The Economics of Science and Technology: An Overview of Initiatives to Foster Innovation, Entrepreneurship, and Economic Growth

131 Pages·2002·3.552 MB·English

by  Maryann P. Feldman, Albert N. Link, Donald S. Siegel (auth.)

THE ECONOMICS
OF SCIENCE AND
TECHNOLOGY
THE ECONOMICS
OF SCIENCE ANO
TECHNOLOGY:
AN OVERVIEW OF INITIATIVES
TO FOSTER INNOVATION,
ENTREPRENEURSHIP, ANO
ECONOMIC GROWTH
Maryann P. Feldman
Johns Hopkins University
Albert N. Link
University of North Carolina at Greensboro
Donald S. Siegel
University of Nottingham, U.K.
Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data
Feldman, Maryann P.
The econom ies of science and technology : an overview of initiatives to foster
innovation, entrepreneurship, and economic growth I Maryann P. Feldman, Albert
N. Link, Donald S. Siegel.
p.cm.
Includes bibliographical references and index.
ISBN 978-1-4613-5335-5 ISBN 978-1-4615-0981-3 (eBook)
DOI 10.1007/978-1-4615-0981-3
1. Research-Economic aspects-United States. 2. Technology-Economic
aspects-United States. 3. Science and state-United States. 4. Technology and
state-United States. 1. Link, Albert N. II. Siegel, Donald S., 1959-III. Title.
QI80.55.E25 F45 2002
338.973'06-dc21 2002019101
Copyright © 2002 by Springer Science+Business Media New York
Origina11y published by Kluwer Academic Publishers in 2002
Softcover reprint ofthe hardcover Ist edition 2002
An
rights reserved. No part ofthis work may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, microfilming, recording, or otherwise, without written permission
from the Publisher, with the exception of any material supplied specifically for
the purpose of being entered and executed on a computer system, for exclusive
use by the purchaser of the work.
Permissions for books published in Europe: [email protected]
Permissions for books published in the United States of America: [email protected]
Printed an acid-free paper.
For our families
CONTENTS
LIST OF TABLES xi
LIST OF FIGURES Xlll
ACKNOWLEDGEMENTS xv
1. INTRODUCTION 1
Fundamental Definitions 3
Overview of th~ Book 5
2. AN HISTORICAL PERSPECTIVE 7
The Colonial Period 7
Toward a National Science and Technology
Infrastructure 10
Toward an Industrial Science and Technology
Infrastructure 11
World War I and the Years that Followed 12
World War II and the Years that Followed 14
3. ECONOMIC GROWTH AND TECHNOLOGICAL
CHANGE 21
4. DIMENSIONS OF R&D 27
Sources of Funding of R&D 27
R&D Performers 30
R&D by Character of Use 32
R&D Activity in Large and Small Firms 33
R&D Activity by Geographic Location 37
R&D-to-Productivity Growth Relationship 38
5. THE ENTREPRENEURIAL PROCESS 43
6. GOVERNMENT'S ROLE IN INNOVATION 47
Economic Rationale for Government Involvement 47
Barriers to Technology and Market Failure 49
7. THE PATENT SYSTEM 53
8. TAX INCENTIVES 59
The Economics of Tax Credits 60
The R&E Tax Credit 61
9. RESEARCH COLLABORATIONS 65
Semiconductor Research Corporation 65
Public Policy Toward Research Collaborations 67
Trends in RJV s 69
Universities as Research Partners 70
Government Laboratories as a Research Partner 72
10. PUBLICIPRIVATE PARTNERSHIPS 75
SEMATECH 77
Small Business Innovation Research Program 79
Advanced Technology Program 80
11. INFRASTRUCTURE TECHNOLOGY 83
Federal Laboratory System 83
National Institute of Standards and Technology 84
The Economics of Standards 89
12. AN INTEGRA TED ENTREPRENEURIAL PROCESS 93
13. LABOR MARKET FOR R&D SCIENTISTS AND
ENGINEERS 97
Foreign-Born Scientists and Engineers 98
R&D Policy on S&E Labor Markets 98
viii
Women in Science 100
Forecasting Scientific Labor Markets 100
14. PUBLIC ACCOUNTABILITY 103
Performance Accountability 104
Fiscal Accountability 107
Systematic Approaches to the Evaluation of
Technology-Based Programs 108
Program Evaluation 111
15. CONCLUSIONS 113
REFERENCES 117
INDEX 131
ix
LIST OF TABLES
Table 1.1. Indices of Public Interest and Self-Assessed
Knowledge in Selected Policy Issues, 1999 2
Table 4.1. National R&D Expenditures, by Performer and
Funding Source, 1999 ($Millions) 28
Table 4.2. Largest R&D-Active U.S. Companies 35
Table 4.3. Selected Studies of the Relationship Between
Innovation and Firm Size 36
Table 4.4. Selected Studies of Knowledge Spillovers 38
Table 4.5. Selected Studies of the Relationship Between
R&D and Productivity Growth 40
Table 7.1. Selected Literature on Patent Activity 56
Table 10.1. Selected PubliclPrivate Technology
Partnership Legislation 78
Table 11.1. Overview of Selected National Laboratories 84
LIST OF FIGURES
Figure 1.1. The Entrepreneurial Process: An Initial Look 4
Figure 3.1. Real GOP per Capita for Selected Countries,
1960-1996 (U.S. $1000) 23
Figure 3.2. Private Non-Farm TFP, 1948-1997
Figure 3.3. The Entrepreneurial Process: A Second Look 25
Figure 4.1. U.S. R&D Funding by Source, 1953-1998
(Billions $1992) 29
Figure 6.1. Gap Between Social and Private Rates of
Return to R&D Projects 50
Figure 7.1. Economics of Patenting: Increasing Marginal
Private Return for the Firm 55
Figure 8.1. Economics of a Tax Credit: Decreasing
Marginal Private Cost for the Firm 60
Figure 12.1. The Entrepreneurial Process:
An Integrated Look 95
ACKNOWLEDGEMENTS
A
spects of the research that underlies this book first appeared as a
centerpiece article in the lournaL of TechnoLogy Transfer. That
abbreviated version of the material presented herein was prepared as a
primer or general introduction to the field that we call the economics of
science and technology. A number of eminent scholars were invited to
participate in the lIT project, and the material contained in this book,
although expanded in scope, has greatly benefited from their input and
thought. We are appreciative to each of them: David Audretsch of Indiana
University, Barry Bozeman of the Georgia Institute of Technology, Kathy
Combs of the University of St. Thomas, Paula Stephan of Georgia State
University, Greg Tassey of the National Institute of Standards and
Technology, and Chuck Wessner of the National Academy of Sciences.
We also thank John Jankowski of the National Science Foundation and
John T. Scott of Dartmouth College for their comments and suggestions
on earlier versions.
And finally, we thank our families, whose patience has been greatly
appreciated throughout this entire undertaking and to whom this book is
dedicated.