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Science Policy Bootcamp Notes, Innovation at the Institutional Level

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Science Policy Bootcamp Notes, Innovation at the Institutional Level CLASSCLASS TWO:TWO: INNOVATIONINNOVATION ATAT THETHE INSTITUTIONALINSTITUTIONAL LEVELLEVEL –– THETHE ORGANIZATIONORGANIZATION OFOF FEDERALFEDERAL SCIENCESCIENCE SUPPORTSUPPORT WilliamWilliam B.B. BonvillianBonvillian Director,Director, MITMIT WashingtonWashington OfficeOffice SeminarSeminar FUNDAMENTALSFUNDAMENTALS OFOF SCIENCESCIENCE ANDAND TECHNOLOGYTECHNOLOGY PUBLICPUBLIC POLICYPOLICY MAKINGMAKING1 QuickQuick SummarySummary ofof ClassClass 1:1: ¾ CLASSCLASS ONE:ONE: GROWTHGROWTH THEORYTHEORY z Intro.Intro. toto GrowthGrowth economicseconomics –– z SolowSolow:: ““TechnologyTechnology andand RelatedRelated InnovationInnovation”” isis thethe keykey factorfactor inin economiceconomic growthgrowth –– notnot capitalcapital supply,supply, notnot laborlabor supplysupply z RomerRomer:: TheThe driverdriver behindbehind technologicaltechnological innovationinnovation isis ““HumanHuman CapitalCapital EngagedEngaged inin ResearchResearch”” z DirectDirect InnovationInnovation Factors:Factors: R&DR&D andand TalentTalent ¾ THETHE INNOVATIONINNOVATION SYSTEMSYSTEM ANDAND ITSITS ACTORSACTORS z NelsonNelson –– therethere areare ““nationalnational systemssystems ofof innovationinnovation”” –– reviewsreviews thethe effectivenesseffectiveness ofof aa ““nationnation’’ss innovationinnovation actorsactors”” z IndirectIndirect InnovationInnovation FactorsFactors -- publicpublic andand privateprivate sectorsector ¾ BRANSCOMBBRANSCOMB ANDAND AUERSWALDAUERSWALD 2 z TheThe ValleyValley ofof DeathDeath betweenbetween R&DR&D PARTPART ONE:ONE: Org.Org. HistoryHistory ofof USUS R&DR&D InnovationInnovation Actors:Actors: ¾¾USUS SCIENCESCIENCE ORG.ORG. ININ WORLDWORLD WARWAR 22 ANDAND THETHE EARLYEARLY POSTPOST WARWAR PERIOD:PERIOD: 3 DavidDavid M.M. Hart,Hart, ForgedForged ConcensusConcensus-- Science,Science, TechnologyTechnology andand EconomicEconomic PolicyPolicy inin thethe U.S.,U.S., 19211921--19531953 (Princeton(Princeton Univ.Univ. PressPress 1998)1998) ¾ 55 VisionsVisions ofof thethe LiberalLiberal statestate andand GovernanceGovernance ofof TechnologicalTechnological Innovation,Innovation, 19211921--5353 ¾ 1)1) CONSERVATISM:CONSERVATISM: z SawSaw needneed forfor statestate toto provideprovide forfor defense,defense, includingincluding militarymilitary technologicaltechnological innovationinnovation z Goal:Goal: keepkeep thisthis spheresphere isolatedisolated fromfrom domesticdomestic economyeconomy z MovementMovement waswas reactionreaction toto thethe ““excessesexcesses”” ofof WilsonWilson’’ss WW1WW1 mobilizationmobilization –– industrialindustrial controlscontrols 4 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’t:t: ¾¾ 1)1) CONSERVATISM,CONSERVATISM, concon’’t:t: z FrankFrank JewettJewett –– anan exponentexponent ofof thisthis directiondirection–– Pres.Pres. ofof BellBell Labs,Labs, headhead ofof NatNat’’ll Academy,Academy, ’’3838 • Felt federal meddling with R&D and patents laws would slow growth of science advance • But: supported WW2 gov’t role in science • Postwar – supported retrenchment of gov’t role z Sen.Sen. RobertRobert TaftTaft –– postpost--WW2WW2 –– militarymilitary strategystrategy waswas toto controlcontrol costcost throughthrough limitslimits onon forceforce size,size, thereforetherefore dependantdependant onon tech.tech. innovationinnovation andand nuclearnuclear arsenalarsenal z SummarySummary –– govgov’’tt’’ss defensedefense sciencescience rolerole andand needsneeds shouldshould bebe isolatedisolated fromfrom domesticdomestic economyeconomy 5 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’t:t: ¾¾ 2)2) ASSOCIATIONALISM:ASSOCIATIONALISM: z Exponent:Exponent: HerbertHerbert HooverHoover –– engineer,engineer, warwar reliefrelief organizer,organizer, CommerceCommerce Sec.,Sec., PresidentPresident z SawSaw thethe powerpower ofof statestate actionaction z FeltFelt unlimitedunlimited economiceconomic competitioncompetition inhibitedinhibited tech.tech. innovationinnovation –– priceprice competitioncompetition preventedprevented riskrisk ofof innovationinnovation –– competitioncompetition blockedblocked largelarge scalescale R&DR&D becausebecause itit fragmentedfragmented industryindustry z AssociationalismAssociationalism originatedoriginated inin WW1WW1 warwar mobilizationmobilization z FDRFDR adoptsadopts HooverHoover’’ss associationalassociational ideaidea –– butbut hishis NRANRA isis anan organizationalorganizational disasterdisaster –– thenthen VannevarVannevar BushBush adoptsadopts thisthis modelmodel forfor WW2WW2 sciencescience andand warwar mobilizationmobilization 6 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’t:t: ¾ 3)3) ASSOCIATIONALISMASSOCIATIONALISM, con’t: z The