The Small Business Innovation Research Program An Assessment of the Department of Defense Fast Track Initiative (2000) / Chapter Skim
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I. Preface
I. Preface
Pages 1-12
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From page 3... ...
For example, in 1798 the federal government laid the foundation for the first machine tool industry with a contract to the inventor, Eli Whitney, for interchangeable musket parts.) A few decades later, in 1842, a hesitant Congress appropriated funds to demonstrate the feasibility of Samuel Morse's telegraph.2 Both Whitney and Morse fostered significant innoiWhitney missed his first delivery date and encountered substantial cost overruns.
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From page 4... ...
Dunng both the nineteenth and twentieth centunes, 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 radio and aircraft frames and engines. The requirements of World War II generated a huge increase in government procurement and support for high-technology industnes.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 Dunng the Cold War, the United States continued to emphasize technological superiority as a means of ensuring U.S.
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The new economic growth theory emphasizes the role of technology creation, believed to be characterized by significant growth externalities.9 6For an excellent review of the role of government support in nurturing the computer industry, see National Research Council, Funding a Revolution: Government Support for Computing Research. Washington, D.C.: National Academy Press, 1999.
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From page 6... ...
Innovators are able to take advantage of the tacit knowledge available in such centers or clusters of activity to acquire relevant technological innovation and to rapidly address other business development issues.~° In addition, some economists have suggested limitations to traditional trade theory, particularly with respect to the reality of imperfect international competition.~i Recent economic analysis suggests that high-technology is often charactenzed by increasing rather than decreasing returns, justifying to some the proposition that governments can capture permanent advantage in key industries by providing relatively small, but potentially decisive support to assist national industries up the learning curve and down the cost curve. In part, this is why the economic literature now recognizes the relationship between technology policy and trade policy.
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Accordingly, these topics were taken up by STEP in a study earned out in conjunction with the Hamburg Institute for Economic Research and the Institute for World Economics in Kiel, Germany, which produced the 1996 report, Conflict and Cooperation in National Competition for High-Technology Industry. One of the principal recommendations for further work emerging from that study was a call for an analysis of the principles of effective cooperation in technology development, to include lessons from national and international consortia, including eligibility standards and assessments of what new cooperative mechanisms might be developed to meet the challenges associated with the development of new high-technology products.~7 In many high-technology industnes, the burgeoning development costs for new technologies, the dispersal of technological expertise, and the growing importance of regulatory and environmental issues have provided powerful incentives for public/pnvate cooperation.
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.22 The rapid expansion of these cooperative programs encountered significant opposition, rekindling the national debate on the appropriate role of the government in fostering new technologies. Indeed, broader philosophical questions about the appropnate role for government in collaborating with industry have tended to obscure the need for policy makers to draw lessons from current and previous collaborative efforts.23 Given the considerable change in federal research and development budgets since the end of the Cold War, and the reduced role of many centralized laboratones in the private sector, government-industry collaboration is of growing importance, yet it has seen remarkably little objective analysis.24 At one level, analysis 20For a review of SEMATECH, see the National Research Council, 1996, op.
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Wnting 20 years ago, one well-known American economist, Richard Nelson, observed that Amencans are still remarkably uninformed about their long history of policies aimed at stimulating innovation.25 Today, many Amencans appreciate the contribution of technology to the current period of robust economic growth.26 Yet there is little evidence that Amencans are aware of the key contributions of federal support for technological innovation, from interchangeable musket parts to radio to the Internet. Leaving aside the desirability of having a better understanding of the role of partnerships in fostering new technologies, one compelling argument for assessment is the simple fact that government intervention in the market is fraught with nsk.
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suggest that worldwide government expenditures in support of high-technology industries involve significant resources and are increasingly focused on what policy makers consider to be strategic industnes.33 The United States is an active, if unavowed, participant in this global competition, at both the state and federal levels. Indeed, the United States has a remarkably wide range of public/pnvate partnerships in high-technology sectors.34 In addition to the well-known cases mentioned above, there are public/pnvate consortia of many types.
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From page 11... ...
As a basis for the consensus report, the Steenng Committee is comm~ssioning research and convening a series of fact-finding meetings in the form of workshops, symposia, and conferences as a means of both informing its deliberations and addressing current policy issues affecting government-industry partnerships. As the project progresses, the Steenng Committee is making recommendations and findings on major elements of its work, particularly in response to requests from participating agencies.
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From page 12... ...
A number of individuals deserve recognition for their contributions to the preparation of this report and for their willingness to serve as reviewers. On behalf of the STEP Board we would like to express special recognition to Jon Baron and Robert L
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