# S9 Ep26: The public origins of American innovation

Page: https://stenobird.com/podcast/voxtalks-economics-504930/s9-ep26-the-public-origins-of-american-innovation
Text version: https://stenobird.com/podcast/voxtalks-economics-504930/s9-ep26-the-public-origins-of-american-innovation.md
Podcast: [VoxTalks Economics](https://stenobird.com/podcast/voxtalks-economics-504930)
Published: 2026-04-24T10:00:00+00:00
Episode link: https://audioboom.com/posts/8894949
Audio file: https://audioboom.com/posts/8894949.mp3?modified=1777020159&sid=4966228&source=rss
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JSON: https://stenobird.com/v1/public/podcasts/voxtalks-economics-504930/episodes/s9-ep26-the-public-origins-of-american-innovation
Duration seconds: 1869

## Resource

The standard story of American innovation features Silicon Valley, venture capital, and the heroic startup founder.When you trace the history of the internet, GPS, mass-produced penicillin, or the COVID vaccine, the starting point is not a term sheet but a government grant. How much does this matter, and can we measure it? Tim Phillips speaks to Paolo Surico of London Business School and CEPR who, working with Andrea Gazzani, Joseba Martinez, and Filippo Natoli, has built the first systematic empirical account of how government-funded innovation has shaped US productivity since the Second World War. The headline result: government-funded patents account for roughly 2% of all patents filed in the post-war period, but explain around 20% of medium-term fluctuations in total factor productivity and GDP growth. The return on every dollar of public R&D is more than double the return on every dollar of private R&D. The key mechanism is not that government crowds out private investment; it crowds it in. For every dollar of public research, roughly another dollar of private investment follows, as talent from universities and research institutes moves into startups that commercialise what the public sector seeded. The logic is high-risk, high-reward: the government takes on the uncertainty and fixed costs that the private sector will not bear, accepting a large number of failures in order to find the breakthroughs that private capital would never have funded. The model is now under pressure: 2025 brought the largest cuts to US federal science funding in the post-war period. AI adds a further complication: for the first time, a general-purpose technology is being driven primarily by private capital, and that capital is now pulling the best scientific talent out of researc…

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## Transcript

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