Sputnik, the first artificial satellite, gave Russia the early lead in the space race.

From  Stewart Brand’s “Spacewar: Fanatic Life and Symbolic Death Among the Computer Bums,” published in Rolling Stone in 1972:

“After Russia’s Sputnik humiliated the US in the middle of the Fifties, America came back hard with the Mercury Program, John Glenn and all that, crash-funded through a new agency directly under the Secretary of Defense – ARPA (Advanced Research Projects Agency).

When the US space program was moved out of the military to become NASA, ARPA was left with a lot of funding momentum and not much program. Into this vacuum stepped J.C.R. Licklider among others, with the suggestion that since the Defense Department was the world’s largest user of computers, it would do well to support information-medium like computers.

So in 1963 a fraction of ARPA’s budget, some $5-8 million, went into a program called IPT, Information Processing Techniques, under the initial direction of Licklider and then of a 26-year-old named Ivan Sutherland. Sutherland, the developer of ‘Sketchpad’ at MIT, gave the agency its bias toward interactive graphics and its commitment to ‘blue sky mode’ re- search. The next director, Bob Taylor, then 32, doubled I PT’s . budget (while ARPA’s overall budget was shrinking) and administered a five-year golden age in computer research.

The beauty was, that being at the very top of the Defense Establishment, the agency had little Congressional scrutiny had little bureaucratic responsibility, able to take creative chances and protect long-term deep-goal projects. Alan Kay: ’90 percent of all good things that I can think of that have been done in computer science have been done funded by that agency. Chances that they would have been funded elsewhere are very low. The basic ARPA idea is that you find good people and you give them a lot of money and then you step back. If they don’t do good things in three years they get dropped – where ‘good’ is very much related to new or interesting.’

One of the accomplishments of ARPA-funded research during this time was time-sharing, Time-sharing is a routing technique that allows a large number of users to sit down ‘on-line’ with a. computer as if each were all alone with it. Naturally, timesharing was of no interest to computer manufacturers like IBM since it meant drastically morc efficient use of their hardware.”

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Spotnik’s launch, October 4, 1957: