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Not long ago, I came across the obituary of an old friend: Jerry Boyd Richardson.
Jerry was a bird colonel in the Air Force. He wasn’t a pilot, though. He was a history major who was sent to get an electrical engineering degree at the Air Force Institute of Technology. From there, he became part of the Defense Advanced Research Projects Agency (DARPA).
His job, as he explained it to me, was to find professors and little guys researching things nobody had heard of yet. He would check in on them once a year and give them a little more money. Then a little more. After two or three years of this, he would look to see, “What can we harvest out of this?”
That’s it. That was the job. Handing out small checks to people whose work had no product, no market, and no obvious purpose—yet.
This kind of federal funding plays a crucial role in innovation. The internet, drones, that voice that speaks to you from your iPhone? That’s all thanks to DARPA. Google’s search engine? Developed with the help of a $4.5 million grant from the National Science Foundation (NSF). Every one of the 210 new drugs approved between 2010 and 2016? Associated with federally funded university research through the National Institutes of Health (NIH).
Like it or not, the infrastructure that provides the fertile ground for the seeds of innovation to be planted has been our own federal government’s investment in us.
The Free Market of Innovation#
Years ago I watched a debate on television between a venture capitalist and the then-CEO of Google, Eric Schmidt. The VC parroted the economic mantra we have lived with since 1980: the federal government has no business investing in the marketplace, and if the market genuinely needs something, private capital will provide it. Schmidt pointed out that VCs are not interested in heavy industry or anything that doesn’t provide instant returns, and without the government, we will never, ever get real manufacturing moving again.
I don’t think this is a close call—Schmidt has the right of it. After decades working in innovation, I can confidently say that venture money is not interested in research for research’s sake. Venture money arrives only after they see a way to make money from a new technology. They’re interested in turning the greatest profit possible with the least amount of risk. That’s the whole model. Expecting venture capital to fund the professor in year one is asking it to do a job it was never built to do and has no mechanism for doing.
Private corporations aren’t funding the research anymore either. The economists Ashish Arora, Sharon Belenzon, and Andrea Patacconi documented this shift in their paper “Killing the Golden Goose?” They found that, between 1989 and 2007, the basic research share of private R&D fell by roughly half, even as the share of patenting increased. As they conclude, “Large firms still value the golden eggs of science (as reflected in patents), but seem to be increasingly unwilling to invest in the golden goose itself (the internal scientific capabilities).”
The Killing of American Innovation#
If corporations aren’t doing the research, where is it coming from? Universities and start-ups, which are largely funded by—you guessed it—federal grants. There is no private-sector equivalent to the funding of foundational research. There never has been.
That’s why the reassurance that private industry will step up if federal funding shrinks is laughable. Private industry can’t step up. It spent forty years systematically dismantling the capability to do so. The corporate labs are gone, and the institutional knowledge of how to run one went with them.
We built a system where federal funding seeds innovation and the private sector harvests, and we are now in the process of defunding the seeding.
We are already starting to see the effects of decreased funding. In 2024, China overtook the United States in total scientific publications—the first time any nation has displaced us since we passed the United Kingdom in 1948. A March 2026 OECD report puts Chinese R&D spending at or above ours on purchasing-power measures, with both nations now past a trillion dollars.
Meanwhile, more than 7,800 grants were frozen or terminated across NIH and NSF in 2025, and NIH has issued roughly 10,000 awards this year against something closer to 18,000 at the same point in prior years. The Information Technology and Innovation Foundation estimates that a 20 percent reduction in federal R&D would cost the American economy on the order of a trillion dollars in output over ten years.
You can’t harvest what you don’t seed. At PCDworks, this isn’t an abstraction. Nearly every innovation project that comes through our doors traces back to a government grant somewhere in its history.
Never as Bad as You Think, Until It Is#
I’ve spent most of my career as an optimist about this. My standard line, delivered to anyone who would listen, was that it’s never as bad or as good as you think it is. Things look horrible, and then they aren’t.
I’m having trouble with that line right now. Now, things look horrible, and hidden, long-lasting damage is being wrought in places we can’t even fathom. How do you place a value on innovation that never sees the light of day? To imagine a world without federal funding of innovation, imagine a world without the internet and without so many of today’s life-saving drugs—or, at the very least, a world in which other countries are the ones who hold the keys to such innovations and all of the socioeconomic power they bestow.
Because that’s the world we’re creating. Jerry’s harvest question only works if somebody planted the seeds three years earlier. We’re going to spend the next decade finding out what didn’t get planted, one absence at a time.
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