Public-private technology partnerships - Promises and pitfalls

The U.S. government has a long history of supporting private sector researc h and development (R & D). The economic justification for government R & D support is clear. Primarily because of knowledge spillovers, profit-maximiz ing firms invest less than the socially optimal level of R & D. This market failure creates the possibility that government can help mitigate the unde rinvestment problem Public-private technology partnerships are the newest a pproach to funding R & D. Technology partnerships include public funding of industry-led R & D projects and private research consortia, and collaborat ions between industry and government scientists. These programs hope to gen erate research that yields commercial products and innovations. This articl e discusses the rise of these programs, she theory supporting them the type s of research projects they must fund to he successful, the technical and p olitical obstacles they face in funding these projects, and the evaluations of the largest partnership programs. This article concludes with policy re commendations, recognizing that these programs have potential hut must over come significant hurdles