Presentation: "Where Good Technologies Come From"

December 20, 2010 | Jesse Jenkins, Daniel Sarewitz,

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Presentation: "Where Good Technologies Come From" [.pptx]

This presentation was delivered by Jesse Jenkins (Director of Energy and Climate Policy, Breakthrough Institute) and Daniel Sarewitz (Director, Center for Science, Policy, and Outcomes, ASU; Breakthrough Institute Senior Fellow) at the Energy Innovation 2010 Conference, December 15th, 2010.


Apple, Amgen and General Electric. Bill Gates, Thomas Edison, and Alexander Graham Bell.

We are all familiar with these genius inventors and titans of industry.

Yet most of us remain unaware of the almost constant presence of a silent partner in American innovation: the federal government.

We might recall something about microchips and the space race, or know that the National Institutes of Health funds research into new drugs and treatments.

But most of us remain unaware of the depth and breadth of government support for technology innovation.

As we gather today to consider how to drive forward the dramatic innovation needed to deliver cheap, clean and massively scalable energy sources to power world, we would do well to pause and take a look back at the United State's long history of limited but energetic public investment in breakthrough technologies.

* * *

Consider the iPhone. There may be no better example of the invisible hand of government in technology innovation than this revolutionary device that yields practically miraculous abilities.

How many of you out there have an iPhone or other smart phone in your pocket? Take it out and consider it for a second. [pause a few seconds...] OK, stop checking your email and come back to us!

With this device, you hold the combined knowledge of the World Wide Web in the palm of your hand, can read practically any newspaper or listen to any song in the world, and quickly find directions to anywhere you may want to go. The device's possibilities are nearly endless, and most were considered science fiction just a decade ago.

And while we all know the device was designed and built by the industrial engineers at Apple, what you probably don't know is that from the microprocessor at its core to the GPS that ensures you're never lost, practically all of the key platform technologies the iPhone is built upon were developed in partnership with the government, through taxpayer funding for communications and information technologies.

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You see, the microchips powering the iPhone owe their emergence to the U.S. military and space programs, which made up almost the entire early market for the breakthrough technology. In the 1960s, the government bought enough of the initially costly chips to drive down their price by a factor of 50 in a few short years, enabling numerous new applications.

The early foundation of cellular communication similarly lies in radiotelephony capabilities progressively advanced throughout the 20th century with support from the U.S. military.

The technologies underpinning the Internet, which gives the "smart phone" its smarts, were developed and funded by the Defense Department's Advanced Research Projects Agency in the 1960s and 70s.

And GPS was originally created and deployed by the military's NAVSTAR satellite program in the 1980s and 90s.

Even the multi-touch display that makes using an iPhone so intuitive has the government's fingerprints all over it. The revolutionary interface was first developed by a brilliant pair of University of Delaware researchers supported by grants and fellowships provided by the National Science Foundation and the CIA.

To be sure, the creativity and genius of Apple's industrial engineers brought the iPhone to fruition. But without the kind of active government support for technology development critical to the birth of so many of these key platform technologies, the iPhone and the many other smart phones now proliferating in the marketplace would never have been possible.

* * *

So where do good technologies come from?

One answer is visionary presidents.

From George Washington to George W. Bush and everywhere in between, under presidents both Republican and Democrat, the unbroken history of American innovation is one of active partnership between public and private sectors.

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Washington helped deliver interchangeable parts, which revolutionized manufacturing, and were first developed by public armories.

Lincoln drove the construction of the transcontinental railroad that first spanned our great nation, and he established land grant colleges, creating a new system of agricultural research that would dramatically improve farm productivity, strengthen the American economy, and help feed a hungry world.

Under Wilson, military procurement and cutting edge R&D performed by the National Advisory Committee for Aeronautics built the modern aviation industry and propelled American firms ahead of international competitors.

Eisenhower built the interstate highways and harnessed Atoms for Peace, launching a public-private partnership to build the first commercial nuclear reactors.

And Kennedy's space and missile programs fueled the rise of microchips and computing, catapulting the world into the Silicon Age.

Richard Nixon launched the quest to cure cancer with the National Cancer Act of 1971.

Two decades later, the budgets for the National Institutes of Health would first double and then triple from 1995 to 2008, under both Presidents Bill Clinton and George W. Bush.

Public support for biomedical innovation would spawn countless blockbuster drugs, spur the rise of biotech giants, and materially improve the lives of millions worldwide.

* * *

As we can see, the story of the iPhone is by no means anomalous. Rather, it is emblematic of the productive public-private partnerships that have always driven America's technological leadership.

