GeminiAtlas

Has Stagnating Innovation Led to This Economic Crisis?

Lucky Lenny, to add to what TimboM comment, the predecessor of the internet was the ARPAnet which is the first packet switching network, basically the basis of how the whole internet works to this day. And the research was funded by DARPA. This was done mainly to link universities and various government labs so that they could share information more easily. Eventually it was used to link military nodes as the MILNET, and then eventually the internet came to be by further investment by commercial concerns.
In any case, much basic research is funded by the government, mainly for military purposes. Much of the research done does have a spin-off effect which is that companies take the research and further it to make commercial technologies. This also has a back and forth feedback loop as some commercial technologies get integrated into military hardware, e.g. electronics. Some military/gov't hardware becomes commercialized, e.g. GPS, night-vision in cameras, etc.
The main reason the government spends money on the basic research is because of "extreme" requirements not usually seen by commercial technologies (i.e. military and space environments and needs). And since basic research is risky with little chance of payoff within a timely manner, many businesses cannot afford to do it since the time horizon could be decades. Much better to form ties to universities and gov't labs to license, or further the research into applied research and then onto development which are less risky, and have a shorter time-horizons to successful commercialization.
But to be a little cynical, although of late, much of the gov't basic research dollars have been pouring into healthcare related research which is okay, per se, but will also mean older people living longer placing more burden on the social security system but nonetheless being reliable voters (coincidence...hmmm?). I, for one, would like to at least be flying around in my jet pack (remember they promised us jet packs way back when?) when I retire.
On a related note, if the government wants to (partly solve) its looming budget shortfalls in the next generation, it should invest more money into basic research, as well as applied. How much tax revenue has the government been able to reap from the rise of GPS, and internet, and other such technologies which have spawned whole new industries? Where would the GDP be if there had been no internet?
I say partly solve, because I doubt congress would be able to keep its hands off any increased tax revenue due to new rising economic activity from its investment. But that's for another discussion...