of enormous entrepreneurial vigor. Men in boardrooms and gray flannel suits are giving way to the casually dressed young founders of start-up computer and Internet companies. Many of these entrepreneurs had their early hands-on computer experience as graduate students conducting federally funded university research.

As the computer revolution continues and private companies increasingly fund innovative activities, the federal government continues to play a major role, especially by funding research. Given the successful history of federal involvement, several questions arise: Are there lessons to be drawn from past successes that can inform future policy making in this area? What future roles might the government play in sustaining the information revolution and helping to initiate other technological developments? This report reviews the history of innovation in computing (and related communications technologies) to elucidate the role the federal government has played by funding computing research and to identify factors that have contributed to the nation's success in this field.1 It draws on a series of case studies that trace the lineage of innovations in particular subdisciplines of computing and on a more general historical review of the industry since World War II. The lessons derived from this examination are intended to guide ongoing efforts to shape federal policy in this field (Box ES.1).

Government-Industry-University Interaction

Innovation in computing stems from a complementary relationship among government, industry, and universities. In this complex arrangement, government agencies and private companies fund research that is conducted primarily in university and industry research laboratories and is incorporated into myriad new products, processes, and services. While the contributions of industry to the computing revolution are manifest in the range of new products, processes, and services offered, those of the federal government are harder to discern. Nevertheless, federal funding of major computing initiatives has often contributed substantially to the development and deployment of commercial technologies. Commercial developments, similarly, have contributed to government endeavors.

The federal government has played a critical role in supporting the research that underlies computer-based products and services. From less than $10 million in 1960, federal funding for research in computer science climbed to almost $1 billion in 1995. Federal expenditures on research in electrical engineering (which includes semiconductor and communications technologies—necessary underpinnings for computing) have fluctuated between $800 million and $1 billion since the 1970s. Such funding has constituted a significant fraction of all research funds in the comput-



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