government’s role: • Disseminate best practices to rationalize industry continuously • Foster industry-wide R&D facilities run by trade association supported by gov’t • Or: gov’t service agencies run these R&D facilities • Must be close ties between industry R&D managers and bench scientists • Basic idea: gov’t industry cooperation, pool resources together, avoid duplication • Example: Hoover’s Dept. of Commerce – the Bureau of Standards: z to reorganize ‘sick” industries with new technology z Build industry collaborative R&D z Tear down barriers that limit high growth industry 7 DavidDavid Hart.Hart. ForgedForged Concensus,Concensus, ConCon’’tt ¾ 3)3) REFORMREFORM LIBERALISM:LIBERALISM: z Espoused after NRA failure in 1935 (exponent -Henry Wallace – Commerce Sec.) z Basic theory: reestablish markets by gov’t regulation (ex., antitrust ) z Saw gov’t as an economic actor z Sought end of suppression of tech. innovation by cartels, monopolies z State could develop and commercialize new technology itself, or z Break bottlenecks that hold back innovation z WW2 mobilization by joint associative gov’t-industry effort ended this movement z Post-WW2 – displaced by Keynesianism 8 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’t:t: ¾¾ 4)4) KEYNESIANISM:KEYNESIANISM: z EmergedEmerged inin 4040’’ss –– (J.M. Keynes econ. theory) z basicbasic view:view: govgov’’tt spendingspending toto contributecontribute liquidityliquidity toto privateprivate markets,markets, toto spurspur demanddemand z DebateDebate overover govgov’’tt S&TS&T rolerole –– 22 viewsviews conflict:conflict: • Tech innovation is logical result of private investment, only gov’t macro tools needed; vs. • Widespread market failures in provision of S&T – state should correct by S&T investment z KoreanKorean WarWar –– resolvedresolved conflictconflict –– KeynesiansKeynesians argueargue aggregateaggregate S&TS&T spending,spending, includingincluding defensedefense R&DR&D spending,spending, benefitsbenefits economyeconomy • Example: NSF R&D spending indicators – come from this macro orientation 9 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’tt ¾ 5)5) NATIONALNATIONAL SECURITYSECURITY STATE:STATE: z Emerged in WW2 and Cold War z Use any means/any model necessary to reach S&T leadership for defense needs z WW2 – associative state and national security state merge z Led by Vannevar Bush in WW2 z During the Cold War – • Congressional Repub. - Conservatives – wanted high tech force (Air Force) – cheaper than mass force • Dem. Keynesians – military R&D was still R&D – contributed to aggregate R&D spending z Were they right??? z Examples: aerospace, computing, electronics were results 10 DavidDavid Hart,Hart, ForgedForged Concensus,Concensus, ConCon’’t:t: ¾ REALITY:REALITY: HYBRIDHYBRID GOVGOV’’TT S&TS&T MODELSMODELS DOMINATEDOMINATE THETHE LASTLAST 5050 YEARS,YEARS, THROUGHTHROUGH THETHE ENDEND OFOF THETHE COLDCOLD WAR:WAR: ¾ WeWe havehave aa blendblend ofof differentdifferent visionsvisions ofof thethe statestate rolerole ¾ TheThe underlyingunderlying conflictconflict betweenbetween positionspositions goesgoes unresolved;unresolved; pragmatismpragmatism reignsreigns asas usual;usual; mixmix of:of: ¾ ConservativeConservative –– govgov’’tt domesticdomestic R&DR&D rolerole –– defensedefense only;only; separateseparate sectors;sectors; privateprivate sectorsector shouldshould playplay domesticdomestic economyeconomy S&TS&T rolerole ¾ NatNat’’ll SecuritySecurity –– useuse anyany modelmodel forfor S&TS&T toto gaingain militarymilitary leadershipleadership ¾ AssociativeAssociative –– Hoover,Hoover, FDR,FDR, VanneverVannever BushBush –– latest:latest: ClintonClinton’’ss publicpublic--privateprivate partnershipspartnerships ¾ KeynesianKeynesian –– aggregateaggregate R&DR&D spendingspending isis key,key, defensedefense andand privateprivate sectorsector adequateadequate 11 JennetJennet Conant,Conant, TuxedoTuxedo ParkPark (bio(bio ofof AlfredAlfred L.L. Loomis)Loomis) (Simon(Simon && ShusterShuster 2002)2002) ¾¾ AlfredAlfred L.L. LoomisLoomis –– 18871887--19751975 z Father deserted family, Loomis is forced to law and Wall St., despite love of science, to support family z Made fortune in emerging electrical utility industry – sold out before ’29 crash z Experimented in physics of ultrasound in 20’s-30’s z Authored 29 science papers before 1939 z Set up his own R&D lab in his Tuxedo Park mansion north of NYC in 30’s z Brought in greatest science physics talent in the world for “summer studies” – informal management z MIT’s RAD Lab was a scale-up of this model z Loomis’ cousin Henry Stimson, FDR’s Sec. of War, is a surrogate father 12 AlfredAlfred LeeLee LoomisLoomis –– ““thethe lastlast ofof thethe greatgreat amateursamateurs ofof sciencescience”” –– LuisLuis AlvarezAlvarez 13 JennetJennet Conant,Conant, TuxedoTuxedo Park,Park, ConCon’’tt
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