Let us be clear. This is quite simply how America does innovation.

America's long history of technology leadership and economic vitality was not born of the singular genius of great inventors and entrepreneurial firms alone - as crucial as these actors were.

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Throughout the nation's history, the federal government has acted as both initial investor in blockbuster research and development and early, demanding customer for innovative new technologies. Both roles are so often essential.

When this vital partnership between the public and private sectors is severed, so too is American economic leadership.

Once a global leader in wind and solar energy technology, the United States faltered and never fully recovered as public support ceased and other governments stepped in to increase their investments in these technologies and assume the mantle of leadership in the emerging sectors.

U.S. leadership in semiconductors was also imperiled for a time, only to be restored through renewed public-private collaboration sponsored by President Ronald Regan's Department of Defense and involving a consortium of the industry's leading figures: SEMATECH.

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So while we all learn of the Invisible Hand of the Market in Economics 101, we rarely recognize that the Invisible Hand of Government lies behind countless American innovations.

From hybrid crops to blockbuster drugs, nuclear power to wind power, and microchips to the Internet, these revolutionary technologies have enriched lives around the world, fueled successive waves of economic growth, and turned America's technological prowess into the envy of the world.

Today, as we consider new ways to structure the American energy innovation system, we must keep in mind these case studies in American innovation, and plan properly how best to construct the kind of public-private partnership that will deliver the energy breakthroughs needed by America and the world.

* * *

As we study America's long history of public support for technology development, one actor takes center stage time and time again: the U.S. Department of Defense. The force behind microchips and the Internet, jet engines and GPS, the DOD has been proven to be a rich source of countless technologies we now take for granted.

What features have made the DOD such an effective innovator, and can we learn lessons to inform America's new innovation imperatives? Here's 10 features that have made the DOD a powerful source of American innovation (Letterman-style):

#10. R&D capacity: DOD has 30,000 scientists and engineers engaged at all stages of the innovation process from basic science (though not much, internally) to acquisitions to maintenance and improvement of deployed systems.

#9. A related point: DOD maintains strong ties to academia, using public funds to expand the relevant knowledge base but disciplining research to maintain relevance to security mission.

#8. A diversity of roles and approaches - e.g., DARPA vs ONR vs other service labs. Different cultures in terms of risk, patience, role in innovation activities. For example, DARPA hands off advanced technology systems to services for continued innovation activities related to improved performance.

#7. Role as a test bed for innovative technologies; from demonstration to early deployment. Potential role of bases for testing and improving new energy infrastructure technologies like micro-smart grid, synthetic fuels for forward bases, advanced battery technologies for wired foot-soldiers, etc.

#6. Persistence. DOD has engaged in innovation on particular areas of technology over many decades to ensure continued performance improvement. Batteries, gas turbines, synthetic fuels, nuclear technologies, all with direct relevance to energy technology challenge.

#5. High price point. Focus on mission and performance over price, allows early adoption of promising technologies with little normal market potential. $200-400/gallon gasoline 'all-in' cost to deliver to front in Afghanistan, for example; grid security for bases; improved autonomy of foot soldiers (portable power, advanced batteries etc.), etc.

#4. Strong enduring ties to firms due to role as both innovation investor and customer for new technologies. Allows close and trusting institutional relations that can often lubricate transactions and improve performance (can also lead to corruption and capture, of course). Strong contrast w/DOE here (which lacks such relationships).

#3. Role as customer: procurement as key source of significant early markets for many new technologies that creates confidence in, and competition among, high-tech firms.

#2. Trillions of dollars! (big budgets don't hurt; can't get big innovation on the cheap)

#1. Shared values. National defense as a public good. During Cold War, this was a powerful underlying driver of DOD's capacity to innovate, as strong, shared values nationwide supported national defense mission. The political challenge today is to seek a framing for energy technology innovation that can have at least some of the same galvanizing and unifying effect as the cold war era. Innovation and its contribution to wealth creation, efficiency, competitiveness, energy security, as well as climate change, can all be part of this framing.

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While these realities have forced us to rethink how we look at the military-industrial complex, this isn't to say that DOD has to be the central actor in the new effort to spur dramatic energy innovation.

Given that Pentagon's strategic and operational interests in reducing reliance on oil in the front and the nation's fragile electricity grid at home, it will likely be a key player in the U.S. energy innovation system.

But regardless of which actors take center stage now, the key features that have helped make DOD such an effective source of American innovation in the past will likely be prominent aspects of the energy innovation system we must build for the future.