ABSTRACT
The US government has historically had an important partnership role with the private sector in fostering innovation. This intuitive conclusion logically follows from the following: innovation leads to technology; technology is the prime driver of economic growth; in the absence of government intervention, firms in all sectors will underinvest in the innovation process (especially in R&D) due to knowledge spillovers and appropriability issues; and government has a responsibility to address this underinvestment by providing incentives for the continued conduct of, or perhaps increase in, R&D.
