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Source: Daniel P. Gross and Bhaven N. Sampat, “Inventing the Endless Frontier: The Effects of the World War II Research Effort on Post-war Innovation,” NBER Working Paper No. 27375, June 2020.
Commentary: Critics of public R&D funding often argue that while the investment may increase research in the short run, it fails to induce long-term changes in innovation. Evidence about the World War II-era Office of Scientific Research and Development (OSRD), which engaged in 2,200 contracts worth nearly $8 billion in present value, puts that claim to bed. A new study finds that prior to the war, patenting in counties that received large amounts of OSRD funding had been in line with other counties, but then they diverged significantly, increasing patenting by 30 percent in 1970 relative to other counties.