During both the nineteenth and twentieth centuries, the federal government has had an enormous impact on the structure and composition of the economy through infrastructure development, regulation, procurement, and a vast array of policies to support industrial and agricultural development.3 Between World War I and World War II, these policies included support for the development of key industries, which we would now call dual-use, such as radios and aircraft frames and engines. The requirements of World War II generated a huge increase in government procurement and support for high-technology industries. At the industrial level, there were "major collaborative initiatives in pharmaceutical manufacturing, petrochemicals, synthetic robber, and atomic weapons." 4 An impressive array of weapons based on new technologies was developed during the war, ranging from radar and improved aircraft, to missiles and, not least, the atomic bomb. Following the 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 United States continued to emphasize technological superiority as a means of ensuring U.S. security. Government funds and cost-plus contracts helped to support systems and enabling technologies such as semiconductors and new materials, radar, jet engines, computer hardware and software, and missiles. For example, the government played a central role in the creation of the first electronic digital computer, the ENIAC.6 In the post-Cold War period, the evolution of the American economy continues to be profoundly marked by government-funded research in areas such as microelectronics,


of Electrical and Electronics Engineers, New York, 1995, pp. 9–12. For a more detailed account, see Robert Luther Thompson, Wiring a Continent: The History of the Telegraph Industry in the United States 1823–1836. Princeton University Press, Princeton, N.J., 1947.


Examples abound. The government played a key role in the development of the U.S. railway network, growth of agriculture through the Morrill Act (1862) and the agricultural extension service, and support of industry through the National Bureau of Standards (1901). 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. 1998, p. 37.


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 these years. For an account of the politics of the NSF's creation, see G. Pascal 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, NC: Duke University Press, 1995.


Kenneth Flamm, Creating the Computer. Washington, DC: The Brookings Institution, 1988, chapters 1–3. For a detailed account of ENIAC's creation see Scott McCartney, ENIAC: The Triumphs and Tragedies of the World's First Computer. New York: Walker and Company, 1999.

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