1. Many of these bids are not fully public. However, from criteria in Amazon’s initial requests for proposal and published news reports, it is fair to say that most bids include such elements.
2. “Remarks by President Trump on the Economy,” White House, July 27, 2018, https://www.whitehouse.gov/briefings-statements/remarks-president-trump-economy.
3. Amazon also announced that more than five thousand jobs with an average wage of over $150,000 would be created in Nashville, Tennessee, but these will be in an “Operations Center of Excellence” and are not likely to pay as much as the HQ2 jobs going to Northern Virginia and New York. Day One Staff, “Amazon Selects New York City and Northern Virginia for New Headquarters,” Day One, November 13, 2018, https://blog.aboutamazon.com/company-news/amazon-selects-new-york-city-and-northern-virginia-for-new-headquarters.
INTRODUCTION
1. Vannevar Bush, Science: The Endless Frontier (Washington, DC: United States Government Printing Office, 1945), p. 19.
2. Details on US army preparation are from Rick Atkinson, An Army at Dawn (New York: Henry Holt, 2002), pp. 8–9.
3. Remarkably, these profound problems “did not come to light until the war was well along.” These quotes are from Samuel Elliot Morrison, History of US Naval Operations in World War II, Volume IV, Coral Sea, Midway and Submarine Actions (Boston: Little, Brown, 1949), pp. 191, 222.
4. Paul Kennedy, Engineers of Victory: The Problem Solvers Who Turned the Tide in the Second World War (New York: Random House, 2013).
5. From the New York Times obituary for Vannevar Bush: “He directed the work of 30,000 men throughout the country and had over‐all responsibility for developing such sophisticated new weapons as radar, the proximity fuze, fire control mechanisms, amphibious vehicles and ultimately the atomic bomb—devices that overnight revolutionized the concept of war.” And “The mass production of sulfa drugs and penicillin was achieved by the O.S.R.D.” Robert Reinhold, “Dr. Vannevar Bush Is Dead at 84,” New York Times, June 30, 1974, http://www.nytimes.com/1974/06/30/archives/dr-vannevar-bush-is-dead-at-84-dr-vannevar-bush-who-marshaled.html.
6. Vannevar Bush, Pieces of the Action (New York: William Morrow, 1970), pp. 31–32.
7. According to his New York Times obituary: “It is estimated that two-thirds of all the physicists in the United States were working for Dr. Bush.” Reinhold, “Dr. Vannevar Bush is Dead.”
8. These data are from table 1 on p. 80 of Bush, Science: The Endless Frontier, calculated by dividing government (federal and state) spending on scientific research (the fifth column) by national income (the second column).
9. Over the years, experts have argued repeatedly about how best to think about and organize the relationship between the development of basic science and applications for commercial use. Bush’s own writings suggest that he was a pragmatic inventor who saw pervasive spillover effects from more basic research. This is what we mean by the Bush model described later.
10. “It [the scientific war effort] put penicillin at our service, as could have been done ten years before had there been ample effort, and thus introduced the wide range of antibiotics.” Bush, Pieces of the Action, p. 8.
11. Terry Sharrer, “The Discovery of Streptomycin,” Scientist, August 2007, https://www.the-scientist.com/?articles.view/articleNo/25252/title/The-discovery-of-streptomycin/.
12. Bush, Pieces of the Action, p. 8.
13. “Out of it [the wartime science effort] came the conquest of malaria, a temporary conquest, it is true, for the lower organisms which prey upon us exhibit agility in evading our chemicals,” Bush, Pieces of the Action, p. 8. Part of the subsequent resurgence of malaria was due to the development of DDT-resistant mosquitoes. There were also difficulties sustaining anti-mosquito campaigns in some parts of the world.
14. See Bush’s Pieces of the Action, pp. 43–49, for further discussion on how medical research was brought under his committee’s jurisdiction, initially against his recommendation. Bush was rarely opposed to taking on new tasks but had concerns about the specific politics surrounding medicine.
15. Interestingly, Vannevar Bush’s wartime committee did not directly provide the decisive push for computing. Pitched on the idea by a former MIT colleague during the war, Bush felt—most likely correctly—the technology was not at a stage where it could have immediate impact on the war effort.
16. From the National Science Foundation’s Science & Engineering Indicators 2018, Chapter 4, figure 4-3, “Ratio of U.S. R&D to gross domestic product, by roles of federal, business, and other nonfederal funding for R&D: 1953–2015,” https://nsf.gov/statistics/2018/nsb20181/figures. The peak for federally funded R&D was 1.86 percent of GDP in 1964. The most recent data point in this series, for 2015, is 0.67 percent of GDP.
17. Real GDP was just over $2 trillion in 1947 and $5.7 trillion in 1973, for a compound annual average growth rate of just under 4 percent. Real GDP is from the Bureau of Economic Analysis historical data, accessed through the St. Louis Fed’s FRED economic database: for levels, “Real Gross Domestic Product (GDPCA),” FRED Economic Data, updated July 27, 2018, https://fred.stlouisfed.org/series/GDPCA; and for annual growth rates, “Real Gross Domestic Product (A191RL1A225NBEA),” FRED Economic Data, updated July 27, 2018, https://fred.stlouisfed.org/graph/?id=A191RL1A225NBEA,#0.
18. For longer time periods, slightly different starting or ending dates do not change the averages much. Changing the dates can affect averages over shorter periods, but the general conclusion stands: growth in the size of the American economy has slowed down.
19. “An Update to the Economic Outlook: 2018 to 2028,” Congressional Budget Office, August 13, 2018, https://www.cbo.gov/publication/54318.
20. From 1920 to 1970, output per hour grew by 2.82 percent per annum on average in the United States. From 1970 to 2014, this measure of productivity growth declined to just 1.62 percent. As Robert Gordon argues in The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016), most of the decline is due to slower growth in total factor productivity, “the best proxy available for the underlying effect of innovation and technological change on economic growth” (p. 16, figure 1-2 and surrounding text). Gordon argues that the 1920–1970 period was special, representing the effects of major technologies that were invented earlier, before World War II, and which took time to have their effects.
21. In one recent estimate, the GDP of Silicon Valley is around $235 billion. This is an impressive number and larger than the economies of some countries, but total GDP of the United States is close to $20 trillion. https://cityscene.org/the-silicon-valley-economy-surpasses-the-gdp-of-many-nations/ (website discontinued).
22. This point is made by Mariana Mazzucato in The Entrepreneurial State, revised ed. (New York: Public Affairs, 2015).
CHAPTER 1: FOR OUR COMFORT, OUR SECURITY, OUR PROSPERITY
1. Jennet Conant, Man of the Hour: James B. Conant, Warrior Scientist (New York: Simon & Schuster, 2017), p. 221. Conant was president of Harvard, visiting London to assess British technology and to build potential cooperation, on behalf of Bush’s OSRD. He went on to be responsible for overseeing the development of the atomic bomb.
2. Bush was vice chairman and then chairman of the National Advisory Committee for Aeronautics, and his fears proved well-founded. “The Lockheed P-38, Bell P-39, Curtiss P-40, Grumman F4F, and Brewster Buffalo were the most modern U.S. Army and Navy fighters in the active inventory when the war started. Yet, with the exception of the P-38—which was available in only very small numbers at the beginning of the war—these fighters were generally outclassed by the leading Japanese and German fighters against which they had to fight. None of these fighters—except for the P-38—remained in production by the later stages of the war.” “As a result, the Japanese essentially retained air superiority in most theaters until the P-38 Lightning, F4U Corsair, and F6F Hellcat began entering service in significant numbers in 1943.” Mark Lorell, The US Combat Aircraft Industry, 1909-2000 (Santa Monica, CA: RAND Corporation, 2003), https://www.rand.org/content/dam/rand/pubs/monograph_reports/2005/MR1696.pdf, p. 57.
3. Elting E. Morison, From Know-How to Nowhere: The Development of American Technology (New York: Basic Books, 1974).
4. A direct descendant from the steam engines that pumped water out of coal mines and horse-drawn wagons that moved coal along inclined planes.
5. Estimate for Britain is from Dan Bogart, Leigh Shaw-Taylor, and Xuesheng You, “The Development of the Railway Network in Britain 1825–1911,” Cambridge Group for the History of Population and Social Structure, https://www.campop.geog.cam.ac.uk/research/projects/transport/onlineatlas/railways.pdf. US numbers are from table 1 in E. R. Wicker, “Railroad Investment before the Civil War,” in Trends in the American Economy in the Nineteenth Century (Princeton, NJ: Princeton University Press, 1960).
6. “British Railways,” Encyclopedia Britannica, https://www.britannica.com/topic/British-Railways.
7. Morison, From Know-How to Nowhere.
8. “Why the Americans Apply Themselves to the Practice of the Sciences Rather than to the Theory,” in Democracy in America, vol. 2, trans. and ed. Harvey C. Mansfield and Debra Winthrop (Chicago: University of Chicago, 2000).
9. This paragraph and the next paragraph are based on Morison, From Know-How to Nowhere.
10. As reported in Morison, From Know-How to Nowhere, p. 108.
11. Details in this paragraph are from Morison, From Know-How to Nowhere, pp. 129–131.
12. David F. Noble, America by Design: Science, Technology, and the Rise of Corporate Capitalism (Oxford, UK: Oxford University Press, 1979), p. 114.
13. Noble, America by Design, p. 121.
14. Noble, America by Design, pp. 11–12. The chemical industry, which developed slightly later, followed a similar approach.
15. Noble, America by Design, p. 39. The 1930 number of engineers was only 0.5 percent of workers in industry.
16. Vannevar Bush, Science: The Endless Frontier (Washington, DC: United States Government Printing Office, 1945), p. 80. The earliest data for government science spending in this source are from 1923, and the university spending series starts in 1930.
17. Noble, America by Design, p. 120.
18. On the history and development of US higher education and its relationship to research, see Jonathan R. Cole, The Great American University (New York: Public Affairs, 2009).
19. Noble, America by Design, p. 22.
20. In the early twentieth century, there were twenty-six members of the Association of American Universities “and perhaps a dozen other aspirants.” The primary activity was teaching undergraduates and even the American elite universities were “no match for Cambridge or Berlin.” Hugh Davis Graham and Nancy Diamond, The Rise of American Research Universities: Elites and Challengers in the Postwar Era (Baltimore: Johns Hopkins University Press, 1997), p. 20.
21. Vannevar Bush, Pieces of the Action (New York: William Morrow, 1970), p. 115: “When I was just starting in as an engineer, they [Germany] had led the world.”
22. To be clear, prior to World War II, there were some physics prize winners who did their award-winning work abroad but who lived or worked in the United States at some point in their life. Ferdinand Braun, who won in 1909, arrived in the United states during World War I to testify about a patent and was detained due to his German citizenship. He died while detained in 1917. Albert Einstein, who won the physics prize in 1921, came to the United States in the early 1930s in response to the rise of the Nazis. James Franck won his prize in 1925. He came to the United States and worked as a professor from 1935. Franck returned to West Germany at the end of his life. Frenchman Jean Baptiste Perrin won the physics prize in 1926. He came to the United States in 1940 after the Germans invaded France. In 1936, Austrian Victor Hess won the physics prize. He worked in the United States both before and after he won, but his prize-winning work was done in Austria.
23. US-born scientists Clinton Davisson and Ernest Lawrence won in 1937 and 1939, respectively.
24. A. Hunter Dupree, Science in the Federal Government: A History of Policies and Activities (Baltimore: Johns Hopkins University Press, 1986).
25. The National Academy of Sciences was established during the Civil War, and the National Research Council was added in 1916. Neither had much immediate effect on the military effort. See Dupree, Science in the Federal Government.
26. G. Pascal Zachary, Endless Frontier (Cambridge, MA: MIT Press, 1999), pp. 65–66.
27. “In the twelve months from June 1940 to June 1941 our civilian casualties were 43,381 killed and 50,856 seriously injured, a total of 94,237.” Winston Churchill, The Grand Alliance: The Second World War, vol. 3 (Boston: Houghton Mifflin, 1950), p. 42.
28. American public opinion at the time remained strongly in favor of neutrality. The official State Department history sums up the situation: “Overall, the Neutrality Acts [of 1935, 1937, and 1939] represented a compromise whereby the United States Government accommodated the isolationist sentiment of the American public, but still retained some ability to interact with the world.” https://history.state.gov/milestones/1921-1936/neutrality-acts. President Franklin Delano Roosevelt was sympathetic to the British cause, but it had previously proven hard to entice the United States to share technological insights that could assist the war effort. For example, the British wanted access to the Norden bombsight, which they understood would greatly improve the precision of high-altitude bombing. The Americans were concerned that this could fall into the hands of the Germans—for example, if a plane were shot down—and refused to share this technology until much later.
29. Stephen Phelps, “Minutes of the First Meeting of the British Technical Mission to the USA,” in The Tizard Mission (Yardley, PA: Westholme, 2009), pp. 295–298.
30. With the exception only of the British jet engine program and what the navy had learned about German magnetic mines. Phelps, The Tizard Mission.
31. Raymond C. Watson Jr., Radar Origins Worldwide (Bloomington, IN: Trafford, 2009). Of these thirteen countries, at least seven were in the running to deploy workable systems, but the British got there first—at least with regard to full-scale deployment for air defense.
32. The essential work on radio was carried out by James Clerk Maxwell (a Scottish scientist at King’s College in London) in the 1860s and Heinrich Rudolf Hertz (at the University of Karlsruhe in Germany) in the late 1880s. Major breakthroughs in terms of applications came from Guglielmo Marconi (an Italian who worked initially in the UK) and others.
33. In September 1922, A. Hoyt Taylor and Leo C. Young made some of the earliest discoveries while working at the Naval Aircraft Radio Laboratory in Washington, DC. Samuel E. Morrison, The Battle of the Atlantic, September 1939–May 1943 (Annapolis, MD: Naval Institute Press, 1947), pp. 8–9, 225.
34. In 1932, the average speed of US civilian planes, operating on long distance routes, was 110 MPH; by 1940, this speed had increased to 155 MPH. Ronald Miller and David Sawers, The Technical Development of Modern Aviation (New York: Praeger, 1970), p. 211.
35. Baldwin was prime minister of Britain both before and after he made this statement.
36. Tizard was head of Imperial College, a leading engineering school. He was actually a chemist, not a physicist, but he knew how to run a committee. It helped that he had previously been an aircraft researcher who had flown military planes. Tizard also knew how to manage the relationship between civilian scientists and military hierarchy—as well as with the civil service.
37. The early inventive work was funded in a rather haphazard way. Winston Churchill’s favorite scientist, Frederick Lindemann, also preferred rather more esoteric forms of air defense—including dropping bombs on parachutes in front of oncoming bombers.
38. For attacks during the day, it was sufficient for ground-based controllers to direct interceptor planes close enough to see their targets. Early on, however, Tizard and his colleagues recognized that guiding fighters at night would require much more precision—and almost certainly involve aircraft-mounted radar.
39. Jennet Conant, Tuxedo Park (New York: Simon & Schuster, 2002) provides a fascinating biography of Loomis, as well as a history of his involvement with radar.
40. Conant, Tuxedo Park, says this meeting was on September 11, but Robert Buderi, The Invention That Changed the World (New York: Simon & Schuster, 1996), says September 19.
41. Conant, Tuxedo Park, pp. 189–192.
42. It helped that Loomis had direct access to Henry Stimson, the secretary of war. In fact, they were cousins, and Loomis had long advised Stimson on his personal finances, as well as on the future of technology from an investor’s perspective. Bush’s team had a consistently better relationship with the army, overseen by Stimson, than with the secretary of the navy and some powerful admirals. Bush, Pieces of the Action, p. 50.
43. Buderi, Invention That Changed the World, p. 45. Jewett was brought on board in a meeting on October 16, 1940, in Bush’s office. Compton was persuaded on October 17.
44. Bush, Pieces of the Action, p. 45.
45. Reflecting on the wartime radar effort as a whole, according to Bush, “Scientific personnel became so scarce they even took in biologists and made radar experts out of them.” Ibid., p. 138.
46. Ibid., p. 38.
47. The key meeting was again at Tuxedo Park on the weekend of October 12–13, 1940, with Ernest Lawrence now in attendance. The following Monday, Loomis invited companies to bid (and build) equipment that was obviously already needed. There were just a handful of suppliers, with the work divided up among them: Bell (the magnetron), GE (the magnet), RCA (pulse modulator, cathode ray tubes, and power supply), and Sperry (parabolic reflectors and scanning gear). Westinghouse later contracted for antennas and Bendix for the power supply that would run off an aircraft engine. Buderi, Invention That Changed the World, p. 44; Conant, Tuxedo Park, p. 201.
48. Conant, Tuxedo Park, pp. 197–198. The lab space was made available on October 17 (Buderi, Invention That Changed the World, p. 45).
49. “MIT Radiation Laboratory,” Lincoln Laboratory, https://www.ll.mit.edu/about/History/RadLab.html.
50. By coincidence, at the end of October, MIT hosted a major annual conference on applied nuclear physics, with six hundred people attending. Loomis turned this effectively into a job fair. By the end of the conference, more than two dozen people had been hired. Conant, Tuxedo Park, pp. 202–203.
51. Buderi, Invention That Changed the World, p. 50, puts employment at the Rad Lab in summer 1945 at 3,897 people and the annual budget at $43.2 million; this was up from first year numbers of 30–40 employees and a budget of $815,000. The entire OSRD budget in fiscal year 1944/45 was $113.5 million; this does not include the Manhattan Project. In his postwar plans for a new agency to support science, Bush proposed to spend $33.5 million initially, rising to $122.5 million after five years (Zachary, Endless Frontier, p. 249)—implying a scale roughly similar to the OSRD at its pinnacle.
52. Buderi, Invention That Changed the World, pp. 155–165.
53. Buderi, Invention That Changed the World, p. 143. King reportedly said this in spring 1941.
54. Bush, Pieces of the Action, pp. 99, 104 on tanks and DUKW, respectively.
55. See Investigation of the Pearl Harbor Attack: Report of the Joint Committee on the Investigation of the Pearl Harbor Attack (Washington, DC: Government Printing Office, July 20, 1946), pp. 140–142. “The maximum distance radar could pick up approaching planes was approximately 130 miles” (p. 129). The actual distance of the attacking force when first detected was 132 miles (p. 152). The lack of preparation and integration with radar was profound—it would have taken four hours to prepare the US Army planes properly for the attack (p. 129).
56. Samuel E. Morrison, The Atlantic Battle Won, May 1943–May 1945 (Annapolis, MD: Naval Institute Press, 1953), pp. 8–9.
57. This shift was not only about technological miracles but also about designing a new system that applied the technology effectively. This system involved creating a new organizational structure, in this case the Tenth Fleet, in which naval officers and civilian engineers could cooperate without the previous constraints. See Ladislas Farago, The Tenth Fleet (New York: Drum, 1986).
58. “The tide turned abruptly in 1943. It could have changed much earlier.” Bush, Pieces of the Action, p. 88.
59. Bush, Pieces of the Action, p. 109.
60. The hiring at the Rad Lab was handled by the director Lee DuBridge. Bush felt DuBridge hired too many physicists relative to engineers. DuBridge retorted, after the Rad Lab success had become clear, “You see we did not need the engineers.” Bush replied, according to his account, “Hell, any self-respecting physicist can become an engineer in a year or two if he puts his mind to it” (Bush, Pieces of the Action, p. 138). Paul Kennedy, Engineers of Victory: The Problem Solvers Who Turned the Tide in the Second World War (New York: Random House, 2013) makes the case that engineering work had a major impact on the war outcome.
61. Bush, Pieces of the Action, p. 106.
62. The first jet engine with the performance necessary for a potential commercial jet airliner was the British Rolls-Royce Avon available by 1949/1950. The first American commercial jet engine was the Pratt & Whitney J57 available in 1952/1953.
63. The four most important early engines were the Pratt and Whitney J57, the Rolls-Royce Avon, the Rolls-Royce Conway, and the General Electric J79 (Miller and Sawers, Technical Development of Modern Aviation, p. 161).
64. Ibid., pp. 156–157.
65. This list is based on Buderi, Invention That Changed the World, pp. 15–16.
66. There was a prewar research agenda at Bell Labs (vacuum tubes were major part of phone systems) and the notion of a semiconductor was first demonstrated in 1940 (Michael Riordan and Lillian Hoddeson, Crystal Fire: The Invention of the Transistor and the Birth of the Information Age [New York: W. W. Norton, 1997], p. 88). These researchers and related resources were diverted into the war effort, including on radar and to help the navy—William Shockley, for example, became a consultant to various parts of the military. These experiences contributed to how the research team approached what became transistors after the war (Riordan and Hoddeson, Crystal Fire). We discuss the development of the transistor further in the next chapter.
67. Evan Ackerman, “When 82 TV Channels Was More Than Enough,” IEEE Spectrum, January 29, 2016, https://spectrum.ieee.org/tech-history/cyberspace/when-82-tv-channels-was-more-than-enough.
68. Evan Ackerman, “A Brief History of the Microwave Oven,” IEEE Spectrum, September 30, 2016, https://spectrum.ieee.org/tech-history/space-age/a-brief-history-of-the-microwave-oven.
69. Buderi, Invention That Changed the World, p. 48. The only person to win a Nobel Prize for work done at the Rad Lab was Edwin McMillan, who won the chemistry prize in 1951. Thomas R. Cech (chemistry, 1989), Sidney Altman (chemistry, 1989), Mario J. Molina (chemistry, 1995), Felix Bloch (physics, 1952), E. M. Purcell (physics, 1952), Charles H. Townes (physics, 1964), Julian Schwinger (physics, 1965), Luis Alvarez (physics, 1968), and Norman Ramsey (physics, 1989) all won for work they did after their time at the Rad Lab. Isidor Isaac Rabi won the physics prize in 1944 for work that he did in 1939.
70. The First Annual Report of the National Science Foundation, 1950–51 (Washington, DC: US Government Printing Office, n.d.), p. 31, which has data on federal expenditures for research and development from 1940 through 1950. Correcting for inflation during the war is very difficult, as prices were controlled and the availability of some goods was limited. Still, these nominal figures convey the broad picture.
71. The three services had combined R&D budgets of only $26.4 million in fiscal year 1940 (First Annual Report of the National Science Foundation, p. 31).
72. One estimate is that radar cost perhaps 50 percent more than the Manhattan Project. Watson, Radar Origins Worldwide, p. 3. This seems high, but there is no question that the development of radar was a major research and industrial endeavor, comparable in scale to the Manhattan Project.
73. “Manhattan Project,” CTBTO Preparatory Commission, https://www.ctbto.org/nuclear-testing/history-of-nuclear-testing/manhattan-project/.
74. Bush, Pieces of the Action, p. 8.
75. Vannevar Bush, Science: The Endless Frontier (Washington, DC: United States Government Printing Office, 1945), p. 8.
76. Bush, Science, p. 14.
77. Ibid., p. 19.
78. Officially, the development of both nuclear weapons and power generation came under the authority of the Atomic Energy Commission (https://www.energy.gov/sites/prod/files/AEC%20History.pdf). The commission became controversial for the development of the hydrogen bomb, the investigation of Robert Oppenheimer, and perhaps most of all for the way it oversaw the approval and building of nuclear power stations. Daniel Ford’s Cult of the Atom: The Secret Papers of the Atomic Energy Commission (New York: Simon and Schuster, 1982) is a hard-hitting critique.
79. Bush, Science, p. 7.
80. National Center for Education Statistics, 120 Years of American Education: A Statistical Portrait (Washington, DC: US Department of Education, 1993), https://nces.ed.gov/pubs93/93442.pdf, p. 7.
81. Ibid., table 23.
82. We count US winners as people who were American by birth or were only associated with American universities/organizations at the time of their win. Our source is biographical information published by the Nobel Foundation.
83. There were two individuals who did their work in Germany (the 1933 physics prize winner and 1938 chemistry winner), although they were not German during this period. They are included in the German total here.
84. From 2010 to 2017, the United States won only 47 percent of the scientific Nobel Prizes.
85. In fiction, the first postwar articulation of the dangers posed by automation—in fact, directly from the development of cybernetics during the 1940s—may have been Vonnegut’s Player Piano. But the dark side of inventions already existed as a theme, at least since the work of H. G. Wells; a uranium-based hand grenade features in his 1914 novel, The World Set Free.
86. Kurt Vonnegut, Player Piano (New York: Dial Press, 2006). Consequently, there is a high degree of inequality in the America of Vonnegut’s imagination—very different from what transpired in the 1950s, although not so different from what we face today.
87. The impact of new technology on wages depends on the details of exactly what that technology does. In the early years of the nineteenth-century Industrial Revolution, machines replaced the labor of skilled artisans—and tended to lower their wages. From the early twentieth century, however, technological changes, including the use of electricity in factories, became complementary to skilled labor. Now the efforts of unskilled people could be replaced by machines, but this in turn could create jobs managing the machines, the broader business enterprise, and the surrounding social enterprise—hence the expansion of white-collar jobs. For a full historical analysis, see Claudia Goldin and Lawrence F. Katz, The Race Between Education and Technology (Cambridge, MA: Harvard University Press, 2008).
88. Seminal contributions were made by Norbert Wiener, whose work on antiaircraft guns led him to invent what became known as cybernetics, a branch of information theory and a forerunner of artificial intelligence. Wiener published a relatively technical volume, Cybernetics: Or Control and Communication in the Animal and the Machine, in 1948, and then a more popular book, The Human Use of Human Beings, in 1950. Vonnegut refers to this thinking in Player Piano. Wiener’s wartime work was supported by the NDRC/OSRD.
89. This is the pretax skill premium (i.e., not including the effect of taxation and any redistributive programs).
90. Enrico Moretti makes this important point in his study of city growth, The New Geography of Jobs (New York: Mariner Books, 2013).
91. “Education and Training; History and Timeline,” US Department of Veterans Affairs, https://www.benefits.va.gov/gibill/history.asp.
92. Thomas K. McCraw, American Business Since 1920: How It Worked, 2nd ed. (Hoboken, NJ: Wiley-Blackwell, 2009), p. 89. “The 1944 GI Bill provided returning veterans with money for college, businesses and home mortgages. Suddenly, millions of servicemen were able to afford homes of their own for the first time. As a result, residential construction jumped from 114,000 new homes in 1944 to 1.7 million in 1950. In 1947, William Levitt turned 4,000 acres of Long Island, New York, potato farms into the then largest privately planned housing project in American history. With 30 houses built in assembly-line fashion every day—each with a tree in the front yard—the American subdivision was born.” Claire Suddath, “The Middle Class,” Time, February 27, 2009, http://content.time.com/time/nation/article/0,8599,1882147,00.html.
93. The official title of this legislation was Public Law 346.
94. Alan T. Waterman, introduction to Science: The Endless Frontier, by Vannevar Bush (Alexandria, VA: National Science Foundation, 1960), p. xvi. This edition appeared to mark the tenth anniversary of the NSF—and the fifteenth anniversary of the report. In a foreword, Bush endorses Waterman’s “effective summary of the extent to which the recommendations of Science: The Endless Frontier have been realized.” Waterman goes on to say, “About two million veterans of the Korean conflict received similar educational opportunities under the Veterans Readjustment Assistance Act of 1952. Engineering, medical, dental, and scientific fields attracted about a quarter million of these.”
