What’s the difference?

This is an important post in setting the context for a number of the following posts in this innovation series. Understanding the distinction between direct and indirect funding of innovation by government is an important concept. This post will provide some background on direct versus indirect funding.

Lets start by saying there is a significant difference between direct and indirect support of knowledge based infrastructure through government policy. Direct Policy puts government funding into publicly (government) administered programs. Indirect Policy creates industry based tax incentives and grants that are applied to the private sector. In very simplistic terms direct policy means that government funds public sector support organizations that administer and /or deliver “programs” for industry. Indirect policy also has support organizations, however, they tend to be much leaner and the majority of the funding makes its way to the private sector. If you are planning to use public policy to innovate and commercialize then it is far better to have the funds used at the discretion of the strategic target industry rather than creating bureaucracies.

Ian Graham

Filed under: Commercialization, Entrepreneurship, Innovation by Ian
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