America, Jump-started: World War II R&D and the Takeoff of the U.S. Innovation System
During World War II, the U.S. government's Office of Scientific Research and Development (OSRD) undertook one of the largest public investments in applied R&D in U.S. history, entering into thousands of contracts with firms and universities to perform research essential to the war effort. Using data on all OSRD-funded invention, we show that this shock had a formative impact on the U.S. innovation system, catalyzing technology clusters around the country with accompanying increases in high-tech entrepreneurship and employment. These effects continue growing to at least 1970 and appear to be attributable to agglomeration externalities, rather than sustained public R&D investment, which led to widening disparities in inventive output across the country. In the aggregate, wartime R&D permanently changed the trajectory of U.S. innovation in the direction of funded technologies, including electronics and communications.
This paper is a revised version of a working paper previously circulated as “Inventing the Endless Frontier: The Long-Run Impacts of the World War II Research Effort on U.S. Innovation.” We thank Mike Andrews, Ashish Arora, Pierre Azoulay, Sharon Belenzon, Enrico Berkes, Wes Cohen, Claudia Goldin, Jon Gruber, Adam Jaffe, Simon Johnson, Shawn Kantor, David Mindell, Petra Moser, Tom Nicholas, Bitsy Perlman, Scott Stern, and Martin Watzinger for helpful comments. We also thank numerous conference and seminar audiences, and discussants Alex Whalley and Taylor Jaworski. We also thank Hayley Pallan, Greg Saldutte, and Innessa Colaiacovo for outstanding research assistance; Enrico Berkes and Gilles Duranton for sharing data; and the National Science Foundation, the Duke University Fuqua School of Business, Columbia University, Harvard Business School, and the NBER Innovation Policy grant for financial support. This material is based upon work supported by the National Science Foundation under Grant No. 1951470. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- Federal support for research led to a surge in wartime patenting and also propelled innovation hubs that fostered post-war...