95. Brad Plumer, “Here’s Where Wages Have Been Stagnating Since the 1970s,” Washington Post, March 21, 2013, https://www.washingtonpost.com/news/wonk/wp/2013/03/21/heres-where-wages-have-been-stagnating-since-1970/?utm_term=.f7ed8963af35.
96. “The Postwar Economy: 1945–1960,” University of Groningen, http://www.let.rug.nl/usa/outlines/history-1994/postwar-america/the-postwar-economy-1945-1960.php.
97. Ibid.
98. Shmoop Editorial Team, “Society in the 1950s,” Shmoop University, last updated November 8, 2011, https://www.shmoop.com/1950s/society.html.
99. McCraw, American Business Since 1920, p. 65: “American industrial mobilization as a whole was brilliantly successful. Without question it was the key to victory over Japan, and it was the single most important element in the Allied triumph on the Western Front in Europe.”
100. Ibid., p. 75.
101. Historical Statistics of the United States: Colonial Times to 1970, Bicentennial Edition, Part 1 (Washington, DC: US Bureau of the Census, 1975), https://fraser.stlouisfed.org/files/docs/publications/histstatus/hstat1970_cen_1975_v1.pdf.
102. Some women who entered the workforce during the war were no longer employed and not looking for work in the immediate postwar years. Still, many of them did want to work—and this was part of the labor force expansion.
103. These data are from Historical Statistics of the United States: Colonial Times to 1970, Bicentennial Edition, Part 2 (Washington, DC: US Bureau of the Census, 1975), “Series D 1–10, Labor Force and its Components: 1900 to 1947”; annual average; data from 1948 are in “Series D 11-25, Labor Force Status of the Population: 1870 to 1970”; the labor force is slightly lower as it is for ages sixteen and higher in this series. Unemployment was 4.4 percent in 1955, reaching 6.8 percent in 1958 (“Series D 85–86”)—higher than during the war but much lower than the 20–25 percent rates experienced during the Great Depression. https://fraser.stlouisfed.org/files/docs/publications/histstatus/hstat1970_cen_1975_v2.pdf.
104. Synthetic rubber is a good example. The shift from natural to synthetic rubber (a petroleum by-product) was overseen by Bush’s NDRC, and most US rubber products were synthetic by 1945. Before the war, the United States was the largest importer of rubber in the world; after the war, it became a major exporter (McCraw, American Business Since 1920, pp. 64–65). James Conant, chemistry professor, Harvard’s president, and key confidant of Vannevar Bush, provided scientific oversight.
105. “Since the late nineteenth century, the Democrats had associated high tariffs with monopoly profits for the rich and low tariffs with low prices for goods consumed by the average citizen. Furthermore, they maintained that low US tariffs encouraged low foreign tariffs and thus indirectly stimulated increases in US exports, especially agricultural goods.” And “thus, over 80 percent of the Democrats voting in the House of Representatives supported the party’s position on extending the trade agreements program during the 1940s and 1950s.” Robert Baldwin, “The Changing Nature of US Trade Policy Since World War II,” in The Structure and Evolution of Recent US Trade Policy, ed. Robert E. Baldwin and Anne O. Krueger (Chicago: University of Chicago Press, 1984), http://www.nber.org/chapters/c5828.pdf.
106. During the interwar years, the US share of world exports fluctuated between 12 and 16 percent; it was 15.3 percent in 1938. In 1948, the situation was transformed: US exports now comprised 30.5 percent of world exports. For manufactured goods, the change was just as dramatic. Among the ten largest industrial countries, in 1928 and 1938, the US share of manufacturing exports was 21 percent. In 1952, the US export share of manufactures was 35 percent. Baldwin, The Structure and Evolution, p. 8.
107. The Truman administration launched the Marshall Plan, which provided loans to Europe and oversaw the creation of the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund with the same initial primary purpose. Subsequently, “Eisenhower and his main advisors within the administration and in Congress believed—like earlier Democratic administrations—that trade liberalization was an important foreign policy instrument for strengthening the ‘free world’ against communism” (Ibid., p. 12).
108. Ibid., p. 8.
109. For example, the AFL-CIO changed its view on the desirability of liberal trade policy only in the 1960s, in the face of increasing imports relative to market size in “wool and man-made textiles and apparel, footwear, automobiles, steel, and electrical consumer goods, such as television sets, radios, and phonographs” (Ibid., p. 13).
110. Frank Gollop and Dale Jorgenson, “U.S. Productivity Growth by Industry, 1947–93,” in New Developments in Productivity Measurement, ed. John W. Kendrick and Beatrice N. Vaccara (Chicago: University of Chicago Press, 1980), pp. 15–136, table 1.29.
CHAPTER 2: WHATEVER IT TAKES
1. John F. Kennedy, “Science as a Guide of Public Policy,” in The Burden and the Glory, ed. Allan Nevins (New York: Harper & Row, 1964), p. 264.
2. The launch was on October 5, local time (in Kazakhstan). The news reached Washington, DC, on Friday evening, October 4, 1957.
3. William I. Hitchcock, The Age of Eisenhower (New York: Simon & Schuster, 2018), p. 379. The first dog in space died after a few hours; subsequently, the Soviet authorities decided to bring orbiting dogs back home safely—and did: https://www.theguardian.com/artanddesign/2014/sep/02/soviet-space-dogs.
4. Bush insisted that it was essential to have the president of the NRF picked by its board of directors, not by the president. No one in the White House found that idea appealing.
5. G. Pascal Zachary, Endless Frontier (Cambridge, MA: MIT Press, 1999), pp. 246–260, 300–309.
6. More generally, Bush saw himself as supporting government funding but resisting government control. Kilgore did not have an issue with government control. Zachary, Endless Frontier, pp. 253–254.
7. Item 1858 was a pocket veto of S.526, 79th Cong. (1945), https://www.senate.gov/reference/Legislation/Vetoes/Presidents/TrumanH.pdf.
8. The NSF was established by an act of Congress on May 10, 1950. The director of the NSF was appointed by the president, subject to confirmation by the Senate.
9. These amounts are for the fiscal year indicated. For fiscal year 1960, the NSF’s “total adjusted appropriation” was $154.8 million. From Alan T. Waterman, introduction to Science: The Endless Frontier, by Vannevar Bush (Alexandria, VA: National Science Foundation, 1960), p. xxiv. Waterman was director of the NSF in 1960.
10. Hitchcock, Eisenhower, p. 379. Compounding the pressure was the Gaither report, presented to the National Security Council on November 7, 1957: the United States needed to spend an extra $4 billion per year to defend against surprise attacks, on top of the $38 billion per year already being spent (pp. 379–380).
11. Khrushchev first made this statement in November 1956 at the Polish embassy in Moscow.
12. Johnson was Senate majority leader; he organized these hearings as chairman of the Preparedness Subcommittee of the Senate Armed Services Committee. Teller does not mention this testimony in his memoir, but his general position at this time is clear—the United States needed to do more and to spend more to stay up with the Soviets.
13. Hitchcock, Eisenhower, p. 383.
14. Ibid., p. 380, quoting a National Intelligence Estimate that projected Soviet capabilities from 1957 to 1962. The Gaither Report, presented to the White House in November 1957, had also expressed concern about the missile gap.
15. Killian had previously chaired a 1955 panel, which found that long-range missiles were now an essential part of American defense. During World War II, Killian had effectively been the chief operating officer of MIT, providing well-received support to the Rad Lab and broader wartime scientific effort. Interestingly, Killian himself was not a scientist; he had previously run Technology Review, an MIT publication, but he had earned the confidence of scientists. And as he disarmingly points out in his memoir, President Eisenhower was really bringing on board the image of MIT—and the wartime achievements of the OSRD and broader scientific community.
16. From a legislative perspective, federal support for education had been proposed previously but without effect. The Sputnik crisis broke the logjam. “Sputnik Spurs Passage of the National Defense Education Act,” US Senate, October 4, 1957, https://www.senate.gov/artandhistory/history/minute/Sputnik_Spurs_Passage_of_National_Defense_Education_Act.htm.
17. Cornelia Dean, “When Science Suddenly Mattered, in Space and in Class,” New York Times, September 25, 2007, https://www.nytimes.com/2007/09/25/science/space/25educ.html.
18. From $254 million to $1.57 billion in nominal dollars. Hugh Davis Graham and Nancy Diamond, The Rise of American Research Universities: Elites and Challengers in the Postwar Era (Baltimore: Johns Hopkins University Press, 1997), p. 47. Other details in this paragraph are from pp. 47–48 of this source.
19. “60 Years Ago, Eisenhower Proposes NASA to Congress,” April 2, 2018, NASA, https://www.nasa.gov/feature/60-years-ago-eisenhower-proposes-nasa-to-congress.
20. McGeorge Bundy, Danger and Survival (New York: Random House, 1988), p. 352: “McNamara discovered within weeks that there was no discernible missile gap,” and “the eventual force of 1,000 Minutemen, 656 Polaris missiles on submarines, and some 500 bombers was about the same as what Eisenhower had planned.” Bundy was national security advisor from January 1961 to February 1966.
21. Ted Sorensen, Counselor: A Life at the Edge of History (New York: Harper, 2008). The quote is from p. 336, and the assessment of the administration’s thinking is on pp. 334–336.
22. Annie Jacobsen, Operation Paperclip: The Secret Intelligence Program that Brought Nazi Scientists to America (New York: Little, Brown, 2014).
23. Although his culpability in this was always denied by von Braun, V-2 production made use of concentration camp labor. Von Braun’s biographical details are drawn from Michael J. Neufeld, Von Braun: Dreamer of Space, Engineer of War (New York: Vintage Books, 2007).
24. Wernher von Braun, The Mars Project (Champaign: University of Illinois Press, 1991).
25. David Merriman Scott and Richard Jurek, Marketing the Moon: The Selling of the Apollo Lunar Program (Cambridge, MA: MIT Press, 2014), chap. 1.
26. “In 2008 dollars, the cumulative cost of the Manhattan project over 5 fiscal years was approximately $22 billion; of the Apollo program over 14 fiscal years, approximately $98 billion; of post-oil shock energy R&D efforts over 35 fiscal years, $118 billion.” Deborah D. Stine, The Manhattan Project, the Apollo Program, and Federal Energy Technology R&D Programs: A Comparative Analysis (Washington, DC: Congressional Research Service, 2009), https://fas.org/sgp/crs/misc/RL34645.pdf.
27. Ibid.
28. “Table 1.2, Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930–2023,” Office of Budget and Management Historical Tables, https://www.whitehouse.gov/omb/historical-tables/.
29. NASA Sounding Rockets, 1958–1968: A Historical Summary, NASA SP-4401 (Washington, DC: NASA, 1971), https://history.nasa.gov/SP-4401.pdf.
30. “Historical Trends in R&D,” American Association for the Advancement of Science, https://www.aaas.org/programs/r-d-budget-and-policy/historical-trends-federal-rd.
31. “Occupational Employment and Wages, May 2017,” Bureau of Labor Statistics, https://www.bls.gov/oes/current/oes172011.htm.
32. These were all achievements of the X-15, a 1959–1968 joint program between NASA, the navy, and the private sector (North American Aviation, now part of Boeing); “NASA Exploration and Innovation Lead to New Discoveries,” NASA, https://spinoff.nasa.gov/Spinoff2008/pdf/timeline_08.pdf.
33. This includes structural integrity technology; see John A. Alic, Lewis M. Branscomb, Harvey Brooks, Ashton B. Carter, and Gerald L. Epstein, Beyond Spinoff: Military and Commercial Technologies in a Changing World, Harvard Business School Press (Brighton, MA: Harvard Business School Press, 1992), p. 38. The Boeing 707 was a spin-off from the Dash-80 prototype, a four-jet swept-wing design developed to provide aerial refueling for the air force.
34. Tang was developed in 1957, the invention of Teflon dates from 1938, and Velcro was created by George de Maestral in the 1940s. Alic et al., Beyond Spinoff, p. 57. NASA agrees; see “Are Tang, Teflon, and Velcro NASA Spinoffs?,” NASA, https://www.nasa.gov/offices/ipp/home/myth_tang.html.
35. “50 Science Sagas for 50 Years,” Council for the Advancement of Science Writing, http://www.casw.org/casw/article/50-science-sagas-50-years#1950s.
36. “About Spinoff,” NASA Spinoff, https://spinoff.nasa.gov/about.html.
37. On NASA’s Tumblr feed, https://nasa.tumblr.com/, posted October 9, 2015.
38. Jeremy Hsu, “Space Shuttle’s Legacy: More Tech Spinoffs Than Apollo Era,” July 19, 2011, https://www.space.com/12344-nasa-space-shuttle-program-technology-spinoffs.html.
39. The earliest studies of NASA’s impact, conducted in the early 1960s, are among the most systematic and impressive. An analysis conducted by the University of Denver Research Institute, published in 1963, looked at the impact of “spin-off from missile and space programs” on thirty-three separate areas of technology. The most common impact was “stimulation of basic and applied research,” but they also found evidence of product improvement and new product development, although they did not put a dollar value on anything specific. For some recent materials, see this page: “STMD: Technology Transfer,” NASA, https://www.nasa.gov/directorates/spacetech/techtransfer.
40. These were Television Infrared Observation Satellite, TIROS 1, and ECHO, respectively.
41. Dan Freyer, Liftoff: Careers in Satellite, the World’s First and Most Successful Space Industry (New York: Society of Satellite Professionals International, 2010), https://www.aem.umn.edu/teaching/undergraduate/advising_guide/Liftoff_Satellite_Careers.pdf, p. 11.
42. Ibid, p. 8.
43. In 2016, the US satellite industry had revenues of $110.3 billion, while the non-US industry had revenues of $150.2 billion.
44. Of global revenues for satellite TV, 41 percent are earned in the United States. State of the Satellite Industry Report (Alexandria, VA: Bryce Space and Technology, 2017), https://www.sia.org/wp-content/uploads/2017/07/SIA-SSIR-2017.pdf.
45. The Space Economy at a Glance 2011 (Paris: OCED, 2011), https://www.oecd.org/sti/futures/space/48301203.pdf.
46. The US Naval Research Laboratory was created in 1923; https://www.onr.navy.mil/en/About-ONR/History, building on work begun during World War I. The ONR has a webpage on the Nobel prize-winners it has supported: https://www.onr.navy.mil/About-ONR/History/Nobels.
47. Kenneth Flamm, Creating the Computer (Washington, DC: Brookings Institution, 1988), pp. 42–43, 54. The National Science Foundation was intended to support basic research, “but because computer science did not mature as a separate academic discipline until the mid-1960s, the foundation largely excluded computer research from support in the first decades after the birth of the computer. Fortunately for the U.S. computer, however, the military establishment guaranteed support to the industry for the sake of national security” (Flamm, p. 78).
48. Important precursors included differential analyzers—electromechanical machines for solving particular kinds of differential equations (e.g., useful in ballistics). Vannevar Bush was a leader in this field while at MIT.
49. Flamm, Creating the Computer, p. 37.
50. Ibid., p. 75.
51. Ibid., p. 55. Whirlwind was not the first modern large-scale digital computer—that distinction arguably belongs to a British machine invented during World War II to assist with code breaking.
52. See Robert Buderi, The Invention That Changed the World (New York: Simon & Schuster, 1996), Chapter 17, on Jay Forrester and Project Whirlwind; also Martin Campbell-Kelly, Computer: A History of the Information Machine (New York: Routledge, 2013).
53. The air force, created in 1907, was immediately focused not just on airplane design but also on computational systems that could support air defense, in particular by integrating and processing the information received from myriad radar systems.
54. Magnetic core used material developed in Germany and brought back to the United States—by the military—after the war (Flamm, Creating the Computer, pp. 15, 58).
55. RAND, short for Research ANd Development, was a public policy group originally set up by the US Air Force. Nathan L. Ensmenger, The Computer Boys Take Over: Computers, Programmers, and the Politics of Technical Expertise (Cambridge, MA: MIT Press, 2010).
56. Ibid. Computer programming was not initially regarded as highly skilled work.
57. Buderi, Invention That Changed The World, and Flamm, Creating the Computer, p. 56. “SAGE was essentially the first wide-area computer network, the first extensive digital data communications system, the first real-time transaction processing system. Concepts developed for its operation formed the base on which time-sharing and computer networks were later developed” (Flamm, Creating the Computer, p. 89).
58. Employment data from Moody’s Manual of Investments; available through Mergent.
59. Flamm, Creating the Computer, p. 41.
60. Alic et al., Beyond Spinoff, pp. 67–68.
61. National Research Council and Computer Science and Telecommunications Board, Funding a Revolution: Government Support for Computing Research (Washington, DC: National Academies Press, 1999, p. 59.
62. Flamm, Creating the Computer, pp. 87–89.
63. Ibid., p. 89.
64. General Motors, for long the definition of an industrial giant, employed 288,286 people in 1929.
65. IBM was for a long time the most highly ranked tech company: #8 in 1980, #4 in 1990, #6 in 2000, and still #10 in 2005.
66. “Jean Hoerni at Fairchild developed the planar transistor then Jack Kilby at Texas Instruments and Robert Noyce at Fairchild developed the integrated circuit.” “The Transistor and the Integrated Circuit,” Design Automation Conference, https://dac.com/blog/post/transistor-and-integrated-circuit.
67. The numbers in this paragraph are from Flamm, Creating the Computer, pp. 16, 18.
68. Ibid.
69. Integrated circuits, weather forecasting, highway grooves that reduce tire hydroplaning, and ways to measure air pollution are striking examples in the first edition of NASA’s Spinoff publication: Neil P. Ruzic, Spinoff 1976: A Bicentennial Report (Washington, DC: NASA, 1976), https://spinoff.nasa.gov/back_issues_archives/1976.pdf.
70. DARPA quotes in this and the preceding paragraph are from Innovation at DARPA (Arlington, VA: DARPA, 2011), https://www.darpa.mil/attachments/DARPA_Innovation_2016.pdf, p. 6.
71. “DARPA’s many important achievements have included seminal roles in the development of the Internet (initially known as Arpanet), stealth aircraft, miniaturized GPS technologies, unmanned aerial vehicles, flat-screen displays, and the brain-computer interface work that is making it possible for subjects to use their thoughts to move artificial limbs”; Innovation at DARPA. On Agent Orange: “Inside DARPA, The Pentagon Agency Whose Technology Has ‘Changed the World,’” NPR, March 28, 2017, https://www.npr.org/2017/03/28/521779864/inside-darpa-the-pentagon-agency-whose-technology-has-changed-the-world. See also the list in New Scientist: Duncan Graham-Rowe, “Fifty Years of DARPA: Hits, Misses and Ones to Watch,” New Scientist, May 15, 2008, https://www.newscientist.com/article/dn13907-fifty-years-of-darpa-hits-misses-and-ones-to-watch/.
72. Not all DARPA innovations have been so positive for human and economic development—the agency also helped invent Agent Orange, a chemical defoliant used in the Vietnam War, which proved highly toxic.
73. Table 3-1 in Flamm, Creating the Computer, pp. 76–77, offers a comprehensive list of government support for early computer development.
74. In its earliest days, DARPA had a positive impact on general purpose time-sharing operating systems, as well as on computer networks.
75. Flamm, Creating the Computer, p. 79.
76. National Research Council, Funding a Revolution, p. 74.
77. Ibid., p. 77.
78. Ibid., p. 68.
79. “Inside DARPA,” NPR.
80. About 20 percent of all IBM employees worked on SAGE at its peak.
81. Writing in the mid-1990s, the president’s Council of Economic Advisers said, “R&D spending by industry is highly concentrated in the United States—eight industries account for more than 80 percent of the total—and the top two, aircraft and communications equipment, are closely related to defense.” Economic Report of the President: 1995 (Washington, DC: United States Government Printing Office, 1995), https://www.presidency.ucsb.edu/sites/default/files/books/presidential-documents-archive-guidebook/the-economic-report-of-the-president-truman-1947-obama-2017/1995.pdf.
82. Vannevar Bush, Pieces of the Action (New York: William Morrow, 1970), p. 31. Admiral William D. Leahy, the president’s chief of staff and top military adviser, represented the old-school military view perfectly at the end of a briefing for President Truman in April 1945, in which the president was informed of the existence of the atomic bomb. “This is the biggest fool thing we have ever done. The bomb will never go off, and I speak as an expert in explosives.” The quote is as reported by President Truman in his memoir 1945: Year of Decisions (Old Saybrook, CT: William S. Konecky Associates, 1999), p. 11.
83. This was the assessment of President Clinton’s Council of Economic Advisers: “Technology and Economic Growth: Producing Real Results for the American,” White House, November 8, 1995, https://clintonwhitehouse2.archives.gov/WH/EOP/OSTP/html/techgrow.html#1. This assessment was produced as part of an argument with congressional Republicans, who were seeking to cut nonmilitary R&D spending. More specifically, what the CEA found (based on Bureau of Labor Statistics data) was that “investment in [public and private] R&D contributed about 0.2 percentage point to the growth of productivity between 1963 and 1992, with essentially no difference before and after 1972”—although, as they pointed out, this is likely an underestimate of the contribution primarily due to measurement issues, including for productivity in the service sector. Trend productivity growth was 0.9 percent per year from 1978 to 1987 and 1.2 percent per year from 1988 to 1994. Economic Report of the President: 1995.
84. The total civilian labor force in the early 1990s was just over 125 million people, and employment was around 117 million, https://www.bls.gov/web/empsit/cps_charts.pdf. Nothing in terms of job creation lasts forever, and from the early 1990s, employment in the computer and electronic products industry, as measured by the Bureau of Labor Statistics, fell from just under 2 million to 1.1 million, https://www.pbs.org/newshour/economy/rise-fall-u-s-corporations. Of course, employment in other technology-related business—including in and around the internet—boomed during that same period of time.
85. “Between 1940 and 1944 the US government placed $175.066 billion of prime defence contracts with US corporations. Two-thirds of these awards went to only 100 companies and 20% to only five companies leading to charges that the prime contractors were favoured.” Fred R. Kaen, “World War II Prime Defence Contractors: Were They Favored?,” Journal of Business History 53 (2011). Kaen, looking just at stock prices, argues the contractors were not favored. Zachary, Endless Frontier, reports that one-third of all “war orders” went to ten companies—some of which lent executives to the government (pp. 248–249).
86. Flamm, Creating the Computer, p. 55.
CHAPTER 3: DESCENT FROM THE HEAVENS
1. AP, “G.B. Kistiakowsky Is Dead at 82; Bomb Pioneer Sought Nuclear Ban,” New York Times, December 8, 1982, http://www.nytimes.com/1982/12/08/obituaries/gb-kistiakowsky-is-dead-at-82-bomb-pioneer-sought-nuclear-ban.html.
2. The general occupation of scientist received one of the highest prestige ratings in a March 1947 survey, just behind US Supreme Court justice and physician. In 1947, 51 percent of respondents did not know what they thought of nuclear physicists specifically. By June 1963, the Don’t Know category was down to 10 percent. In that survey, 70 percent of people thought the reputation of nuclear physicist was Excellent; 23 percent thought it was Good, and only 2 percent thought it was Below Average or Poor. By way of comparison, the percent viewing the prestige of economist as Excellent was only 20 percent in 1963. Robert E. Hodge, Paul M. Siegel, and Peter H. Rossi, “Occupational Prestige in the United States, 1925–63,” American Journal of Sociology 70, no. 3 (1964): 286–302, table 1, p. 290.
3. “U.S. Scientists: 1960,” Person of the Year: A Photo History, Time, http://content.time.com/time/specials/packages/article/0,28804,2019712_2019703_2019661,00.html.
4. According to the National Science Board’s Science & Engineering Indicators 2018, federal spending on R&D was 0.67 percent of GDP in 2015, the latest year for which data are available; see figure 4-3, “Ratio of U.S. R&D to gross domestic product, by roles of federal, business, and other nonfederal funding for R&D: 1953–2015,” from https://nsf.gov/statistics/2018/nsb20181/figures.
5. “In its reaction to my appointment, the press was almost unanimously favorable.” James R. Killian Jr., Sputnik, Scientists, and Eisenhower: A Memoir of the First Special Assistant to the President for Science and Technology (Cambridge, MA: MIT Press, 1977), p. 31.
6. Umair Irfan, “Trump Finally Picked a Science Adviser,” Vox, August 1, 2018, https://www.vox.com/2018/8/1/17639314/trump-science-adviser-kelvin-droegemeier-ostp.
7. At the end of the war, the US Alsos mission established that “the Germans had no bombs or prototypes, no working reactors or stockpiles of plutonium and uranium-235, no community of scientists with bomb-making expertise who might work for the Russians.” There had been an atomic bomb program from 1939 (three years before the Americans got started), but it was scaled back in 1942. Thomas Powers, “The Private Heisenberg and the Absent Bomb,” New York Times Review of Books, December 22, 2016, http://www.nybooks.com/articles/2016/12/22/private-heisenberg-absent-bomb/.
8. “But the overriding consideration was this: I had great respect for German science. If a bomb were possible, if it turned out to have enormous power, the result in the hands of Hitler might indeed enable him to enslave the world. It was essential to get there first, if an all-out American effort could accomplish the difficult task.” Vannevar Bush, Pieces of the Action (New York: William Morrow, 1970) p. 59.
9. Later, Groves put it this way: “So when I say that we [the military leaders at Los Alamos] were responsible for the scientific decisions, I am not saying that we were extremely able nuclear physicists, because actually we were not. We were what might be termed ‘thoroughly practical nuclear physicists.’” This quote is from Groves’s testimony regarding Oppenheimer’s security clearance, held before the Atomic Energy Commission in 1954. It appears in Edward Teller, introduction to Now It Can Be Told: The Story of the Manhattan Project, by Leslie Groves (Cambridge, MA: Da Capo Press, 1983), p. vi. Italics are as they appear in the book.
10. Bush’s falling out with Truman, discussed in Chapter 2, happened subsequently.
11. The US government published the broad outlines of its nuclear program, in carefully edited form, in 1945: Henry D. Smyth, Atomic Energy for Military Purposes: A General Account of the Scientific Research That Went Into the Making of Atomic Bombs (Princeton, NJ: Princeton University Press, 1945). The preface by the author is dated July 1945, with amendments dated September 1, 1945; General Groves’s foreword is dated August 1945. The intent to develop peaceful civilian applications was already apparent, although precisely what this would entail remained vague.
12. The universities were Columbia University, Cornell University, Harvard University, Johns Hopkins University, Massachusetts Institute of Technology, University of Pennsylvania, Princeton University, University of Rochester, and Yale University. Philip Morse, the director of this new lab, was a polymath. An important figure in ASWORG (the navy’s anti-submarine group) during the war, he also founded the field of operations research along the way; his textbook, Philip Morse and George E. Kimball, Methods of Operation Research (n.p.: Andesite Press, 2015), is a must-read for anyone interested in how to use data to solve real-world problems. Professor Isidor Isaac Rabi, 1944 Nobel Prize winner and a senior person at the Rad Lab, was also involved. See William L. Laurence, “Atomic Laboratory on Long Island to Be a Mighty Research Center,” New York Times, March 1, 1947, https://timesmachine.nytimes.com/timesmachine/1947/03/01/88763292.pdf, and the New York Times obituary for Morse: “Philip McCord Morse, Physicist,” New York Times, September 13, 1985, https://www.nytimes.com/1985/09/13/us/philip-mccord-morse-physicist.html.
