Profits may be eroded so quickly that the investor does not recoup the cost of innovation. Knowing this, the investment will not be undertaken. Producers further down the process chain may benefit, by receiving cheaper inputs. However, the innovator benefits as well . Private Indicates no market failure exists and the government has no role in funding the project or activities.
Market failure exists at an industry level.
This often means that information needs to be gathered in order to implement the appropriate government policy. An example of a private rated sub-project is one that assists Australian producers draw up contracts with foreign purchasers. An example of an industry rated project is one that provides information on improved crop rotations. By conducting experiments using different rotations, scientists can pinpoint the effects on output. The beneficiaries of this research, and the subsequent extension, are clearly grain growers.