No to ARPA: How state research spending does not stimulate innovation

This report from UK think tank the Adam Smith Institute looks at claims that ARPA is responsible for substantial technological progress.

The original Advanced Research Projects Agency (ARPA), subsequently renamed Defense Advanced Research Projects Agency (DARPA), was created in the US in 1958. ARPA funded especially pure, especially unrestricted research; and it recruited scientists on unusually free contracts, and with unusually large budgets, to essentially do what they wanted.1 Its supporters claim that ARPA delivered the modern world: so Mariana Mazzucato, Professor of Economics of Innovation and Public Value at University College London, has claimed that ARPA is responsible for key advancements in semiconductors and personal computing, “Going way beyond simply funding research, DARPA funded the formation of computer science departments, provided start-up firms with early research support, contributed to semiconductor research and support to human computer interface research, and oversaw the early stages of the internet.” 2 This view has been echoed on the Conservative side of politics, and on January 28, 2020, Policy Exchange released Visions of ARPA, which argued that a vast government investment in pure, undirected science, would help transform the economy. This argument had been adumbrated a year earlier, on March 11, 2019, in a blog by Prime Minister Boris Johnson’s chief adviser Dominic Cummings: “I have repeated this theme ad nauseam on this blog: 1) We KNOW how effective the very unusual funding for computer science was in the 1960s/1970s—ARPA-PARC created the internet and personal computing … ” 3 Later in 2019, he wrote that: “As Bill Gates said, he and Steve Jobs essentially stole into PARC, stole their ideas, and created Microsoft and Apple.” 4 According to Cummings, therefore, Britain needs an ARPA so Britain, too, can lead the world technologically. And, as Prime Minister Boris Johnson said during the 2019 election campaign, his government was committed to spending taxpayers’ money on ‘blue skies’ research. 5 This sentiment was echoed in the Queen’s Speech on October 14, 2019, which stated that the British government would: “… significantly boost public R&D … modelled on the US Advanced Research Projects Agency …”6 Which was followed by the announcement of £800 million for a British ARPA in the March 2020 budget, which in turn was intended to be only the first instalment in doubling the British government’s expenditure on research, from £11.4 billion to £22 billion a year, over the next 5 years. 7 This paper seeks to reassess the accuracy of claims that ARPA/DARPA is responsible for substantial technological progress.

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