Crisis Innovation Policy from World War Ii to Covid-19

35 Pages Posted: 14 Jun 2021 Last revised: 20 Jul 2021

See all articles by Daniel P. Gross

Daniel P. Gross

Duke University - Fuqua School of Business; National Bureau of Economic Research

Bhaven N. Sampat

Columbia University - Mailman School of Public Health

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Date Written: June 2021

Abstract

Innovation policy can be a crucial component of governments' responses to crises. Because speed is a paramount objective, crisis innovation may also require different policy tools than innovation policy in non-crisis times, raising distinct questions and tradeoffs. In this paper, we survey the U.S. policy response to two crises where innovation was crucial to a resolution: World War II and the COVID-19 pandemic. After providing an overview of the main elements of each of these efforts, we discuss how they compare, and to what degree their differences reflect the nature of the central innovation policy problems and the maturity of the U.S. innovation system. We then explore four key tradeoffs for crisis innovation policy—top-down vs. bottom-up priority setting, concentrated vs. distributed funding, patent policy, and managing disruptions to the innovation system—and provide a logic for policy choices. Finally, we describe the longer-run impacts of the World War II effort and use these lessons to speculate on the potential long-run effects of the COVID-19 crisis on innovation policy and the innovation system.

Suggested Citation

Gross, Daniel P. and Sampat, Bhaven N., Crisis Innovation Policy from World War Ii to Covid-19 (June 2021). NBER Working Paper No. w28915, Available at SSRN: https://ssrn.com/abstract=3866348

Daniel P. Gross (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Bhaven N. Sampat

Columbia University - Mailman School of Public Health ( email )

600 West 168th St. 6th Floor
New York, NY 10032
United States

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