13. AUI has helped to create and manage other projects, including the National Radio Astronomy Observatory: “Our Story,” Associated Universities, https://www.aui.edu/our-story/. From Article 1 of its charter: “To constitute an agency through which universities and other research organizations will be enabled to cooperate with one another, with governments and with other organizations toward the development of scientific knowledge in the fields.” “Article 1: The Corporation’s Purpose,” Associated Universities, https://www.aui.edu/charter-by-laws/article-1-corporations-purpose/.
14. According to his wife, “he named the swimsuit a bikini, thinking of the nuclear explosions at Bikini Atoll around that time.” From Reuters, “Louis Reard Engineer, Dies: Designed the Bikini in 1946,” New York Times, September 18, 1984, http://www.nytimes.com/1984/09/18/obituaries/louis-reard-engineer-dies-designed-the-bikini-in-1946.html. These designs did not really catch on until the 1960s, aided by the arrival of Lycra from 1964: Sylvia Rubin, “Fashion Shocker of ’46: The Naked Belly Button / But the Bikini Wasn’t a Hit Until Sixties,” San Francisco Chronicle, July 2, 2006, https://www.sfgate.com/news/article/Fashion-shocker-of-46-the-naked-belly-button-2493673.php.
15. On how the atomic bomb changed popular culture, see “How the Bomb Changed Everything,” BBC, July 2, 2015, http://www.bbc.com/culture/story/20150702-how-the-bomb-changed-everything. Wonder gave way to fear, but not immediately. The United States dropped a total of twenty-three nuclear bombs on Bikini Atoll. Eleanor Ainge Roy, “‘Quite Odd’: Coral and Fish Thrive on Bikini Atoll 70 Years After Nuclear Tests,” Guardian, July 15, 2017, https://www.theguardian.com/world/2017/jul/15/quite-odd-coral-and-fish-thrive-on-bikini-atoll-70-years-after-nuclear-tests.
16. The Aircraft Nuclear Propulsion program was canceled in 1961, because “the atomic airplane showed little military promise.” “Reason for Abandonment,” New York Times, November 7, 1961. The navy did, of course, develop nuclear-powered submarines—followed by aircraft carriers and other vessels.
17. “The Atomic Pen’s design called for a tiny packet of radioactive isotopes, which would heat the ink to produce a selectable range of line densities. Perhaps understandably, no production units were ever made.” Evan Ackerman, “A Radioactive Pen in Your Pocket? Sure!,” IEEE Spectrum, October 28, 2016, https://spectrum.ieee.org/tech-history/heroic-failures/a-radioactive-pen-in-your-pocket-sure. The Nucleon, a nuclear-powered car, was a concept unveiled by Ford.
18. Alexis Madrigal, “7 (Crazy) Civilian Uses for Nuclear Bombs,” Wired, April 10, 2009, https://www.wired.com/2009/04/yourfriendatom/. Edward Teller made the famous remark about nuclear explosions being used to dig holes; he was only partly being humorous.
19. Richard D. Lyons, “End of Rocket Project Produces Space Age Ghost Town,” New York Times, March 26, 1972, https://timesmachine.nytimes.com/timesmachine/1972/03/26/90711148.pdf.
20. There is debate about what exactly Lewis Strauss, the chairman of the Atomic Energy Commission, was thinking when he said, in 1954, that electricity would become too cheap to meter, but he did make the free electricity statement. “‘Too Cheap to Meter’: A History of the Phrase,” US Nuclear Regulatory Commission, June 3, 2016, https://public-blog.nrc-gateway.gov/2016/06/03/too-cheap-to-meter-a-history-of-the-phrase/.
21. Glenn Seaborg, one of the country’s most influential scientists, was still optimistic about the potential for atomic power in 1970, when his book Man and Atom appeared. In retrospect, resistance to building nuclear power plants was only increasing. Seaborg chaired the Atomic Energy Commission (1961–1970); previously, he’d helped discover plutonium and nine other elements and won the Nobel Prize. “Glenn Seaborg,” Economist, March 4, 1999, https://www.economist.com/node/188956.
22. Anthony Standen, Science Is a Sacred Cow (New York: E. P. Dutton, 1950), p. 79. He was writing, as a chemist, specifically about the teaching of chemistry. But his book also makes this general point about what was then modern science. Wolfgang Saxon wrote, “Mr. Standen’s point was that scientists, and especially teachers of science, tended to have inflated egos, certain of their superior wisdom and virtue. In reality, he asserted, they are mostly dull and pompous and should be laughed at now and then. Unfortunately in his view, the general public stood in awe of them even when they talked Latinized nonsense,” from “Anthony Standen Is Dead at 86; Chemist Who Deflated Pomposity,” New York Times, June 25, 1993, http://www.nytimes.com/1993/06/25/obituaries/anthony-standen-is-dead-at-86-chemist-who-deflated-pomposity.html.
23. William L. Laurence, “U.S. Atom Bomb Site Belies Tokyo Tales,” New York Times, September 9, 1945. The message was conveyed by the subheading: “That Blast, Not Radiation, Took Toll.”
24. On the long-term effects of radiation, see “Children of the Atomic Bomb,” Asian American Studies Center, http://www.aasc.ucla.edu/cab/index.html, based on the work of Dr. James N. Yamazaki, lead physician of the US Atomic Bomb Medical Team in 1949, “studying the effects of nuclear bombing on children in Nagasaki, Japan.”
25. Laurence was a distinguished science writer who won two Pulitzer Prizes and cofounded the National Association of Science Writers. He witnessed the Alamogordo (a.k.a. Trinity) nuclear test on July 16, 1945, and flew on the August 9 mission that dropped an atomic bomb on Nagasaki. His military affiliation was not mentioned in a long and otherwise informative obituary in the New York Times: “William Laurence, Ex-Science Writer for The Times, Dies,” New York Times, March 19, 1977, https://www.nytimes.com/1977/03/19/archives/william-laurence-exscience-writer-for-the-times-dies-william-l.html. Laurence’s employment during the war by the military is recognized and discussed in detail in General Leslie M. Groves’s memoir, Now It Can Be Told, originally published in 1962: “It seemed desirable for security reasons, as well as easier for the employer, to have Laurence continue on the payroll of the New York Times, but with his expenses to be covered by the MED [the Manhattan Engineering District, i.e., the atomic bomb project],” p. 326.
26. “Beginning in April 1945, Mr. Laurence was secretly seconded by The Times to the War Department on the request of Maj. Gen. Leslie R. Groves, commander of the atomic bomb project.” David W. Dunlap, “1945 Witnessing the A-Bomb, but Forbidden to File,” New York Times, August 6, 2015, https://www.nytimes.com/times-insider/2015/08/06/1945-witnessing-the-a-bomb-but-forbidden-to-file/.
27. Kelly Moore, Disrupting Science: Social Movements, American Scientists, and the Politics of the Military 1945-1975 (Princeton, NJ: Princeton University Press, 2013).
28. Melinda Gormley and Melissae Fellet, “When Science Doesn’t Have a Simple Answer,” Slate, July 29, 2015, http://www.slate.com/articles/technology/future_tense/2015/07/the_cold_war_pauling_teller_debate_on_nuclear_testing_shows_the_role_scientists.html.
29. According to the Environmental Protection Agency, “Exposure to low levels of radiation encountered in the environment does not cause immediate health effects, but is a minor contributor to our overall cancer risk.” EPA, “Radiation Health Effects,” https://www.epa.gov/radiation/radiation-health-effects.
30. The Bulletin of the Atomic Scientists was founded by physicists aiming to “educate the public to the necessity for a civilian-controlled program of atomic energy free of unreasonable security restrictions.” Daniel J. Kevles, The Physicists: The History of a Scientific Community in Modern America (Cambridge, MA: Harvard University Press, 1971), p. 351.
31. DDT is short for dichloro-diphenyl-trichloro-ethane; it was patented in 1940 by Paul Müller, a Swiss chemist, who won the 1948 Nobel Prize in Physiology or Medicine for this work. Scaling-up of production and widespread use against mosquitoes was organized in large part by Vannevar Bush’s OSRD/NDRC.
32. “Award Ceremony Speech,” Nobel Prize, https://www.nobelprize.org/prizes/medicine/1948/ceremony-speech/.
33. “DDT Regulatory History: A Brief Survey (to 1975),” EPA, https://archive.epa.gov/epa/aboutepa/ddt-regulatory-history-brief-survey-1975.html.
34. Kate Wong, “DDT Debate,” Scientific American, December 4, 2000, https://www.scientificamerican.com/article/ddt-debate/.
35. Again, this was not a new point—many people have repeated versions at least since Mary Shelley’s Frankenstein, the ultimate scientific nightmare, published in 1818, before industrialized science had really taken off. Edward Tenner’s Why Things Bite Back: Technology and the Revenge of Unintended Consequences (New York: Vintage, 1997) provides an entertaining if sobering history of unintended consequences since 1900.
36. “Many man-made chemicals act in much the same way as radiation; they lie long in the soil, and enter into living organisms, passing from one to another. Or they may travel mysteriously by underground streams, emerging to combine, through the alchemy of air and sunlight, into new forms, which kill vegetation, sicken cattle, and work unknown harm on those who drink from once pure wells.” Rachel Carson, “Silent Spring-I,” New Yorker, June 16, 1962, https://www.newyorker.com/magazine/1962/06/16.
37. “In 1972, EPA issued a cancellation order for DDT based on its adverse environmental effects, such as those to wildlife, as well as its potential human health risks. Since then, studies have continued, and a relationship between DDT exposure and reproductive effects in humans is suspected, based on studies in animals. In addition, some animals exposed to DDT in studies developed liver tumors. As a result, today, DDT is classified as a probable human carcinogen by U.S. and international authorities.” The Stockholm convention on persistent organic pollutants bans DDT, with the limited and specific exception of malaria control. “DDT—A Brief History and Status,” EPA, https://www.epa.gov/ingredients-used-pesticide-products/ddt-brief-history-and-status.
38. See, for example, this online exhibition: Mark Stoll, “The Personal Attacks on Rachel Carson as a Woman Scientist,” Environment and Society Portal, 2012, http://www.environmentandsociety.org/exhibitions/silent-spring/personal-attacks-rachel-carson.
39. According to the Environmental Protection Agency, “The publication in 1962 of Rachel Carson’s Silent Spring stimulated widespread public concern over the dangers of improper pesticide use and the need for better pesticide controls.” “DDT—A Brief History and Status,” EPA.
40. Carson’s impact on Europe was more limited or perhaps just delayed. See Mark Stoll, “Why Europe Responded Differently from the United States,” Environment and Society Portal, 2012, http://www.environmentandsociety.org/exhibitions/silent-spring/why-europe-responded-differently-united-states.
41. For a detailed assessment of how these concerns spread, see Moore, Disrupting Science.
42. “‘Silent Spring’ was more than a study of the effects of synthetic pesticides; it was an indictment of the late 1950s.” Eliza Griswold, “How ‘Silent Spring’ Ignited the Environmental Movement,” New York Times, September 23, 2012, http://www.nytimes.com/2012/09/23/magazine/how-silent-spring-ignited-the-environmental-movement.html. While some pro-environment groups such as the Audubon Society have been around for a long time, a wave of new organizations arose from the late 1960s, including the Union of Concerned Scientists and Friends of the Earth in 1969, the Natural Resources Defense Council in 1970, and Greenpeace in 1971.
43. This point is made by Charles Perrow, Normal Accidents: Living with High-Risk Technologies (Princeton, NJ: Princeton University Press, 1999). Perrow leads with the case of Three Mile Island and refers to the peril of atomic energy throughout his book, although his point is much broader.
44. See the interactive graphic at “Global Nuclear Power Database,” Bulletin of the Atomic Scientists, https://thebulletin.org/global-nuclear-power-database; the number of annual construction starts peaked in 1976 at forty-four (of which twelve were later abandoned).
45. “Almost all the US nuclear generating capacity comes from reactors built between 1967 and 1990. Until 2013 there had been no new construction starts since 1977, largely because for a number of years gas generation was considered more economically attractive and because construction schedules during the 1970s and 1980s had frequently been extended by opposition, compounded by heightened safety fears following the Three Mile Island accident in 1979.” “Nuclear Power in the USA,” World Nuclear Associated, updated October 2018, http://www.world-nuclear.org/information-library/country-profiles/countries-t-z/usa-nuclear-power.aspx. About 20 percent of US electricity is generated from nuclear power.
46. “Manhattan Project Spotlight: George and Vera Kistiakowsky,” Atomic Heritage Foundation, October 15, 2014, https://www.atomicheritage.org/article/manhattan-project-spotlight-george-and-vera-kistiakowsky.
47. Interviewed by Richard Rhodes, historian of the atomic bomb, in 1980: “But then Oppenheimer and Groves started urging [James] Conant, because they did not have confidence in Neddermeyer, that they needed me over there because I was supposed to be the number one civilian explosives expert, with these new-fangled ideas about precision instruments—explosives position instruments. And so I said all right, this is war time, and although I’m a civilian, I obeyed the orders of my boss Conant.” “George Kistiakowsky’s Interview,” Voices of the Manhattan Project, https://www.manhattanprojectvoices.org/oral-histories/george-kistiakowskys-interview. Neddermeyer was the Manhattan Project expert on detonation. Conant was president of Harvard, right-hand man to Bush during the war, and top of the scientific hierarchy overseeing the atomic bomb project.
48. Kistiakowsky himself was quite modest about the accomplishment. See “George Kistiakowsky’s Interview,” Voices of the Manhattan Project.
49. As he put it later, “For many years, well into the mid 1950s, I saw myself as a technical expert being available to policy makers to put the policies into effect.” Ibid.
50. “There were three points that were of great importance, our committee concluded. And von Neumann was the leader in it. The warhead could be cut down to somewhere like a thousand pounds and still be of the order of a megaton explosive yield. The size of the missile could be cut down to a third of what old Air Force missiles promised to be. And incidentally that size was the same as the Soviet size of the SS-6, which was then used to launch satellites in space in 1957–58.” Ibid.
51. Kistiakowsky’s diary makes it clear that he was close to or involved in decision-making at the highest level, including with regular access to the president. He was also seen as relatively nonpartisan and did not participate in Richard Nixon’s 1960 election campaign. George B. Kistiakowsky, A Scientist at the White House: The Private Diary of President Eisenhower’s Special Assistant for Science and Technology (Cambridge, MA: Harvard University Press, Cambridge, 1976).
52. This is according to McGeorge Bundy, Danger and Survival (New York: Random House, 1988). Photographs obtained by a U-2 spy plane contributed to a reassessment—the CIA revised down its estimates of long-range missiles to 35 for mid-1960 and 140–200 by mid-1961 (p. 343). At least by early 1961, when Kennedy took office and Bundy became national security advisor, there was no missile gap.
53. “George Kistiakowsky’s Interview,” Voices of the Manhattan Project.
54. Gregg Herken, Cardinal Choices (Stanford, CA: Stanford University Press, 2000), says that the report was “suppressed” (p. 150).
55. Herken, Cardinal Choices, p. 150.
56. Ibid. McNamara’s thinking is also discussed in David Halberstam, The Best and the Brightest (New York: Ballantine Books, 1993), p. 630.
57. A group of scientific advisors known as the Jasons became proponents of the air force bombing approach. By the early 1960s, the Jasons comprised about forty young physicists, who met each summer to consider Pentagon-related problems. Increasingly, however, there was friction between the Jasons and an older set of scientific advisors, known as the Cambridge group (which included Kistiakowsky), who questioned the morality and strategic wisdom of bombing. Herken, Cardinal Choices, p. 153.
58. Ibid., p. 155.
59. Leo Szilard, a Hungarian émigré, cofounded Council for a Livable World in 1962. Szilard, first to conceive the notion of a nuclear chain reaction, was a strong voice favoring the development of the atomic bomb, based on his conviction that the Germans were likely to develop this capability soon. He persuaded Albert Einstein to write to President Roosevelt about this issue.
60. Halberstam, The Best and the Brightest.
61. “However disenchantment grew as the Vietnam War continued, and the politicos in the White House—not least, Lyndon Johnson—began to lose confidence in the White House science structure.” Guy Stever, In War and Peace (Washington, DC: Joseph Henry Press, 2002), p. 205.
62. Joel Primack and Frank von Hippel, Advice and Dissent: Scientists in the Political Arena (New York: Basic Books, 1974), p. 22.
63. Ibid.
64. Concorde had the same sonic boom issue and therefore only reached supersonic speeds over water. It was not a commercial success, and maintenance became an issue. After a fatal crash in 2000, all Concordes were withdrawn from service.
65. Martin Tolchin, “The Perplexing Mr. Proxmire,” New York Times, May 28, 1978, https://www.nytimes.com/1978/05/28/archives/the-perplexing-mr-proxmire-with-new-york-facing-bankruptcy-by-hands.html.
66. Stever, In War and Peace, p. 203. Congressional testimony opposing administration policy annoyed the White House.
67. Naturally, there were scientists on both sides of this (and every other) issue. One survey found that 62 percent of scientists were completely opposed to ABMs in general, while 22 percent completely favored these systems; others had more intermediate views. Anne Hessing Cahn, Eggheads and Warheads: Scientists and the ABM, Science and Public Policy Program (Cambridge, MA: Department of Political Science and Center for International Studies, MIT, 1971).
68. Argonne National Laboratory grew out of work on the Manhattan Project by physicists at the University of Chicago: “About Argonne,” Argonne National Laboratory, https://www.anl.gov/argonne-national-laboratory. The labs were initially under the Atomic Energy Commission and are now part of the Department of Energy, which was created in 1977.
69. Both quotes in the paragraph are from Primack and von Hippel, Advice and Dissent, p. 186.
70. Ibid., pp. 183–187.
71. The quote is from Stever, In War and Peace, p. 203. See also Herken, Cardinal Choices, pp. 166–183.
72. The Nixon administration changed its plans and received funding for two ABM sites that would defend Minuteman missile launch bases in Montana and North Dakota. In 1972, the United States and the Soviet Union agreed to limit ABM deployment. Primack and von Hippel, Advice and Dissent, pp. 190–191.
73. Bruce L. R. Smith, The Advisers: Scientists in the Policy Process (Washington, DC: Brookings Institution, 1992), p. 171.
74. President Eisenhower created the position of president’s science advisor in 1957; he also created the President’s Science Advisory Council, or PSAC (there had been a council under Truman, but lower profile). The staff of the science advisor became, in 1962, the Office of Science and Technology (OST). Nixon abolished PSAC and OST in 1973 and transferred some of the responsibilities of the science advisor to the director of the National Science Foundation. Primack and von Hippel, Advice and Dissent, p. 289.
75. This was the assessment of Stever, In War and Peace, pp. 202–203. As head of the National Science Foundation, Stever witnessed firsthand the Nixon White House turn against its scientific advisors. In Stever’s assessment, the role of the presidential science advisor began to decline when McGeorge Bundy built up the National Security Council under President Kennedy (p. 204).
76. Jim Austin, “Dr. Grant Swinger,” Science, September 30, 2010, http://blogs.sciencemag.org/sciencecareers/2010/09/dr-grant-swinge.html.
77. D. S. Greenberg, “1965: Herewith, a Conversation with the Mythical Grant Swinger, Head of Breakthrough Institute,” Science, http://science.sciencemag.org/content/147/3653/29.
78. In its modern materials, the society itself disputes that this campaign was ever a major focus of its activities. “Myths vs Facts,” John Birch Society, https://www.jbs.org/about-jbs/myths-vs-facts.
79. “Barry Goldwater for President 1964 Campaign Brochure,” 4President Corporation, http://www.4president.org/brochures/goldwater1964brochure.htm.
80. Rancor here presumably means an assertive foreign policy. Richard H. Rovere, “The Campaign: Goldwater,” New Yorker, October 3, 1964, https://www.newyorker.com/magazine/1964/10/03/the-campaign-goldwater.
81. Patrick J. Buchanan, “With Nixon in ’68: The Year America Came Apart,” Wall Street Journal, April 5, 2018, https://www.wsj.com/articles/with-nixon-in-68-the-year-america-came-apart-1522937732.
82. The beginning was the 1965 “teach-in,” with panel discussions on the war held on more than 120 campuses. Moore, Disrupting Science, p. 133.
83. Ibid., pp. 133–134.
84. MIT was an epicenter for such protests. Ibid., p. 140.
85. John Sides, “How Did the Dramatic Election of 1968 Change US Politics? This New Book Explains,” Washington Post, May 25, 2016, https://www.washingtonpost.com/news/monkey-cage/wp/2016/05/25/how-did-the-1968-election-change-u-s-politics-so-dramatically-this-new-book-explains/?utm_term=.2f90228ccb9d.
86. Nell Greenfieldboyce, “‘Shrimp on a Treadmill’: The Politics of ‘Silly’ Studies,” NPR, August 23, 2011, https://www.npr.org/2011/08/23/139852035/shrimp-on-a-treadmill-the-politics-of-silly-studies.
87. Hugh Davis Graham and Nancy Diamond, The Rise of American Research Universities: Elites and Challengers in the Postwar Era (Baltimore: Johns Hopkins University Press, 1997), p. 88.
88. Alan Rohn, “How Much Did The Vietnam War Cost?,” Vietnam War, updated April 6, 2016, https://thevietnamwar.info/how-much-vietnam-war-cost/.
89. Figure 1, “Mandatory Outlays Before Offsetting Receipts as a Percentage of Total Outlays (FY1962–FY2025),” from Mindy R. Levit, D. Andrew Austin, and Jeffrey M. Stupak, Mandatory Spending Since 1962 (Washington, DC: Congressional Research Service, 2016), https://fas.org/sgp/crs/misc/RL33074.pdf.
90. And a broader decline in military spending: “Between 1968 and 1971, defense-related employment in the private sector declined by more than 1 million.” Engineering and Scientific Manpower: Recommendations for the Seventies (Washington, DC: National Academy of Engineering, 1973), https://www.nap.edu/download/20514.
91. Stever, In War and Peace, p. 202: “In constant dollars it [overall federal support for basic research] went from $1.7 billion in 1967 to $1.4 billion. Most fields—aside from some areas of biology, engineering, and oceanography—declined, with the sharpest cuts in the physical sciences, especially physics and chemistry.”
92. “The Mansfield Amendment,” National Science Board, https://www.nsf.gov/nsb/documents/2000/nsb00215/nsb50/1970/mansfield.html. The amendment was later repealed, but its intent remained influential.
93. Ibid. This amendment should not be confused with another famous Mansfield amendment, which aimed in 1971 to reduce US forces deployed in Europe.
94. Stever, In War and Peace, p. 202. Stever was director of the National Science Foundation at this time. He asked for $675 million for 1974 and reports that he received $640 million. There was a short-lived boost in energy-related research after the oil crisis of 1973: Alexis C. Madrigal, “Moondoggle: The Forgotten Opposition to the Apollo Program,” Atlantic, September 12, 2012, https://www.theatlantic.com/technology/archive/2012/09/moondoggle-the-forgotten-opposition-to-the-apollo-program/262254/.
95. The National Research Council suggested there was a potential oversupply of engineers and scientists. See Engineering and Scientific Manpower.
96. Data from Jonathan Gruber, Public Finance and Public Policy, 6th ed. (New York: Macmillan, 2019).
97. Ibid.
98. Ibid.
99. Stever, In War and Peace, discusses the historical and political context on pp. 258–261. Edward Teller pushed hard for a more modern antiballistic missile (ABM) program.
100. Reagan may not have consulted fully with his own top officials before announcing the Star Wars initiative: Caspar Weinberger, the defense secretary, was reportedly “slack-jawed hearing Reagan announce they were going to build this system.” “The same thing with the DARPA director, the same thing with the Pentagon’s chief technologist. They were just in shock.” “Inside DARPA,” NPR.
101. As a percent of GDP, from 1979 to 1988, total R&D spending went from 1.07 percent of GDP in 1979 to 1.08 percent in 1988; military R&D went from 0.48 percent to 0.67 percent, and nonmilitary fell from 0.59 percent to 0.41 percent.
102. Deborah D. Stine, The Manhattan Project, the Apollo Program, and Federal Energy Technology R&D Programs: A Comparative Analysis (Washington, DC: Congressional Research Service, 2009), https://fas.org/sgp/crs/misc/RL34645.pdf.
103. Ibid.
104. See the discussion in Stever, In War and Peace, p. 262. He chaired a committee convened by the OTA at the request of Congress. Their report was not opposed to research on the issue but was skeptical that the United States would be able to defend itself effectively against the Soviet Union in this fashion; see Office of Technology Assessment, US Congress, Ballistic Missile Defense Technologies (Washington DC: US Government Printing Office, 1985). For more on the demise of OTA, see Jathan Sadowski, “The Much-Needed and Sane Congressional Office That Gingrich Killed Off and We Need Back,” Atlantic, October 26, 2012, https://www.theatlantic.com/technology/archive/2012/10/the-much-needed-and-sane-congressional-office-that-gingrich-killed-off-and-we-need-back/264160/.
105. David Appell, “The Supercollider That Never Was,” Scientific American, October 15, 2013, https://www.scientificamerican.com/article/the-supercollider-that-never-was/.
106. “The Higgs Boson,” CERN, https://home.cern/topics/higgs-boson. Two scientists shared the 2013 Nobel Prize in physics for this discovery.
107. Athena Yenko, “World’s First Colored Human X-Ray Applies CERN Technology Used in Search of ‘God Particle,’” Tech Times, July 13, 2018, https://www.techtimes.com/articles/232239/20180713/world-s-first-colored-human-x-ray-applies-cern-technology-used-in-search-of-god-particle.htm.
108. Gruber, Public Finance and Public Policy.
109. The size of this decline depends on exactly which start and end year you use. However, there is no question that—with the exception of the short-lived stimulus period (federal R&D was 1.12 percent of GDP in 2009)—there was a real squeeze on federal R&D spending from the early 2000s to the post-Obama period.
110. Watching TV shows is not necessarily the same as supporting government spending. During the 1960s, between 45 and 60 percent of Americans thought the government was spending too much on space. Support eventually increased after the event. In 1979, only 47 percent of Americans thought it was worth landing on the moon, but by 1989, support was up to 77 percent. Madrigal, “Moondoggle.”
111. Some scientists did become more left-wing during the 1930s, generally when they struggled to find work opportunities or funding for their research. Peter J. Kuznick, Beyond the Laboratory: Scientists as Political Activists in 1930’s America (Chicago: University of Chicago Press, 1997).
112. Francie Diep, “When Did Science Become Apolitical?,” Pacific Standard, March 13, 2017, https://psmag.com/news/when-did-science-become-apolitical.
