How does the US government support technological innovation?
Strategic Frontier Technology
Technological innovation is a systematic project. Good industrial policies, accumulation of basic research, close cooperation between industry, university and research are indispensable.
Ford Professor of Economics at MIT, Jonathan Gruber, Director of the Health Care Program of the National Bureau of Economic Research, and his partner Simon Johnson in the book "A Brief History of American Innovation", Industrial Policy on American Technological Innovation The changes have been interpreted, from which we can also see the course of the development of scientific and technological innovation in the United States.
To a certain extent, the "A Brief History of American Innovation" co-authored by MIT professors Jonathan Gruber and Simon Johnson is a prosperous alarm in times of peace.
The United States' technological innovation capability, technological strength, and educational strength have been leading the world for many years. In many fields of science and technology, such advantages have also become the killer of the United States in sanctions or restraining some companies in other countries. For the Chinese, the most memorable example is that the US government banned the sale of chips to Huawei. Huawei was hit hard as a result.
Even under such circumstances, "A Brief History of American Innovation" still sounded the alarm about the lack of funding for scientific innovation by the US government. Through this book, we can not only understand classic cases in the history of American innovation, but also learn more about the current problems of American innovation.
A brief history of American innovation
In this book, Jonathan Gruber, a Ford Professor of Economics at the Massachusetts Institute of Technology and Director of the Health Care Program at the National Bureau of Economic Research, combed through the important history of American innovation, expressed concern about the current situation, and raised concerns about the future. Provide concrete and feasible strategic support.
1. The government supports technological innovation, with pearls and jade first
From the perspective of R&D investment, the United States ranks first in the world. The comparative dimension of "A Brief History of American Innovation" is not to compare the United States with other countries in terms of the amount of investment, but to compare the amount of government funding for scientific innovation in the history of the United States and the proportion of GDP.
The Chinese have a familiar saying that science and technology are the primary productive forces, but many people may not really understand the path that science and technology promote economic development and improve national competitiveness. In this regard, this book starts from actual cases in the United States and makes a convincing explanation-in terms of factors that promote economic development, scientific innovation has a spillover effect, promotes further innovation, and creates numerous job opportunities. When a country takes the lead in the most critical industry, it can take the lead in the competition between countries.
In the view of Jonathan Gruber and Simon Johnson, the successful case of the U.S. government funding for scientific innovation is the funding of scientific innovation by the National Defense Research Council led by Vannevar Bush, the former vice president and head of the engineering department of the Massachusetts Institute of Technology. He made outstanding contributions to the victory of World War II and laid the foundation for the economic growth of the United States after World War II.
On June 12, 1940, Vannevar Bush visited the White House. He suggested to President Roosevelt the establishment of a National Defense Research Committee led by scientists and engineers to control the leadership and funding of new weapons research and development. Some industrial companies don't want private top research laboratories. Roosevelt approved this request.
The founding members of Bush’s Defense Research Council included Karl Compton, then Dean of the Massachusetts Institute of Technology, Harvard University President James Conant, and President of the National Academy of Sciences and Director of Bell Labs Frank B. Juvet, California Institute of Technology Richard C. Toroman, Dean of the Graduate School. The research fields of these scientific and technological elites involve atomic theory and some emerging concepts.
At its peak, Bush led 30,000 people, including 6,000 scientists, including about two-thirds of physicists in the United States. What followed was a sharp increase in scientific research funding. In 1938, the US federal government and state governments invested 0.076% of US national income in research funding; by 1944, this figure had risen to 0.5%. Most are spent from the National Defense Research Council.
In 1945, Bush prepared a report "Science: Endless Frontiers" for President Roosevelt. He pointed out that inventions and creations can save lives, improve the quality of life and create jobs; the government should not directly engage in scientific research, and the military's scientific bureaucratic command hinders science. Explore; companies, wealthy individuals, and first-class universities cannot solely undertake and carry out the scientific innovation and research needed by the country.
Bush proposed that the U.S. government continuously provide a large amount of funds to facilitate cooperation between universities and private enterprises to create "post-war innovation machines." In 1944, the "Veterans Rights Act" expanded university enrollment and trained many engineering and technical personnel. After the nascent industry has developed, many unprecedented jobs have been created. In the following 20 years, the salaries of American middle school graduates and college graduates have increased significantly. From 1940 to 1964, the federal government's investment in research and development increased by 20 times. In the heyday of the 1960s, this expenditure accounted for about 2% of GDP, which is roughly equivalent to today's 400 billion U.S. dollars.
On the other hand, during World War II, although the US government allocated a large amount of funds to the National Defense Research Council, the National Defense Research Council was composed and led by scientists and engineers. The bureaucracy of the US government (including the military) has no right to interfere in the work of these scientists and engineers. Decide. This approach has produced good results. The various scientific innovations promoted by the National Defense Research Council have made a significant contribution to the United States in winning the Second World War.
Looking back at the history of scientific innovation in the United States during this period, the special backgrounds such as World War II and the Cold War arms race are clearly "indispensable." They have become the best reason for the generous support of investors and the government's massive funding of scientific innovation. But from a methodological point of view, the special precedents during the Second World War may not be comparable.
Facts have also proved that with the reduction of government support, US technological innovation has gradually entered a low ebb.
2. Scientific innovation of U.S. private companies
The innovations of US private companies such as Microsoft, Apple, Amazon, and Google have hardly received any support from the government. They are entirely self-motivating within the companies for the purpose of competition and survival. A large number of privately supported laboratories at Stanford University, Massachusetts Institute of Technology, University of Washington, University of California, and Johns Hopkins University play a very important role in basic research in the United States.
