Five Ways Government Supports and Fosters Innovation in the Private Sector

3 min readMay 20, 2020


Government has been a source of innovation for decades. However, that role can be obscured in the discussion of the private sector. Any innovation strategy should be built on an understanding of how government supports it, in a few key ways.

Regulatory Frameworks

Some have a kneejerk approach to regulations, and it’s easy to forget that they often come into existence not to hinder but to guide private industry toward safer, more effective solutions in the long term and to set a level playing field using proper scientific investigation. Getting proper guidance on the regulations in your industry can often help you rule out blind alleys in your innovation approach, especially if you find out why the regulations were imposed.

Basic Research

From an innovation standpoint, NASA is undeniably one of the most effective uses of taxpayer money that’s ever been conceived. NASA’s work to send Americans to space has led to safer food, better clothing, new fields of medicine, and beyond. Much of this, however, has a very modest foundation. No one had done the basic research, learning just what burns at what temperature or just when and why food goes bad because to do so was either expensive or outside a private company’s resources and mission. Government funding of basic research, and making that research available to everyone, gives private industry a unique foundation on which to build.

Stakeholder Outreach

Governments, by their nature, have to engage with every citizen; leaving somebody out of the process is a failure of their mission. Private companies, by contrast, can struggle to reach every possible stakeholder on some projects, and that can create problems further down the line. Working with governments to reach out can both anticipate problems and provide resources to ensure a more effective outreach process.


It’s increasingly popular for governments to seek out public/private partnerships, also called P3s. These have a long history. Much of America’s early roadways, for example, were built by private companies that were hired by the government for their expertise, while the government dealt with the legal end of things. These collaborations can be incredibly complex, and there’s no one definition of what a P3 truly is. Nor are P3s the only method of collaboration.


Finally, government can be a source for innovation funding, depending on the circumstances and your industry. If the work you’re doing can solve a problem a local, state, or even federal government is facing, it’s worth seeing what opportunities are available. Conversely, it can be worth looking into what challenges they’re looking to overcome and seeing if they fit with your mission.

That said, you should ask upfront what your government contacts will need. Government funding has higher accountability standards and controls than other funding sources, including disclosure rules and possibly even security clearances. Make sure you can comply with their needs before going forward.

Government and private industry have worked hand-in-hand for centuries, and that tradition continues to drive innovation. To learn more about where the government fits into your innovation strategy, contact us today.

This article was originally published on the IdeaScale blog here.




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