Government and Innovation Flashcards
AT&T and the Transistor
→ AT&T patented the invention
→ However they didn’t sell the technology at a high price or licensing it at a high fee
→ This was because it had recently had antitrust problems with the government.
→ It is likely that either high prices or high license fees for the transistor would have attracted the intention of antitrust lawyers in the Department of Justice
→ They wanted to stay a regulated monopoly
→ Instead, the company informed competitors and potential buyers about the technology, licensed the technology to others in exchange for a modest fee
→ They also licensed access to competitors’ (cross licensing) which gave them access to new technology
→ This gave AT&T access to the bulk of the new technology in the industry.
→ It also allowed other firms to take the transistor and improve on it.
→ Texas Instruments produced the first commercially successful transistor and the first integrated circuit, which addressed reliability problems caused by connecting a number of transistors into a single system.
The general point here is that the threat of antitrust action seems to have contributed to the rapid spread of the use of, and improvements in, the transistor.
ENIAC
Electronic Numerical Integrator and Computer
EDVAC
Electronic Discrete Variable Automatic Computer
Conclusions
→ Military procurement reduced the problems of risk and cost in the development of technology for private industries
→ US universities, substantially subsidized by governments, provided:
→ A core location of the research on computers and software
→ Served an important role as diffusers of knowledge about computers between the military and commercial users
→ Provided training programs that helped diffuse the use of transistors.
→ Government policy with respect to intellectual property was also important:
→ The threat of anti-trust enforcement led AT&T to make the transistor broadly available
The decision by army lawyers to put the knowledge base of EDVAC into the public domain contributed to the diffusion of the technology and allowed commercial enterprises to take it and improve on it.