113. Erik M. Conway and Naomi Oreskes, “Why Conservatives Turned Against Science,” Chronicle of Higher Education, November 5, 2012, https://www.chronicle.com/article/The-Conservative-Turn-Against/135488. One recent poll found that only 6 percent of scientists are Republicans; Puneet Opal, “The Danger of Making Science Political,” Atlantic, January 19, 2013, https://www.theatlantic.com/health/archive/2013/01/the-danger-of-making-science-political/267327/.
114. Chris C. Mooney, The Republican War on Science (New York: Basic Books, 2005).
CHAPTER 4: THE LIMITS OF PRIVATE RESEARCH AND DEVELOPMENT
1. Bronwyn Hall, Jacques Mairesse, and Pierre Mohnen, “Measuring the Returns to R&D,” in Handbook of the Economics of Innovation, vol. 1, ed. Bronwyn Hall and Nathan Rosenberg (Amsterdam: North-Holland, 2010).
2. Steve Jobs and Steve Wozniak did actually start Apple in their family garages. Earlier, Bill Hewlett and David Packard started their company in a garage behind the rooms they were renting.
3. John Steele Gordon and Michael Maiello, “Pioneers Die Broke,” Forbes, December 23, 2012, https://www.forbes.com/forbes/2002/1223/258.html#6366c40666e6.
4. Robert E. Hall and Susan E. Woodward, “The Burden of the Nondiversifiable Risk of Entrepreneurship,” American Economic Review 100, no. 3 (2010): 1163–1194.
5. “Global Market Demand for Flat Panel Displays (FPD) from 2000 to 2020 (in Billion U.S. Dollars),” Statista, https://www.statista.com/statistics/530497/worldwide-flat-panel-display-market-demand/.
6. As of the mid-1990s, the top ten suppliers of LCDs were in Asia, and there were no US high-volume producers. Sheila Galatowitsch, “Emerging US Flat Panel Display Industry Embraces Automation,” Solid State Technology, https://electroiq.com/1996/09/emerging-us-flat-panel-display-industry-embraces-automation/. Of the top thirty-nine LCD manufacturers listed in Wikipedia, only three are US based. “List of liquid-crystal-display manufacturers,” Wikipedia, https://en.wikipedia.org/wiki/List_of_liquid-crystal-display_manufacturers.
7. Robert H. Chen, Liquid Crystal Displays: Fundamental Physics and Technology (Hoboken, NJ: John Wiley and Sons, 2011), p. 213. This section draws heavily on Chen’s book, but the outline of the story is confirmed elsewhere (e.g., see Benjamin Gross, The TVs of Tomorrow: How RCA’s Flat-Screen Dreams Led to the First LCDs [Chicago: University of Chicago Press, 2018]). Summary at Benjamin Gross, “How RCA Lost the LCD,” IEEE Spectrum, November 1, 2012, https://spectrum.ieee.org/tech-history/heroic-failures/how-rca-lost-the-lcd.
8. Chen, Liquid Crystal Displays, p. 214.
9. Ibid., p. 215.
10. Ibid., p. 216.
11. Ibid.; Joseph A. Castellano, Liquid Gold: The Story of Liquid Crystal Displays and the Creation of an Industry (Singapore: World Scientific, 2005), p. 84; Gross, The TVs of Tomorrow, p. 202.
12. Chen, Liquid Crystal Displays, p. 217.
13. Ibid., p. 256.
14. Ibid.
15. “T. Peter Brody Papers,” Philadelphia Area Consortium of Special Collections Libraries, http://dla.library.upenn.edu/cocoon/dla/pacscl/ead.html?sort=date_added_sort%20desc&showall=sort&id=PACSCL_HML_2532&.
16. Finley Colville, “Korean Capital Equipment Suppliers Target US$15 Billion PV Opportunity,” Inter PV, http://www.interpv.net/market/market_view.asp?idx=465&part_code=04.
17. Richard Florida and David Browdy, “The Invention That Got Away,” Technology Review 94, no. 6 (1991). The Japanese company Seiko had entered the US market and infringed on Westinghouse’s patents for active-matrix displays. The International Trade Commission encouraged Panelvision to bring suit. The company started this process in motion, alerting Seiko of a potential lawsuit. But the suit was ultimately viewed as not fruitful given Japan’s large lead in the technology.
18. The New York Times reported similar stories in Andrew Pollack, “US Project Hobbled by Japan’s Lead,” New York Times, December 18, 1990, http://www.nytimes.com/1990/12/18/business/us-project-hobbled-by-japan-s-lead.html?pagewanted=all. Brody tried again with a new company called Magnascreen in 1988. It received interest from larger companies but faltered when these companies were not willing to help build a factory to produce large volumes of flat-panel displays. Neither, ultimately, were venture capitalists willing to provide the funding needed to increase manufacturing to a level that could compete with Japanese companies. Government funding arrived, but it was too late to make a difference—and not enough to matter relative to the established scale of competitors. DARPA awarded Magnascreen a $7.8 million contract in 1988 and, in the budget for 1994, DARPA was given an appropriation of $75 million to spend on high-definition television displays. It was too little; estimates suggest that Japanese investment for LCD manufacturing in 1994/1995 was $4.5 billion. Rick Jurgens, “Don’t Try to Catch Up with Japanese Flat Panel Makers,” Christian Science Monitor, May 3, 1994, https://www.csmonitor.com/1994/0503/03091.html. “The Domestic Flat Panel Display Industry: Cause for Concern?” in Flat Panel Displays in Perspective (Washington, DC: US Government Printing Office, 1995), https://www.princeton.edu/~ota/disk1/1995/9520/952004.PDF.
19. Real per capita GDP was $14,203 in the first quarter of 1947 and $26,718 in the first quarter of 1973, a ratio of 1.88 (or an overall increase of 88 percent).
20. There are a number of ways to measure economic growth, but a useful metric for measuring economic growth is comparing the size of the economy in per capita real terms by taking inflation out of the equation. (An economy with twice as many goods but twice as many people isn’t richer from the perspective of any given individual.) Data for this paragraph and the next from the FRED database maintained by the St. Louis Fed. “Real Gross Domestic Product Per Capita,” FRED Economic Data, https://fred.stlouisfed.org/series/A939RX0Q048SBEA.
21. We calculate this compound average annual growth using the quarterly GDP per capita series, from Q1 1973 to Q1 2018, using data from “Real gross domestic product per capita (A939RX0Q048SBEA),” FRED Economic Data, https://fred.stlouisfed.org/graph/?id=A939RX0Q048SBEA. The equivalent growth rate from Q1 1947 to Q2 1973 was 2.46 percent per annum. Choosing slightly different starting and ending dates does not change the conclusion that there has been a slowdown in the growth of GDP per capita.
22. There is some debate about exactly how best to measure economic growth—for example, when completely new products arrive, such as smartphones. Still, the general point holds—the key to sustained economic growth is to increase productivity.
23. Patent terms available at “2701 Patent Term [R-07.2015],” US Patent and Trademark Office, https://www.uspto.gov/web/offices/pac/mpep/s2701.html.
24. “List of Edison patents,” Wikipedia, https://en.wikipedia.org/wiki/List_of_Edison_patents.
25. Note that when we use the term spillovers, we are referring to two separate phenomena: value creation and value capture. Spillovers in value creation are technical/engineering in nature and occur when a firm’s discovery creates general knowledge that other firms can use to innovate (perhaps trying to solve very different problems), thus creating their own new products. Spillovers in value capture are financial and occur when one firm’s discovery ends up yielding profits for other firms. This is an important distinction among specialists, but for ease of discussion—and because it does not affect our general point—we group the two together here.
26. Douglas Engelbart, “Workstation History and the Augmented Knowledge Workshop,” Doug Engelbart Institute, December 5, 1985, https://www.dougengelbart.org/pubs/augment-101931.html. John Markoff, What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry (New York: Penguin, 2005).
27. Jeffrey S. Young, Steve Jobs: The Journey Is the Reward (New York: Lynx Books, 1988), p. 174. Michael Hiltzik, Dealers of Lightning (Collingdale, PA: Diane Publishing Company, 1999), p. 342.
28. “Apple Computer Inc.,” Encyclopedia.com, https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/apple-computer-inc.
29. Apple didn’t fight back initially because “while who was right legally was debatable, we couldn’t afford to sue the only company developing successful software for Macintosh at a still turbulent time.” Brit Hume, “Apple Appears to Be Fighting IBM by Taking On Microsoft,” Washington Post, April 4, 1988, https://www.washingtonpost.com/archive/business/1988/04/04/apple-appears-to-be-fighting-ibm-by-taking-on-microsoft/ed882313-dd2a-4bc7-b1f5-06394ea93093/?noredirect=on&utm_term=.bff2d1e4712f.
30. John C. Dvorak, “Sorting Out Fact from Fiction in the Apple-Microsoft Lawsuit,” PC Magazine, 1988, p. 36.
31. Chris Velazco, “Microsoft Sold 450 Million Copies of Windows 7,” TechCrunch, September 13, 2011, https://techcrunch.com/2011/09/13/microsoft-sold-450-million-copies-of-windows-7/.
32. What if Xerox had never sold its Apple shares? Given the various splits in Apple stock since that date, one share of Apple stock at its IPO is equivalent to fifty-six shares today. As of February 6, 2018, the price of an Apple share is $163.03. So Xerox would be holding 5.6 million shares at $163.03 per share, or $914 million worth of Apple stock. A lot of money, but still small relative to the ultimate value of what Jobs discovered.
33. Hiltzik, Dealers of Lightning, p. 387.
34. Andy Hertzfeld, “A Rich Neighbor Named Xerox,” Folklore, November 1983, https://www.folklore.org/StoryView.py?story=A_Rich_Neighbor_Named_Xerox.txt.
35. Rick Mullin, “Cost to Develop New Pharmaceutical Drug Now Exceeds $2.5B,” Scientific American, November 24, 2014, https://www.scientificamerican.com/article/cost-to-develop-new-pharmaceutical-drug-now-exceeds-2-5b/.
36. This section summarizes the excellent discussion of early-stage research in James P. Hughes, Stephen Rees, S. Barrett Kalindjian, and Karen L. Philpott, “Principles of Early Drug Discovery,” British Journal of Pharmacology 162, no. 6 (2011), https://www.ncbi.nlm.nih.gov/pubmed/21091654.
37. P. Roy Vagelos and Louis Galambos, Medicine, Science, and Merck (Cambridge, UK: Cambridge University Press, 2004), pp. 133–151. Akira Endo, “A Historical Perspective on the Discovery of Statins,” Proceedings of the Japan Academy Series B, Physical and Biological Sciences 86, no. 5 (2010).
38. Endo, “A Historical Perspective.” Thomas P. Stossel, “The Discovery of Statins,” Cell 134, no. 6 (2008), https://www.sciencedirect.com/science/article/pii/S0092867408011276.
39. Vagelos and Galambos, Medicine, Science, and Merck.
40. In July 1982, the FDA approved Merck providing lovastatin to Roger Illingsworth (OHSU) and Scott Grundy / David Billheimer (UT SW Medical Center). Specifically, Merck did not have approval from the FDA, but approval was granted to the researchers. Conditions of these approvals allowed the researchers to see Merck’s drug master file on lovastatin. See: Scott M. Grundy, “History of Statins,” https://knightadrc.wustl.edu/Education/PDFs/Berg2012Slides/Grundy.pdf. A brief circulated by the FDA suggests that despite Merck’s withdrawal from lovastatin research, the FDA was still very interested in developing statins. See Suzanne White Junod, “Statins: A Success Story Involving FDA, Academia and Industry,” Update, March–April 2007, https://www.fda.gov/downloads/AboutFDA/History/ProductRegulation/UCM593497.pdf.
41. Endo, “A Historical Perspective.”
42. “Merck, Bristol-Myers Want to Sell Cholesterol Medicines Over the Counter,” Courier, December 11, 2004, https://wcfcourier.com/business/local/merck-bristol-myers-want-to-sell-cholesterol-medicines-over-the/article_3681ea5a-58d7-5558-97f7-d8446b950e50.html.
43. Endo, “A Historical Perspective.”
44. David C. Grabowski, Darius N. Lakdawalla, Dana P. Goldman, Michael Eber, Larry Z. Liu, Tamer Abdelgawad, Andreas Kuznik, Michael E. Chernew, and Tomas Philipson, “The Large Social Value Resulting from Use of Statins Warrants Steps to Improve Adherence and Broaden Treatment,” Health Affairs 31, no. 1 (2012), https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2011.1120.
45. Stossel, “The Discovery of Statins.”
46. This paragraph summarizes the results from Eric Budish, Benjamin N. Roin, and Heidi Williams, “Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials,” American Economic Review 105, no. 7 (2015): pp. 2044–2085.
47. Ibid. In particular, for the 2003 cohort of US cancer patients, the value of lost life was $89 billion. Taking the present value over all future cohorts yields the figure of $2.2 trillion.
48. Nicole Goodkind, “Pfizer Ends Funding for Alzheimer’s, Parkinson’s Research,” Newsweek, January 13, 2018, https://www.newsweek.com/alzheimers-parkinsons-tax-cuts-pfizer-research-780163.
49. “Venture Capital: Sand Hill Road Rules the Valley,” Bloomberg, December 4, 2014, https://www.bloomberg.com/news/articles/2014-12-04/venture-capital-sand-hill-road-rules-silicon-valley.
50. Paul Gompers, “The Rise and Fall of Venture Capital,” Business and Economic History 23, no. 2 (1994), https://www.thebhc.org/sites/default/files/beh/BEHprint/v023n2/p0001-p0026.pdf.
51. Steven Kaplan and Josh Lerner, “It Ain’t Broke: The Past, Present, and Future of Venture Capital,” Journal of Applied Corporate Finance 22, no. 2 (2010).
52. Will Gornall and Ilya A. Strebulaev, “The Economic Impact of Venture Capital: Evidence from Public Companies” (research paper no. 15-55, Stanford Graduate School of Business Stanford, CA, 2015), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2681841.
53. Shikhar Ghosh and Ramana Nanda, “Venture Capital Investment in the Clean Energy Sector” (working paper #11-020, Harvard Business School, Boston, MA, 2010), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1669445.
54. Kaplan and Lerner, “It Ain’t Broke.”
55. Bryan Borzykowski, “US Venture Capital Investments Down, But Global Inflows Rise,” RocketSpace, February 6, 2017, https://www.rocketspace.com/tech-startups/united-states-venture-capital-investments-down.
56. Data from FRED shows gross private domestic investment of $3,057 billion in 2016. See “Gross Private Domestic Investment,” FRED Economic Data, https://fred.stlouisfed.org/graph/?id=GPDIA.
57. This discussion summarizes the material in Hall and Woodward, “Burden of the Nondiversifiable Risk.”
58. Hall and Woodward find that 68 percent of start-ups yield no meaningful value to entrepreneurs and that a “large fraction of the total value to entrepreneurs arises from the tiny fraction of startups that deliver hundreds of millions of dollars of exit value to the entrepreneurs.” A report from the Wall Street Journal in 2012 finds that three out of four start-ups fail. Deborah Gage, “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Wall Street Journal, September 20, 2012, https://www.wsj.com/articles/SB10000872396390443720204578004980476429190.
59. Hall and Woodward, “Burden of the Nondiversifiable Risk.”
60. Venture funders will invest in stages, with relatively small investments initially, but then in ever-increasing investments as they learn more from ongoing company performance. Ramana Nanda, Ken Younge, and Lee Fleming, “Innovation and Entrepreneurship in Renewable Energy,” in The Changing Frontier: Rethinking Science and Innovation Policy, ed. Adam Jaffe and Benjamin Jones (Chicago: University of Chicago Press), 2015.
61. Relative to companies selected in the first year of a fund, companies that are selected in year four or five are 10 percent older, are 5 percent more likely to be at a later stage of their development, and have received 6 percent more rounds of financing at the time of the investment. For companies that are selected beyond that year, these differences reach 21 percent, 12 percent, and 19 percent. Jean-Noël Barrot, “Investor Horizon and the Life Cycle of Innovative Firms: Evidence from Venture Capital,” Management Science 63, no. 9 (2016).
62. Nanda, Younge, and Fleming, “Innovation and Entrepreneurship.”
63. Ibid.
64. Ramana Nanda and Matthew Rhodes-Kropf, “Investment Cycles and Startup Innovation,” Journal of Financial Economics 110, no. 2 (2013).
65. “We turn next to showing how this fall in the cost of starting businesses impacted the way in which VCs managed their portfolios. We show that in sectors impacted by the technological shock, VCs responded by providing a little funding and limited governance to an increased number of start-ups, which they were more likely to abandon after the initial round of funding. The number of initial investments made per year by VCs in treated sectors nearly doubled from the pre- to the post-period, without a commensurate increase in follow-on investments, and VCs making initial investments in treated sectors were less likely to take a board seat following the technological shock.” Michael Ewens, Ramana Nanda, and Matthew Rhodes-Kropf, “Cost of Experimentation and the Evolution of Venture Capital,” Journal of Financial Economics 128, no. 3 (2018).
66. Ghosh and Nanda, “Venture Capital Investment.”
67. “BU-103: Global Battery Markets,” Battery University, http://batteryuniversity.com/index.php/learn/article/global_battery_markets.
68. J. V. Chamary, “Why Are Samsung’s Galaxy Note 7 Phones Exploding?,” Forbes, September 4, 2016, https://www.forbes.com/sites/jvchamary/2016/09/04/samsung-note7-battery/.
69. “A Massachusetts Green Energy Company Heads for China,” WBUR 90.9, October 19, 2011, http://www.wbur.org/hereandnow/2011/10/19/energy-china-battery.
70. GSR is not explicitly a government fund, but it is well-connected enough that it can help local governments arrange subsidies packages to attract companies. “When it enters into a deal, GSR does more than invest its own money. It taps its contacts in government in China and at other investment entities to pile on their money too.” Jeffrey Ball, “Silicon Valley’s New Power Player: China,” Fortune, December 4, 2015, http://fortune.com/china-clean-tech-silicon-valley/.
71. Eric Wesoff, “Boston-Power Aims to Rival Tesla with Gigawatt Battery Factories,” GTM, January 8, 2015, https://www.greentechmedia.com/articles/read/boston-power-aims-to-rival-tesla-with-gigawatt-battery-factories.
72. Boston Power, “Local Chinese Governments Give Financial Support to Leading US Electric Vehicle Battery Company,” PR Newswire, December 22, 2014, https://www.prnewswire.com/news-releases/local-chinese-governments-give-financial-support-to-leading-us-electric-vehicle-battery-company-300013108.html.
73. Stephen Merrill, Righting the Research Imbalance (Durham, NC: Duke University Center for Innovation Policy, 2018), https://law.duke.edu/sites/default/files/centers/cip/CIP-White-Paper_Righting-the-Research-Imbalance.pdf.
74. Alex Kacik, “Drug Prices Rise as Pharma Prices Soar,” Modern Healthcare, December 28, 2017, http://www.modernhealthcare.com/article/20171228/NEWS/171229930.
75. Drug Industry: Profits, Research and Development Spending, and Merger and Acquisition Deals (Washington, DC: US Government Accountability Office 2017), https://www.gao.gov/assets/690/688472.pdf.
76. Ibid.
77. Rates of Return to Investment in Science and Innovation (London: Frontier Economics, 2014), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/333006/bis-14-990-rates-of-return-to-investment-in-science-and-innovation-revised-final-report.pdf. For other capital investments, the long run rate of return is on the order of 9 percent. Sarah Osborne and Bonnie A. Retus, “Returns for Domestic Nonfinancial Business,” Survey of Current Business 96, no. 12 (2016), https://bea.gov/scb/pdf/2016/12%20December/1216_returns_for_domestic_nonfinancial_business.pdf.
78. “Manufacturing Challenges for Cell and Gene Therapies,” Cell and Gene Therapy Catapult, February 21, 2017, https://ct.catapult.org.uk/news-media/general-news/manufacturing-challenges-cell-and-gene-therapies.
79. Ralf Otto, Alberto Santagostino, and Ulf Schrader, “Rapid Growth in Biopharma: Challenges and Opportunities,” McKinsey & Company, December 2014, https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/rapid-growth-in-biopharma. This study reports manufacturing setup costs of $200 million–$500 million. These costs have been falling recently, with Amgen’s new state-of-the-art facility in Rhode Island expected to cost about $200 million: “Amgen Breaks Ground on Next-Generation Biomanufacturing Plant in Rhode Island,” Amgen, July 31, 2018, https://www.amgen.com/media/news-releases/2018/07/amgen-breaks-ground-on-next-generation-biomanufacturing-plant-in-rhode-island/.
80. Peter Olagunju, Rodney Rietze, and Dieter Hauwaerts, “Meeting the Cell Therapy Cost Challenge with Automation,” Invetech, February 21, 2017, https://www.invetechgroup.com/insights/2017/02/meeting-the-cell-therapy-cost-challenge-with-automation/. Provenge (sipuleucel-T) is a prescription medicine that is used to treat certain patients with advanced prostate cancer.
81. Ronald Rader, “Cell and Gene Therapies: Industry Faces Potential Capacity Shortages,” Genetic Engineering and Biotechnology News 37, no. 20 (2017), https://www.genengnews.com/gen-articles/cell-and-gene-therapies-industry-faces-potential-capacity-shortages/6203.
82. Gina Kolata, “Gene Therapy Hits a Peculiar Roadblock: A Virus Shortage,” New York Times, November 27, 2017, https://www.nytimes.com/2017/11/27/health/gene-therapy-virus-shortage.html.
83. Rader, “Cell and Gene Therapies.”
84. Ibid.
85. Lev Gervolin and Walter Colasante, “Building New Business Models to Support High-Cost Cell and Gene Therapies,” Pharma Letter, June 13, 2018, https://www.thepharmaletter.com/article/building-new-business-models-to-support-high-cost-cell-and-gene-therapies.
86. For an expanded analysis focused on one type of manufacturing, see William B. Bonvillian, “Advanced Manufacturing: A New Policy Challenge,” Annals of Science and Technology Policy 1, no. 1 (2017): 1–131.
87. Ibid. Richard P. Harrison, Steven Ruck, Qasim A. Rafiq, and Nicholas Medcalf, “Decentralised Manufacturing of Cell and Gene Therapy Products: Learning from Other Healthcare Sectors,” Biotechnology Advances 36, no. 6 (2018).
88. Nicholas Bloom, Mark Schankerman, and John Van Reenen, “Identifying Technology Spillovers and Product Market Rivalry,” Econometrica 81, no. 4 (2013): 1347–1393.
89. We continue to combine two economic concepts. Research on the social rate of return refers to the technical aspect of value creation—the fact that the domain knowledge generated by one firm can be used by other firms to innovate. The problem for Xerox and others under discussion here was one of value capture (i.e., they were not the ones who received the enormous returns from their new inventions). In either case, the problem that arises is the same: since firms know that they will not experience the full return from their investments, they underinvest relative to what would be optimal from a broader society-wide perspective.
90. Merrill, Righting the Research Imbalance.
91. Ashish Arora, Sharon Belenzon, and Lia Sheer, “Back to Basics: Why Do Firms Invest in Research?” (working paper #23187, National Bureau of Economic Research, Cambridge, MA, 2017).
92. Arno Penzias and Robert Wilson, “The Large Horn Antenna and the Discovery of Cosmic Microwave Background Radiation,” APS Physics, https://www.aps.org/programs/outreach/history/historicsites/penziaswilson.cfm. “Scanning Tunneling Microscope,” IBM, http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/microscope/.
93. “Congressional Briefing,” Duke Law, https://law.duke.edu/innovationpolicy/congressionalbriefing/.
94. Ashish Arora, Sharon Belenzon, and Andrea Patacconi, “The Decline of Science in Corporate R&D,” Strategic Management Journal 39, no. 1 (2018).
95. Arora, Belenzon, and Sheer, “Back to Basics.”
96. Arora, Belenzon, and Patacconi, “The Decline of Science.”
97. “8 Jules Verne Inventions That Came True (Pictures),” National Geographic, February 8, 2011, https://news.nationalgeographic.com/news/2011/02/pictures/110208-jules-verne-google-doodle-183rd-birthday-anniversary/.
98. The points about transistors and the increasing cost of productivity improvements are drawn from Nicholas Bloom, Charles Jones, John Van Reenen, and Michael Webb, “Are Ideas Getting Harder to Find?” (working paper #23782, National Bureau of Economic Research, Cambridge, MA, September 2017).
99. Tom Simonite, “Moore’s Law Is Dead. Now What?,” MIT Technology Review, May 13, 2016, https://www.technologyreview.com/s/601441/moores-law-is-dead-now-what/. “Moore’s Law is named after Intel cofounder Gordon Moore. He observed in 1965 that transistors were shrinking so fast that every year twice as many could fit onto a chip, and in 1975 adjusted the pace to a doubling every two years.”
CHAPTER 5: PUBLIC R&D
1. From interview on NOVA: Cracking the Code of Life, May 23, 1998.
2. “Deoxyribonucleic Acid (DNA),” National Human Genome Research Institute, June 16, 2015, https://www.genome.gov/25520880/.
3. Besides the DNA located in the nucleus, humans and other complex organisms also have a small amount of DNA in cell structures known as mitochondria. Mitochondria generate the energy the cell needs to function properly.
4. “Deoxyribonucleic Acid (DNA),” National Human Genome Research Institute.
5. “What Is DNA?,” US National Library of Medicine, September 4, 2018, https://ghr.nlm.nih.gov/primer/basics/dna.
6. “DNA Sequencing,” National Human Genome Research Institute, December 18, 2015, https://www.genome.gov/10001177/dna-sequencing-fact-sheet/.
7. “About the Laboratory of Molecular Biology,” Medical Research Council Laboratory of Molecular Biology, http://www2.mrc-lmb.cam.ac.uk/about-lmb/.
8. Misha Gajewski, “Everything You Really Need to Know About DNA Sequencing,” Cancer Research UK, April 25, 2016, https://scienceblog.cancerresearchuk.org/2016/04/25/everything-you-really-need-to-know-about-dna-sequencing/.
9. Ibid.
10. Leroy E. Hood, Michael W. Hunkapiller, and Lloyd M. Smith, “Automated DNA Sequencing and Analysis of the Human Genome,” Genomics 1, no. 3 (1987), https://ac.els-cdn.com/0888754387900462/1-s2.0-0888754387900462-main.pdf?_tid=b131add0-f579-11e7-8189-00000aab0f02&acdnat=1515529047_30f88c264b77e65317f652c6a58df911.
11. Gajewski, “Everything You Really Need.”
12. Robert Kanigel, “The Genome Project,” New York Times, December 13, 1987, https://www.nytimes.com/1987/12/13/magazine/the-genome-projectz.html.
13. Kevin Davies, “Kevin Ulmer—The Sisyphus of Sequencing,” Bio IT World, September 28, 2010, http://www.bio-itworld.com/2010/issues/sept-oct/ulmer.html.
