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A State-Powered Green Revolution

Discussions about building a green future tend to focus on the need to improve the generation of energy from renewable sources. But that is just the first step. Better mechanisms for storing and releasing that energy are also critical. And, contrary to popular belief, it is the public sector that is leading the way toward […]

Since the commercial development of lithium-ion batteries – the rechargeable batteries common in consumer electronics – in the early 1990s, the challenge of storing and releasing power effectively enough to make sustainable energy sources viable alternatives to fossil fuels has been a vexing one. And efforts by entrepreneurial billionaires like Bill Gates and Elon Musk to overcome this challenge have been the focus of much excited media speculation. So how many billionaires does it take to change a battery?

The answer, it turns out, is zero. This week, Ellen Williams, Director of the Advanced Research Projects Agency-Energy, part of the US Department of Energy, announced that her agency had beaten the billionaires to it. ARPA-E, she declared, had attained “some holy grails in batteries,” which will enable us to “create a totally new approach to battery technology, make it work, make it commercially viable.”

While praising Musk’s achievements, Williams drew a sharp distinction between their approaches. Musk has been engaged in the large-scale production of “an existing, pretty powerful battery technology.” ARPA-E, by contrast, has been pursuing technological innovation in the purest sense: “creating new ways of doing” things. And they “are pretty well convinced” that some of their technologies “have the potential to be significantly better.”

To many people, this development may seem surprising. After all, the private sector has long been regarded as an economy’s most important source of innovation. But this perception is not entirely accurate.

In fact, history’s great entrepreneurial figures have frequently stood on the shoulders of the entrepreneurial state. The late Apple founder and CEO Steve Jobs was a smart businessman, but every technology that makes the iPhone “smart” was developed with state funding. That is why Gates has declared that only the state, in the form of public institutions like ARPA-E, can lead the way to an energy breakthrough.

It is critical to note here that it is not the state as administrator fulfilling this role; rather, it is the entrepreneurial state in action, creating markets, instead of just fixing them. With a mission-oriented approach and the freedom to experiment – with failure understood to be an unavoidable, and even welcome, feature of the learning process – the state is better able to attract top talent and pursue radical innovation.

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