Energy firms such as GE have lavishly praised China for investing big money in making the country the global leader in renewable technologies such as solar photovoltaic (PV) cells. While there are definitely worthy aspects of China's energy policy -- such as its clarity in how things are regulated and what government's position will be over the long-term -- much of the government's funding has gone to sudsidize as much as half the cost of installing renewables. Unsurprisingly, this spending has quickly made China the world's biggest renewables market. The large local market, strong local talent, and generous financing has led to China also becoming the global leader in new markets such as solar PV manufacturing.
The United States has a checkered history of supporting innovation, but in bolstering the spread of healthcare IT the government is clearly calling the right plays. Rather than investing vast sums in an enormous national healthcare IT system (as the UK did, only to scrapped the failed project), it has taken a far leaner, more flexible, and generally more cost-effective approach. The government is subsidizing the cost of healthcare IT installation by physicians, but doing much else besides. It is creating beacon communities to serve as reference customers for wary doctors, showing the value of adopting these systems. It is borrowing from the agricultural extension playbook by creating local extension programs devoted to surmounting everyday implementation issues in doctors' offices. The government is also partnering with industry to create standards for data interchange between software systems. Another initiative has the government copying from the weather bureau, of all places, in placing a huge amount of data online, in machine-readable format, and creating a software developer community through meetings and competitions to leverage this data in a host of ways that only a few dreamers can conceive of today. In short, most of these initiatives are dirt-cheap, leverage government's unique position, and rely on entrepreneurism to generate wave after wave of new markets using these resources.
The great and challenging thing about new markets is that the innovation never stops. By investing too much in creating a new market that seems close, government can overly influence entrepreneurs to lose focus on the great new markets of the slightly more distant future. Government can play a critical role in market creation, but that role should be one that relies on entrepreneurship to discern where the next big opportunities lie.
This post was written by Steve Wunker. Click for more of New Markets' thinking on healthcare.