These stories are already familiar to us, but scientific innovation in private companies has not been smooth sailing—at least from the perspective of the United States.
One of the wonderful stories is how the United States missed the liquid crystal display products and handed over to Japan in the 1960s.
In 1968, researchers from RCA held a press conference to showcase the world’s first commercial LCD display—this was the beginning of the liquid crystal display (LCD), and this project was quickly planned. Belongs to the semiconductor team that holds the patent of transistor cathode ray tube (RCT).
Perhaps because of concerns that the development of LCD technology will endanger the very successful and lucrative RCT TV business and the benefits of patent licenses, all research activities on LCD screens were forced to terminate. This decision happened to give the rising Japan an excellent opportunity.
It was in this year that the Japan Broadcasting Association (NHK) went to the American Radio Broadcasting Corporation to shoot the documentary "The Company of the World: Modern Alchemy", one of which showed the LCD screen. After the show was broadcast, this emerging technology attracted the attention of many people, including Tomio Wada, who is in charge of Sharp's computer display business.
He immediately suggested: Use LCD screens to make calculators.
Subsequently, Sharp's management, who had great ambitions to transform into a high-tech industry, went to the American Radio Broadcasting Corporation in person. At that time, the American Radio Broadcasting Corporation was not enthusiastic about this technology, so it sold the patent license to Sharp at a price of 3 million US dollars.
In 1973, Sharp announced that the world's first-generation commercial pocket calculators used LCD screens.
The United States originally had a second chance to overtake.
Sharp's LCD screen uses passive matrix technology. The image is composed of rows and columns of pixels. Complex images require many rows and columns, which results in slower data signals. In addition to the active matrix processing system developed by Westinghouse scientists in the United States, the use of transistors to turn on all pixels at once makes the screen faster, brighter, and clearer.
At that time, Westinghouse did not pay enough attention to this technology. The Brody team responsible for the development of the technology left Westinghouse’s independent portal in anger. In 1984, he began to sell experimental products and laboratory prototype screens. The industry has 80 customers.
If the first time Americans missed a good opportunity, it was because of the short-sightedness of ABC, then this time, American venture capitalists did not show enough courage. They believed that Japanese companies were already in a leading position. it is too late. Finally, Brody's company failed because it was unable to achieve scale.
We all know the following story. Japan has occupied and monopolized the world market. From the mid-1990s to 2010, the scale of the industry has increased tenfold. The current global sales are 114 billion U.S. dollars, but there is no American company. Profit from this industry, and no American workers are employed in this industry.
Ironically, the US state of Wisconsin took the initiative to introduce Foxconn’s LCD factory project several years ago.
3. In the new situation, how does the US government support scientific innovation?
Although the U.S. government's funding for scientific innovation has fallen sharply after the 1970s, there are not a few companies benefiting from the U.S. government's funding, and they have also achieved remarkable results. Genome sequencing is a typical case.
In 1988, the U.S. Congress agreed to fund the National Research Institute of the United States to conduct human genome research. In 1990, the Human Genome Project was launched, which is expected to last for 15 years, with a total budget of US$3 billion. In 1999, the funded Cereira Genomics Company carried out the human genome sequencing work, and its sequencing method was a great success.
There are many government-funded companies like Cereira Genomics, which directly stimulates the development of the entire industry and drives a considerable number of jobs——
In 2004, the total value of the stock market in the genomics category was 28 billion, and 75% were publicly listed companies. Among those private companies that are not listed, 62% are based in the United States;
From 1988 to 2012, direct and indirect economic activity expenditures related to this project amounted to US$965 billion, creating 280,000 jobs and US$19 billion in personal income;
In 2012 alone, the industrial sector supported by genomic research generated US$3.9 billion in federal taxes and US$2.1 billion in state and local taxes, far exceeding the US$3 billion investment in 13 years.
On the other hand, government-funded scientific innovations have higher social returns than private returns because of the spread of technological innovation to other fields. For example, scientific innovation has driven the development of some superstar cities in the United States-the center of biotechnology is located in Cambridge, and Microsoft moved its headquarters to Seattle in 1979. This has had a profound impact on the local area.
Having said so much about the benefits of government funding for innovation, the author also makes suggestions: It is proposed that the US federal government spends 100 billion US dollars to fund scientific innovation every year, which can create 4 million jobs and share the growth opportunities of the entire country.
Based on past innovation cases, the author suggests: First, focus on the integration of research and products. The public sector and private enterprises should establish partnerships to form a good complementarity, generate better returns to compensate for possible losses caused by risky investment, and attract more More investment; the second is to extend public research funds to various places to obtain intensive benefits; the third is to create new innovation centers through competition, and formulate local regulations that are conducive to economic growth, successful infrastructure plans and education base plans, etc.; The fourth is to use an independent committee to ensure that funds are used for the most valuable research projects; the fifth is to benefit more people by sharing innovation dividends.
"A Brief History of American Innovation" does not recapitulate the glory of the past in the field of scientific innovation, but under the new scientific competition landscape, it is vocal about the lack of funding for scientific innovation by the US government, and hopes to form realistic decisions to maintain the leading edge of the United States. . As professional scholars, Jonathan Gruber and Simon Johnson also explained the internal mechanism of scientific innovation to promote economic development, and analyzed the reasons why scientific innovation improves national competitiveness. This allows readers to deeply understand the importance of scientific innovation.
However, do the heads of government and politicians of the United States have such great determination? Can they give up political disputes for the benefit of the whole country? Do U.S. taxpayers agree to pay more taxes for this?
These are obviously more important and difficult issues.
