“Let’s start with one success and one failure”
A Department of Energy loan to Tesla was a successful industrial policy for pushing the electric vehicle industry forward because it helped a critical company survive. But it could succeed only because electric vehicle technology was on the verge of commercial viability. In contrast, a 1980s government program to develop a synthetic fuels industry failed because synthetic fuels, at the end of the day, did not make economic sense in the long run even with a billion-dollar boost.
It can be extremely hard to know in advance whether the economics are on the side of a particular industrial policy, and thus a large dose of humility is in order. But I believe there is a case that drones at least have a good shot at being the target of successful industrial policy.
Let me begin with a simple sketch of my policy idea that I would like to pitch here for the very first time: Drone to the Top.
- The federal government will commit to spending a fixed amount annually, for 10 years, on drone swarms for organizations that want to use them for the public good.
- Organizations will submit short proposals for how they’d use the swarms in innovative ways that generate public value.
- Every year the federal government pre-approves a list of drone makers whose supply chains are in the U.S. or selected allies.
- The federal government picks winning organizations who then get to choose which drone maker suits their particular needs, and the government buys a drone swarm for them.
- The federal government advises winning organizations on implementation and then publishes annual reports of what was learned from the year’s case studies.
The result of this is organizations across the U.S. with access to drone swarms for purposes of the public good, and drone industries located in the U.S. and allied nations getting what is called an “advance market commitment” that lets them know there will be demand.
