Exploring the Unknown - NASA's History Office

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Document III-3
Document title: “Economic Impact of Stimulated Technological Activity,” Final Report,
Midwest Research Institute, Contract NASW-2030, October 15, 1971, pp. 1–11.
Source: NASA Historical Reference Collection, NASA History Office, NASA
Headquarters, Washington, D.C.
This analysis was the first truly comprehensive national estimate of the returns from NASA R&D
expenditures. It used a methodology developed by Robert Solow based on an aggregate national production
function to estimate overall returns from R&D and then the subset of NASA R&D impacts.
The results of a seven-to-one return on NASA expenditures and a projected 33-percent discounted rate
of return from 1958 through 1987 were used for many years in press releases and public statements
about the beneficial effects of NASA R&D. The following is Part I of what was a three-part report.
Economic Impact of Stimulated Technological Activity
[1] ECONOMIC CONSEQUENCES OF STIMULATED TECHNOLOGICAL ACTIVITY
“The nation’s technological capacity, which is conceptually analogous to the capacity
of its physical plant, is unquestionably a nation’s most important economic resource. By
the same token, the rate at which its technological capacity grows sets what is probably the
most important ceiling on its long-term rate of economic growth.
The rate of growth of a nation’s technological capacity depends jointly upon the rate
at which it produces new technology and the rate at which it disseminates the old.”
OVERVIEW
SPACE AS AN INVESTMENT IN ECONOMIC GROWTH
Jacob Schmookler
Invention and Economic Growth
1966
The degree to which a nation can satisfy its collective and individual wants is dependent
upon the wealth of the nation and its citizens. The accumulation of economic wherewithal
is obtained through combinations of labor, capital, and technology. All three inputs
are essential but it is through technological progress that the productivity of labor and
capital are increased to obtain more output per unit of input and, consequently, greater
per capita wealth. The United States leads the world in the generation and application of
technology. Our technological progress poses certain dilemmas, but is also the source of
much of the economic power we are bringing to bear on societal deficiencies—deficiencies
that many less wealthy nations cannot afford to consider, much less mount assaults
upon.
This volume highlights the findings of a research inquiry into the relationships
between technological progress and economic development, with emphasis on the several
ways in which NASA research and development has aided in the accumulation and commercial
application of new or improved scientific and technological knowledge.
[2] Scope of Research
The research undertaken had three separate, but related parts: Part I was an examination
of the importance of technological progress in the generation of national eco-