14. HGP first appeared in Reagan’s 1988 budget approved by Congress. One of the main advocates for HGP’s inclusion in the budget was Senator Peter Domenici, a Republican from New Mexico. Domenici, who apparently described himself as a “sucker for big science,” advocated for the Human Genome Project—for example, by introducing a bill in July 1987 to create a federal advisory board and government-university-industry consortium for mapping and sequencing the human genome. Domenici chaired the Senate Committee on Energy and Natural Resources and the Budget Committee, both of which were highly important in setting the Department of Energy budget. Charles DeLisi, director of the DOE’s Health and Environmental Research Programs from 1985 to 1987, was the main figure to propose and defend his plans for the HGP in front of Congress. In 2001, DeLisi received the Presidential Citizens Medal for his role in launching the project. Mark Oswald, “Team Was First for Sen. Domenici,” Albuquerque Journal, September 16, 2017, https://www.abqjournal.com/1064853/team-was-first-for-sen-pete-domenici.html. Jeffrey Mervis, “Human Genome Bill Sponsor Pulls Back, Shifts Tactics,” Scientist, August 10, 1987, https://www.the-scientist.com/news/human-genome-bill-sponsor-pulls-back-shifts-tactics-63548.
15. The project was very computationally intensive, and the national laboratories of the Department of Energy had the computing resources available. The NCHGR became the National Human Genome Research Institute (NHGRI) in 1997 and was part of the NIH.
16. Gajewski, “Everything You Really Need.”
17. The sequencing process can be broken down into several steps. To meet the HGP’s challenging goals, scientists were able to improve current technologies and develop new technologies, especially through automation. For example, the “front end” molecular biology step where samples are prepped has benefited from automated robotic samples. The “back end” computer analysis step, which involves designing software packages to analyze results, must also be flexible enough to adapt to different approaches taken in preceding steps. So while all these steps are being individually improved, the overall genome sequencing progress may not appear that impressive. But put all those improved technologies all together and the entire sequencing process has become much more efficient than it once was. Michael C. Giddings, Jessica Severin, Michael Westphall, Jiazhen Wu, and Lloyd M. Smith, “A Software System for Data Analysis in Automated DNA Sequencing,” Genome Research 8 (1998): 644–665, https://genome.cshlp.org/content/8/6/644.long.
18. Katerina Sideri, Bioproperty, Biomedicine and Deliberative Governance (New York: Routledge, 2016), p. 114.
19. A truce between the NIH and Celera was negotiated in 2000, and in February 2001, both the NIH and Celera published draft maps of the genome. For the next two years, Celera was able to protect the genes they had sequenced—but that the NIH had not yet sequenced—with a form of intellectual property. But by 2003, the entire map had been made public, so Celera’s intellectual property effectively expired. Celera’s intellectual property rights during the 2001–2003 period slowed down follow-on scientific research and product development relative to having the data freely available in the public domain. Specifically, there was significantly less development of downstream scientific research and medical product development for genes that were held with Celera’s intellectual property, relative to genes sequenced by the public effort in the same year. The reduction in subsequent scientific research and product development was on the order of 20–30 percent. Heidi Williams, “Intellectual Property Rights and Innovation: Evidence from the Human Genome,” Journal of Political Economy 121, no. 1 (2013).
20. Ilse R. Wiechers, Noah C. Perin, and Robert Cook-Deegan, “The Emergence of Commercial Genomics: Analysis of the Rise of a Biotechnology Subsector During the Human Genome Project, 1990 to 2004,” Genome Medicine 5, no. 9 (2013), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3971346/.
21. The Impact of Genomics on the U.S. Economy (Columbus, OH: Battelle Memorial Institute, 2013), https://web.ornl.gov/sci/techresources/Human_Genome/publicat/2013BattelleReportImpact-of-Genomics-on-the-US-Economy.pdf.
22. Ibid.
23. We recognize the controversy over genetic modification of our food supply. Indeed, this type of issue further heightens the importance of being the innovator in an area so that the United States can help set the rules of the road. We discuss this further in Chapter 8.
24. Simon Tripp and Martin Grueber, Economic Impact of the Human Genome Project (Columbus, OH: Battelle Memorial Institute, 2011), https://www.battelle.org/docs/default-source/misc/battelle-2011-misc-economic-impact-human-genome-project.pdf.
25. Full disclosure for this section: one of us (Jonathan) has had NIH support for much of his career!
26. Hamilton Moses, David H. M. Matheson, Sarah Cairns-Smith, Benjamin P. George, Chase Palisch, and E. Ray Dorsey, “The Anatomy of Medical Research: US and International Comparisons,” Journal of the American Medical Association 313, no. 2 (2015), https://www.ncbi.nlm.nih.gov/pubmed/25585329.
27. “What We Do: Budget,” National Institutes of Health, April 11, 2018, https://www.nih.gov/about-nih/what-we-do/budget.
28. Awarded annually since 1945, the Lasker Awards recognize major contributions to medical science or individuals who have performed public service on behalf of medicine.
29. Pierre Azoulay, Joshua S. Graff Zivin, Danielle Li, and Bhaven N. Sampat, “Public R&D Investments and Private Sector Patenting: Evidence from NIH Funding Rules,” Review of Economic Studies 86, no. 1 (2019): 117–152.
30. Ibid.
31. Andrew A. Toole, “Does Public Scientific Research Complement Private Investment in Research and Development in the Pharmaceutical Industry?,” Journal of Law and Economics 50, no. 1 (2007).
32. “Impact of NIH Research: Our Society,” National Institutes of Health, May 1, 2018, https://www.nih.gov/about-nih/what-we-do/impact-nih-research/our-society.
33. The Framingham Heart Study: Laying the Foundation for Preventative Health Care (Bethesda, MD: National Institutes of Health, n.d.), https://www.nih.gov/sites/default/files/about-nih/impact/framingham-heart-study.pdf.
34. “Vaccine Types,” US Department of Health & Human Services, https://www.vaccines.gov/basics/types/index.html.
35. Childhood Hib Vaccines: Nearly Eliminating the Threat of Bacterial Meningitis (Bethesda, MD: National Institutes of Health, n.d.), https://www.nih.gov/sites/default/files/about-nih/impact/childhood-hib-vaccines-case-study.pdf.
36. “Impact of NIH Research: Our Knowledge,” National Institutes of Health, May 8, 2018, https://www.nih.gov/about-nih/what-we-do/impact-nih-research/our-knowledge.
37. The full impact of the JAK research remains at the research frontier: at the start of 2016, a dozen other compounds that target JAKs were in clinical trials for treatment of various autoimmune diseases. Understanding Immune Cells and Inflammation: Opening New Treatment Avenues for Rheumatoid Arthritis and Other Conditions (Bethesda, MD: National Institutes of Health, n.d.), https://www.nih.gov/sites/default/files/about-nih/impact/immune-cells-inflammation-case-study.pdf.
38. James Barron, “High Cost of Military Parts,” New York Times, September 1, 1983, https://www.nytimes.com/1983/09/01/business/high-cost-of-military-parts.html.
39. Enrico Moretti, Claudia Steinwender, and John Van Reenen, “The Intellectual Spoils of War?: Defense R&D, Productivity and Spillovers” (working paper, 2016), https://eml.berkeley.edu/~moretti/military.pdf.
40. That’s 2 percent, not two percentage points (i.e., from 2 percent per year to 2.04 percent per year).
41. Peter Warren Singer, Wired for War: The Robotics Revolution and Conflict in the Twenty-First Century (New York: Penguin, 2009), pp. 21–29.
42. Brian Heater, “How Baby Dolls, Mine Sweepers and Mars Rovers Led iRobot to the Roomba,” TechCrunch, March 8, 2017, https://techcrunch.com/2017/03/08/colin-angle-interview/.
43. Craig Smith, “10 Interesting iRobot Statistics and Facts,” DMR, September 7, 2018, https://expandedramblings.com/index.php/irobot-statistics-facts/.
44. Aditya Kaul, “iRobot Doubles Down on Consumer Robots by Selling Military Unit,” Tractica, February 11, 2016, https://www.tractica.com/automation-robotics/irobot-doubles-down-on-consumer-robots-by-selling-military-unit/.
45. “iRobot Corporation,” United States Securities and Exchange Commission, February 16, 2018, https://www.sec.gov/Archives/edgar/data/1159167/000115916718000004/irbt-12302017x10k.htm.
46. “iRobot Reports Strong Second-Quarter Financial Results,” PR Newswire, July 25, 2017, https://www.prnewswire.com/news-releases/irobot-reports-strong-second-quarter-financial-results-300494007.html.
47. Darrell Etherington, “iRobot Says 20 Percent of the World’s Vacuums Are Now Robots,” TechCrunch, November 7, 2016, https://techcrunch.com/2016/11/07/irobot-says-20-percent-of-the-worlds-vacuums-are-now-robots/.
48. Description of the SBIR program comes from Josh Lerner, “The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program,” Journal of Business 72, no. 3 (1999), and Sabrina Howell, “Financing Innovation: Evidence from R&D Grants,” American Economic Review 107, no. 4 (2017).
49. Mariana Mazzucato, “Innovation, the State and Patient Capital,” Political Quarterly 86, no. S1 (2015): 98–118.
50. Matthew Keller and Fred Block, “Explaining the Transformation in the US Innovation System: The Impact of a Small Government Program,” Socio-Economic Review 11 (2013): 629–656.
51. “Symantec Recognized By Small Business Administration,” SBIR, March 3, 2011, https://www.sbir.gov/success-story/symantec-recognized-small-business-administration. Employment numbers for 2017 are from the 2017 Corporate Responsibility Report (Mountain View, CA: Symantec, 2017), https://www.symantec.com/content/dam/symantec/docs/reports/2017-corporate-responsibility-report-en.pdf, p.13.
52. “Qualcomm Inducted into SBIR Hall of Fame,” SBIR, March 15, 2011, https://www.sbir.gov/success-story/qualcomm-inducted-sbir-hall-fame. “The Small Business Technology Council” (white paper, Small Business Technology Council, Washington, DC, January 19, 2017), http://sbtc.org/wp-content/uploads/2017/01/SBTC-SBIR-White-Paper-2017.pdf. SBIR/STTR Program (Washington, DC: US Department of the Navy, n.d.), https://www.navysbir.com/docs/Navy-SBIR-Economic_Impact.pdf. “QUALCOMM Incorporated,” United States Securities and Exchange Commission, November 1, 2017, https://www.sec.gov/Archives/edgar/data/804328/000123445217000190/qcom10-k2017.htm. Estimate of US employment is based on “fifty-two percent of its workforce is based in the U.S.,” from Mike Freeman, “Qualcomm Sheds 1,231 San Diego Workers in Latest Restructuring,” San Diego Union-Tribune, April 19, 2018, https://www.sandiegouniontribune.com/business/technology/sd-fi-layoff-number-20180419-story.html.
53. “Statement by Dr. Irwin Mark Jacobs Prepared for the Hearing on Reauthorization of the SBIR and STTR Programs,” United States Senate, February 17,2011, https://www.sbc.senate.gov/public/_cache/files/4/8/4878f6aa-114e-495a-9fea-03ab2a21cf9c/78A77C01862D1DAD0B9A5CDCF5DEB9B4.testimony-jacobs.pdf.
54. The SBIR is not without its critics, many of whom focus on the fact that the SBIR doesn’t do enough to facilitate the pathway from R&D to commercialization and instead creates SBIR “mills” that “live off SBIR awards.” On the flip side, there are some scientists who criticize SBIR because they fear SBIR commercialization-focused funds will be expanded at the expense of funds for basic science. National Research Council (US) Committee for Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program (Washington, DC: National Academies Press, 2008). Eugenie Samuel Reich, “US Research Firms Put Under Pressure to Sell,” Nature, July 9, 2013, https://www.nature.com/news/us-research-firms-put-under-pressure-to-sell-1.13354. Jeffrey Mervis, “U.S. Research Groups Going to War Again over Small Business Funding,” Science, May 18, 2016, http://www.sciencemag.org/news/2016/05/us-research-groups-going-war-again-over-small-business-funding.
55. Lerner, “The Government as Venture Capitalist.” Scott Wallsten’s study from this era does not support the positive effects documented by Lerner; see Scott Wallsten, “The Effects of Government-Industry R&D Programs on Private R&D: The Case of the Small Business Innovation Research Program,” RAND Journal of Economics 31, no. 1 (2000): 82–100.
56. Sabrina Howell, “Financing Innovation: Evidence from R&D Grants,” American Economic Review 107, no. 4 (2017): 1136–1164. On the other hand, those firms that continue on to phase II are largely those who were not able to obtain VC financing and were therefore weaker candidates so that there was little effect on phase II. This suggests that the main effect of the SBIR grants is through promoting prototyping—developing proofs of concept that can be used to attract further financing.
57. “Visionary David Walt,” Tufts Tech Transfer, http://techtransfer.tufts.edu/visionary-david-walt/.
58. “Illumina Inducted into U.S. SBA Hall of Fame,” Illumina, January 23, 2017, https://www.illumina.com/company/news-center/feature-articles/illumina-inducted-into-u-s—small-business-administration-hall-o.html.
59. “Case Studies,” Appendix D, in An Assessment of the SBIR Program at the National Institutes of Health (Washington, DC: National Academies Press, 2009).
60. “#1250 Illumina,” Forbes, June 2018, https://www.forbes.com/companies/illumina/. “Illumina Fact Sheet,” Illumina, https://www.illumina.com/company/about-us/fact-sheet.html. US employees estimate from “Illumina,” Great Place to Work, http://reviews.greatplacetowork.com/illumina-inc (a source that is hard to verify independently).
61. National Institute of Standards and Technology, https://www.nist.gov.
62. Ibid.
63. Daniel Smith, Maryann Feldman, and Gary Anderson, “The Longer Term Effects of Federal Subsidies on Firm Survival: Evidence from the Advanced Technology Program,” Journal of Technology Transfer 43, no. 3 (2018): 593–614.
64. Ibid.
65. A newer program of public subsidization of R&D is the National Network for Manufacturing Innovation program, or Manufacturing USA, introduced under the Obama administration in 2014. This initiative aims to promote private-public partnerships focused on manufacturing innovation and engaging universities, as well as to coordinate federal resources and programs to overcome barriers to scaling up new technologies and products. The federal government provides financial resources, which are matched by private industry in a collaborative arrangement with: universities; federal laboratories; and federal, state, and local governments. Federal investments are modest, at around $100 million nationally, with about 2:1 matching from the private sector. As of 2016, there were eight established localities for the program, with 753 members. This program is too new to have been evaluated, but its budget is also under attack, with a proposed cut this year from $25 million to $15 million.
66. “Chartbook of Social Inequality: Real Mean and Median Income, Families and Individuals, 1947–2012, and Households, 1967–2012,” Russell Sage Foundation, https://www.russellsage.org/sites/all/files/chartbook/Income%20and%20Earnings.pdf. Data updated to 2016 dollars using CPI.
67. “Historical Income Tables: Families,” United States Census Bureau, August 10, 2017, https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-families.html.
68. “Chartbook of Social Inequality,” Russell Sage Foundation. Data updated to 2016 dollars using CPI.
69. “Historical Income Tables: Families,” United States Census Bureau.
70. “Chartbook of Social Inequality,” Russell Sage Foundation. Data updated to 2016 dollars using CPI.
71. Emmanuel Saez, “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2015 Preliminary Estimates),” Econometrics Laboratory, University of California–Berkeley, June 30, 2016, https://eml.berkeley.edu/~saez/saez-UStopincomes-2015.pdf.
72. Richard Hornbeck and Enrico Moretti, “Who Gains When a City Has a Productivity Spurt?” (working paper #24661, National Bureau of Economic Research, Cambridge, MA, September 2018).
73. As one industry source states, “As the industry matures and begins to commercialize products, the highest growth in skills and knowledge demand will not be in this highly expert group but increasingly in competent technicians or operators capable of reliably running routine manufacturing operations.” “Outputs from the Advanced Therapies Manufacturing Task-force (People, Skills and Training sub-team),” UK Bioindustry Association, https://www.bioindustry.org/uploads/assets/uploaded/dbf22953-f5c0-40d8-885744ccff307348.pdf.
74. Paul Lewis, “How to Create Skills for an Emerging Industry: The Case of Technician Skills and Training in Cell Therapy,” Social Science Research Network, January 2017; http://www.gatsby.org.uk/uploads/education/reports/pdf/paul-lewis-cell-therapy-jan2017.pdf.
75. “Medical and Clinical Laboratory Technologists and Technicians,” Bureau of Labor Statistics, June 1, 2018, https://www.bls.gov/ooh/healthcare/medical-and-clinical-laboratory-technologists-and-technicians.htm.
76. Douglas Woodward, Octavio Figueiredo, and Paulo Guimaraes, “Beyond the Silicon Valley: University R&D and High-Technology Location,” Journal of Urban Economics vol. 60 (2006); Bruce A. Kirchhoff, Scott L. Newbert, Iftekhar Hasan, and Catherine Armington, “The Influence of University R & D Expenditures on New Business Formations and Employment Growth,” Entrepreneurship Theory and Practice 31, no. 4 (2007).
77. It is difficult to say whether this reflected more patentable research or just a stronger effort by universities to patent existing research, but at least one study suggests that Bayh-Dole led to higher-quality innovation. Naomi Hausman, “University Innovation, Local Economic Growth, and Entrepreneurship” (working paper #CES-WP-12-10, US Census Bureau Center for Economic Studies, Suitland, MD, 2012).
78. In particular, we estimate a model of change in the natural logarithm of the ratio of employment to working-age population on the change in the natural logarithm of the ratio of university research funding to working-age population. The regression is weighted by area population.
79. We cannot, of course, prove that the university research funding was heading to places that would not have grown for other reasons, but we can include county-specific trends in the model to show that these were not simply places that were growing more quickly even absent the university funding.
80. Adam Jaffe and Trinh Le, “The Impact of R&D Subsidization on Innovation: A Study of New Zealand Firms” (working paper #21479, National Bureau of Economic Research, Cambridge, MA, August 2015).
81. Elias Einio, “R&D Subsidies and Company Performance: Evidence from Geographic Variation in Government Funding Based on the ERDF Population-Density Rule,” Review of Economics and Statistics 96 no. 4 (2014): 710–728. Hannu Piekkola, “Public Funding of R&D and Growth: Firm-Level Evidence from Finland,” Economics of Innovation and New Technology 16, no. 3 (2007): 195–210.
82. Adam B. Jaffe, Manuel Trajtenberg, and Rebecca Henderson, “Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,” Quarterly Journal of Economics 108, no. 3 (1993). Neil Bania, Lindsay N. Calkins, and Douglas R. Dalenberg, “The Effects of Regional Science and Technology Policy on the Geographic Distribution of Industrial R&D Laboratories,” Journal of Regional Science 32, no. 2 (1992). Thomas Döring and Jan Schnellenbach, “What Do We Know About Geographical Knowledge Spillovers and Regional Growth?: A Survey of the Literature,” Regional Studies 40, no. 3 (2006).
83. Jung Won Sonn and Michael Storper, “The Increasing Importance of Geographical Proximity in Knowledge Production: An Analysis of US Patent Citations, 1975–1997,” Environment and Planning A: Economy and Space 40, no. 5 (2008).
84. Sharon Belenzon and Mark Schankerman, “Spreading the Word: Geography, Policy, and Knowledge Spillovers,” Review of Economics and Statistics 95, no. 3 (2013).
85. Lynne Zucker, Michael Darby, and Marilynn Brewer, “Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises,” American Economic Review 88, no. 1 (1998): 290–306.
86. Woodward, Figueiredo, and Guimaraes, “Beyond the Silicon Valley.” Recent confirmation of this effect comes from a study that shows that the introduction of low-cost airline routes increased collaboration among chemists at either end of the route. Christian Catalini, Christian Fons-Rosen, and Patrick Gaule, “How Do Transportation Costs Shape Collaboration?” (working paper #24780, National Bureau of Economic Research, Cambridge, MA, 2018).
87. Gil Avnimelech and Maryann Feldman, “The Stickiness of University Spin-Offs: A Study of Formal and Informal Spin-Offs and Their Location from 124 US Academic Institutions,” International Journal of Technology Management 68, nos. 1–2 (2015): 122–149.
88. Christian Helmers and Henry G. Overman, “My Precious! The Location and Diffusion of Scientific Research: Evidence from the Synchrotron Diamond Light Source,” Economic Journal 127, no. 604 (2017), http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12387/full.
89. D’Angelo Gore, “Obama’s Solyndra Problem,” FactCheck.org, October 7, 2011, https://www.factcheck.org/wp-content/cache/wp-rocket/www.factcheck.org/2011/10/obamas-solyndra-problem/index.html_gzip.
90. Jeff Brady, “After Solyndra Loss, U.S. Energy Loan Program Turning a Profit,” NPR, November 13, 2014, https://www.npr.org/2014/11/13/363572151/after-solyndra-loss-u-s-energy-loan-program-turning-a-profit. Steve Hargreaves, “Obama’s Alternative Energy Bankruptcies,” CNN Money, October 22, 2012, https://money.cnn.com/2012/10/22/news/economy/obama-energy-bankruptcies/index.html.
91. “NRG Energy and MidAmerican Solar Complete Agua Caliente, the World’s Largest Fully-Operational Solar Photovoltaic Facility,” Business Wire, April 29, 2014, https://www.businesswire.com/news/home/20140429005803/en/NRG-Energy-MidAmerican-Solar-Complete-Agua-Caliente.
92. Agua Caliente Solar Project (Carlsbad, CA: NRG Energy, 2011), http://assets.fiercemarkets.net/public/sites/energy/reports/aguasolarreport.pdf.
93. “FACT SHEET: The Recovery Act Made the Largest Single Investment in Clean Energy in History, Driving the Deployment of Clean Energy, Promoting Energy Efficiency, and Supporting Manufacturing,” White House Office of the Press Secretary, February 25, 2016, https://obamawhitehouse.archives.gov/the-press-office/2016/02/25/fact-sheet-recovery-act-made-largest-single-investment-clean-energy.
94. Steve Hargreaves, “Seven Things You Should Know About Solyndra,” CNN Money, June 6, 2012, https://money.cnn.com/2012/06/06/technology/solyndra/index.htm?iid=EL.
95. $535 million loan and $750 million factory. Carol D. Leonnig, “Chu Takes Responsibility for a Loan Deal That Put More Taxpayer Money at Risk in Solyndra,” Washington Post, September 29, 2011, https://www.washingtonpost.com/politics/chu-takes-responsibility-for-a-loan-deal-that-put-more-taxpayer-money-at-risk-in-solyndra/2011/09/29/gIQArdYQ8K_story.html?utm_term=.ddca86f1f1e7.
96. Hargreaves, “Seven Things.”
97. Carol Leonnig, Joe Stephens, Sisi Wei, and Amanda Zamora, “Solyndra Scandal Timeline,” Washington Post, December 2011, http://www.washingtonpost.com/wp-srv/special/politics/solyndra-scandal-timeline/?noredirect=on. Carol D. Leonnig, “Top Leaders of Solyndra Solar Panel Company Repeatedly Misled Federal Officials, Investigation Finds,” Washington Post, August 26, 2015, https://www.washingtonpost.com/news/federal-eye/wp/2015/08/26/top-leaders-of-solyndra-solar-panel-company-repeatedly-misled-federal-officials-investigation-finds/?utm_term=.9bbdcc0692e8.
98. “Committee Releases Extensive Report Detailing Findings of Solyndra Saga,” House Energy and Commerce Committee, August 2, 2012, https://energycommerce.house.gov/news/committee-releases-extensive-report-detailing-findings-solyndra-saga/.
99. Matthew L. Wald, “Solar Firm Aided by Federal Loans Shuts Doors,” New York Times, August 31, 2011, https://www.nytimes.com/2011/09/01/business/energy-environment/solyndra-solar-firm-aided-by-federal-loans-shuts-doors.html.
100. MIT Energy Initiative, The Future of Solar Energy (Cambridge, MA: MIT, 2015).
101. Paula Stephan, “The Endless Frontier: Reaping What Bush Sowed,” in The Changing Frontier: Rethinking Science and Innovation Policy, ed. Adam Jaffe and Benjamin Jones (Chicago: University of Chicago Press, 2015).
102. Ibid., p. 354.
103. Ibid.
104. David Ignatius, “The Ideas Engine Needs a Tuneup,” Washington Post, June 3, 2007.
105. For Germany, see Matthias Almus and Dirk Czarnitzki, “The Effects of Public R&D Subsidies on Firms’ Innovation Activities: The Case of Eastern Germany,” Journal of Business & Economic Statistics 21, no. 2, 2003. Reinhard Hujer and Dubravko Radić, “Evaluating the Impacts of Subsidies on Innovation Activities in Germany,” Scottish Journal of Political Economy 52, no. 4, 2005; Dirk Czarnitzki and Andrew A. Toole, “Business R&D and the Interplay of R&D Subsidies and Product Market Uncertainty,” Review of Industrial Organization 31, no. 3 (2007). Katrin Hussinger, “R&D and Subsidies at the Firm Level: An Application of Parametric and Semiparametric Two‐Step Selection Models,” Journal of Applied Econometrics 23, no. 6 (2008). For Belgium, see Hanna Hottenrott and Cindy Lopes-Bento, “(International) R&D Collaboration and SMEs: The Effectiveness of Targeted Public R&D Support Schemes,” Research Policy 43, no. 6, 2017. For both Germany and Belgium, see Kris Aerts and Tobias Schmidt, “Two for the Price of One?: Additionality Effects of R&D Subsidies: A Comparison Between Flanders and Germany,” Research Policy 37, no. 5 (2008). For Finland, see Tuomos Takalo, Tanja Tanayama, and Otto Toivanen, “Estimating the Benefits of Targeted R&D Subsidies,” Review of Economics and Statistics 95, no. 1 (2013). For Israel, see Saul Lach, “Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel,” Journal of Industrial Economics 50, no. 4 (2002). For Spain, see Xulia González, Jordi Jaumandreu, and Consuelo Pazó, “Barriers to Innovation and Subsidy Effectiveness,” RAND Journal of Economics (2005). Xulia González and Consuelo Pazó, “Do Public Subsidies Stimulate Private R&D Spending?,” Research Policy 37, no. 3 (2008). For South Korea, see Soogwan Doh and Byungkyu Kim, “Government Support for SME Innovations in the Regional Industries: The Case of Government Financial Support Program in South Korea,” Research Policy 43, no. 9 (2014). For the OECD more generally, see Martin Falk, “What Drives Business Research and Development (R&D) Intensity Across Organisation for Economic Co-operation and Development (OECD) Countries?,” Applied Economics 38, no. 5 (2006). Guntram Wolff and Volker Reinthaler, “The Effectiveness of Subsidies Revisited: Accounting for Wage and Employment Effects in Business R&D,” Research Policy 37, no. 8 (2008).
1. “Amazon Announces Candidate Cities for HQ2,” Amazon, https://www.amazon.com/b?ie=UTF8&node=17044620011. The announcement was made in January 2018. On the same page, the company also says, “Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy—every dollar invested by Amazon in Seattle generated an additional $1.40 for the city’s economy overall.”
2. We exclude Hawaii and Alaska. The cost of living in these areas is exceptionally high, so we focus on the mainland states. Average earnings per worker is computed by dividing total household earnings in the MSA by the number of workers and then dividing by a CPI index to create earnings in 2016 dollars.
