The failure of Solyndra – a United States solar energy venture backed by $535 million in federal loan guarantees drew the ire of many people concerned with the state of the federal budget deficit and the growing national debt. But was the federal government wrong to offer loan guarantees to Solyndra?
This is the question many people asked back when the failure happened, and I would be interested to hear what you think.
In a previous article I stated some of my thoughts on the role the federal government should play in the overall innovation ecosystem in the United States, and I stand by what I said in that article – An Open Letter on Innovation to President Obama.
To quote the relevant part for the discussion:
We need to take a step back and define what the role of government is in our overall innovation efforts as a country:
- What are the big research challenges that companies are unwilling to spend on that if pursued and conquered, would unleash a wave of innovation?
- How can companies and the government work together to fund and share technology that doesn’t define competition, but does accelerate productivity and global competitiveness of U.S. firms against foreign competitors?
- How can we restructure our tax system to reward successful American firms for taking the bigger risks that will help them continue to lead their industries in the future?
- How can we incent American exporters trailing foreign competitors to try and leapfrog and disrupt foreign competitors, take market share, and create jobs in this country?
- Should we build a deep innovation coaching capability into the Small Business Administration so that small companies can get access to innovation education?
- If the last wave of innovation in this country was built on the passion and ideas of foreign born entrepreneurs, should we not be doing more (not less) to encourage the world’s best to come here and study and start businesses?
- If we are in a war for innovation, should we not be building innovation alliances with countries in the same way we have built military alliances for centuries? More and more companies are doing this, why not countries?
You’ll notice that nowhere on this list was funding companies. This is a special skill and one that most people wouldn’t think about the government as having, especially when you take into account that identifying a potentially successful startup is not about the idea, but about identifying strong management teams that have the capability to lead a team of people to find and overcome the critical flaws in the founding idea and get the final solution to market. Funding companies isn’t something that the government should be focusing on – even when they pursue it in a portfolio approach (Solyndra represents only 2% of the Department of Energy’s committed loan guarantees).