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08.11
A Brief History
of the U.S. Federal
Government and Innovation (Part III):
World War II and
Beyond (1945 – 1987)
By the
Staff of the IEEE History Center
Introduction
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It is only through “learning by
doing” that organizations create the competence
to bring embryonic technologies to commercially
viable products and services. The
experimentation that accompanies
learning-by-doing can be costly and entail
considerable risks. If private enterprise can
imagine commercial promise in a radically new
technical idea then it will gamble. But there
are limits to a firm’s willingness to gamble. If
the idea is too speculative, with the outcome of
R&D completely unpredictable, or if the scale of
the R&D is too large or far exceeds the
perceived commercial value of the idea, then
firms will be extremely reluctant to gamble.
Surprisingly, public enterprise has often been
willing to underwrite big-stake gambles when
private industry has been unwilling or unable to
do so. The visible hand of government has made
mistakes, but it has also played a strong role
in
laying the foundation for America’s
technological and industrial leadership.
Spanning the period from the American Revolution
to the end of World War II,
part one and
part two of this series looked at the roles
of the U.S. federal government as an actor in,
and director of, the innovation process. Through
six examples, this third and last part of the
series will illustrate the hands-on role of
government in shaping the direction, rhythm,
timing of innovation during the post World War
II period. The six examples are 1) the
aeronautical industry, 2) the Federally Funded
Research and Development Centers (FFRDC), 3)
computers, 4) semiconductors, 5) The Global
Positioning System, and 6) the Lithium battery.
Aeronautic and Space
Industries
In the 1980s, Nathan Rosenberg
and David Mowery — two eminent historians of
technology, economics and business — examined,
in considerable detail, the role of the
government in the U. S. aviation industry. Their
work underscores the considerable investment,
first with the National Advisory Committee on
Aeronautics (NACA, 1915 – 1958), and then with
the National Aeronautics and Space
Administration (NASA, 1958 – present), that the
U.S. federal government made in America’s
producers of aircraft. These investments helped
set the stage for America’s global technological
pre-eminence in aeronautical and space
technology. In addition to directly helping to
mitigate the high costs and risks of R&D, the
government, through its power of procurement,
allowed industry to take bigger gambles on R&D.
Many of the significant innovations in
commercial aircraft design were first nurtured
in military applications. Jet engines and air
frames are good examples
It is difficult to imagine the
U.S. aircraft industry of the early 1940s
developing the jet engine on its own initiative.
The R&D costs were enormous, the technical
uncertainty high, and the prospect of a
commercial market was far from self-evident. For
military enterprise, however, the life-and-death
struggle of WW II and the ensuing Cold War made
the jet engine a gamble worth taking. The bulk
of postwar airframe technology also emanated
from government-sponsored research. Boeing
illustrates this military to civilian shift
quite well. In 1957, only 2 percent of Boeing’s
sales were nonmilitary. By 1966, Boeing’s
civilian sales leapt to 52 percent, and then
climbed to 77 percent by 1971.
The considerable technological
achievements of the NASA through the many decade
history of the nation’s space program also
underscores the central role of government in
creating and sustaining the technological
capacity for humanity to venture out into the
solar system and beyond. The exploration of
space is reminiscent of humanity’s exploration
of another inhospitable environment. When the
distances were great, the risks high, and the
investments considerable, as was the case in
transoceanic exploration, the state became the
prime mover and sponsor behind the journeys of
exploration. One should not forget that, for
their time, the ships used in exploration during
the 15th
through 18th
centuries were advanced, large and complex
technological systems: propulsion, navigation,
life-support were some of the subsystems. As
financial risks became manageable and the
technical uncertainties were reduced, private
enterprise took on an increasingly larger role
in maritime transportation. One can imagine a
similar process unfolding with space travel.
There are already several companies talking
about the idea of taking tourists into space,
and NASA set the foundation upon which they can
build.
Federally Funded Research and
Development Centers (FFRDC)
At start of WWII virtually all
America’s scientific and technological talent
rested in universities and industry. In the
total war environment of WW II, the U.S.
military had to harness the scientific and
engineering know-how of its entire population.
