In early 2009 bestselling author and New York Times columnist Thomas Friedman wrote a column decrying the US government's decision to give failing American automakers billions of dollars in aid. He was writing in the wake of the worldwide fiscal crisis of 2008, the biggest since the Great Depression.

“When it comes to helping companies,” Friedman says, “precious public money should focus on start-ups, not bailouts … Let's make sure all the losers clamoring for help don't drown out the potential winners who could lift us out of this.” He goes on to suggest that top venture capital firms (VCs) pick the winners and allot the Federal funds.

It is clear that the importance of innovation in spurring economic growth and creating new wealth and prosperity is no longer in question. During the American presidential campaign of 2008 there were constant calls for the development of new, revolutionary energy technology as a way of reigniting the economy. But there was plenty of support for this position at the highest levels of government even before that. Here is an excerpt from the 2005 US President's “Economic report.”