Balancing the Scales: Mixing Public and Private Inputs to Optimize Scientific Advancement

Abstract

The case study contemplates two primary ways in which scientific advancement is financed. First, government can support science in the name of serving the public interest. Most science does not produce immediate benefits in terms of tangible advances. It is, therefore, reasoned that government ought to subsidize exploratory research because business will often fail to see where profits justify the expense, especially with basic research. Second, there are privatized efforts that corporations invest in when attempting to discover new technologies. The intention with business investment is often to ultimately develop some product or service that will yield economic benefits.

There are trade-offs involved in determining the optimal mix of public and private investment. Too much governmental investment will end up crowding out private initiatives. Alternatively, there are political pressures and a genuine need for government to take the lead in pursuing science, especially when faced with an existential threat. Students are asked to sift through the evidence in determining what will result in an optimal balance in promoting science overall.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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