The public sector’s role in funding research and development is decades, if not centuries old. The question government’s face is not whether to fund R&D but in what manner. The positive impact of R&D is well documented, but if mismanaged, government-driven R&D can create more problems than it solves. By examining success stories and failures of government-backed R&D efforts, policymakers can develop more effective programs that produce greater returns. Programs must remain flexible, scalable, and results oriented. Government efforts should take advantage of their ability to establish sandboxes to test products and bring together public and private resources for basic and applied research in a relatively regulation-free environment. Bureaucrats behind government R&D efforts should not be afraid to fail fast and move on to the next promising project. At the same time, the government needs to build open lines of communication with the private sector and avoid cannibalising private funding.