Exploring the Unknown - NASA's History Office

EXPLORING THE UNKNOWN 387
However, discerning the economic impact of “little” technologies is another matter.
Since NASA has been committed to increasing its impact on the economy through an
aggressive technology transfer program, that program has primarily focused on funding
demonstration projects that attempt to take ideas generated within NASA (or its contractors)
and moving them toward usable end products. Although there have been some successes
in this process, the technology transfer program has generated criticism over the
years. NASA has been keenly aware of the vulnerability of the program as well as the
importance of measuring its success through case studies and more aggregated metrics.
In many ways, the agency has gained political support through the anecdotal accounts of
useful products developed through the technology transfer process. These examples, particularly
in the biomedical area, have provided a grounding for space technology that is
understandable to Congress and the general population in human terms.
The focus of this chapter is twofold. First, it traces the history of macroeconomic measures
of NASA’s impact on the economy from both policy and economic methodology perspectives.
Second, it discusses the efforts to develop measures of specific technology transfer
activities. Together, these two trends are related to overall political and social forces that
have influenced NASA’s budget and the public’s perception of space activities. This chapter
does not review the short-term impact analyses or the impacts of the “big” technologies
on the economy because these issues are well documented in other literature. 2
Measuring NASA’s Impact on the Economy
Three distinct approaches have been used to quantify the economic impacts of space
R&D:
• An adaptation of a macroeconomic production function model estimates impacts of
technological change attributed to R&D spending on the “gross domestic product” and
derivative measures such as employment and earnings. The results of using this type of
model can be expressed as a rate of return to a given investment or as a total value.
• A microeconomic model evaluates the returns to specific technologies through the
use of benefit-cost ratios. Benefits derived from these studies are rarely additive to
aggregate benefits across different technologies because of technical incompatibilities
in data collection and economic assumptions underlying the models.
• An examination of data provides evidence of the direct transfer of technology from
federal space R&D programs to the private sector. The results of these analyses tend
to be reported in actual numbers measured (number of patents or inventions, value
of royalties, value of sales, and so on). They are rarely compared to associated government
expenditures because of the difficulty of linking specific funding to specific
products or patents.
Until the very late 1960s, NASA did not have to worry much about defending its budget.
During the early years of the Apollo era (which ran from 1961 to 1972) the United
States was in the most heated part of the Cold War and had made a commitment to get a
human on the Moon before the Soviet Union. The expense was almost secondary, and
NASA was provided with a budget large enough to perform the job. At the same time, the
United States had an overall budget surplus. This was before the impact of the expenses
2. The short-term direct impact of federal expenditures is a topic that is thoroughly discussed in any
elementary economics textbook. Reference will be made in this essay to studies that have focused on the special
distribution of NASA short-term employment and income effects.