As detailed in the previous article, the federal
government established a number of ad hoc
university based, R&D organizations around
specific technological programs such as radar,
the computer, and the atomic bomb. A great deal
of very advanced technical expertise had been
created within this collective of government
sponsored labs. With the war’s end, there was
concern among defense policy makers that most of
this know-how would be dissipated because most
of the scientists wanted to return to research
within the traditional academic environment.
Even before the war ended, the United States had
concluded that the geopolitical ambitions of the
U.S.S.R would come into direct conflict with its
own ambitions. Therefore military preparedness
became the cornerstone of American postwar
military policy. Preserving and expanding the
wartime network of research centers into the
postwar period was an essential element in this
preparedness. From this effort eventually
emerged the Federal Research Contract Centers
which then transformed into the Federally Funded
Research and Development Centers (FFRDC).
Since their inception, the
nature and purpose of these FFDRCs have evolved.
The federal agencies funding the FFDRCs have
expanded beyond the department of Defense (DOD)
to include the Department of Energy (DOE),
National Aeronautics and Space Administration
(NASA), the National Science Foundation, the
National Institutes of Health (NIH), the Federal
Aviation Administration (FAA), and others. DOD
and DOE, however, support the lion’s share of
the FFDRCs. Initially, FFDRCs were R&D
laboratories. But soon the FFDRCs expanded their
roles to include study and analysis centers or
“think tanks,” as well as system engineering and
technical direction centers. The number of
centers changed over the years. While new
Centers were created others were dissolved. In
1950 there were 23 FFRDCs. The number increased
to a peak of 74 in 1969, and then declined to
the mid 30s during the 1980s. In 2010, there
were 40. The most successful centers had a
function that could not be effectively carried
out by a federal agency or a for-profit company.
In the FFDRCs, the federal
government created, and continues to maintain,
an arms-length organizational infrastructure
that helps strengthens America’s capacity for
technological innovation. In a 1995 study of the
FFDRCs, the congressional Office of Technology
Assessment, concluded that the network of these
centers “are able to address long-term
problems of considerable complexity and to
analyze technical questions with a high degree
of objectivity borne of having renounced any
possibility of selling products to the federal
government or forming partnerships with those
who do, while remaining outside of the federal
government itself.” Even a partial list of
the 40 present day FFDRCs reveals an impressive
collection of scientific and technical
capabilities: the Los Alamos National
Laboratory, Lawrence Livermore National
Laboratory, the Lincoln Laboratory; the Jet
Propulsion Laboratory; the think tanks overseen
by RAND; the Software Engineering Institute; the
Center for Communications and Computing; the
Homeland Security Systems Engineering and
Development Institute; the National Renewable
Energy Laboratory; National Cancer Institute at
Frederick; and the Center for Advanced Aviation
System Development. The FFDRCs are not a
replacement for innovation in the private
sector. Neither do they undermine it. Rather, in
nurturing a national pool of scientific and
technical expertise that can take on high-risk
technical challenges, FFDRCs complements the
private sector’s market-driven approach to
innovation. The enduring FFDRCs created a body
of scientific and technical expertise that could
not have been recruited, sustained, and managed
within the civil service. Whether FFDRC’s
efforts have led to long-term economic benefits
needs to be examined on case-by-case basis, but
in the case of computers their influence has
surely been beneficial.
Computation and the
Electronic Digital Computer
The electronic digital computer
is perhaps the single most important
technological development in the last 60 years.
Digital processing has become embedded in just
about all facets of human life in
technologically advanced societies Ubiquitous
computational technologies enable modern
economic growth and shape human interactions in
profound ways. From a scan of the products and
services that define digital technology in the
21st century one might think that
America’s global leadership in computer
technology rests, and has always rested,
squarely on the shoulders of private enterprise.
One cannot deny that this leadership in the
digital economy illustrates the creativity,
vitality, and the daring of America’s private
sector, but to conclude that private enterprise
was the prime mover of the computer revolution
is to ignore history. The visible hand of
government was there to nurture the computer’s
development when there were few civilian
incentives and little market rationale to
support this embryonic industry.
