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CNN Fact Check: A rocket-propelled economy

By the CNN Wire Staff
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Obama issues innovation challenge
STORY HIGHLIGHTS
  • Obama says the U.S. "unleashed a wave of innovation" after Sputnik
  • He called for a similar push in his State of the Union address Tuesday night

(CNN) -- President Barack Obama's vision of a new "Sputnik moment" for the United States carried echoes of a new "New Frontier."

If not the Kennedy-era agenda, at least the song by Steely Dan co-founder Donald Fagen. Or perhaps another Fagen tune, "I.G.Y.," with its visions of trains of "graphite and glitter" and cities powered by the sun. Obama coupled his pitch with an appeal to a nation groaning under an unemployment rate over 9 percent -- a vision of new technologies, fostered in part by government investment, bringing new jobs.

Hearkening back to the stunning 1957 news that the Soviet Union had beaten America into space by launching the first artificial satellite into Earth orbit, Obama said the United States "had no idea" how to respond at first.

"The science wasn't even there yet. NASA didn't exist," he said in his State of the Union speech Tuesday night. "But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs."

Fact Check: What did the Space Race do for the economy?

-- Plenty, according to most experts. The space program helped spur the miniaturization of electronics that fueled the computer revolution and spawned the Internet. Other products whose development has been linked to the space program range from cordless drills to car navigation systems.

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-- The U.S. semiconductor industry grew rapidly from its origins in the late 1940s, "greatly aided" by NASA and similar military technology, a 1983 Rutgers University analysis of the industry noted. Today, the industry boasts U.S. sales of $115 billion and employs more than 200,000 people, according to the Semiconductor Industry Association.

-- The commercial satellite industry, meanwhile, was nonexistent before the 1960s. By 2003, commercial space revenue had topped $90 billion in businesses that employed more than 576,000 people, according to a 2005 paper for the American Academy of Arts and Sciences.

-- At a 2009 conference in Washington, George Washington University space policy researcher Henry Hertzfeld estimated the space economy at $250 billion, roughly half of which was commercial. But he said the true size was difficult to calculate.

Bottom line:

Obama is correct in describing the space program as a boost to nascent U.S. industries. But the goal he set Tuesday night is just the first stage in what is likely to be a tough debate about the role of government in the economy.

CNN's Matt Smith and Katie Glaeser contributed to this report.

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