NSF Award
2420824
Since World War II, the U.S. federal government has been the country’s largest funder of research and development (R&D), with tripartite objectives of national defense, health, and economic growth. Much attention has been given to studying large expansions of federal R&D investment. Yet federally-funded R&D, as a share of domestic R&D or GDP, has been on decline since its twentieth century peak—an era which has also seen a major reorientation of the federal portfolio from defense to biomedicine. The consequences of these changes are not yet fully understood. A traditional economic view is that public R&D fills gaps that markets leave behind. However, since the 1950s the U.S. (and global) innovation system have matured significantly, potentially leaving fewer gaps for public R&D to fill. Moreover, though the impacts of past public R&D investments often inspire new ones, there is less evidence on the effects of public R&D drawdowns and budget cuts to inform choices when renewing funding for programs.<br/><br/>This research evaluates the impacts of declining public R&D and the pivot away from defense innovation. Using recently-collected long-run data on government-funded invention, paired with new data on the postwar scientific workforce, this project examines (i) the effects of federally-funded R&D on the development of complex, science-based technologies (i.e., “deep tech” innovation); and (ii) the impacts of large and abrupt cuts to defense research in the 1970s (before which the Department of Defense was nearly as large a funder of basic research as NSF) on the U.S. innovation system, including science, scientists, universities, and high-tech industries. The project results improve understanding of science and technology with new evidence on the effects of government withdrawal from R&D funding and produces new approaches to evaluating public-private R&D spillovers and identifying regularities and tensions that inform future policy choices.<br/><br/>This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.