The urgent need to produce
ballistic firing tables during World War II, as
discussed in part II of this series, prompted
the U.S. government to fund the development of a
new, and revolutionary computational technology:
the electronic digital computer. Like the
Manhattan Project, this computer, named ENIAC,
was a top secret project. On the other side of
the Atlantic, the British government was funding
its own top secret project to design and build
an electronic digital computer called Colossus.
While ENIAC was designed to do high-speed
numerical computation, the goal of Colossus was
high speed code decryption. If the war had not
ended with the Soviet Union emerging as a new
world military power and a real threat to the
United States and Western Europe, the electronic
digital computer might have languished for some
time. Postwar tensions with the Soviet Union
turned the computer into an essential tool for
national security. The development of
thermonuclear weapons created computational
needs that would have seemed unimaginable to
physicists and engineers a decade earlier, and
secrecy in this and other technological,
economic, and diplomatic matters became
paramount, so did the need to develop the most
advanced computational technology for
cryptology, and for the capture and analysis of
foreign intelligence.
Immediately following World War
II, the U.S. government funded and guided the
creation of a national competence in digital
computer technology. The list of machines that
ensued is a Who’s Who of the early years
of computer technology. Funded by the U.S. Army
and Navy, and the Atomic Energy Commission, John
Von Neumann embarked on a project, at the
Institute of Advanced Study in Princeton, N.J.,
to design and build one of the first,
post-ENIAC, generation of computers. The IAS
computer, as it was called, was replicated in
the national laboratories as well as other
defense related R&D centers: MANIAC at Los
Alamos, ORDVAC at Aberdeen, AVIDAC at Argonne,
ORACLE at Oak Ridge, JOHNNIAC at Rand, and
ILLIAC 1 at the University of Illinois, While
much of military related research was kept
secret, the work on the IAS computer was
circulated widely, which aided the development
of computer design know-how in key universities
and industries. The National Bureau of
Standards, with support from the U.S. Army,
became an active player in the design and
building of computers. Launched by the National
Bureau of Standards in the Spring of 1950, SEAC
was perhaps the first operational electronic
digital computer in operation in the U.S.
There are many stories of the
U.S. federal government directly nurturing the
creation and expansion of technological
competence within the computer industry, but in
the interest of brevity one will be highlighted.
Started immediately after WW II and paid for by
the Navy, the Whirlwind computer project at MIT
realized the first breakthrough in random access
memory called magnetic core-memory, which later
became critical for the commercialization of
computers. Also from Whirlwind came the
development of graphic displays using cathode
ray tubes (CRTs) to visualize the movement of
airplanes in real-time. The Whirlwind team and
its know-how quickly became integrated into the
much larger project called the Semi-Automated
Ground Environment (SAGE) air defense system.
SAGE was an ambitious project that merged
communications and computer technology as parts
of an air defense system against Soviet attack.
The cost of this project was enormous. Perhaps
as much at $10 billion had been spent on this
project by the time it was completed in the
early 1960s. IBM built the computer, the biggest
of its day, and the Burroughs Corporation
handled the communications technology. SAGE
provided IBM and Burroughs the opportunity to
move up a learning curve that could have never
been provided by the civilian marketplace. From
its experience in SAGE, in the early 1960s, IBM
developed SABRE for American Airlines, one of
the world’s first computerized airline
reservations. Integrating digital
communications, stat display, and information
processing, SABRE made IBM a leader in real-time
transaction technology. The SABRE system still
continues to this day, albeit highly
transformed.
The Early Years of
Semiconductor Miniaturization
The technical advances and
economic benefits of computers and
semiconductors are inextricably linked to each
other. Captured in Moore’s Law, the virtuous
circle of this computer-semiconductor feedback
bears witness to the creativity and vitality of
private enterprise to innovate and market new
products and services for the civilian
marketplace. But as with the computer, history
once again reveals that the early growth of
semiconductor technology depended, in part, on
the active participation of government in the
innovation process. In today’s world, the great
value of semiconductors to human existence
appears self-evident. And yet, in the decade
following the transistor’s invention, there was
still real doubt about the transistor’s broader
market potential. It was during this period of
market uncertainty that government support
helped nurture the still embryonic semiconductor
industry.
