tions of the Department of Defense to the computer industry are addressed below in “Government Support of Dual-Use Technology: DARPA.") In fact, between 1945 and 1955, all major computer technology projects in the United States were supported by government or military users, or both.19

Although IBM funded early development work in electronics and computers during the 1940s and 1950s, sales of these products to the federal government generated a significant amount of revenue for the company.20 Direct government support for R&D work, special projects, and studies was received for defense-related purposes at IBM, including programs associated with the B-52 bomber and navigation system. In addition, from 1953 through 1955, 6 of the 18,701 computers (the company’s first-delivered computer) sold by IBM went to government agencies and laboratories. Other projects for the government, such as the SAGE and Stretch programs for the military, helped to advance the firm’s technological frontiers in commercial products, including the diffusion of transistor technology in IBM products.

Cray Research, Inc. developed supercomputers by working as a contractor for Los Alamos National Laboratory, which functioned as “the market” by defining specifications and evaluating the quality of machines installed at its facilities. At critical junctures, federal purchases of Cray supercomputers kept the company in business. In addition, extensive government investments in computer networks in the 1970s and early 1980s, reduced instruction set computing, and sophisticated graphics are now bearing fruit in commercial applications.

The federal government played an important, direct role in the commercial development of the computer industry. Clearly, much of the success of this involvement can be attributed to government procurement practices, which helped ensure a market for products supported through DOD and DARPA. Nevertheless, early federal support also included pre-commercial R&D and prototype development projects that assisted firms in moving beyond research into technology commercialization in civilian markets.

The Biomedical Industry

The growth of the U.S. biomedical industry—pharmaceuticals, medical equipment and devices, and more recently, biotechnology—was supported by government funding of medical research and the training of scientists and medical personnel by agencies such as the National Institutes of Health (NIH).21 Collaborative projects in biomedicine established a precedent for the expansion of cooperative R&D programs in subsequent decades. The dominant role of NIH in funding U.S. biomedical R&D evolved through the agency’s wartime programs. Prior to World War II, as part of the Public Health Service, NIH helped develop treatments for then prevalent ailments



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