Innovation in the American Era of Industrial Preeminence: The Interaction of Policy, Finance, and Human Capital

It is commonly accepted that innovation and economic prosperity after World War II were really spurred by the tremendous benefits of public investments. While public funding was crucial, a missing component of the historical analysis is a synthesis of the effects of these investments with changes in financial regulations enacted during the Great Depression, specific economic and employment policies, and the infusion of intellectual capital from scientists and engineers fleeing Nazi Germany and the turmoil of the war. The purpose of this article is to synthesize and analyze the effect of these three components—public polices, changes in private financial structures, and highly skilled immigration. This analysis will allow us to explore the broader impact and interdependence of knowledge creation, human and financial capital, and innovation.