Second, changing capital requirements. Each
stage of innovation is distinct and has its own
level of risk and capital requirements. A broad
range of investors, with different risk preferences
and capital availability, will ensure there is adequate support at all stages of innovation. When
there are no investors for all stages, innovations
can fail to progress and be left stranded.
Take the Human Genome Project (HGP), for
example. The level of funding increased over
time as the project advanced. In 1988, $54 million was provided, much of it from public funds,
Fig. 3 Four stages of innovation pathway. Source Vivid Economics
Table 4 The example of ethanol fuel
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295
stage of innovation is distinct and has its own
level of risk and capital requirements. A broad
range of investors, with different risk preferences
and capital availability, will ensure there is adequate support at all stages of innovation. When
there are no investors for all stages, innovations
can fail to progress and be left stranded.
Take the Human Genome Project (HGP), for
example. The level of funding increased over
time as the project advanced. In 1988, $54 million was provided, much of it from public funds,
Fig. 3 Four stages of innovation pathway. Source Vivid Economics
Table 4 The example of ethanol fuel
Special Report 3: A Study of China’s Technology Revolution
295