The transistor, invented in 1947
at Bell Labs, offered a radically new device for
electronic amplification based on very different
scientific principles than the vacuum tube, but
it would take some time before this radically
new electronic component would generate business
to rival the vacuum tube. At the start of World
War II, vacuum tube sales were nearly $250
million. By 1951, vacuum tubes were a $4 billion
dollar industry. The radio and phonograph
manufacturers generated most of the vacuum tube
purchases. In the immediate post WW II years, a
relatively new technology, television, exploded
into a huge mass market and the demand for
vacuum tubes soared. Through the 1950s, vacuum
tube sales still dominated the consumer
electronics market. Ten years after the
invention of the transistor, vacuum tubes were
outselling transistors by more than 13 to 1.With
transistors being far more expensive than vacuum
tubes, the manufacturers of radios and
televisions had little incentive to switch to
solid–state devices. The early makers of
computers also faced a similar cost constraint.
Replacing thousands of tubes with transistors
would be very expensive proposition.
For the military, however, the
transistor was essential to the progress of its
weapon and mobile communications systems.
Increasing complexity characterized the design
of new weapons systems in the 1950s. More and
more components were being jammed into circuits
to do ever more sophisticated tasks. Increasing
complexity translated into physically larger
systems. Complexity also meant correspondingly
higher energy demands and heat dissipation
issues for electronic systems. There were limits
to the number of electronic components that one
could stuff into an airplane or missile. So
miniaturization was essential. Increased
complexity also brought problems of reliability.
As the number of components (particularly vacuum
tubes) increased, the “mean time between
failures” (MTBF) of the entire system got
shorter. The reliability problem was compounded
by the less than ideal conditions in which these
systems would operate. The more sophisticated
the system, the more likely it would fail. To
the military mind the implications were truly
frightening. In 1953, one senior U.S. Navy
Officer, referring the lessons of Mary Shelley’s
novel, captured this fear in the following
words: “like the creator of Frankenstein we have
produced devices which in the hands of the
operating forces, are so unreliable that they
could lead to our ultimate destruction.” The
complexity, miniaturization, and reliability
difficulties were further accentuated by the
military’s obsession with ultimate performance.
Because of the relative simplicity of radios,
phonographs, and televisions, complexity was
never such an issue for the consumer electronics
industry.
The military devoted a great
deal of money to miniaturizing the vacuum tube
and to looking for alternatives. Government
money poured into transistor R&D at Bell Labs
and elsewhere. Through its willingness to pay
for expensive components, the military provided
a much needed revenue stream to transistor
companies. Digital technology was the ultimate
expression of the increasing complexity of post
WW II electronic technology. Government helped
both the computer and semiconductors industries
get through the early high-risk part of the
technology curve. The U.S. private sector then
took over and turned digital electronics into a
global, mass-market revolution.
A 1968 report by the OECD on the
nature and origins of America’s global dominance
in semiconductors concluded that U.S. leadership
had been made possible by the active
participation of the U.S. federal government. In
those early uncertain years of this new
technology, government agencies, particularly
those with interest in defense, were willing to
support solid-state R&D, to subsidize
engineering effort required to install
production capacity, and to pay premium prices
for procurement of new devices when the civilian
market was incapable of doing so. With its deep
pockets, the U.S. military thus helped sustain a
young semiconductor industry as it “learned by
doing.”
Global Positioning System
(GPS)
It is becoming difficult to
imagine everyday life without the Global
Position System (GPS). Embedded in most smart
phones, and even automobiles, GPS is changing
the way products and services are marketed to
consumers. Surprisingly, however, the origins of
this technology had absolutely nothing to do
with consumer demand or the marketing vision of
private enterprise.
GPS had its origins in Transit,
a satellite system deployed by the U.S. Navy in
1964 to determine the positions of its ships and
ballistic submarines across the world’s oceans.
The U.S. Air Force was also interested in
Transit as a real-time navigational tool for its
aircraft, but Transit was inadequate for the Air
Force’s needs. Ships move over a 2-dimensional
surface while planes fly in 3-dimensions. So the
Air Force started on a system of its own.