3. The top ten in 1980: Bridgeport-Stamford-Norwalk, CT; Flint, MI; Detroit-Warren-Dearborn, MI; Midland, MI; Washington-Arlington-Alexandria, DC/VA; Saginaw, MI; Midland, TX; Casper, WY; Monroe, MI; and Bremerton-Silverdale, WA. The top ten in 2016: Bridgeport-Stamford-Norwalk, CT; San Jose–Sunnyvale–Santa Clara, CA; San Francisco-Oakland-Heyward, CA; Washington-Arlington-Alexandria, DC/VA; Seattle-Tacoma-Bellevue, WA;Boston-Cambridge-Newton, MA; Trenton, NJ; New York–Newark–Jersey City, NY/NJ; Boulder, CO; Baltimore-Columbia-Towson, MD. All figures here refer to calculations done by the authors from census data. MSA definitions are held constant at their 2016 boundaries for comparison.
4. Authors’ calculations, along the same lines as in previous note.
5. This paragraph and the reasoning about agglomeration draws heavily on Enrico Moretti, The New Geography of Jobs (New York: Mariner Books, 2013).
6. Kimberly Amadeo, “Silicon Valley, America’s Innovative Advantage,” Balance, updated March 10, 2018, https://www.thebalance.com/what-is-silicon-valley-3305808.
7. “What a Performance,” Economist, July 28, 2015, https://www.economist.com/graphic-detail/2015/07/28/what-a-performance?fsrc=scn/tw/te/bl/ed/WhatAPErformance.
8. Asma Khalid, “How Boston Became ‘The Best Place in the World’ to Launch a Biotech Company,” WBUR 90.9, June 19, 2017, http://www.wbur.org/bostonomix/2017/06/19/boston-biotech-success.
9. Moretti reviews a large body of literature (most of it his own work) to show that this is true.
10. Enrico Moretti, “The Local and Aggregate Effect of Agglomeration on Innovation: Evidence from High Tech Clusters” (working paper, Berkeley University, Berkeley, CA, 2018).
11. For a nice review of the economics of local agglomeration, see Gilles Duranton and Diego Puga, “Micro-Foundations of Urban Agglomeration Economies,” in Handbook of Urban and Regional Economics, vol. 4, ed. J. V. Henderson and J.-F. Thisse (Amsterdam: North-Holland, 2004).
12. These facts from Moretti, The New Geography of Jobs, Chapter 5, appropriately titled “The Great Divergence.”
13. In 2015, the top ten states for public R&D per capita were Maryland, New Mexico, Alabama, Virginia, Massachusetts, Colorado, Connecticut, Rhode Island, California, and Utah.
14. Emily Badger, “What Happened to the American Boomtown?,” New York Times, December 6, 2017, https://www.nytimes.com/2017/12/06/upshot/what-happened-to-the-american-boomtown.html.
15. Chang-Tai Hsieh and Enrico Moretti, “Housing Constraints and Spatial Misallocation” (working paper #21154, National Bureau of Economic Research, Cambridge, MA, 2017), http://www.nber.org/papers/w21154.
16. Moretti, The New Geography of Jobs, p. 169.
17. Divya Raghavan, “Quarter Pounder Index: The Most and Least Expensive Cities in America,” NerdWallet, May 12, 2013, https://www.nerdwallet.com/blog/mortgages/home-search/quarter-pounder-index-most-least-expensive-cities/.
18. Moretti, The New Geography of Jobs, p. 168.
19. Data on value per owner occupied house from the census. These are self-reported home values, but they should be good indicators of trends in underlying home prices. The data are incomplete for 2016, so we use 2010.
20. E. Glaeser and J. Gyourko, “The Economic Implications of Housing Supply,” Journal of Economic Perspectives 32, no. 1 (2018).
21. According to the Fair Housing Center of Greater Boston, most suburbs around Boston have large minimum lot requirements—many larger than one acre—in order to preserve open spaces and prevent overdevelopment of suburban land. Of the 187 municipalities of greater Boston, 95 zone over 50 percent of their land area for lot sizes of one acre per home or greater. Of those 95 municipalities, 14 zone more than 90 percent of their land for two-acre lot sizes, and 27 zone more than 90 percent of the land for at least one-acre lot sizes. “1970s–Present: Minimum Lot Size Requirements,” Fair Housing Center of Greater Boston, http://www.bostonfairhousing.org/timeline/1970s-present-Local-Land_use-Regulations-4.html.
22. Ibid.
23. “Palo Alto Home Prices & Values,” Zillow, https://www.zillow.com/palo-alto-ca/home-values/.
24. Adam Brinklow, “Exclusive interview: Palo Alto Mayor Patrick Burt Fires Back at Housing Critics,” Curbed, August 23, 2016, https://sf.curbed.com/2016/8/23/12603188/palo-alto-mayor-housing-interview.
25. Elinor Aspegren and Shawna Chen, “Planning Commission Unanimously Recommends Office-Cap Extension,” Palo Alto Online, July 27, 2017, https://paloaltoonline.com/news/2017/07/27/planning-commission-unanimously-recommends-officeap-extension.
26. Edward Glaeser, Triumph of the City (New York: Penguin, 2012), Kindle edition, location 4015.
27. “1950s–1975: Impact of Rte 128 & Rte 495,” Fair Housing Center of Greater Boston, http://www.bostonfairhousing.org/timeline/1950s-1975-Suburbs.html. “1970s–Present: The Impact of Zoning,” Fair Housing Center of Greater Boston, http://www.bostonfairhousing.org/timeline/1970s-present-Local-Land_use-Regulations-1.html.
28. State policy makers in places like California and Massachusetts have long been cognizant of the pitfalls of zoning controls and have tried to set up processes to circumvent local control. This has met with only limited success. In one case in 2014, a developer proposed replacing a gym property and building 334 apartments, including 81 affordable units, in the Boston suburb of Newton. The developer sought to go through the state process to avoid local opposition but was unable to do so—and the proposal was rejected. Layers of restriction in cases like the Newton project shape a decidedly inertial development climate. Scott Van Voorhis, “Housing Proposed for Newton Office Complex,” Boston Globe, June 11, 2014, https://www.bostonglobe.com/metro/regionals/west/2014/06/11/apartment-complex-proposed-for-route-office-park/SPxooSILRitazfOkRKDhLJ/story.html. Ellen Ishkanian, “Developer Loses Appeal to Build Housing at Wells Avenue Office Park,” Boston Globe, December 24, 2015, https://www.bostonglobe.com/metro/regionals/west/2015/12/24/developer-loses-appeal-build-housing-wells-avenue-office-park/UhtZWDbpzQXMHbae9PDBfO/story.html.
29. Hsieh and Moretti, “Housing Constraints.”
30. Moretti, The New Geography of Jobs, p. 157.
31. Conor Dougherty and Brad Plumer, “A Bold, Divisive Plan to Wean Californians from Cars,” New York Times, March 16, 2018, https://www.nytimes.com/2018/03/16/business/energy-environment/climate-density.html.
32. Authors’ calculations from 2016 census based on self-reported information by workers on their commuting length.
33. Benjamin Schneider, “YIMBYs Defeated as California’s Transit Density Bill Stalls,” CityLab, April 18, 2018, https://www.citylab.com/equity/2018/04/californias-transit-density-bill-stalls/558341/.
34. As clear evidence of this phenomenon, one study found that when direct flights are introduced between the home location of venture investors and the location of their potential investments, the VCs are more likely to invest. Shai Bernstein, Xavier Giroud, and Richard R. Townsend, “The Impact of Venture Capital Monitoring,” Journal of Finance 71, no. 4 (2016): 1591–1622.
35. Richard Florida, “A Closer Look at the Geography of Venture Capital in the U.S.,” CityLab, February 23, 2016, https://www.citylab.com/life/2016/02/the-spiky-geography-of-venture-capital-in-the-us/470208/.
36. Alexander M. Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova, and John Van Reenen, “Who Becomes an Inventor in America? The Importance of Exposure to Innovation” (working paper #24062 National Bureau of Economic Research, Cambridge, MA, November 2017).
37. “There is no sign that the labor market, which is so buoyant at the national level, is helping to heal this [red-blue state labor market] divide. If anything, the divide is growing.” Robin Brooks, Jonathan Fortun, and Greg Basile, Global Macro Views—The Red-Blue Labor Market Split (Washington DC: Institute for International Finance, 2018).
38. To be clear, the current high level of political polarization in the United States has multiple causes, including shifts in party alliances since the 1960s and the way in which redistricting has been implemented. The economic and geographic dimensions of polarization discussed in this book reinforce the other more political facets of polarization.
39. Richard Florida, “How America’s Metro Areas Voted,” CityLab, November 29, 2016, https://www.citylab.com/equity/2016/11/how-americas-metro-areas-voted/508355/.
40. Since the samples are small in each year (about 1,500 observations nationally), we pool the two most recent years available (2014 and 2016) to get somewhat reliable estimates. Reported results are those for the coefficient of a superstar region dummy variable in a regression controlling for age, gender, race, and education; results reported are statistically significant.
41. For our first fact, respondents are answering a series of questions that are prefaced by “I’m going to read you some statements like those you might find in a newspaper or magazine article. For each statement, please tell me if you strongly agree, agree, disagree, or strongly disagree.” Those in the superstar areas are 5.5 percentage points more likely to agree that scientific research should be supported (compared to a national mean of 40 percent).
For our second fact, respondents are told, “We are faced with many problems in this country, none of which can be solved easily or inexpensively. I’m going to name some of these problems… and for each one, I’d like you to tell me whether you think we’re spending too much money on it, too little money, or about the right amount.” Those in superstar areas are 5.2 percentage points more likely to say that we are spending too little on supporting scientific research (compared to a national mean of 42 percent).
For our last fact, respondents are told, “I am going to name some institutions in this country. As far as the people running these institutions are concerned, would you say that you have a great deal of confidence, only some confidence, or hardly any confidence at all in them?” Those in superstar areas are 4.4 percent more likely to say that they have great confidence in educational institutions (compared to 17 percent nationwide).
42. Nick Wingfield and Patricia Cohen, “Amazon Plans Second Headquarters, Opening a Bidding War Among Cities,” New York Times, September 7, 2017, https://www.nytimes.com/2017/09/07/technology/amazon-headquarters-north-america.html.
43. The only states where no city applied were Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, and Wyoming. We are basing this analysis on the cities that announced they were bidding. Matt Day, “Amazon Receives 238 Bids for Its Second Headquarters,” Seattle Times, October 23, 2017, https://www.seattletimes.com/business/amazon/amazon-receives-238-bids-for-its-second-headquarters/.
44. Nick Wingfield, “Amazon Chooses 20 Finalists for Second Headquarters,” New York Times, January 18, 2018, https://www.nytimes.com/2018/01/18/technology/amazon-finalists-headquarters.html.
45. The full list is: Atlanta, GA; Austin, TX; Boston, MA; Chicago, IL; Columbus, OH; Dallas, TX; Denver, CO; Indianapolis, IN; Los Angeles, CA; Miami, FL; Montgomery County, MD; Nashville, TN; Newark, NJ; New York, NY; Northern Virginia; Philadelphia, PA; Pittsburgh, PA; Raleigh, NC; Toronto, Ontario; Washington, DC. From “Where Amazon May Build Its New Headquarters,” New York Times.
46. Ibid.
47. David M. Levitt, “Christie Backs Newark’s Amazon Bid with $7 Billion in Tax Breaks,” Bloomberg, October 16, 2017, https://www.bloomberg.com/news/articles/2017-10-16/christie-backs-newark-s-amazon-bid-with-7-billion-in-tax-breaks.
48. Robert McCartney and Ovetta Wiggins, “A $5 billion Carrot: Larry Hogan’s Historic Offer to win Amazon HQ2,” Washington Post, January 21, 2018, https://www.washingtonpost.com/local/md-politics/a-5-billion-carrot-larry-hogans-historic-offer-to-win-amazon-hq2/2018/01/21/4d5631d8-fedd-11e7-bb03-722769454f82_story.html?utm_term=.fb448a7316ee.
49. Emily Badger, “In Superstar Cities, the Rich Get Richer, and They Get Amazon,” New York Times, November 7, 2018, https://www.nytimes.com/2018/11/07/upshot/in-superstar-cities-the-rich-get-richer-and-they-get-amazon.html.
50. Ibid.
51. Moretti, The New Geography of Jobs.
52. Authors’ tabulations from “American Community Survey (ACS),” United States Census Bureau, https://www.census.gov/programs-surveys/acs/.
53. Every decade, the NRC ranks programs in a variety of scientific fields across a large number of schools. We consider programs in the physical sciences, engineering, and the social sciences. For the latest survey (2005), there are forty-seven fields for which the NRC ranked the top twenty programs. National Research Council, A Data-Based Assessment of Research-Doctorate Programs in the United States (with CD) (Washington, DC: National Academies Press, 2011), https://doi.org/10.17226/12994.http://sites.nationalacademies.org/PGA/resdoc/index.htm.
54. These data are from the National Science Foundation, which does a survey every year of those graduating from graduate schools in the United States. The numbers reported here cover every student graduating from a US PhD program between 2005 and 2015, inclusive. Data were helpfully compiled for us by the NSF.
55. Slightly longer ago, before the 1950s, what is now called Silicon Valley was mostly fruit orchards. We thank the library of the California Historical Society for allowing us to review early maps, photographs, and regional materials.
56. Necco stands for the New England Confectionary Company.
57. Jim Miara, “The Reinvention of Kendall Square,” Urban Land, February 17, 2012, https://urbanland.uli.org/development-business/the-reinvention-of-kendall-square/.
58. Michael Blanding, “The Past and Future of Kendall Square,” MIT Technology Review, https://www.technologyreview.com/s/540206/the-past-and-future-of-kendall-square/.
59. Ibid.
60. Garret Fitzpatrick, “Duck Pin, We Have a Problem,” MIT Technology Review, August 21, 2012, https://www.technologyreview.com/s/428696/duck-pin-we-have-a-problem/. Scott Kirsner, “Making Better Use of Parcel in Kendall Square,” Boston Globe, February 2, 2014, https://www.bostonglobe.com/metro/2014/02/02/underused-parcel-kendall-square-could-put-better-use-government-would-sell/MIxAawAL7tqYvGssmwpJjN/story.html.
61. One of his cofounders, Charles Weissmann, was Swiss.
62. Damian Garde, “Get to Know Kendall Square, Biotech’s Booming Epicenter of Big Risks and Bright Minds,” STAT, May 5, 2016, https://www.statnews.com/2016/05/05/kendall-beating-heart-biotech/.
63. Blanding, “The Past and Future.”
64. Ibid.
65. Miara, “The Reinvention.”
66. Cambridge Innovation Center, https://cic.com/.
67. Authors’ tabulations from “American Community Survey (ACS),” US Census Bureau.
68. This section draws directly from Moretti, The New Geography of Jobs. In his assessment, “Seattle was not an obvious choice for a software company. In fact, it seemed like a terrible place. Far from being the high-flying hub it is today, it was a struggling town. Like many other cities in the Pacific Northwest, it was bleeding jobs every year. It had high unemployment and no clear prospects for future growth. It was closer to today’s Detroit than to Silicon Valley.”
69. Authors’ tabulations from “American Community Survey (ACS),” US Census Bureau.
70. The 1.42 percent figure refers to the profit measure known as value added, which is revenues minus input costs. For a detailed overview of the data collection effort and the resulting database, see Timothy J. Bartik, A New Panel Database on Business Incentives for Economic Development Offered by State and Local Governments in the United States (Kalamazoo, MI: W. E. Upjohn Institute for Employment Research, 2017), http://research.upjohn.org/cgi/viewcontent.cgi?article=1228&context=reports.
71. Eva Dou, “Foxconn Considers $7 Billion Investment to Build U.S. Factory,” Wall Street Journal, updated January 23, 2017, http://www.wsj.com/articles/foxconn-mulls-7-billion-investment-to-build-u-s-factory-1485153535.
72. Danielle Paquette, “Foxconn Deal to Build Massive Factory in Wisconsin Could Cost the State $230,700 Per Worker,” Washington Post, July 27, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/07/27/foxconn-deal-would-cost-wisconsin-230700-per-worker/.
73. Nelson D. Schwartz, Patricia Cohen, and Julie Hirschfeld Davis, “Wisconsin’s Lavish Lure for Foxconn: $3 Billion in Tax Subsidies,” New York Times, July 27, 2017, https://www.nytimes.com/2017/07/27/business/wisconsin-foxconn-tax-subsidies.html.
74. In addition to the previous article, see Chris Isidore and Julia Horowitz, “Foxconn Got a Really Good Deal from Wisconsin. And It’s Getting Better,” CNN Money, December 28, 2017, http://money.cnn.com/2017/12/28/news/companies/foxconn-wisconsin-incentive-package/index.html.
75. Wisconsin Legislature Legislative Fiscal Bureau, “2017 Wisconsin Act 58 (Foxconn/Fiserv),” October 4, 2017, http://docs.legis.wisconsin.gov/misc/lfb/bill_summaries/2017_19/0001_2017_wisconsin_act_58_foxconn_fiserv_10_4_17.pdf.
76. Nathan M. Jensen, “Exit Options in Firm-Government Negotiations: An Evaluation of the Texas Chapter 313 Program” (working paper, University of Texas at Austin, 2017), http://www.natemjensen.com/wp-content/uploads/2017/02/Jensen-Chapter-313-Policy-Brief-1.pdf.
77. Michael Greenstone, Richard Hornbeck, and Enrico Moretti, “Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings,” Journal of Political Economy 118, no. 3 (2010).
78. On average currently, the federal government raises around 19 percent of GDP in taxes, while state and local government raise about 12 percent. Important categories of spending, such as education, are almost entirely the responsibility of local government. “World Economic Outlook (April 2018),” International Monetary Fund, https://www.imf.org/en/Publications/WEO/Issues/2018/03/20/world-economic-outlook-april-2018. “The Budget and Economic Outlook: 2018 to 2028,” Congressional Budget Office, https://www.cbo.gov/publication/53651.
79. Most recently popularized by the song “The Room Where It Happens” in the hit musical Hamilton.
80. “Transcript of Morrill Act (1862),” Our Documents, https://www.ourdocuments.gov/doc.php?flash=false&doc=33&page=transcript.
81. Arthur A. Hauck, “Maine’s University and the Land-Grant Tradition,” General University of Maine Publications 174 (1954). “Holmes Hall,” University of Maine, https://umaine.edu/150/a-chapter-in-history/a-walk-through-history/holmes-hall/.
82. Shimeng Liu, “Spillovers from Universities: Evidence from the Land-Grant Program,” Journal of Urban Economics 87 (2015), https://lusk.usc.edu/sites/default/files/Spillovers_from_Universities_Land_grant_Program.pdf.
83. Enrico Moretti, “Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-Sectional Data,” Journal of Econometrics 121 (2004): 175–212.
84. Pat Kline and Enrico Moretti, “Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority,” Quarterly Journal of Economics 129 (2014).
85. Updating the $20 billion figure from Kline and Moretti, “Local Economic Development,” by the 33 percent inflation from 2000 to 2016.
86. Ibid.
87. “UTIA Study Finds $1M-Per-Mile Economic Impact of TVA Reservoirs,” Tennessee Valley Authority, May 1, 2017, https://www.tva.gov/Newsroom/Press-Releases/UTIA-Study-Finds-1-Million-Per-Mile-Economic-Impact-of-TVA-Reservoirs.
88. Rick Perlstein, Before the Storm: Barry Goldwater and the Unmaking of the American Consensus (New York: Nation Books, 2009).
89. The TVA is currently a government-owned independent corporation. It’s now fully self-financed, makes no profit, and receives no tax money. The Obama administration was considering divesting part or all ownership because the TVA’s anticipated capital needs looked like they would exceed the agency’s statutory cap. Then new private owners would divide up the TVA electric power system. Sue Sturgis, “The Strange Politics of TVA Privatization,” Facing South, April 16, 2013, https://www.facingsouth.org/2013/04/the-strange-politics-of-tva-privatization.html. Philip Bump, “Goodbye, New Deal: Obama Proposes Selling the TVA,” Atlantic, April 11, 2013, https://www.theatlantic.com/politics/archive/2013/04/goodbye-new-deal-obama-proposes-selling-tva/316380/. “TVA at a Glance,” Tennessee Valley Authority, https://www.tva.gov/About-TVA/TVA-at-a-Glance.
90. Kline and Moretti, “Local Economic Development.”
91. Dwight D. Eisenhower, “To Frank Goad Clement,” Internet Archive, https://web.archive.org/web/20101122171602/http://www.eisenhowermemorial.org/presidential-papers/first-term/documents/1132.cfm.
92. Kline and Moretti, “Local Economic Development.”
93. “Military’s Impact on State Economies,” National Conference of State Legislatures, April 9, 2018, http://www.ncsl.org/research/military-and-veterans-affairs/military-s-impact-on-state-economies.aspx.
94. “Economic Data,” State of California Governor’s Military Council, https://militarycouncil.ca.gov/s_economicdata/.
95. “History of Malmstrom Air Force Base,” Malmstrom Air Force Base, http://www.malmstrom.af.mil/About-Us/History/Malmstrom-History/.
96. “Airport History,” Great Falls International Airport, http://flygtf.com/?p=History.
97. Malmstrom Air Force Base & Central Montana: Partners in One Community (Malmstrom AFB, MT: 341st Missile Wing Public Affairs Office, 2016), https://greatfallsmt.net/sites/default/files/fileattachments/community/page/40351/malmstromafbcentralmtpartnerscommunityflyer.pdf.
98. Benjamin A. Austin, Edward L. Glaeser, and Lawrence H. Summers, “Jobs for the Heartland: Place-Based Policies in 21st Century America” (working paper #24548, National Bureau of Economic Research, Cambridge, MA, 2018).
99. Austin, Glaeser, and Summers, “Jobs for the Heartland,” refer to the lack of evidence in favor of a European Union policy that tries to reduce income disparities across areas in Europe. On the other hand, the Zonenrandgebeit (ZRG) initiative in Germany in 1971, as discussed in Maximilian von Ehrlich and Tobias Seidel, “The Persistent Effects of Place-Based Policy: Evidence from the West-German Zonenrandgebeit” (working paper series #5373, CESifo, Munich, Germany, 2015), had more positive impacts. This initiative consisted of a large-scale transfer program to stimulate economic development in a well-defined geographical area adjacent to the Iron Curtain, to compensate residents for being cut off from East German markets. Incomes in this area, relative to nearby areas, were 30–50 percent higher by 1986, and this difference persisted until at least 2010.
100. This is also a line of investigation that has been pursued by Fiona Murray and Phil Budden—for example, in “A Systematic MIT Approach for assessing ‘Innovation-Driven Entrepreneurship’ in Ecosystems (iEcosystems)” (working paper, MIT Lab for Innovation Science and Policy, Cambridge, MA, September 2017), and “An MIT Framework for Innovation Ecosystem Policy: Developing Policies to support Vibrant Innovation Ecosystems (iEcosystems)” (working paper, MIT Lab for Innovation Science and Policy, Cambridge, MA, October 2018).
101. These 378 areas are not an exhaustive list of places that could be considered for new technology hubs; indeed, some of the initial Amazon applicants were not on this list of metropolitan statistical areas (MSAs). But all the Amazon finalists are MSAs, so MSAs provide a natural starting point for thinking about the criteria for technology hub centers.
102. We can see this by comparing the NRC rankings of top graduate programs in 1982 to the rankings in 2005. For example, according to NRC rankings from 1982, Johns Hopkins University had four top twenty programs in sciences and engineering; by 2005, they had eighteen, including newly minted top twenty programs in statistics, astrophysics, and materials science and engineering. Pennsylvania State University had only three top-twenty programs in 1982 and had twenty-eight by 2005, including statistics, biochemistry, and physiology.
103. Research on reported well-being shows that commuting is the activity that contributes most to unhappiness, more than work, housework, and taking care of children, yet people living in the superstar cities endure longer and longer commutes. Daniel Kahneman, Alan B. Krueger, David A. Schkade, Norbert Schwarz, and Arthur A. Stone, “A Survey Method for Characterizing Daily Life Experience: The Day Reconstruction Method,” Science 306, no. 5702 (2004).
104. Within each category, we use data on the ranking within the list of potential economic areas, so we are averaging across rankings in all these calculations—getting at the idea that you just need to be more attractive as a location than other places.
105. This list uses the division labels (i.e., within regions) from “Census Regions and Divisions of the United States,” US Census Bureau, https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf.
106. We use the latest available Kauffman Index, which is for 2017: “Metropolitan Areas Rankings: Growth Entrepreneurship—Data Table,” Kauffman Index, https://www.kauffman.org/kauffman-index/rankings?report=growth&indicator=growth-rate&type=metro.
107. “Repeat Defenders,” Site Selection, March 2018, pp. 108–125. There are thirty-two cities on these three lists combined, due to some ties.
108. At the time of its founding (mid-1880s), Stanford University was apparently referred to in some newspapers as an “asylum for decayed sea-captains in Switzerland”—implying presumably that it was not needed in a place such as California. This is according to chancellor emeritus David Starr Jordan, “Early Days of Stanford,” Daily Palo Alto Times Memorial Number, Stanford edition (no date, but the context in its content suggests it was published just after the end of World War I).
CHAPTER 7: INNOVATION FOR GROWTH
1. Owning and managing patents in this fashion is controversial. However, the sentiments expressed in this quote are exactly on target.
2. Abraham Aboraya, “7 Things You Didn’t Know About Research Park Near UCF,” Orlando Business Journal, updated May 23, 2014, http://www.bizjournals.com/orlando/blog/2014/05/7-things-you-didn-t-know-about-the-ucf-research.html. Updated through conversations with CFRP manager Joe Wallace.
3. The statistical unit is called the Union Park county subdivision, but locals know it as East Orange County (as opposed to the Disney-dominated West Orange County).
4. Charlie Jean, “Orlando Leader Martin Andersen Dies: Former Publisher Helped Set Course for Central Florida,” Orlando Sentinel, May 7, 1986, http://articles.orlandosentinel.com/1986-05-07/news/0220130227_1_martin-andersen-orlando-central-florida.
5. The focus of NTDC was on combat simulation and had previously been located in Long Island. “The History,” RTC Orlando, http://rtcorlando.homestead.com/.
6. Based on conversations with CFRP manager Joe Wallace.
7. In 1983, President Reagan signed a bill for $23.5 million to pay for a new simulation center in CFRP.
8. Susan G. Strother, “2 Move to Research Park Training-simulation Companies Hope to Tap Area’s Military Market,” Orlando Sentinel, March 2, 1987, http://articles.orlandosentinel.com/1987-03-02/business/0110260180_1_florida-research-park-simulation-and-training-training-simulation. Also conversation with CFRP manager Joe Wallace.
9. “Historical Enrollment,” Institutional Knowledge Management, https://ikm.ucf.edu/historical-enrollment/.
10. Resource Square One and Three: Offering Summary (Miami, FL: HFF, 2018), https://my.hfflp.com/GetDocument?DT=DealDocument&ID=175837.
