ABSTRACT
The transistor story was different in that, unlike the two innovations just mentioned, it was financed privately, at AT&T's Bell Labs, and not publicly. The main impetus toward its development, announced in December 1947, was the desire to improve long distance telephone transmission. However, the Department of Defense was quick to understand that miniaturisation and increased reliability of electrical circuits would also play an important role in the improvement of military hardware. It was widely realised that further improvements in this technology would find a large and ready market in military procurement contracts. Thus, when the integrated circuit was introduced after 1960, purchases were overwhelmingly dominated, for several year, by the military. The essential points here is that the impact of the military upon technological change was not exercised only through large R&D budgets but also through the awareness, in the private sector, that very large military procurement contracts were likely to be captured by firms that could generate the appropriate new technologies.
