Taxpayers and the Government Built the iPhone

If only government would get out of the way, then our job creators and innovators could unleash true economic development and innovation! Right?


Contrary to public perception, it is government and taxpayer dollars, not private enterprise, that are the main drivers of technological innovation. If it wasn’t for government funding of new technologies, the smart phone you are holding in your hand right now wouldn’t exist. Furthermore, nearly the entire high-tech industry owes its existence to government.

The majority of the technologies that make the smart phone “smart” were invented in government research centers funded by taxpayer dollars. For example:
  • The touchscreen was developed in a University of Kentucky laboratory.
  • The first CPU developed was invented by three university researchers from Iowa State and the University of Pennsylvania.
  • The first multi-core processor was invented at Stanford University with Department of Defense funding.
  • An MIT researcher, supported by the US Navy, performed the research that resulted in the creation of the first magnetic core RAM.
  • A research team at John Hopkins University developed the first satellite navigation system, known today as GPS.
  • The lithium Ion Battery was made possible by the invention of lithium cobalt oxide cathode materials by a physicist at Oxford University. 

These are all technologies, developed through publicly funded research, that are absolutely essential for companies like Apple to build and sell their products. In turn Apple has done everything in their power to ensure that the American public is never repaid for this essential funding that has allowed its business to exist. Apple has stashed its profits in foreign tax havens to avoid paying tax, built factories in foreign countries and used its profits, not to reinvest in research and development of new technologies, but to manipulate its stock price in order to enrich top corporate managers and Wall Street investors. (More on: How Apple manipulates its stock price and avoids paying taxes)

Private industry is incapable of developing the technology of tomorrow. Today’s corporate and wall street culture has created a business dynamic that demands companies focus on short term profiting and shareholder enrichment over long term company competitiveness and innovation. Companies are now spending 95% of their net income on dividends and share buybacks rather than investing those resources in research and innovation, which in the long run, would put the company and the overall national economy in a more competitive position. In many cases it takes decades of research and development for new innovations to be created and many projects fail to materialize. Banks and investors do not have the patience to wait for a new profitable innovation to materialize. 

When politicians cut funding to education and the national science foundation in order to give tax breaks to the super wealthy, they are not spurring innovation, job growth and economic growth. In fact, they are damaging America's long term competitiveness in the global economy. 

It is time we celebrate the amazing work that our scientists and researchers do at our publicly funded universities instead of just glorifying the businessmen who profit off of their work. 


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