health, transport, and defense. In other cases, limited support of promising technologies with widespread applications may be the most appropriate approach.


The government’s role in supporting the development of new technologies is not new. During the nineteenth century, the federal government had an enormous impact on the structure and composition of the economy. The government played an essential role in developing the U.S. railway network, and—through the 1862 Morrill Act and support for the agricultural extension service—the farm sector.2

This support continued into the twentieth century. In 1901, the federal government established the National Bureau of Standards to help industry. Later, the federal government provided special backing for the development of (what we now call) dual-use industries—such as aircraft frames and engines and radio—seen as important to the nation’s security and commerce. The unprecedented challenges of World War II generated huge increases in the level of government procurement and support for high-technology industries.3 Today’s computing industry has its origins in the government’s wartime support for a program that resulted in the creation of one of the earliest electronic digital computers, the ENIAC.4 Following that war, the federal government began to fund basic research at universities on a significant scale, first through the Office of Naval Research and later through the National Science Foundation.5

During the Cold War, the government continued to emphasize technological superiority as a means of ensuring U.S. security. Government funds and cost-plus contracts helped to support enabling technologies, such as semiconductors, new materials, radar, jet engines, missiles, and computer hardware and software.6


See Richard Bingham, Industrial Policy American Style: From Hamilton to HDTV, New York: M.E.Sharpe, 1998 for a comprehensive review.


David Mowery, “Collaborative R&D: how effective is it?” Issues in Science and Technology, 15(1), 1998, p. 37.


Kenneth Flamm, Creating the Computer. Washington, D.C.: The Brookings Institution, 1988, chapters 1–3.


The National Science Foundation was initially seen as the agency that would fund basic scientific research at universities after World War II. However, disagreements over the degree of Executive Branch control over the NSF delayed passage of its authorizing legislation until 1950, even though the concept for the agency was first put forth in 1945 in Vannevar Bush’s report, Science: The Endless Frontier. The Office of Naval Research bridged the gap in basic research funding during those years. For an account of the politics of the NSF’s creation, see G.Paschal Zachary, Endless Frontier: Vannevar Bush, Engineer of the American Century, New York: The Free Press, 1997, pp. 231. See also Daniel Lee Kleinman, Politics on the Endless Frontier: Postwar Research Policy in the United States, Durham, N.C.: Duke University Press, 1995.


For an excellent review of the role of government support in developing the computer industry and the Internet, see National Research Council, Funding a Revolution: Government Support for Computing Research, Washington, D.C.: National Academy Press, 1999.

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