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America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System

Daniel P. Gross, Bhaven N. Sampat

American Economic Review · 2023 · Volume 113 · Issue 12

DOI: 10.1257/aer.20221365

Abstract

During World War II, the US government's Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact on the US innovation system, catalyzing technology clusters across the country, with accompanying increases in high-tech entrepreneurship and employment. These effects persist until at least the 1970s and appear to be driven by agglomerative forces and endogenous growth. In addition to creating technology clusters, wartime R&D permanently changed the trajectory of overall US innovation in the direction of OSRD-funded technologies.

Keywords

National Security and War, Economic History: Government, War, Law, International Relations, and Regulation: U.S., Canada: 1913-, Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S., Innovation and Invention: Processes and Incentives, Technological Change: Choices and Consequences, Diffusion Processes, Technological Change: Government Policy, Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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