Government policy, innovation and economic growth. Lessons from a study of satellite communications

The paper analyzes NASA's involvement in the development of satellite communications technology. It begins by a historical account of the main developments which culminated into first commercialization of the technology in 1965. The description highlights NASA's role in accelerating this process. It also provides important background information for measuring the costs of NASA's involvement and some aspects of the benefits, namely part of the 'direct' benefits achieved in the initial applications segment (transatlantic voice communications). The paper then analyzes a number of factors responsible for the success of NASA's involvement, both with respect to the efficiency of the 'baseline' technology arrived at and with respect to the transition from early R & D to commercialization. A comparison is also made with other less successful cases of government intervention to promote new technologies.