Defense Procurement Funding to Business Enterprises in the Development of U.S. Electronics Sector

The United States was an early leader in the history of the global electronics sector. Success in technology had strong implications for national security, political influence, and economic growth. Thus, there is much value to be gained in understanding the conditions of the early U.S. electronics sector development. It is suggested from background materials that government support was an important, possibly essential, force in the evolution of the electronics sector. The influence of the federal government on the development of the industry has been attributed to a variety of mechanisms from antitrust to intellectual property policies but prominence is usually assigned to the funds that the US government provided to the business sector in the form of R&D funding and procurement contracts. As Mowery and Nelson (1999) put it: "[v]irtually all accounts of the rise to dominance of the American semiconductor and computer industries … emphasize the procurement and R&D policies of the U.S. Department of Defense." Of the two policies, procurement arises as the more influential factor.