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42 / SUPPLEMENT 1 



magnitude during World War II, and two important institutional innovations were ^" 

 introduced. First, large numbers of academic researchers were mobilized to work in 

 their own institutions' laboratories on wartime R&D projects, whereas during World 

 War I, scientists working on military projects had been made members of the mili- 

 tary. Second, the R&D contract was devised as a mechanism to pay for private 

 performance of work whose approach and outcome — in this case, R&D results — 

 could not be specified precisely in advance. Importantly, the federal government 

 agreed to compensate university and industry performers for the indirect or over- 

 head costs of R&D done under grants and contracts, in addition to paying for direct 

 expenses. 



To carry out the vastly increased scale of R&D during World War II, major 

 investments were made in research laboratories. New government laboratories 

 were created and new administrative mechanisms were devised to oversee their 

 work in the face of a shortage of government employees experienced in managing 

 major R&D programs. A sense of mutual obligation emerged in which the R&D 

 institutions could reasonably expect continued funding in return for producing 

 quality efforts and results from government-financed programs. 



• Federal R&D support was consolidated in the immediate postwar 

 period. In his July 1945 report, 5c/e«ce — The Endless Fro«Wer, ^Vannevar Bush, 

 who headed the U.S. wartime R&D effort, provided the intellectual rationale for 

 federal support of both basic research and research related to national security, 

 industr)', and human health and welfare. He sketched a plan for a national research 

 foundation, to be funded by the federal government and led by scientists from the 

 private sector, that would support basic scientific research and education in areas 

 related to medicine, the natural sciences, and new weapons. His plan contributed 

 to legislation adopted in 1950 that established the National Science Foundation 

 (NSF). By that time, however, the National Institutes of Health (NIH) had estab- 

 lished its control over most health-related research, including university-based 

 biomedical research and training; the Office of Naval Research (ONR) had taken on 

 a major role in supporting academic research in the physical sciences; and the new 

 Atomic Energ)' Commission had been assigned control of R&D on nuclear weapons 

 and nuclear power NSF's mission thus focused on supporting fundamental research 

 and related educational activities, and its annual budget was less than $10 million 

 until the late 1950s. In contrast, the NIH's annual budget, which had been less than 

 $3 million at the end of the war, grew to more than $50 million by 1950. 



• The scope of federal R&D support grew modestly in the decade after 

 World War n. Several additional federal R&D efforts were launched during the late 

 1940s and early 1950s. Anxien- over the Cold War, and the loss in 1949 of the U.S. 

 monopoly in nuclear weapons, led to expanded R&D programs in the Army and in 

 the newly established Air Force, and to a continuing buildup in support for nuclear 

 weapons R&D in the Atomic Energy Commission. On the civilian side, R&D pro- 

 grams were established or expanded in fields with direct practical importance, such 

 as aeronautics technology, water desalinization, and atmospheric disturbances and 

 weather. However, appropriations for these new civilian R&D efforts remained 

 relatively limited through the mid-1950s. 



• Sputnik provided the impetus for a major expansion of federal 

 support for R&D. The launch of Sputnik by the Soviet Union in 1957 provoked 



