places few restrictions on the ultimate output of the R&D investment or the use made of the technology and discoveries resulting from that investment. As such, these mechanisms will be inadequate when the government would like to maintain close control over the precise development of a technology or keep a given technology secret. When the government has clear technical objectives and an interest in maintaining precise control, the government can staff and fund intramural research and even implement prototyping and development programs.

Government Research

Since the beginning of the computer era, national laboratories and other government agencies have conducted supercomputer research and, in some cases, been responsible for building individual machines. A key benefit of internal development is that the government can maintain extensive control over the evolution of the technology and, when needed, maintain a high level of secrecy for the technology. Maintaining such control may be important in those cases where the technology is being developed for very specific government missions within very narrow parameters and where secrecy and continued control over the technology is much more important than cost or the ability to build on a diverse set of already existing technologies. The degree of control and secrecy that are feasible even under internal development should not be overstated. Government employees can move to private industry (or even start their own companies), and as long as individual components or subsystems are being procured from the private sector, it is difficult to maintain complete secrecy over the technology choices and capabilities of large government projects.

Most important, large intramural technology development projects are likely to be extremely costly, relative to what could be achieved through procurement from the private sector. Indeed, while overall government science and technology expenditures are predominantly funded through grants and tax credits, a high share of supercomputer investment is implemented through procurement contracts with private firms. Under ideal conditions, procurement allows the government to acquire specific types of advanced technology while taking advantage of competition between firms on the basis of cost and performance. The government can indeed take advantage of these benefits when it is a relatively small player in an otherwise competitive market. For example, over the past two decades, the government has been able to take advantage of the rapid pace of technical advance and the high level of competition in the market for personal computers as it acquires desktop PCs for nearly all government functions.

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