Knowledge Spillovers and Industrial Policy: Evidence from the Advanced Technology Program and the Department of Defense

The Economics of Adaptation and Long-term Relationships (Elgar, March 2019)

Posted: 2 May 2019

Date Written: March 29, 2019

Abstract

For a generation the federal government has maintained programs promoting research joint ventures (RJV’s). The ostensible motivation late in the going was to promote knowledge spillovers. The real motivation was to stem the perceived decline of American competitiveness. It is not obvious, however, that federal government initiatives had any effect with respect to either knowledge spillovers or “competitiveness”. It is not obvious that public initiatives were good at identifying RJV’s that would be best situated to generate spillovers. Rather, federal initiatives appear to have channeled resources to ventures that private parties could have been expected to pursue absent subsidies. The government selected the wrong ventures to subsidize.

The conclusion derives from examination of 171 RJV contracts. RJV’s involving technologies that were less susceptible to unintended spillover have tended to exploit contractual mechanisms to contain spillovers. Government-subsidized ventures were more likely to exploit those same mechanisms.

Keywords: research joint ventures, uncertain property rights, knowledge spillover, Background Intellectual Property, Foreground Intellectual Property, nondisclosure agreements

JEL Classification: D23, L24, L52, O31, O38

Suggested Citation

Williamson, Dean V., Knowledge Spillovers and Industrial Policy: Evidence from the Advanced Technology Program and the Department of Defense (March 29, 2019). The Economics of Adaptation and Long-term Relationships (Elgar, March 2019), Available at SSRN: https://ssrn.com/abstract=3364936

Dean V. Williamson (Contact Author)

Independent ( email )

Washington, DC
United States

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