Working Paper: NBER ID: w28915
Authors: Daniel P. Gross; Bhaven N. Sampat
Abstract: Innovation policy can be a crucial component of governments' responses to crises. Because speed is a paramount objective, crisis innovation may also require different policy tools than innovation policy in non-crisis times, raising distinct questions and tradeoffs. In this paper, we survey the U.S. policy response to two crises where innovation was crucial to a resolution: World War II and the COVID-19 pandemic. After providing an overview of the main elements of each of these efforts, we discuss how they compare, and to what degree their differences reflect the nature of the central innovation policy problems and the maturity of the U.S. innovation system. We then explore four key tradeoffs for crisis innovation policy—top-down vs. bottom-up priority setting, concentrated vs. distributed funding, patent policy, and managing disruptions to the innovation system—and provide a logic for policy choices. Finally, we describe the longer-run impacts of the World War II effort and use these lessons to speculate on the potential long-run effects of the COVID-19 crisis on innovation policy and the innovation system.
Keywords: No keywords provided
JEL Codes: H12; H56; I18; N42; N72; O31; O32; O38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structure of the wartime efforts (H56) | postwar innovation policy (O25) |
| OSRD's focus on applied research and coordination between military and scientific efforts (I23) | significant technological advancements (O33) |
| COVID-19 crisis (H12) | rapid innovation responses (O35) |
| nature of the crises (urgent, high-stakes, and often unanticipated) (H12) | focused innovation efforts (O36) |
| understanding these historical contexts (B15) | current and future innovation policies (O38) |