The Value of R & D, Romer’s NYT Op-Ed, and Driverless Cars

I don’t usually get two days out of any given Op-Ed, which goes to show you how much is going on in Romer’s essay from the NYT.

Another point she raises here:

Government spending on things like basic scientific research, education and infrastructure, on the other hand, helps increase future productivity. This type of spending often produces high social returns, but the private sector is unlikely to step up if the government pulls back. Case studies described in a recent survey found that less than half of the returns from research-and-development spending were captured by the private investor, so corporations shy away from such endeavors. Cutting federal funds for R.& D. would leave a void and could have significant long-run effects on growth.

Now, there are a bunch of things we can question here. The first is whether the private sector wouldn’t do more research if it had to, without having government sponsored universities and its research programs bearing some of those costs.

But the basic point is a good one as we sit back and watch Google and Volkswagen roll out their automated cars. The news stories make me want to rip out my hair: Oh, how clever are these companies?! Look at how they came up with automated cars all by themselves!

Google and Volkswagen–and the rest of us–are benefiting from more than a century of academic research on computing. There’s no Google at all without Alan Turing. We are always standing on the shoulders of giants—even the giants among us.

It’s unlikely we’d be at the point of automating cars without the space program or the army. Sure, there are plenty of roads to the same destination, and I’ve never been one to think that any one contribution is the be-all hero’s journey story that storytellers like to make of them.

But we have to give government-sponsored R & D some due: the investments in research often look arsy varsy and wasteful at the time. Who could have seen where we are today when Turing was fiddling about with algorithms while he was supported by the British government? What else might have he produced if he had done less applied work on the governments’ immediate problems? All those combinatorial math guys, foodling about. Where would traffic signals be without them?

Between Law & Order and the recent critiques of higher ed found *everywhere* produced mostly by people within the academy who hate it and their colleagues, it’s tempting to think that all academics get paid to sit around and molest their grad students. But reality is, as usual, different from stereotypes—the selected bad behaviors among some that are strategically emphasized to misrepresent the whole.

So how much R & D is too much? It’s a worthy question when social programs are getting cut, and hard to answer when you don’t know when the right idea is going to come along or when its application will suddenly become clear.

I have long sat through arguments from welfare rights advocates about how wasteful the space program is. It’s hard to disagree: when families are in need, don’t they have a greater claim to the resources? My response is that a wealthy country like the US can afford both to support poor families and innovation, but I don’t know that I believe my own response, and I’m not sure, if I had chose, which way I’d go.


If anything is likely to curb the bloodbath and loss of human life that are car crashes, it’s automated cars, the direct descendent of robotics and guided systems that were improved via space and aviation research. Automated driving is the potentially revolutionary marriage of government and market–research and implementation–that Google’s cars now represent. If defense and space research helped us get there, then the benefits to both rich and poor would be staggering in the retention of human capital.