11. Impacts of Florida Modeling, Simulation and Training (Orlando, FL: National Center for Simulation, 2012), https://www.simulationinformation.com/sites/default/files/news/2013-01-10/258-impacts-florida-modeling-simulation-training-research-project-dr.guy-hagen-tuckerhall/uploads/guy-hagen-2012-mst-study-final.pdf.
12. Estimates provided by Joe Wallace.
13. Marco Santana, “Orlando Ranks No. 2 in Florida in Venture Capital Activity, Report Says,” Orlando Sentinel, January 27, 2016, http://www.orlandosentinel.com/business/os-investment-in-orlando-companies-dropped-8-percent-last-year-report-says-20160127-post.html.
14. Mary Shanklin, “With Defense Cuts, Vacancies Rise at Central Florida Research Park,” Orlando Sentinel, December 8, 2013, http://articles.orlandosentinel.com/2013-12-08/business/os-cfb-cover-research-park-20131208_1_central-florida-research-park-defense-cuts-cubic-corp. Richard Burnett, “Cubic Corp. Orlando Unit Wins Training Contract,” Orlando Sentinel, December 4, 2013, http://articles.orlandosentinel.com/2013-12-04/business/os-orlando-team—big-training-deal-20131204_1_cubic-corp-orlando-unit-mission-bay-trainer.
15. “Best States for Pre-K–12,” US News & World Report, https://www.usnews.com/news/best-states/rankings/education/prek-12.
16. Conversation with CFRP manager Joe Wallace.
17. Maryann Feldman and Lauren Lanahan, “State Science Policy Experiments,” in The Changing Frontier: Rethinking Science and Innovation Policy, ed. Adam Jaffe and Benjamin Jones (Chicago: University of Chicago Press, 2015). Georgia Research Alliance, http://gra.org.
18. As discussed in Chapter 5, an investment of 0.5 percent of GDP could accelerate economic growth rate by at least 7 percent relative to what would otherwise be its baseline: a growth rate that would otherwise be 2 percent per annum would now become 2.14 percent.
19. As discussed in Chapter 5, we estimated statistical models to ascertain the relationship between university R&D funding and jobs. We are grateful to Trinh Le for her assistance with this calculation for New Zealand.
20. Gabriel Chodorow-Reich, “Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned” (working paper #23577, National Bureau of Economic Research, Cambridge, MA, 2017). Chodorow-Reich estimates that the cost per job of the highway spending part of the 2009 American Recovery and Reinvestment Act was $50,000.
21. Josh Lerner, Boulevard of Broken Dreams (Princeton, NJ: Princeton University Press, 2009).
22. “The organization will be led by a four-star general and tasked with overseeing the planning and purchasing of everything from futuristic helicopters to direct-energy weapons that the Pentagon believes can someday be used in missile defense.” Dan Lamothe, “Why the Army Decided to Put Its New High-Tech Futures Command in Texas,” Washington Post, July 14, 2018, https://www.washingtonpost.com/news/checkpoint/wp/2018/07/14/understanding-the-armys-reasons-for-putting-its-new-high-tech-futures-command-in-texas/?utm_term=.89065c6fa6f5.
23. Harry Holzer, “Raising Job Quality and Skills for American Workers: Creating More-Effective Education and Workforce Development Systems in the States,” Brookings Institution, November 30, 2011, https://www.brookings.edu/research/raising-job-quality-and-skills-for-american-workers-creating-more-effective-education-and-workforce-development-systems-in-the-states/. Michael Greenstone and Adam Looney, “Building America’s Job Skills with Effective Workforce Programs: A Training Strategy to Raise Wages and Increase Work Opportunities,” Brookings Institution, November 30, 2011, https://www.brookings.edu/research/building-americas-job-skills-with-effective-workforce-programs-a-training-strategy-to-raise-wages-and-increase-work-opportunities/. Martha Laboissiere and Mona Mourshed, “Closing the Skills Gap: Creating Workforce-Development Programs That Work for Everyone,” McKinsey & Company, February 2017, https://www.mckinsey.com/industries/social-sector/our-insights/closing-the-skills-gap-creating-workforce-development-programs-that-work-for-everyone. “CEA Report: Addressing America’s Reskilling Challenge,” White House, July 17, 2018, https://www.whitehouse.gov/briefings-statements/cea-report-addressing-americas-reskilling-challenge/.
24. These data are for people who received bachelor’s degrees in 2015. Given how these data are reported, this number is likely to be an underestimate. See Christine DiGangi, “The Average Student Loan Debt in Every State,” USA Today, April 28, 2017, https://www.usatoday.com/story/money/personalfinance/2017/04/28/average-student-loan-debt-every-state/100893668/.
25. This headline number is the operating revenue of all higher (postsecondary) education and includes some government support for public colleges and also through Pell Grants: “Postsecondary Revenues by Source,” National Center for Education Statistics, https://nces.ed.gov/programs/coe/pdf/Indicator_CUD/coe_cud_2015_06.pdf. The National Center for Education Statistics gives more detail on average tuition by type of institution: “Postsecondary Institution Revenues,” updated May 2018, National Center for Education Statistics, https://nces.ed.gov/programs/coe/indicator_cud.asp.
26. These scandals include the failure of two large for-profit educational chains that defrauded students who borrowed billions in federal student loans. See Erica L. Green, “DeVos to Eliminate Rules Aimed at Abuses by For-Profit Colleges,” New York Times, July 26, 2018, https://www.nytimes.com/2018/07/26/us/politics/betsy-devos-for-profit-colleges.html.
27. For an existing effort along these lines in the state of Montana, see Jon Marcus and Kirk Carapezza, “One State Uses Labor Market Data to Shape What Colleges Teach,” WGBH, November 7, 2018, https://www.wgbh.org/news/education/2018/11/07/one-state-uses-labor-market-data-to-shape-what-colleges-teach. We are well aware that there was a perceived glut of STEM graduates at various times, including when public research and development was cut at the end of the 1960s and again after the end of the Cold War. However, most of these talented people eventually found good jobs, including through starting their own companies or working for start-ups.
28. Paul Lewis, How to Create Skills for an Emerging Industry: The Case of Technician Skills and Training in Cell Therapy (London: Gatsby Charitable Foundation, 2017), http://www.gatsby.org.uk/uploads/education/reports/pdf/paul-lewis-cell-therapy-jan2017.pdf.
29. “CEA Report,” White House.
30. In 1939/40, on the eve of World War II, there were 1,708 American institutions of higher education (i.e., colleges of all kinds) employing just under 150,000 professional staff and about 111,000 instructional staff. In 1959/60, just after Sputnik, there were 380,000 professional staff and 281,500 instructors in 2,004 colleges. By 1989/90, there were 1.5 million professional staff and nearly 1 million instructors in 3,535 colleges. Enrollment increased from 1.5 million students before the war to 3.6 million in 1959/60 and to 13.5 million in 1989/90. National Center for Education Statistics, 120 Years of American Education: A Statistical Portrait (Washington, DC: US Department of Education, 1993), https://nces.ed.gov/pubs93/93442.pdf.
31. For confirmation on the AIP, see p. 9, footnote 2, Amicus Brief filed in 2016 by Airports Council International—North America in the case of The City of Santa Monica v. FAA. Eligible projects include land acquisition, airport safety, capacity, security, and environmental studies. Principles of Federal Appropriations Law: Annual Update of the Third Edition (Washington, DC: US Government Accountability Office, 2009), https://www.nasa.gov/pdf/436198main_GAO_Redbook_Vol_I_Ch_5_and_2009_Update-1-508.pdf. United States Court of Appeals for the Ninth Circuit, “The City of Santa Monica v. Federal Aviation Administration,” City of Santa Monica, https://www.smgov.net/uploadedFiles/Departments/Airport/Litigation/2016.12.23%20Brief%20of%20Amicus%20Curiae%20Airports%20Council%20International%20-%20North%20America.pdf. “Overview: What is AIP?,” Federal Aviation Administration, https://www.faa.gov/airports/aip/overview/.
32. For tax rates by sector, see Kevin Carmichael and Andrea Jones-Rooy, “The GOP’s Corporate Tax Cut May Not Be as Big as It Looks,” FiveThirtyEight, December 15, 2017, https://fivethirtyeight.com/features/the-gops-corporate-tax-cut-may-not-be-as-big-as-it-looks/.
33. For a summary of the Trump tax cuts and their impacts, see Jonathan Gruber, Public Finance and Public Policy, 6th ed. (New York: Macmillan, 2019).
34. Rebecca Spalding, “Kendall Square: How a Rundown Area Near Boston Birthed a Biotech Boom and Real Estate Empire,” Boston Globe, October 15, 2018, http://realestate.boston.com/news/2018/10/15/kendall-square-rundown-area-near-boston-birthed-biotech-boom-real-estate-empire/.
35. Ibid.
36. FY 2011 Federal Real Property Report (Washington, DC: US General Services Administration, n.d.), https://www.gsa.gov/cdnstatic/FY_2011_FRPP_intro_508.pdf.
37. Rob Matheson, “MIT Signs Agreement to Redevelop Volpe Center,” MIT News, January 18, 2017, http://news.mit.edu/2017/agreement-redevelop-volpe-center-kendall-square-0118. We were not involved in any way with this transaction.
38. Shayndi Raice and Keiko Morris, “Search for Amazon HQ2 Sparks Real-Estate Speculation,” Wall Street Journal, updated October 22, 2018, https://www.wsj.com/articles/search-for-amazon-hq2-sparks-real-estate-speculation-1540200601?mod=cx_picks&cx_navSource=cx_picks&cx_tag=collabctx&cx_artPos=1#cxrecs_s.
39. William C. Wheaton, “Percentage Rent in Retail Leasing: The Alignment of Landlord-Tenant Interests,” Real Estate Economics 28, no. 2 (2000). We thank Bill Wheaton for very helpful discussions on this and other real estate–related points.
40. No doubt politicians will spend some time debating what “everyone” means here. We propose that everyone, irrespective of age, who has a Social Security number should receive an equal dividend.
41. Scott Goldsmith, “The Alaska Permanent Fund Dividend: An Experiment in Wealth Distribution,” 2002, http://www.basicincome.org/bien/pdf/2002Goldsmith.pdf.
42. “Investing for Alaska, Investing for the Long Run,” Alaska Permanent Fund Corporation, http://www.apfc.org/home/Content/aboutFund/fundFAQ.cfm.
43. Ibid.
44. Nathaniel Herz, “Gov. Walker’s Veto Cuts Alaska Permanent Fund Dividends to $1,022,” Anchorage Daily News, updated October 19, 2016, https://www.adn.com/politics/2016/09/23/gov-walkers-veto-shaves-alaska-permanent-fund-dividends-to-1022/.
45. Michelle Theriault Boots, “UAA Research Shows Impact of PFD on Poverty Rates in Alaska,” Anchorage Daily News, updated October 20, 2016, https://www.adn.com/alaska-news/2016/10/19/new-uaa-research-shows-impact-of-pfd-on-poverty-rates-in-alaska/.
46. Gloria Guzman, “Household Income: 2016,” US Census Bureau, September 24, 2017, https://www.census.gov/library/publications/2017/acs/acsbr16-02.html.
47. “California Climate Credit,” California Public Utilities Commission, http://www.cpuc.ca.gov/climatecredit/. California may be taking this lesson further. A recent proposal would revise a cap-and-trade system for emissions regulations so as to distribute most of the revenues from their initiative to a per capita dividend for state residents. David Roberts, “California Is About to Revolutionize Climate Policy… Again,” Vox, Mary 3, 2017, https://www.vox.com/energy-and-environment/2017/5/3/15512258/california-revolutionize-cap-and-trade.
CHAPTER 8: BIG SCIENCE AND THE INDUSTRIES OF THE FUTURE
1. Alvin M. Weinberg, “Impact of Large-Scale Science on the United States,” Science 134, no. 347 (1961). Weinberg was director of the Oak Ridge National Laboratory.
2. This description of Lawrence’s innovation and its funding draws on Michael Hiltzik, Big Science: Ernest Lawrence and the Invention That Launched the Military-Industrial Complex (New York: Simon & Schuster, 2015), in particular Chapter 3.
3. This was the Research Corporation, founded in 1912, by Frederick Cottrell. Ibid., pp. 59–60.
4. “Malaria Mortality Among Children Under Five Is Concentrated in Sub-Saharan Africa,” Unicef, June 2018, https://data.unicef.org/topic/child-health/malaria/.
5. Roll Back Malaria Partnership Secretariat, Economic Costs of Malaria (Geneva, Switzerland: World Health Organization, n.d.), https://www.malariaconsortium.org/userfiles/file/Malaria%20resources/RBM%20Economic%20costs%20of%20malaria.pdf.
6. “Chinese Nobel Prize Winner Tu Youyou’s Drug Has Saved Lives of Millions of Malaria Sufferers,” South China Morning Post, October 6, 2015, http://www.scmp.com/news/china/society/article/1864597/drug-chinas-nobel-prize-winner-tu-youyou-worked-has-saved.
7. World Malaria Report 2008 (Geneva, Switzerland: World Health Organization, 2008), http://apps.who.int/iris/bitstream/handle/10665/43939/9789241563697_eng.pdf?sequence=1.
8. Mark Peplow, “Synthetic Biology’s First Malaria Drug Meets Market Resistance,” Nature 530, no. 7591 (2016), https://www.nature.com/news/synthetic-biology-s-first-malaria-drug-meets-market-resistance-1.19426#/market.
9. Dae-Kyun Ro, Eric M. Paradise, Mario Ouellet, Karl J. Fisher, Karyn L. Newman, John M. Ndungu, Kimberly A. Ho, Rachel A. Eachus, Timothy S. Ham, James Kirby, Michelle C. Y. Chang, Sydnor T. Withers, Yoichiro Shiba, Richmond Sarpong, and Jay D. Keasling, “Production of the Antimalarial Drug Precursor Artemisinic Acid in Engineered Yeast,” Nature 440 (2006) describes how they engineered yeast to produce artemisinic acid. In 2008, Sanofi licensed the yeast developed by the team and began industrial-scale production. Mark Peplow, “Malaria Drug Made in Yeast Causes Market Ferment,” Nature 494, no. 7436 (2013), https://www.nature.com/news/malaria-drug-made-in-yeast-causes-market-ferment-1.12417. The researchers set up the company Amyris to produce artemisinin, and much of the funding for its development came from the Bill & Melinda Gates Foundation; our source is Eric Althoff (founder, Arzeda), in discussion with the authors.
10. The Affordable Medicines Facility-Malaria (AMFm) program was run by the Global Fund to Fight AIDS/TB/Malaria and was the main funding route for the finished treatments. Peplow, “Malaria Drug.”
11. Tong Si and Huimin Zhao, “A Brief Overview of Synthetic Biology Research Programs and Roadmap Studies in the United States,” Synthetic and Systems Biology 1, no. 4 (2016), https://www.sciencedirect.com/science/article/pii/S2405805X1630031X.
12. Tanel Ozdemir, Alex J. H. Fedorec, Tal Danino, Chris P. Barnes, “Synthetic Biology and Engineered Live Biotherapeutics: Toward Increasing System Complexity,” Cell 7, no. 1 (2018), https://www.cell.com/cell-systems/abstract/S2405-4712(18)30248-5.
13. Projections suggest that the growth in world population to nine billion by 2050 will require 60 percent more calories than we produce today. But food production is getting harder and harder. The Food and Agricultural Organization of the United Nations reported that arable land per person shrank by more than one-third from 1970 to 2000 and is projected to decline by another one-third from 2000 to 2050. Soil has been eroding at a pace of up to one hundred times greater than the rate of soil formation. Achieving Sustainable Gains in Agriculture (Rome: Food and Agriculture Organization, n.d.), http://www.fao.org/docrep/014/am859e/am859e01.pdf. Oliver Milman, “Earth Has Lost a Third of Arable Land in Past 40 Years, Scientists Say,” Guardian, December 2, 2015, https://www.theguardian.com/environment/2015/dec/02/arable-land-soil-food-security-shortage.
14. One company doing so is Perfect Day, a Berkeley-based start-up formerly known as Muufri. Michael Pellman Rowland, “This Futuristic Startup Could Disrupt the Dairy Industry,” Forbes, February 27, 2018, https://www.forbes.com/sites/michaelpellmanrowland/2018/02/27/perfectday-disrupts-dairy/#70d101e85f61.
15. Cellular agriculture is the application of disciplines like tissue engineering, molecular bio, and synthetic bio to produce products typically associated with traditional agriculture, such as meat and dairy. Christine Gould, “5 Inspiring Ways Synthetic Biology Will Revolutionize Food and Agriculture,” Medium, October 28, 2016, https://medium.com/age-of-awareness/5-inspiring-ways-synthetic-biology-will-revolutionize-food-and-agriculture-3601c25438b5.
16. Synthetic Microorganisms for Agricultural Use (Raleigh: North Carolina State University Genetic Engineering and Society Center, 2017), https://research.ncsu.edu/ges/files/2017/07/Issue-brief-Synbio-in-agriculture-01.2017-v3.pdf.
17. David Freeman, “Artificial Photosynthesis Advance Hailed as Major Breakthrough,” Huffington Post, April 20, 2015, https://www.huffingtonpost.com/2015/04/20/artificial-photosynthesis-environment-energy_n_7088830.html.
18. “Current Uses of Synthetic Biology,” Biotechnology Innovation Organization, https://www.bio.org/articles/current-uses-synthetic-biology.
19. Ibid.
20. A. Rahman and C. D. Miller, “Microalgae as a Source of Bioplastics,” in Algal Green Chemistry: Recent Progress in Biotechnology, ed. Rajesh Prasad Rastogi, Datta Madamwar, and Ashok Pandey (Amsterdam: Elsevier, 2017), https://www.sciencedirect.com/science/article/pii/B9780444637840000060.
21. Figure on tons added to landfills extrapolated from Norm Schriever, “Plastic Water Bottles Causing Flood of Harm to Our Environment,” Huffington Post, updated December 6, 2017, https://www.huffingtonpost.com/norm-schriever/post_5218_b_3613577.html.
22. Alex Janin, “Can a Bottle Made from Algae End the World’s Plastic Addiction?,” Takepart, April 6, 2016, http://www.takepart.com/article/2016/04/06/algae-bottle-end-planets-plastic-addiction.
23. “America’s Bioeconomy Grow Opportunities,” United States Department of Agriculture, https://www.biopreferred.gov/BPResources/files/BP_InfoGraphic.pdf.
24. D. Ewen Cameron, Caleb J. Bashor, and James J. Collins, “A Brief History of Synthetic Biology,” Nature Reviews Microbiology 12, no. 5 (2014), http://collinslab.mit.edu/files/nrm_cameron.pdf.
25. The first international conference for the field, Synthetic Biology 1.0 (SB1.0), was held in the summer of 2004 at MIT and was significant because it provided an identifiable community and helped to consolidate efforts in the field.
26. Todd Kuiken, “U.S. Trends in Synthetic Biology Research Funding,” Wilson Center, September 15, 2015, https://www.wilsoncenter.org/publication/us-trends-synthetic-biology-research-funding.
27. Ibid.
28. Si and Zhao, “A Brief Overview.”
29. Ibid.
30. Sustainability Initiative Initial Findings & Recommendations (New York: Nancy J. Kelley & Associates, 2017), http://nancyjkelley.com/wp-content/uploads/Final-Synberc-Sustainability-Report.pdf.
31. “Award Abstract #1818248,” National Science Foundation, https://nsf.gov/awardsearch/showAward?AWD_ID=1818248&HistoricalAwards=false. Perhaps the largest funder of research in synthetic biology in recent years has been DARPA, within the Department of Defense. While DARPA was providing almost no funding to synthetic biology in 2010, the organization had increased its investment to $100 million per year by 2014. The DARPA program Living Foundries: 1000 Molecules will invest $110 million through 2019 to enable facilities to generate organisms capable of producing one thousand molecules of industrial and defense interest. Harriet Taylor, “Why the Pentagon Is Paying Nearly $2 Million for a Custom-Designed Bacteria,” CNBC, August 15, 2016, https://www.cnbc.com/2016/08/15/why-the-pentagon-is-paying-nearly-2-million-for-a-custom-designed-bacteria.html.Despite these successes, DARPA is not an ideal organization to serve as the primary federal funder of synthetic biology research. DARPA continues to view its mission primarily as focused on military purposes. “The Mansfield amendment was repealed the following year, but its impact lingered. The DoD adjusted its own policies to conform to the law, and it left the adjustments in place. Congress had given clear notice that it wanted to see direct military payoff for the research-and-development dollars spent by DoD. The same enthusiasm led Congress in 1972 to change ARPA’s name to DARPA… a reminder that DARPA was not at liberty to support any technology it might find interesting. Rather it was to support only those projects with clear and present application to the military mission of the armed forces.” Alex Roland and Philip Shiman, Strategic Computing: DARPA and the Quest for Machine Intelligence, 1983–1993 (Cambridge, MA: MIT Press, 2002), p. 29.
32. “SynBio Map,” Synthetic Biology Project, 2018, http://www.synbioproject.org/sbmap/.
33. Shaun Moshasha, “The Rapid Growth of Synthetic Biology in China,” SynBioBeta, March 24, 2016, https://synbiobeta.com/news/rapid-growth-synthetic-biology-china/.
34. “Schools Participating in iGEM 2006,” iGEM, https://2006.igem.org/wiki/index.php/Schools_Participating_in_iGEM_2006. “2018 iGEM Calendar,” iGEM, http://2018.igem.org/Calendar.
35. “Convergence: The Future of Health,” Convergence Revolution, 2016, http://www.convergencerevolution.net/2016-report/.
36. The NSF established the Engineering Research Center for Cell Manufacturing Technologies in September 2017 with a budget of just $20 million. The center has three stated goals: to advance new tools, to develop regulatory guidelines, and to improve workforce development—but not to increase manufacturing capacity. Charlene Betourney, “UGA Partner in Cell Research Consortium,” UGA Today, September 13, 2017, https://news.uga.edu/uga-a-major-partner-in-cell-manufacturing-research-consortium/.
37. The Future Is Unfolding: From Cells to Solutions (Toronto, ON: Center for Commercialization of Regenerative Medicine, 2017), https://www.ccrm.ca/sites/default/files/CCRM%20ANNUAL%20REPORT%202017%20SML.pdf. CCRM describes itself as a “not-for-profit, public-private consortium supporting the development of foundational technologies that accelerate the commercialization of cell and gene therapies, and regenerative medicine technologies.” “Executive Summary,” Center for Commercialization of Regenerative Medicine, 2018, https://www.ccrm.ca/regenerative-medicine-executive-summary.
38. Recognizing that research-and-development teams are hit hardest by an inability to access manufacturing, CCRM will use the facility exclusively to produce materials for clinical trials, with the hope of helping “companies, researchers, and non-profit organizations to take the steps necessary toward regulatory approval of their cell therapies.” “Partnership to Develop Personalized Therapeutics for B-cell Lymphoma and Leukemia,” Center for Commercialization of Regenerative Medicine, September 29, 2017, https://www.ccrm.ca/sites/default/files/media_room/CCRM-Affigen%20Launch%20Press%20Release%20FINAL_0.pdf.
39. K. Thompson and E. P. Foster, “The Cell Therapy Catapult: Growing a U.K. Cell Therapy Industry Generating Health and Wealth,” Stem Cells and Development 22, suppl. 1 (2013): 35–39, https://www.ncbi.nlm.nih.gov/pubmed/24304073.
40. Indeed, CGT Catapult’s 2016 Advanced Therapies Manufacturing Action Plan proposes a series of action items that coordinate industry, government, and academia to “secure [the UK’s] position as a global hub for advanced therapies.” Proposed action items include an extended tax credit for research and development related to manufacturing, £30 million (US$40 million) annually in government-supported competitive funding for increased manufacturing capacity, establishment of a network of treatment centers with £30 million (US$40 million) in government funding delivered through a competitive process, collaboration between industry and educators to develop a talent plan for industry-funded training at all skill levels, and engagement between industry and academic researchers to identify and address gaps in regulatory standards for manufacturing. “Cell and Gene Therapy Catapult Opens Manufacturing Centre to Accelerate Growth of the Industry in the UK,” Catapult Cell and Gene Therapy, April 23, 2018, https://ct.catapult.org.uk/news-media/manufacturing-news/cell-and-gene-therapy-catapult-opens-manufacturing-centre.
41. “Use of Oil,” US Energy Information Administration, September 19, 2017, https://www.eia.gov/energyexplained/index.cfm?page=oil_use.
42. “U.S. Imports of Crude Oil,” United States Census Bureau, https://www.census.gov/foreign-trade/statistics/historical/petr.pdf. “Gross Domestic Product,” Federal Reserve Bank of St. Louis, August 29, 2018, https://fred.stlouisfed.org/series/GDP.
43. “Fast Facts on Transportation Greenhouse Gas Emissions,” EPA, August 27, 2018, https://www.epa.gov/greenvehicles/fast-facts-transportation-greenhouse-gas-emissions.
44. Mashael Yazdanie, Fabrizio Noembrini, Steve Heinen, Augusto Espinel, and Konstantinos Boulouchos, “Well-to-Wheel Costs, Primary Energy Demand, and Greenhouse Gas Emissions for the Production and Operation of Conventional and Alternative Vehicles,” Transportation Research Part D: Transport and Environment 48 (2016): 63–84. Päivi T. Aakko-Saksa, Chris Cook, Jari Kiviaho, and Timo Repo, “Liquid Organic Hydrogen Carriers for Transportation and Storing of Renewable Energy—Review and Discussion,” Journal of Power Sources 396 (2018): 803–823. Wentao Wang, Jose Herreros, Athanasios Tsolakis, and Andrew York, “Ammonia as Hydrogen Carrier for Transportation; Investigation of the Ammonia Exhaust Gas Fuel Reforming,” International Journal of Hydrogen Energy 38 (2013): 9907–9917.
45. How Clean Are Hydrogen Fuel Cell Electric Vehicles? (Cambridge, MA: Union of Concerned Scientists, 2014), https://www.ucsusa.org/sites/default/files/attach/2014/10/How-Clean-Are-Hydrogen-Fuel-Cells-Fact-Sheet.pdf.
46. Donald L. Barlett and J. B. Steele, “Hydrogen Is in His Dreams,” Time, July 14, 2003, http://content.time.com/time/magazine/article/0,9171,464641,00.html. “History,” Fuel Cell Today, http://www.fuelcelltoday.com/history#The%201990s.
47. Nicholas Brown, “Insiders and Experts Are Ripping on Hydrogen Cars, but Why?,” Kompulsa, May 21, 2015, https://www.kompulsa.com/2015/05/21/insiders-and-experts-are-ripping-on-hydrogen-cars-but-why/.
48. Ian Bickis, “Hydrogen Fuel Cells Making an Automotive Comeback,” Canadian Manufacturing, March 31, 2016, https://www.canadianmanufacturing.com/environment-and-safety/hydrogen-fuel-cells-making-automotive-comeback-164989/.
49. “Are Hydrogen Cars Making a Comeback?,” CBS News, November 22, 2013, https://www.cbsnews.com/news/are-hydrogen-cars-making-a-comeback/.
