Economics & Finance / Macroeconomics / Fiscal Policy & Government Spending
Why Government Should Pay for Your R&D? The Shocking Truth About Research Funding
Did you know that most companies are actually terrible at funding the kind of research that drives real economic growth? A 1978 study by Rainer Paulenz reveals the uncomfortable truth: the free market systematically underinvests in R&D, especially in fundamental science. This video breaks down the three main tools governments use to fix this—tax breaks, subsidies, and contracts—and explains why most of them fail. We'll explore the 'R&D hypothesis,' the market failures that create a $1 trillion innovation gap, and the surprising conclusion that government contracts, not tax cuts, are the most effective way to steer technological progress. Whether you're an entrepreneur, a policymaker, or just curious about how innovation really works, this video will change how you think about the role of government in science and technology.
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