In Maryland, meanwhile, another cluster of federal agencies was helping create yet another local industry, biosciences. Its origin here is widely traced to 1971, when President Richard Nixon signed the National Cancer Act. It earmarked $1.6 billion for curing the disease and knighted the National Institutes of Health and the National Cancer Institute as the clearinghouses.

The new industry, said William Haseltine, chief executive of Human Genome Sciences Inc. in Rockville, "started with a series of service companies that grew up to serve the needs of NIH. After Nixon declared war on cancer, Congress gave the NCI and NIH an enormous amount of money in a very short period of time. It just wasn't possible to absorb it all" internally.

Human Genome Sciences CEO William Haseltine adjusts a microscope. (Susan Biddle – The Washington Post)

So quite a bit went out the door to contract labs and other firms that sometimes wouldn't have existed without it. One of those first to provide services to the newly enriched labs was Bethesda Research Labs, founded in 1976 by a New Jersey entrepreneur, Steve Turner. BRL sold products called "restriction enzymes," which were transported in ice buckets, and other products that allowed the manipulation of DNA. One of the company's best customers was NIH.

Bethesda Research Labs became one of the great tap roots of the Washington bioscience family tree, leading to the creation of ever more companies.

In 1983, for example, Turner left BRL and started Oncor, a biotech company working on gene-based diagnostic products. Meanwhile, M. James Barrett, a distinguished-looking businessman fond of dark suits, took charge of the BRL, which despite all the money available, had run into financial troubles. He merged it with a Cleveland company to create Life Technologies, which went public in 1986.

That same year Congress, concerned about global competition and finding ways to get the country's many laboratory discoveries onto the market, passed the Technology Transfer Act. It allowed private companies to potentially profit from collaborative research with NIH and other federal agencies. Through contracts known as Collaborative Research and Development Agreements, companies could collaborate with governmental researchers to commercialize their findings.

The new atmosphere of cooperation smoothed the way in 1987 for another child of Bethesda Research: Barrett went off to start his own company, Genetic Therapy Inc., which hinged on a partnership with W. French Anderson, a molecular hematologist at the NIH.

Deeda Blair, the director of a research foundation, recalls driving around with Barrett one afternoon hunting for a suitable headquarters for Gene Therapy. Barrett spied some space in a strip mall. Blair was mortified. "The first gene therapy company can't be in a shopping center!" she said. It wound up in a nondescript commercial building in Gaithersburg.

The little group of companies in Maryland was now attracting the attention of big venture capital companies from out of town. Gene Therapy was underwritten by HealthCare Ventures of New Jersey. In time, HealthCare Ventures funded other local enterprises here such as MedImmune Inc., Pharmavene, Molecular Oncology, Human Genome Sciences and the nonprofit Institute for Genomic Research. The I-270 corridor began to flower.

In 1995 Barrett sold Genetic Therapy to Sandoz, now part of global pharmaceutical company Novartis, for $300 million. Last year, with mounds of money from Health Care Ventures and other venture capital firms, he started Sensors for Medicine and Science, a Germantown company that hopes to make a small blood-sugar monitoring device to be implanted in diabetics.

"I don't like large companies," he said. So he keeps creating small ones.

A 'Russian-Proof ' Network

Leonard Mitchum and Ralph Goss place a cover on a capsule at Goddard Space Flight Center in 1964. (File photo)

The Internet was based on a concept called "packet switching" – the breaking up of messages into blocks or packets, which were addressed and dispatched separately over a grid of transmission lines. At the destination, the packet would be reassembled in correct order.

With many different routes that a message could take to reach a destination, this system helped make the system "Russian-proof" – if one line was broken in wartime, another still would be operating. But it had important commercial advantages too – it was inherently cheaper than opening a "dedicated" circuit between point A and B.

In 1985 the of the Internet was turned over to the National Science Foundation in the District and the NSF, under Director Erich Bloch and Stephen Wolff, director of network communications, championed the idea of a "network of networks" open to all, not just the government agencies, labs and contractors that were using it at the time.

Soon, as entrepreneurs began realizing the money-making potential of the network, commercial spinoffs appeared, many of them in the Washington area: One of the first was Performance Systems International Inc., which founder Bill Schrader moved from New York to Reston in 1989.

PSI, which offered Internet connections to business and individual customers, rode the Internet's soaring growth in the 1990s, issuing stock to the public in 1995. In one stroke PSI found itself with an estimated 25 millionaires among its 525-employee work force.

Over time other Internet firms sprang up here – UUNet Technologies Inc., Digex Inc., Erols Inc. And America Online Corp., which began as a private online system not linked to the Internet, came to recognize that the global network was the future and patched in its closed community of subscribers. AOL, operating from a campus near Washington Dulles International Airport, is today far and away the largest online company in the country, with close to 14 million subscribers.

Until the Internet's expansion in the mid-1990s, the federal government's parental influence on the Washington region's technology community had been considered a mixed blessing, according to executives like Selin. While the taxpayer money poured in, it often went toward specialized government needs that did not easily translate to commercial markets.

It took many years, but the industry has finally moved beyond specialized contracting and has an opportunity to take its products and services far beyond the beltway, Selin observes. "Maybe the contracting phase was a dead-end, but the Internet and biotechnology areas are wonderfully fascinating."

But as the region's status as a technology center in its own right expands, he said, the successful offspring should remember their federal parent: "I wouldn't say it could happen nowhere else but here, but the Washington connection was key."