The WSJ reports that the Department of Energy has quietly become the biggest venture capital investor:
The DOE hopes to lend or give out more than $40 billion to businesses working on “clean technology,” everything from electric cars and novel batteries to wind turbines and solar panels. In the first nine months of 2009, the DOE doled out $13 billion in loans and grants to such firms. By contrast, venture-capital firms — which have long been the chief funders of fledgling tech firms, taking equity stakes in the start-ups that will pay off if they go public — poured just $2.68 billion into the sector in that time, according to data tracker Cleantech Group.
As previously noted, it’s strange that unlike Defense, Health, Transportation, and Energy, the Department of Education does not have (and apparently has not sought) the ability to make private sector investments. Education is an inefficient sector in desperate need for more R&D spending. But stimulus spending is focused on backfilling cuts and, in the case of Invest in Innovation (i3), spending on school district improvement plans.
There will be some private participation in state Race to the Top plans particularly regarding data systems, but ARRA looks largely like a missed opportunity to leverage private sector investment in educational innovation. Some on Capital Hill would like to further reduce private sector involvement in the ESEA reauthorization–an enormous mistake at a time when we should be investing in the future of learning.