Question

Government funding for​ technology-based innovation is often the only source of funding available for​ high-risk projects that private investors may avoid. For which of the following projects is government funding most​ critical?

a. Low-risk projects with assured returns
b. High-risk projects with potential societal benefits
c. Medium-risk projects with established markets
d. Non-technological projects with immediate profitability

Answer 1

Government funding is crucial for high-risk projects with potential societal benefits, as these projects may lack private investment due to their risk levels. Governments can utilize direct R&D funding, tax incentives, and partnerships to support such innovations.

Step-by-step explanation:

Government funding is most critical for high-risk projects with potential societal benefits. Such projects may be too risky for private investors, who typically seek assurances of a return on their investments. Governments, on the other hand, can fund these initiatives through direct funding of R&D, tax incentives, protection of intellectual property, and cooperative relationships between universities and the private sector. This encourages the development of new technology that might not otherwise receive the necessary resources. It is particularly important in areas where research has the potential to benefit the public at large, such as healthcare or environmental technologies.