50. “5 Fast Facts About Hydrogen and Fuel Cells,” Office of Energy Efficiency and Renewable Energy, October 4, 2017, https://www.energy.gov/eere/articles/5-fast-facts-about-hydrogen-and-fuel-cells. Tests run by the Union of Concerned Scientists on a Hyundai Tucson show emissions reductions of 34 percent using natural gas and 60 percent using 46 percent renewable energy. How Clean are Hydrogen Fuel Cell Electric Vehicles?, Union of Concerned Scientists.
51. Effects of a Transition to a Hydrogen Economy on Employment in the United States Report to Congress (Washington, DC: US Department of Energy, 2008), https://www.hydrogen.energy.gov/pdfs/epact1820_employment_study.pdf. This study may be overly optimistic given the development of electric vehicles and trends in energy prices since the study was done. A more recent projection from the Department of Energy based on current trends suggests a rise in employment of “only” 267,000. But this is a projection based on current trends, not if there is more aggressive investment in the hydrogen economy as in the 2008 report.
52. State of the States: Fuel Cells in America 2016, 7th ed. (Washington, DC: US Department of Energy, 2016), https://www.energy.gov/sites/prod/files/2016/11/f34/fcto_state_of_states_2016_0.pdf.
53. DOE FY05 budget justification tables suggest that FY04 had appropriations of $81.9 million for hydrogen research and $65.1 million for fuel cells; “FY 2005 Budget Justification,” US Department of Energy, https://www.energy.gov/cfo/downloads/fy-2005-budget-justification.
DOE FY09 budget justification tables suggest that FY08 had appropriations of $211 million for hydrogen research and $55 million for fuel cells; “FY 2009 Budget Justification,” US Department of Energy, https://www.energy.gov/cfo/downloads/fy-2009-budget-justification.
DOE FY18 budget justification tables suggest that FY17 had appropriations of $101 million for hydrogen and fuel cell research combined; “FY 2018 Budget Justification,” US Department of Energy https://www.energy.gov/cfo/downloads/fy-2018-budget-justification.
54. Fuel Cell Technologies Market Report 2016 (Washington, DC: US Department of Energy, 2016), https://www.energy.gov/sites/prod/files/2017/10/f37/fcto_2016_market_report.pdf.
55. Fuel Cell Technologies Market Report 2014 (Washington, DC: US Department of Energy), 2014 https://www.energy.gov/sites/prod/files/2015/10/f27/fcto_2014_market_report.pdf.
56. “Hydrogen Basics,” Alternative Fuels Data Center, July 2, 2018, https://www.afdc.energy.gov/fuels/hydrogen_basics.html.
57. Daniel Fraile, Jean-Christophe Lanoix, Patrick Maio, Azalea Rangel, and Angelica Torres, Overview of the Market Segmentation for Hydrogen Across Potential Customer Groups, Based on Key Application Areas (Brussels: CertifHy, 2015), https://www.fch.europa.eu/sites/default/files/project_results_and_deliverables/D%201.2.%20Overview%20of%20the%20market%20segmenatation%20for%20hydrogen%20across%20potential%20customer%20groups%20based%20on%20key%20application%20areas.pdf.
58. “Japan Builds ‘Hydrogen Society of the Future,’” Invest with Values, August 30, 2017, https://investwithvalues.com/news/japan-builds-hydrogen-society-future/.
59. Lun Jingguang, “Hydrogen-Fuel Cell Vehicle Development in China,”United Nations, http://www.un.org/esa/sustdev/csd/csd14/lc/presentation/hydrogen4.pdf.
60. Fangzhu Zhang and Philip Cooke, “Hydrogen and Fuel Cell Development in China: A Review,” European Planning Studies 18, no. 7 (2010). Many of these organizations appear to be small.
61. Yang Yi, “World’s First Hydrogen Tram Runs in China,” XinhuaNet, October 27, 2017, http://www.xinhuanet.com/english/2017-10/27/c_136709647.htm. “China Develops World’s First Hydrogen-Powered Train,” IFL Science, https://www.iflscience.com/technology/china-develops-worlds-first-hydrogen-powered-tram/.
62. Yamei, “Wuhan to House China’s First Industry Park for Developing Hydrogen Fuel Cells,” XinhuaNet, December 24, 2017, http://www.xinhuanet.com/english/2017-12/24/c_136849031.htm.
63. Andrew Kadak, “The Status of the US High-Temperature Gas Reactors,” Engineering 2 (2016): 119–123.
64. Idaho National Laboratory, “An Analysis of the Effect of Reactor Outlet Temperature of a High Temperature Reactor on Electric Power Generation, Hydrogen Production, and Process Heat” (technical evaluation study project no. 23843, September 14, 2010).
65. A. Abdulla, “A Retrospective Analysis of Funding and Focus in US Advanced Fission Innovation,” Environmental Research Letters 12 (2017): 084016.
66. Mark Hibbs, The Future of Nuclear Power in China (Washington, DC: Carnegie Endowment for International Peace, 2018). Abby Harvey, “China Advances HTGR Technology,” Power, November 2017, https://www.powermag.com/china-advances-htgr-technology/. “HTR-PM steam generator passes pressure tests,” World Nuclear News, October 2018, http://www.world-nuclear-news.org/Articles/HTR-PM-steam-generator-passes-pressure-tests.
67. “TerraPower, CNNC Team Up on Travelling Wave Reactor,” World Nuclear News, September 25, 2015, http://www.world-nuclear-news.org/NN-TerraPower-CNNC-team-up-on-travelling-wave-reactor-25091501.html.
68. NASA has a space exploration budget of $3.8 billion, while NOAA has an exploration budget of only $23.7 million. Michael Conathan, “Rockets Top Submarines: Space Exploration Dollars Dwarf Ocean Spending,” Center for American Progress, June 18, 2018, https://www.americanprogress.org/issues/green/news/2013/06/18/66956/rockets-top-submarines-space-exploration-dollars-dwarf-ocean-spending/e.
69. Ibid.
70. “Deepwater Technology,” National Energy Technology Laboratory, https://www.netl.doe.gov/research/oil-and-gas/deepwater-technologies.
71. “Cobalt Demand Worldwide from 2010 to 2015 (in 1,000 Tons),” Statista, 2018, https://www.statista.com/statistics/875808/cobalt-demand-worldwide/. Robert Ferris, “Technology Is Fueling the Growing Demand for the Once-Obscure Element Cobalt,” CNBC, April 16, 2018, https://www.cnbc.com/2018/04/16/technology-is-fueling-the-growing-demand-for-the-once-obscure-element-cobalt.html. Frank Holmes, “The World’s Cobalt Supply Is in Jeopardy,” Forbes, February 27, 2018, https://www.forbes.com/sites/greatspeculations/2018/02/27/the-worlds-cobalt-supply-is-in-jeopardy/#703d71fd1be5.
72. “Deep Sea Mining: The Basics,” Pew Charitable Trusts, February 3, 2017, https://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2017/02/deep-sea-mining-the-basics. Thomas Peacock and Matthew H. Alford, “Is Deep-Sea Mining Worth It?,” Scientific American, April 17, 2018.
73. Peacock and Alford, “Is Deep-Sea Mining Worth It?”
74. Yutaro Takaya, Kazutaka Yasukawa, Takehiro Kawasaki, Koichiro Fujinaga, Junichiro Ohta, Yoichi Usui, Kentaro Nakamura, Jun-Ichi Kimura, Qing Chang, Morihisa Hamada, Gjergj Dodbiba, Tatsuo Nozaki, Koichi Iijima, _Tomohiro Morisawa, Takuma Kuwahara, Yasuyuki Ishida, Takao Ichimura, Masaki Kitazume, Toyohisa Fujita, and Yasuhiro Kato, “The Tremendous Potential of Deep-Sea Mud as a Source of Rare-Earth Elements,” Scientific Reports 8 (2018).
75. “Rare Earth Elements,” MIT: The Future of Strategic Natural Resources, 2016, http://web.mit.edu/12.000/www/m2016/finalwebsite/elements/ree.html.
76. The top producers are China, Australia, and Russia. Rare Earths (Reston, VA: United States Geological Survey, 2017), https://minerals.usgs.gov/minerals/pubs/commodity/rare_earths/mcs-2017-raree.pdf.
77. Clifford Coonan, “Rare-Earth Metal Prices Spike as China Stockpiles Supplies,” Independent, June 21, 2011, https://www.independent.co.uk/environment/rare-earth-metal-prices-spike-as-china-stockpiles-supplies-2300303.html.
78. Christine Parthemore, “Rare Earth Woes Could Mean Trouble for U.S. Stealth Fleet,” Wired, May 11, 2011, https://www.wired.com/2011/05/rare-earth-woes-could-mean-trouble-for-u-s-stealth-fleet/.
79. “Deep Sea Mining,” MIT: The Future of Strategic Natural Resources, 2016, http://web.mit.edu/12.000/www/m2016/finalwebsite/solutions/oceans.html.
80. “Why Are Hadal Zones Important?,” University of South Denmark, August 31, 2018, https://www.sdu.dk/en/om_sdu/institutter_centre/i_biologi/forskning/forskningsprojekter/benthic+diagenesis+and+microbiology+of+hadal+trenches/environment/why.
81. “Deep-Sea Corals,” Smithsonian Institute, https://ocean.si.edu/ecosystems/coral-reefs/deep-sea-corals.
82. Earth’s Final Frontier: A U.S. Strategy for Ocean Exploration (Silver Spring, MD: National Oceanic and Atmospheric Administration, 2000), https://oceanexplorer.noaa.gov/about/what-we-do/program-review/presidents-panel-on-ocean-exploration-report.pdf.
83. There are also autonomous underwater vehicles (AUV, like ROV but not connected to the ship).
84. As of 2015, about 50 percent of WHOI funding is from government sources. Bryan Bender, “Woods Hole Allies with Energy Firms,” Boston Globe, May 25, 2014, https://www.bostonglobe.com/news/nation/2014/05/24/woods-hole-feeling-budget-squeeze-looks-partner-with-energy-industry/sScPY15XErNsnU5PdtANzI/story.html. “History and Legacy,” Woods Hole Oceanographic Institution, http://www.whoi.edu/main/history-legacy.
85. “Hybrid Remotely Operated Vehicle Nereus Reaches Deepest Part of the Ocean,” Woods Hole Oceanographic Institution, June 2, 2009, http://www.whoi.edu/page.do?pid=7545&tid=7342&cid=57586.
86. Daniel Cressey, “Ocean-Diving Robot Nereus Will Not Be Replaced,” Nature 528, no. 7581 (2015), http://www.nature.com/news/ocean-diving-robot-nereus-will-not-be-replaced-1.18972. Instead, the United States is leaning on private organizations such as the Schmidt Ocean Institute (the foundation of Google former chairman Eric Schmidt) to lead the development of new deepwater vehicles, but there has been little progress to date.
87. Feng Liu, Wei Cheng Cui, and Xiang Yang Li. “China’s First Deep Manned Submersible, JIAOLONG,” Science China Earth Sciences 53, no. 10 (2010).
88. Xie Chuanjiao and Zhao Lei, “China’s Deep-Sea Submersible Goes on Global Mission,” Telegraph, July 28, 2017, http://www.telegraph.co.uk/news/world/china-watch/technology/chinas-deep-sea-submersible/.
89. “China Finds Sulfide Deposits in Indian Ocean,” People’s Daily Online, August 14, 2018, http://en.people.cn/n3/2018/0814/c90000-9490361.html (page discontinued).
90. Damian Carrington, “Is Deep Sea Mining Vital for a Greener Future—Even If It Destroys Ecosystems?,” Guardian, June 4, 2017, https://www.theguardian.com/environment/2017/jun/04/is-deep-sea-mining-vital-for-greener-future-even-if-it-means-destroying-precious-ecosystems.
91. Data from OECD R&D statistics. All comparisons are restricted to the twenty other nations that have information on total R&D and government R&D relative to GDP: Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, and Great Britain. For fifteen of the nations, we use data for 1981 and 2015. For Belgium and Portugal, data aren’t available for 1981, so we use 1982 (Belgium) and 1983 (Portugal) instead. For Sweden, data aren’t available for 2015, so we use 2013 instead. “Gross Domestic Spending on R&D,” OECD, 2018, https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm.
92. For government R&D, only the UK spent more than 1 percent of GDP, while only France, Germany, and Sweden spent more than 0.8 percent of GDP. For total R&D, Japan and the UK were slightly behind the United States at 2.2 percent of GDP, with Germany at 2.1 percent and Switzerland at 2 percent.
93. All facts in this paragraph and next are from Richard B. Freeman and Wei Huang, “China’s ‘Great Leap Forward’ in Science and Engineering” (working paper #21081, National Bureau of Economic Research, Cambridge, MA, 2015).
94. Mikhail A. Prokofiev, M. G. Chilikin, and S. I. Tulpanov, “Higher Education in the USSR,” UNESCO Educational studies and documents, vol. 39, 1961.
95. Freeman and Huang, “China’s ‘Great Leap Forward.’”
96. “The Recruitment Program for Innovative Talents (Long Term),” Recruitment Plan of Global Experts, http://www.1000plan.org/en/.
97. Anthony Capaccio, “U.S. Faces ‘Unprecedented Threat’ from China on Tech Takeover,” Bloomberg, June 22, 2018, https://www.bloomberg.com/news/articles/2018-06-22/china-s-thousand-talents-called-key-in-seizing-u-s-expertise.
98. It is notoriously difficult to obtain reliable data on Chinese R&D and in particular the distribution between the public and private sectors.
99. Jeff Tollefson, “China Declared World’s Largest Producer of Scientific Articles,” Nature, January 18, 2018, https://www.nature.com/articles/d41586-018-00927-4. China does have a low rate of international coauthorship, raising issues about the quality of the research by international standards; indeed, China’s share of international citations has been declining over time, although this may just reflect the even rapider growth in domestic citations.
100. This goal was stated in China’s 13th Five-Year Plan in Chapter 3, Box 2. “The 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2016–2020),” Central Committee of the Communist Party of China, Compilation, and Translation Bureau, http://en.ndrc.gov.cn/newsrelease/201612/P020161207645765233498.pdf.
101. Tarmo Lemola, “Finland: Building the Base for Telecom Breakthrough” (presented at Industrial Policy for New Growth Areas and Entrepreneurial Ecosystem conference, Helsinki, Finland, November 28–29, 2016), https://tem.fi/documents/1410877/4430406/Tarmo_Lemola.pdf/8893ba55-c46c-4e53-8346-186dbc5dd147/Tarmo_Lemola.pdf.
102. Edwin Lane, “Nokia: Life After the Fall of a Mobile Phone Giant,” BBC News, March 18, 2016, https://www.bbc.com/news/business-35807556.
103. Naomi Powell, “How Finland’s Economy Became Hooked on Nokia,” Globe and Mail, October 26, 2011, https://www.theglobeandmail.com/report-on-business/economy/economy-lab/how-finlands-economy-became-hooked-on-nokia/article618622/.
104. How America’s 4G Leadership Propelled the U.S. Economy (Dedham, MA: Recon Analytics, 2018), https://api.ctia.org/wp-content/uploads/2018/04/Recon-Analytics_How-Americas-4G-Leadership-Propelled-US-Economy_2018.pdf.
105. Steve Pociask, “The Global Race for 5G Technology Is On, and It’s Not Looking Good,” Forbes, April 17, 2018, https://www.forbes.com/sites/stevepociask/2018/04/17/the-global-race-for-5g-technology-is-on-and-its-not-looking-good/#667007b7555b.
106. The Global Race to 5G (Washington, DC: CTIA, 2018), https://api.ctia.org/wp-content/uploads/2018/04/Race-to-5G-Report.pdf.
107. How America’s 4G Leadership Propelled the U.S. Economy.
108. Roma Eisenstark, “Why China and the US Are Fighting Over 5G,” TechNode, March 30, 2018, https://technode.com/2018/03/30/5g/. “The U.S., China, and Others Race to Develop 5G Mobile Networks,” Stratfor, April 3, 2018, https://worldview.stratfor.com/article/us-china-and-others-race-develop-5g-mobile-networks.
109. Edison Lee, Telecom Services: The Geopolitics of 5G and IoT (New York: Jeffries Financial Group, 2017), http://www.jefferies.com/CMSFiles/Jefferies.com/files/Insights/TelecomServ.pdf.
110. “Many economists have said, yeah, there’s some legitimate issues here,” said Laura D. Tyson, an economist at the Haas School of Business of the University of California–Berkeley, who headed the Council of Economic Advisers under President Bill Clinton. “I haven’t seen any who have said the appropriate response is a series of tariffs on a bunch of goods, most of which don’t have any real link to the underlying issue.” Because tariffs would raise prices for American businesses and consumers that buy imported goods, “you’re hurting yourself if you follow through with it,” Mr. Mankiw said. “It just seems to me to be a not very smart threat to be making, given that it would not be rational to follow through with it.” Jim Tankersley, “Economists Say U.S. Tariffs Are Wrong Move on a Valid Issue,” New York Times, April 11, 2018, https://www.nytimes.com/2018/04/11/business/economy/trump-economists.html.
111. Rebecca Trager, “Countries Poised to Roll Out Deep Sea Mining in New ‘Gold Rush,’” Chemistry World, March 7, 2017, https://www.chemistryworld.com/news/countries-poised-to-roll-out-deep-sea-mining-in-new-gold-rush/2500509.article.
112. A. R. Thurber, A. K. Sweetman, B. E. Narayanaswamy, D. O. B. Jones, J. Ingels, and R. L. Hansman, “Ecosystem Function and Services Provided by the Deep Sea,” Biogeosciences 11, no. 14 (2014), https://www.biogeosciences.net/11/3941/2014/bg-11-3941-2014.pdf.
113. Technically, the ISA controls DSM outside of exclusive economic zones (EEZs) of individual countries (i.e., water that is more than two hundred kilometers from a country’s coast). Countries control regulations within their EEZ.
114. Mike Ives, “Drive to Mine the Deep Sea Raises Concerns Over Impacts,” October 20, 2014, Yale Environment 360, https://e360.yale.edu/features/drive_to_mine_the_deep_sea_raises_concerns_over_impacts.
115. Cary Funk and Brian Kennedy, “3. Public Opinion About Genetically Modified Foods and Trust in Scientists Connected with These Foods,” Pew Research Center, December 1, 2016, http://www.pewinternet.org/2016/12/01/public-opinion-about-genetically-modified-foods-and-trust-in-scientists-connected-with-these-foods/.
116. Anne Q. Hoy, “Agricultural Advances Draw Opposition That Blunts Innovation,” Science 360, no. 6396 (2018), http://science.sciencemag.org/content/360/6396/1413.
117. Kelly Servick, “How Will We Keep Controversial Gene Drive Technology in Check?,” Science, July 19, 2017, http://www.sciencemag.org/news/2017/07/how-will-we-keep-controversial-gene-drive-technology-check.
118. Gigi Kwik Gronvall, “US Competitiveness in Synthetic Biology,” Health Security 13, no. 6 (2015), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4685481/.
119. A more modern version would likely include residential and commercial space, for the reasons we discussed in earlier chapters.
120. “How Important Is the Semiconductor Industry to Taiwan?,” Financial Times, November 22, 2015, https://www.ft.com/content/f49958fc-8f32-11e5-8be4-3506bf20cc2b.
121. Ralph Jennings, “China Looks to Chip Away at Taiwan’s Semiconductor Dominance,” Forbes, November 9, 2017, https://www.forbes.com/sites/ralphjennings/2017/11/09/an-upstart-upstream-high-tech-sector-in-china-threatens-now-dominant-taiwan/#3768d66f5930.
122. Tain-ly Chen, “The Emergence of Hsinchu Science Park as an IT Cluster,” in Growing Industrial Clusters in Asia: Serendipity and Science, ed. Shahid Yusuf, Kaoru Nabeshima, and Shoichi Yamashita (Washington, DC: World Bank, 2008).
123. Yu Zheng, Governance and Foreign Investment in China, India, and Taiwan: Credibility, Flexibility, and International Business (Ann Arbor: University of Michigan Press, 2014). Info on Chang can be found in this IEEE profile: Tekla S. Perry, “Morris Chang: Foundry Father,” IEEE Spectrum, April 19, 2011, https://spectrum.ieee.org/at-work/tech-careers/morris-chang-foundry-father.
124. George Clancy, “Intelligent Island to Biopolis: Smart Minds, Sick Bodies and Millennial Turns in Singapore,” Science, Technology & Society 17, no. 1 (2012).
125. Information derived from the SARS genome helped the Genome Institute of Singapore (GIS)’s scientists “design new molecular probes that will aid in the confirmation of diagnosis,” “assist in the early diagnosis,” and identify possible viral gene targets for vaccines and drugs. “Singapore Scientists Determine Complete Genetic Code of SARS Virus,” Agency of Science, Technology, and Research, April 17, 2003, https://www.a-star.edu.sg/News-and-Events/News/Press-Releases/ID/490.
126. Clancy, “Intelligent Island to Biopolis.”
127. “Singapore’s Biopolis: A Success Story,” Agency for Science Technology and Research, October 16, 2013, http://www.nas.gov.sg/archivesonline/speeches/record-details/530a0796-63db-11e3-bb37-0050568939ad.
128. V. V. Krishna and Sohan Prasad Sha, “Building Science Community by Attracting Global Talents: The Case of Singapore Biopolis,” Science, Technology & Society 20, no. 3 (2015).
129. “Scientific American Worldview Scorecard Methodology,” Scientific American Worldview, 2018, http://www.saworldview.com/scorecard/scientific-american-worldview-scorecard-methodology/.
130. “Singapore Rising,” Scientific American Worldview, 2018, http://www.saworldview.com/scorecard/singapore-rising/.
131. “Biopolis: Ten Years On,” A-Star Research, November 20, 2013, https://www.research.a-star.edu.sg/feature-and-innovation/6861/biopolis-058-ten-years-on.
132. “Global Innovation Powerhouse Benefits from Network in Biopolis @ One-North,” JTC Corporation, June 29, 2017, https://www.jtc.gov.sg/news-and-publications/featured-stories/Pages/Global-innovation-powerhouse-benefits-from-network-in-Biopolis-@-one-north.aspx.
133. “worldVIEWguide,” Scientific American Worldview, http://www.saworldview.com/scorecard/worldviewguide/.
134. Steve Blank, “China Startup Report: Torch, the World’s Most Successful Startup Program (Part 2 of 5),” Startup Grind, 2015, https://www.startupgrind.com/blog/china-startup-report-torch-the-worlds-most-successful-startup-program-part-2-of-5/.
135. The Torch program is the largest and most successful government R&D program, and it was this program that spurred creation of national science/technology industrial parks. “Torch Program in the Past 15 Years,” China Internet Information Center, September 17, 2003, http://www.china.org.cn/english/2003/Sep/75302.htm.
136. Cheng-Hua Tzeng, “The State, the Social Sector, and the Market in the Making of China’s First Entrepreneurial Venture,” Business and Economic History 6 (2008), https://www.thebhc.org/sites/default/files/tzeng.pdf.
137. The company was originally named New Technology Development Company of the Computing Technology Institute of Chinese Academy of Science.
138. “Lenovo Overview,” Glassdoor, https://www.glassdoor.com/Overview/Working-at-Lenovo-EI_IE8034.11,17.htm.
139. Annual reports for the park are available at “Zhongguancun (Annual Reports),” May 17, 2018, https://docs.google.com/spreadsheets/d/1JNx7aq_YgNw1L_BG6dO1f5iN5IPW7AtZbJmN0uW1Zr0/edit?usp=sharing.
140. Researchers used ten data points to determine the rankings, including software engineer salaries, how long it takes to get a business up and running, cost of living and monthly rent prices, growth index, startup output, and other factors. Casey Hynes, “Beijing—Not Silicon Valley—Is the World’s Top Tech Hub, Report Says,” Forbes, November 2, 2017, https://www.forbes.com/sites/chynes/2017/11/02/has-beijing-unseated-silicon-valley-as-the-worlds-top-tech-hub-one-report-says-yes/#417f49a7acf2.
141. The Chinese Academy of Science has always been an integral part of the park, since many of the early start-ups originated from CAS talent. The CAS also contributed to ZGC’s growth by creating a policy framework called One Academy, Two Systems. The first of the Two Systems involved keeping a small number of scientists and engineers in basic research, while the second system was designed to encourage most researchers to seek outside funding for applied research that directly benefits the economy and that serves market needs.
142. Highest percentage of alumni in CAS: “USTC Introduction,” University of Science and Technology of China, October 14, 2016, http://en.ustc.edu.cn/about/201101/t20110113_87798.html.
Student populations for each college:
PKU: “Peking University 2017 Basic Data,” Peking University, December 2017, http://xxgk.pku.edu.cn/docs/20180410192941232836.pdf.
Tsinghua: “General Information,” Tsinghua University, 2018, https://www.tsinghua.edu.cn/publish/thu2018en/newthuen_cnt/01-about-1.html.
USTC: “USTC Introduction,” University of Science and Technology of China, October 14, 2016, http://en.ustc.edu.cn/about/201101/t20110113_87798.html.
Uniqueness of having two national labs: Ibid.
143. “Anhui Statistical Yearbook—1999,” China Statistics Publishing House, http://www.ahtjj.gov.cn/tjjweb/web/tjnj_view.jsp?strColId=13787135717978521&_index=1. “Anhui Statistical Yearbook—2017,” China Statistics Publishing House, http://www.ahtjj.gov.cn/tjjweb/web/tjnj_view.jsp?strColId=13787135717978521&_index=1.
144. Of course, none of these impressive facts prove that the research park strategy has worked in China—all this growth in companies and population movement may have happened even without the Chinese research park strategy.
145. “Our Results,” Mars Discovery District, 2018, https://www.marsdd.com/about/results/.
146. Information in this section from the Auditor General’s 2014 Annual Ontario report on the MaRS Phase 2 development (Chapter 3, Section 3.06 Appendix) and the update in 2016 (Chapter 1, Section 1.06). Office of the Auditor General of Ontario, “Infrastructure Ontario’s Loans Program” in Annual Report 2014 (Toronto: Queen’s Printer for Ontario, 2014), http://www.auditor.on.ca/en/content/annualreports/arreports/en14/306en14.pdf. Office of the Auditor General of Ontario, “Infrastructure Ontario’s Loans Program” in Annual Report 2016, vol. 2 (Toronto: Queen’s Printer for Ontario, 2016). MaRS Discovery District (Toronto: PricewaterhouseCoopers, 2016), https://www.marsdd.com/wp-content/uploads/2017/05/MaRS-DISCOVERY-DISTRICT-FS-2016.pdf.
147. Robert Benzie, “Booming MaRS Repays 290m Government Loan Three Years Early,” Star, February 7, 2017, https://www.thestar.com/news/queenspark/2017/02/09/booming-mars-repays-290m-government-loan-three-years-early.html.
148. The Economic Impact of MaRS Discovery District Activities on the Ontario Economy (Milton, ON: Centre for Spatial Economics, 2014), http://www.c4se.com/documents/MarsReport.pdf.