The Seeds of Innovation

By Kevin Ashton

Government stimulus is not only good for the economy—it also leads to groundbreaking technologies.


I recently traveled from Washington, D.C., to Silicon Valley. In D.C., I listened to lengthy discourses by members of the U.S. Congress about how it is not government’s responsibility to stimulate the economy. In Silicon Valley, I met with people who are doing amazing things with silicon chips and the Internet. There’s a delicious dichotomy here. Silicon Valley—indeed, most of the United States’ technology economy—grew from expensive seeds planted by the government to stimulate the economy, in the post-Depression era, during World War Two and in the Cold War that followed. If there had been no government stimulus during the past 75 years, Silicon Valley’s San Jose International Airport—self-described as the world’s most modern airport, due in part to its free and secure Wi-Fi service in all public areas—would still be a peach field.

I know we are supposed to believe that technology success is the result of simple entrepreneurism: rags-to-riches tales of men and women pulling themselves up by their bootstraps by developing innovative items in their garages. But that is only part of the story. The Internet grew out of defense funding—specifically, a Cold War desire for a computer system that wouldn’t stop working if cities were subject to nuclear attack. For years, the only market for silicon chips was NASA’s space program—no one else wanted or needed computers that were miniature and lightweight but very, very expensive.

Radio frequency identification has benefited from intelligent government stimulus, too: The U.S. Department of Defense was an early adopter of active RFID tags for logistics purposes. The DOD also was a sponsor of the Auto-ID Center at the Massachusetts Institute of Technology, which developed the Electronic Product Code. And along with Wal-Mart, the DOD announced broad plans in 2003 for the adoption of passive RFID tags.

It’s certainly true that we don’t need the U.S. government to compete with entrepreneurs, or to subsidize bad ideas and useless products. But history shows that the government is nearly always an important early adopter of paradigm-breaking technologies and new ways of doing things. That willingness to buy first and be on the bleeding edge is the reason we have the Internet, the integrated circuit, radar and GPS, to name but a few.

While the U.S. Congress refuses to stimulate the growth and development of new technology for the first time in decades, other nations are injecting huge shots of political adrenaline into their tech economies. China leads the way, and South Korea is not far behind. There is also the European Union, with a visionary directorate in new technology that is evaluating everything from RFID to sensors and smart, self-driving cars.

In addition to the U.S. Congress, a large section of the American electorate appears to be ignoring its own high-tech history. Meanwhile, everyone else, ironically, is actively learning from it.

Kevin Ashton was cofounder and executive director of the Auto-ID Center.