Research universities throughout the world are part of a larger effort by countries to bolster science and technological innovation and compete economically. The United States remains highly competitive as a source of high-tech innovation because of a number of market positions, many the results of long-term investments in institutions (such as research universities) and in research and development funding, and more broadly influenced by a political culture that has tended to support entrepreneurs and risk taking. In essence, the United States was the first mover in pursuing the nexus of science and economic policy. The following essay attempts to place universities within this larger political and policy environment by discussing market factors that have influenced knowledge accumulation and high-tech innovation in the United States. It also gives an assessment of their current saliency in the face of globalisation and the growing market position of competitors, such as the European Union. The article also provides observations on major US state-based high-tech initiatives intended to create or sustain knowledge-based economic areas, and discusses the prospect of a major new federal initiative to increase national research and development funding.