Working Paper: NBER ID: w27375
Authors: Daniel P. Gross; Bhaven N. Sampat
Abstract: During World War II, the U.S. government's Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in U.S. history. 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 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 U.S. innovation in the direction of OSRD-funded technologies.
Keywords: World War II; R&D; Innovation System; Technology Clusters; Public Investment
JEL Codes: H56; N42; N72; O31; O32; O33; O38; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| OSRD shock (I19) | patenting rates (O34) |
| OSRD shock (I19) | growth of technology clusters (O49) |
| OSRD shock (I19) | self-sustained agglomeration dynamics (R11) |
| OSRD shock (I19) | local industrial employment (L69) |
| OSRD shock (I19) | firm creation in high-tech industries (L26) |
| OSRD shock (I19) | trajectory of US innovation towards electronics and communications technologies (L63) |