Wanted: The ability to fail

If entrepreneurs are to solve the world’s biggest problems — energy self-sufficiency, a reversal of climate change, finding a way to feed the 9 billion people expected to populate this planet in a few years — they need to be able to try and fail. And, this means the government needs to play a role in important research even if that means some money is wasted, say academics and researchers, who spoke at MIT’s EMtech 2012 conference this week.

That sentiment may be surprising given a political climate when the word Solyndra, the failed greenpower company that got federal funding, is thrown around like a machete. But then again, it’s really not shocking given that solutions to these problems — unlike the latest iPad(s aapl) app — often require big capital spending, tons of research, and usually some sort of public-private partnership. That  means public dollars.

“VCs are the best but even they are afraid of failure and when you don’t have failure as an option you can’t push the boundaries,” said Rodney Brooks, CEO of Rethink Robotics and professor emeritus at MIT. “Governments are scared to invest in high-risk research [but] we need more of it to come up with fresh ideas to solve global problems.”

Fear of failure cripples big-time innovation

“For solving externalities like carbon warming, the idea of government buy-in is essential,” said David Keith, CEO of Carbon Engineering. a Calgary, Alberta startup working on technologies to reverse the impact of climate change. “I don’t know of any other way but the government to do coordination of a common price to pay for using the atmosphere as a wasteland.”

GigaOM has written before about the need to fund really critical — and expensive, long-term projects — to address these big problems. But that theme surfaced again big-time  this week.

Government as prime motivator or traffic cop?

Keith called for a limited role for government, however, because he sees it doing a bad job when it comes to innovation. “Ideally the government will set rules in a simple way and will include a  substantial price for using atmosphere as storage for carbon– but beyond that we need to find ways to get real competition going — a marketplace for new ideas and technologies at scale.”

For complicated projects like Terrapower’s proposed new nuclear reactors — which would use existing nuclear waste as fuel — the expense is too large to be borne privately. Each reactor would cost $1 billion to $2 billion, necessitating some sort of government buy-in, said Nathan Myrhvold, founder of Innovation Ventures, a Terrapower investor.

Some entrepreneurs said government in the US has nibbled around the edges of the energy problem without touching really important issues like rationalizing the power distribution grid which is a patchwork of state-regulated systems.

“Ask politicians for a national way to run power from wind farms in South Dakota to Illinois. That’s where you really need political will power — it’s not a physics problem,” Myrhvold said.

Granted, many of the speakers were academics and researchers who rely on government grants  — but the capital expense needed to design, test and build these new technologies outstrips the ability of most startups to finance. There needs to be a way for innovative companies to try things out and fail. They should be able to fail with consequences but not fatal consequences.

Photo courtesy of  Flickr user loop_oh