07/29/2026
Public-private partnerships will define innovation in the AI era
Capital investment is concentrated in a narrow set of technologies, with non-AI fields typically underfunded, hindering their ability to scale and fulfil their potential.
Greater diffusion of emerging technologies will occur if governments, business, civil society and academia collaborate.
Worldwide, examples where government support for start-ups and infrastructure have boosted a country’s innovation; academia can cultivate the pipeline of ideas and talent while civil society can anchor trust and ethics.
The latest advances in artificial intelligence, quantum computing, and biotechnology have the potential to lift living standards, boost productivity, and drive more sustainable growth. Yet despite record investment, many solutions are struggling to scale beyond the lab and translate into real-world economic benefits. The full potential of innovation is not being harnessed. Public-private partnerships will be the key to unlocking this potential.
https://time.com/article/2026/06/24/public-private-partnerships-will-define-innovation-in-the-ai-era/
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The latest advances in artificial intelligence, quantum computing, and biotechnology have the potential to lift living standards, boost productivity, and drive more sustainable growth. Yet despite record investment, many solutions are struggling to scale beyond the lab and translate into real-world economic benefits. The full potential of innovation is not being harnessed. Public-private partnerships will be the key to unlocking this potential.
The next phase of innovation is as much about accelerating the diffusion of emerging technologies as it is about generating new breakthroughs. To accelerate this diffusion, collaboration between government, business, civil society, and academia will be vital to share risks, smooth the path to market, and ensure that technological breakthroughs have a positive impact on societies. Capturing this innovation potential should provide opportunities to strengthen economic resilience both nationally and globally, which is especially important in these times of geoeconomic tension and war.
Different regions, given their diverging strengths and interests, face different challenges. The United States has the considerable advantage of deep capital markets, making it a powerhouse for private investment. In 2025 alone, $339 billion was invested in start-ups in the U.S., about two-thirds of which focus on AI. Yet, too often, that capital is concentrated in a narrow set of technologies: early-stage start-ups and non-AI fields are underfunded and lack the resources to scale.
Across the Atlantic, Europe is driving green industrial policy, with major initiatives such as the European Commission’s Net Zero Industry Act designed to accelerate domestic clean-tech manufacturing and the energy transition. Europe is also home to research and talent of the highest caliber, backed by a strong industrial base. However, the region’s innovation culture could benefit from some of the entrepreneurial dynamics seen in the U.S., particularly around risk-taking. Europe’s investment environment is more cautious, too. But European leaders are working to strengthen access to capital and reduce market fragmentation.
Meanwhile, fledgling companies in China benefit from substantial state support, which has significantly boosted the country’s global standing in innovation over the last decade. Today, the Global Innovation Index (GII) ranks China in the top ten of countries for innovation. Long-term state investment in infrastructure has stimulated enterprise. For example, ultra-high-voltage transmission lines are the backbone of China’s accelerated energy transition and have contributed to the mass development of electric vehicles.
Amid this divergent global scenario, Switzerland offers useful lessons. Switzerland was ranked the top innovation economy worldwide for the 15th consecutive year in 2025. Crucially, the country excels at connecting academia—with top-tier universities that produce world-class research which complements technical universities that provide specialized apprenticeships—and the private sector. Innosuisse, Switzerland’s government agency for innovation, provides funding for innovation through universities, which share the intellectual property benefits with start-ups. Bringing research institutions and start-ups together at an early stage enables projects to secure funding before they can access venture capital, smoothing the way for ideas to make the leap from laboratory to marketplace.
Other countries wishing to stimulate innovation could do well to emulate this nexus between government, business, and academia that has been so successful in Switzerland. Certainly, none of these actors can succeed in isolation, and the effectiveness of the public and private sectors, together with other institutions and civil society, will depend on how well they operate together as complementary players.
In principle, governments can help to absorb initial risks as businesses grow. Emerging technologies often require immense upfront capital, and public funding can make a huge difference, particularly in early-stage research and infrastructure.
Governments can also support innovation procurement. Take NASA, which often acts as a first customer for unproven technology. Or CERN, an international physics laboratory at the French-Swiss border, which functions as a critical market adopter with pre-commercial procurement models. In some sectors, private companies are increasingly taking on roles once played by governments, particularly where they have the heft to move quickly from innovation to deployment, as in the case of SpaceX, which has recently undergone a high-profile initial public offering. Regulatory flexibility is also key, as demonstrated by Switzerland’s FINMA fintech sandbox, which allows blockchain and digital asset start-ups to test financial innovations without a formal banking license.
In parallel, academia can cultivate the pipeline of ideas and talent. The field of deep tech is especially promising, not least quantum technologies, where decades of academic research are creating new possibilities for applications such as drug discovery. Civil society will also make vital contributions by anchoring ethical development, addressing societal concerns, and building public trust between consumers and innovators.
International collaboration can further amplify these dynamics. Cross-border networks expand the boundaries of scientific reach, but they also increase the frequency of breakthroughs and support market integration—helping to alleviate the complexities presented by recent geoeconomic tensions. One positive example of intercontinental cooperation is the Special Fund for China-Africa Green Industrial Chain, which uses publicly backed mechanisms to build and deploy green energy and industrial development projects.
“The next phase of innovation will belong to those who use public-private partnerships to bolster their competitive advantage,” writes Alois Zwinggi.
