The TechCrunch Global Affairs Project examines the increasingly intertwined relationship between the tech sector and global politics.
The Soviet Union kicked off the Space Age when it propelled the world’s first satellite into space from a desert steppe in Kazakhstan on October 4, 1957. The launch of Sputnik I — a small aluminum orb, no bigger than a beach ball — proved a transformative moment for the United States. It triggered the U.S.-Soviet space race, served as the impetus for new government institutions, and precipitated substantial increases in federal R&D spending and funding for STEM education.
Sputnik was a galvanizing force, providing the shock and momentum needed to revolutionize the country’s science and technology base. In recent years, government officials and lawmakers have called for a new “Sputnik moment” as they reckon with how to successfully compete economically and technologically with China. While a singular, transformative “Sputnik moment” has yet to occur, there is growing consensus in Washington that the U.S. has fallen or is at risk of falling behind China.
The U.S.-China competition is novel in many ways, but that doesn’t mean America’s way of competing has to be. To reclaim its inimitable role as a driver of American innovation, the U.S. government must muster the kind of energy it did in the aftermath of Sputnik — mobilizing the country’s remarkable talent, institutions and R&D resources — to successfully compete with China.
First, it’s important to revisit what happened 60 some years ago. In the months following Sputnik’s launch, the U.S. government created two new institutions. Congress passed the National Aeronautics and Space Act in July 1958, creating NASA and placing the country’s space program under civilian control. NASA’s primary objective was to land a man on the moon, and it was given a lot of money to do it. Its budget increased almost 500% from 1961 to 1964, accounting for nearly 4.5% of federal spending at its peak. NASA took Americans to the moon and contributed to the development of major technologies with wide commercial application.
The federal government also established the Advanced Research Projects Agency (now the Defense Advanced Research Projects Agency, or DARPA) with the mission to prevent future technology surprises. Its research and work contributed to a variety of technologies that remain critical to America’s economic competitiveness, including GPS, voice recognition, and most notably, the foundational elements for the internet.
The Sputnik launch also motivated the passage of the 1958 National Defense Education Act (NDEA) of 1958. The NDEA devoted federal funding for STEM and foreign language education and established the country’s first federal student loan program. The NDEA explicitly linked the promotion of education to addressing America’s defense needs, recognizing it as an integral component of U.S. national security.
Sputnik spurred massive growth in federal R&D spending, which was instrumental in creating today’s robust tech and startup community. The federal government was funding close to 70% of total U.S. R&D by the 1960s — more than the rest of the world combined. Government R&D investment has declined in the decades since, however. As the Cold War ended and the private sector started spending more on R&D, federal R&D spending as a percentage of GDP fell from about 1.2% in 1972 to approximately 0.7% in 2018.
As policymakers deliberate on how the U.S. should compete technologically, economically and militarily against China, they should heed the lessons learned in the Sputnik moment.
First, while Sputnik provided the political capital to create new institutions and increase spending on R&D and education, the groundwork for many of these efforts was already in place. NASA built off the work of its predecessor, the National Advisory Committee for Aeronautics, and the preparations for many of the provisions in the NDEA were in motion for some time. Sputnik provided shock and urgency, but the momentum and much of the legwork was already underway. Today, the U.S. government should commit to sustained investment in its science and technology base — ensuring a strong foundation for American innovation no matter what challenge the country faces in the future.
Second, the federal government should establish clear national objectives to direct technology investment and motivate the public to contribute to those priorities. President Kennedy’s call to land a man on the moon was unambiguous, inspiring and provided direction for R&D investment. Policymakers should identify specific goals with measurable metrics for critical technology sectors, explaining how these goals will bolster American national security and economic growth.
Finally, while the government’s R&D investments helped spawn remarkable technological advancements, its approach for allocating and overseeing that spending was equally important. As Margaret O’Mara explains in her book, “The Code: Silicon Valley and the Remaking of America,” federal funding flowed “indirectly” and “competitively,” giving the tech community “remarkable freedom to define what the future might look like” and “push the boundaries of the technologically possible.” The U.S. government must again take care that its investments fuel technological competitiveness without morphing into what could be conceived of as broad-based, inefficient industrial policy.
The phrase “Sputnik moment” is often invoked in an attempt to spur government action and public involvement. And indeed, actions taken in Sputnik’s aftermath are illustrative of what the U.S. government can accomplish when its approach is unified and driven by clear objectives. Rarely, however, has America achieved comparable improvements to the country’s innovation base. That doesn’t have to be the case. After Sputnik, the U.S. government reinvigorated its science and technology base by investing in the people, infrastructure and resources that would ultimately establish American technological hegemony. A new Sputnik spirit today can power American technological competitiveness into the future. Time is of the essence.