Prompted by cost and the need for inter-service
operability, the Department of Defense (DOD)
called for a coordinated approach. In 1968, DOD
established a tri-service steering committee
called the Navigation Satellite Executive Group
(NAVSEG). NAVSEG spent several years hammering
out a set of specifications — the number of
satellites, type of orbit, signal protocols and
modulation techniques — and developing cost
estimates that all of the services could accept.
By 1973, the group reached a compromise, and in
1974, DOD started the long-term project to build
the NAVSTAR GPS. By 1994, the 24th and final GPS
satellite was in orbit. By 1995, DOD stated that
it had spent about $8 billion to develop and
deploy GPS. To this day, DOD still owns and
operates the world’s global positioning system.
GPS’ 24 satellites lie in six orbital planes and
circle 20,200 km above the Earth in 12-hour
orbits.
Even before NAVSTAR GPS was
fully operational, the civilian markets —
predominantly the maritime and aviation
industries — were knocking on DOD’s door, asking
for access to the system. How could one ever get
any reasonable return on such a massive
investment? Where was the market to justify the
great financial risks? But supply created a
demand.
In 1983, prompted by the downing
of Korean Air flight 007, President Reagan
allowed civilian aviation to share the GPS
technology. In 1991, the United States made GPS
available on a continuous basis for civilian use
around the world. However, because of security
concerns, the Dept. of Defense purposely reduced
the accuracy of the GPS available to the
civilian sector. In 2000, when President Clinton
ordered “intentional degradation” discontinued,
GPS became a true mass-market technology:
automobiles, recreational vessels, and the
countless number of “apps” for the new
generation of smart devices to name but a few
examples. Few could have imagined the diverse
applications GPS could accommodate and the
mass-market appeal it could generate, and it is
hard to imagine any profit-driven institution,
committing to spend billions of dollars to
answer these questions.
The Early Years of Lithium
Battery Technology
By the 1960s, progress in
battery technology was running up against the
constraints of Faraday’s Law of Electrolysis.
Simply put, with energy densities having reached
a peak, any increase in battery output required
a corresponding increase in the battery’s size:
double the output, the double the size. Lithium
chemistry offered higher energy densities.
Lithium chemistry for batteries had been first
suggested for pacemakers in the 1960s. But only
in the 1970s did a serious effort begin at Exxon
on producing a lithium battery. Industrial R&D
on the battery, however, soon ended. Lithium was
a difficult metal to work with, Because of its
extreme reactivity: much expensive basic
research was needed before Lithium could be a
viable technology. For battery manufacturers,
the technical and market uncertainties
associated with Lithium were too high to justify
large R&D investments and the great expense of
retooling production for this new battery
technology. But the U.S. Army took a great
interest in Lithium technology.
With the ever growing number of
electronic technologies used by the Army, the
development of lighter-weight, cost-effective
power sources with higher energy densities had
become essential to the deployment of new
battlefield devices. As a result, in the 1980s,
the U.S. military started to underwrite a lot
the basic R&D to develop the Lithium battery.
Although progress was made, the reader may
recall that as late as 2003, the shortage of
Lithium batteries affected the scheduling
operations in the second Gulf War.
Throughout the 1980s, millions
of Lithium batteries were sold, but only as an
expensive technology for a specialized market,
the military. The consumer market opened up
when, in the early 1990s, Sony in collaboration
with the Asahi Chemical Co. pioneered the
Lithium-ion battery. Although the availability
of Lithium batteries for consumers was a private
sector accomplishment, there had been 15 years
of R&D, overseen mainly by the military, on
Lithium approaches to the battery. Although the
Lithium-ion battery would in time become the
heart of the consumer electronics, in the early
years the big user remained the military. In
1995, the U.S. Army first introduced the
rechargeable BB-2847 lithium-ion battery for
Night Vision equipment. While the U.S. military
led the way in different Lithium technologies,
America’s private sector missed the opportunity
to grab the baton and lead in Lithium-ion
battery technology. As the Japanese were scaling
up Lithium-ion battery production in the 1990s,
a Joint Battery Industry Sector Study, led by
U.S. and Canadian military services, expressed
concerned over the slow diversification of North
American industry from military to civilian
applications. The legacy of this issue can still
be seen today, when technical competence in
battery technology will be crucial to the future
of the electric car industry, and may determine
which nation becomes the technological leader in
this field
Conclusion
Over the course of the three
articles, we have demonstrated the long, broad
and deep role of the U.S. Government in
fostering technological innovation. Initially
the focus was on creating a level playing field
for innovators—patents are actually required by
the Constitution!—and on investment in the
development of military technology, as at the
Springfield armory. Ultimately such investment
spread to transportation, telecommunications and
public health. After the civil war, investment
continued in the form of land-grant colleges and
the beginnings of the federal laboratory system.
