We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Naturally, they will do it politically, not rationally. What would anybody expect? How many experienced venture capitalists do they have on board?
Fact is, there is a ton of loose venture capital out there, looking for things to invest in and to support, from hi-tech to low-tech. Scouring the entire planet for interesting opportunities and good ideas. The difference is that they know what to look for, and the government is just looking to buy votes and to throw our hard-earned money at crap. It's not a joke, but it is.
Rep Gov John Kaisch is pushing the same type of thing for OH.
Of course it's bound to fail. Off the top of my head, I see several problems
1. Who gets the best deals? VCs will be competing for these same projects. If gov't offers a better deal than a VC, then they take more risk as in not recouping their loss investments through their winners.
And why would the gov't give some deals? Will this be political favoritism? How can it not be?
2. Who judges? Take a look at the Dept of Commerce's Adv Tech Program or Ohio's 3rd Frontier, and you'll see a whole bunch of projects that sounded good to academic/gov't researchers, but didn't do squat in the marketplace.
3. Similarly, what categories get judged? Does anyone fund a Starbucks or Krispy Kreme start up? Hardly hi-tech, but certainly has provided jobs through the past few decades.
4. How does gov't react to competitors? Will the gov't defend those companies or technologies that it has a stake in? Even defending it against superior competitors? How will that benefit the US? Will taxpayers be forced to fund investments that may drive their own companies out of business?
5. When is funding stopped? Will this be political? Will politicians have the will to keep funding a risky project that is still viable? Will a simple change of administrations end funding for projects...some just as they might actually hit?
VCs are far from perfect on their investments, but it's their money. Risking gov't money on such investments is so far from the role of a sound gov't that it's ludicrous to start, let alone expand on the nonsense that's already been tried.
Projects like this always trend to invest in the "trendy" rather than the economically rational. I knew someone who was starting a small manufacturing business and applied for support to a county "incubator" program. But the county program was only interested in "high-tech" businesses--software, web services, etc--and turned him down. (There were no environmental issues; his business was clean light manufacturing)
This was around 1999. I wonder how many of those "high-tech" companies are still around.
Of course, real VCs can be excessively trendy, too, but the ones who survive & thrive learn rapidly to balance trendiness with realism and with contrarian thinking.
Here in Austin (Madison, Ws South) Texas we have turned the corner on "investments" and we call the purveyors of the new business: VENTURE SOCIALISTS. They take the money from other programs and spend it on a project that
private money knows is a loser and if it doesn't work out they just spend more. In the meantime the regulate the cr*p out of someone that is trying to start up a business that "might" be a success.
It reminds me of a boondoggle that was started by the last Pubbie governor of NC when he started the "Global TransPark". It sounded like a good idea (create an air transport hub and have manufacturers and other users situated close by. Then let the synergies take off!), but it flopped. It's been sucking up taxpayer money for probably 20 years and there are no manufacturers taking advantage of the park and I believe the main thing it's used for is aircraft maintenance. And it only took it 20 years to become that useful!
My experience in govt. economic development (from the govt. side) is: the projects can't find funding any where else. The govt becomes the funder of last resort. The govt simply funds a long shot hope. In many projects there is no collateral and a personal guarantee is worthless. The govt program managers have no authority to step in and change management or accounting practices. There are a few programs that are successful but that's generally because the person running the program has financial or business experience. After three years of lackluster lending success we abandoned lending for funding hard assets, ie sites and buildings, that might be useful for a second time around. Blick