private and third sectors for the greater good.

Blasting a shuttle into space is a costly business. With the National Aeronautics and Space Agency (NASA) at the controls, a single shuttle could burn US$1.5 billion taking matter into low Earth orbit.1

But NASA's approach seems anathema today. Who would plan such a costly, complex operation and jettison parts after a single use? Today, US commercial operator SpaceX partners NASA in transporting cargo to the International Space Station over 400 kilometres above the earth, but it has a different vision; based around simplifying and re-using as quickly as possible.

By using new approaches - like a floating platform to land a rocket booster as it returns to land, or a ship armed with nets to ‘catch' jettisoned parts - the economics of space travel can be transformed. Targeting rapid parts turnaround means cost equations change entirely.

"Reusability is only relevant if it is rapid and complete," explains SpaceX CEO Elon Musk. "You do not send your aircraft into Boeing in between flights."2

Of course, the reality is complicated, and only small parts of the ‘re-use and re-cycle' vision have been achieved. An insulated rocket nose cone could be larger than a bus, weighing-in at around 800 kilos and, even when slowed by a parachute, getting an ocean landing area cleared and a recovery boat in the right spot to ‘catch' it will be challenging.


Costing progress

Costing progress chart
Source: The Impact of Lower Launch Cost on Space Life Support. NASA Ames Research Center

It is a nice story, but it is reasonable to question why this is relevant in understanding who is best-placed to solve complex challenges in the long-standing public/private debate.

1. Who needs innovation ‘moonshots'?

It could be argued no-one ‘needed' President Kennedy's ‘moonshot' in the 1960s, but the US justified an enormous national investment as the Soviet Union was sabre-rattling. The space programme served a clear political objective - a direct challenge to USSR - and led to innovation in multiple fields simultaneously; defence, robotics, satellite technology, nutritional science, water purification and textile design.4

Since then, private companies have actively capitalised on those ideas. New communications technologies, drought warning systems, specialist fabrics for extreme climates, dehydrated foods, comfort foam beds… the list goes on. The value created from the original research drive has been immense, and whole new areas of commercial activity have emerged. A world monitored from space has few places to hide, but may have the infrastructure to deliver cheap, universal WiFi.5

This raises several questions. Which of today's problems need cutting-edge science, and who should deliver the solutions? Specifically, what should the role of the state be when resources are short but society's wants and to-do lists are so long? And, if delivering solutions means pulling in capital and market discipline from the private sector, how can incentives be structured in ways that will genuinely benefit the wider community? 

Setting the compass

An approach gaining traction involves re-imagining the role of the state; not as a sluggish Leviathan, but an important player directing growth. Professor Mariana Mazzucato from the Institute of Innovation and Public Purpose at University College London, believes innovation has two elements - pace and direction - and governments can influence both. In her view, an unfettered free market has benefits but is unlikely to deliver complex technical or social goals without at least some direction from the state. She argues it is naïve to think achievements that are often ‘claimed' by the private sector - like the development of the smart phone - came about without any government involvement.  

"If you take apart the iPhone, every little bit of it is actually funded by the state," she says. "The state has not just funded the schools that have educated the workers that have done the research behind the iPhone. The state directly funded the internet, GPS, the touchscreen display and the communication technology behind the phone."

This conviction in the state's ability to make and shape underpins the mission-led innovation policy Mazzucato is actively promoting around the world. By setting targets and providing explicit incentives - like providing capital to the institutions that underpin research, offering tax breaks, income-contingent loans and credit guarantees - state involvement can be transformative.



  1. 1. The Impact of Lower Launch Cost on Space Life Support. NASA Ames Research Center 
  2. 2. Interview with TED curator Chris Anderson. Published 3 May 2017
  3. 3. The Impact of Lower Launch Cost on Space Life Support. NASA Ames Research Center 
  4. 4. Space Race legacy: 10 technologies still in use today. Telegraph. 9 February 2019
  5. 5. SpaceX Just Launched The First 60 of Nearly 12,000 High-Speed Internet Satellites. Science Alert. 24 May 2019


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