The two World Wars and the Cold War sparked ever
greater investment in research and development
directly in the federal laboratories and also in
contract laboratories, often partnered with
universities. The pattern has been one of the
federal government funding and sometimes
directing research in areas where there is a
long-term potential benefit for the nation but
where such research is too expensive or the
outcome too unclear for a private entity to risk
investment.
The improvements to society
brought about by this federal involvement are
too numerous to cover in three short articles;
we have just scratched the surface here. We
could just as well have discussed the ARPANET, a
computer communications network developed under
the stewardship of the Department of Defense’s
Advanced Research Projects Agency (ARPA).
ARPANET was the paradigm and foundation for the
subsequent development of the Internet. For more
information on this and other important stories,
the reader is urged to visit the IEEE
Global History Network.
While reasonable people can
disagree about the appropriate levels of federal
research and development activity for the 21st
century, we hope that any discussions on the
matter will all take this rich history into
account.
References
Here are some of the works
consulted for this series of articles, which the
reader may want to reference for further detail.
Ernst Braun and Stuart
MacDonald, Revolution in Miniature,
(Cambridge: Cambridge University Press, 1982)
Robert Buderi, The Invention
that Changed the World: How a Small Group of
Radar Pioneers Won the Second World War and
Launched a Technological Revolution (New
York: Simon & Schuster, 1996)
H.A. Christopher, S. Gilman, and
R. P. Hamlen, “U.S. Army Research Laboratory
Power Sources R&D Programs”, IEEE AES Systems
Magazine, May 1993, 7-10.
Lewis Coe, The Telegraph: A
History of Morse's Telegraph and its
Predecessors in the United States,
(Jefferson, NC: McFarland & Co., 1993)
A. Hunter Dupree, Science in
the Federal Government, A History of Policies
and Activities to 1940. (Cambridge, Mass.,
Belknap Press of Harvard University Press, 1957)
Kenneth Flamm, Creating the
Computer: Government, Industry, and High
Technology, (Washington D.C.: The Brookings
Institution, 1988)
Victoria A. Harden, “A Short
History of the National Institutes of Health,"
National Institutes of Health website, http://history.nih.gov/exhibits/history/index.html,
accessed 11 July 2011.
David Mowery and Nathan
Rosenberg, “The Commercial Aircraft Industry”,
in Government and Technical Progress,
Richard Nelson (ed.), (New York: Pergamon Press,
1982), 101-162.
Office of Technology Assessment,
Congress of the United States, A History of
the Department of Defense Federally Funded
Research and Development Centers,
(Washington, D.C.: Government Printing Office,
June 1995)
Emerson W. Pugh and Lars Heide,
"IEEE STARS: Punched Card Equipment," IEEE
Global History Network website,
http://www.ieeeghn.org/wiki/index.php/STARS:Punched_Card_Equipment,
accessed on 11 July 2011.
Richard Rhodes, The Making of
the Atomic Bomb, (New York: Simon and
Shuster, 1986)
Merritt Roes Smith, Harper's
Ferry Armory and the New Technology: The
Challenge of Change, (Ithaca, NY: Cornell
University Press, 1977)
Roger L. Williams, The
Origins of Federal Support for Higher Education:
George W. Atherton and the Land-Grant College
Movement, (University Park, PA: Pennsylvania
State University Press, 1991)
G. Pascal Zachary, Endless
Frontier: Vannevar Bush, Engineer of the
American Century, (New York; The Free Press,
1997)
Visit the IEEE History
Center's Web page at:
www.ieee.org/organizations/history_center.
Comments may be submitted to
todaysengineer@ieee.org.
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