Research funding policy needs scientific and statistical grounding

Washington, D.C., is abuzz with new policy initiatives and talk about increasing funding for basic scientific research-especially in long-neglected areas like the physical sciences and engineering.

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Washington, D.C., is abuzz with new policy initiatives and talk about increasing funding for basic scientific research-especially in long-neglected areas like the physical sciences and engineering. This change comes on the heels of a multiyear effort by organizations like SPIE (Bellingham, WA) to educate elected officials about the importance of investing in basic or fundamental research.

Recent studies such as the National Academies’ Gathering Storm Report depict a nation facing massive challenges in producing scientific talent to meet our economic needs while addressing the imminent erosion of our standard of living (see and Washington is now pondering both our savvy international competition and what appears to be our demographic “destiny”: the bulk of current U.S. scientific and engineering talent will soon retire with relatively few U.S.-born replacements, even in sensitive areas such as military research.

In most scientific disciplines, the United States has become totally dependent upon the matriculation of foreign talent in U.S. higher-learning institutions. But that’s actually the good news. The bad news is that the U.S. can no longer rely on such individuals staying in the U.S. to pursue careers. Newly emergent economies are luring many to opportunities in their native lands. By 2010, at least 90% of the planet’s scientists and engineers will reside outside the U.S.

None of this should come as a surprise. At least 11 well-researched studies, including Solow’s 1957 Nobel Prize-winning work, link between 45% and 75% of economic growth to technology innovation. And alarming reports have been circulating for years, including the Hart-Rudman Report of 2001, the PCAST (President’s Council of Advisors on Science and Technology) Report of 2002, numerous ASTRA (Alliance for Science and Technology Research in America) reports, and many other studies and commissions. Some observers argue that our research funding policies only respond to challenges (or villains) such as Sputnik, the Cold War, or “Japan Inc.,” which seem to go away once “market forces” come into play. But the current predicament is obviously broader and more problematic.

Only a handful of scientists actually hold elective office in the U.S. Congress. Consequently, the vast majority of those who determine the funding for scientific research and discovery have little or no experiential basis for understanding the complex processes of science itself. And that is also where the biggest disconnect arises between what the economy seems to need and the flow of taxpayer investment. Most policymakers speak of R&D as if research and development were synonymous, rather than opposite ends of a technological continuum.

Research vs. development

According to the traditional model, basic research yields randomly generated scientific information and intelligence about phenomena. These may not be thoroughly understood at first. But through intensive study-and a bit of inspiration-they can lead to discovery, proof of concept, applied research, and ultimately to commercialization of new products and services with their own ensuing life cycles.

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Funding (in constant dollars) for research in the physical sciences and engineering has been stagnant or declining from 1976 to 2004.
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Traditionally, the federal government has funded about 60% of all basic or fundamental scientific research in the U.S. Universities and foundations fund a smaller amount, and industry hardly any. Most basic research is performed in universities and national labs. Only about 5% of industrial research expenditures could be categorized as “basic,” and survey instruments that have tried to capture this data are questionable. They tend to exaggerate industrial expenditures in basic research, most likely due to the broad scope of activities that qualify for the Research & Experimentation (R&E) tax credit.

Most corporations invest primarily in applied research-that is, research tied to next-generation product development-and Wall Street rewards such behavior. But the timeline from basic research to commercial product tends to span decades (and can be endless). The paradox is that the market fails when it comes to basic research investment, yet basic research plays a crucial role in the market’s ability to produce innovative products and services.

A scan of science papers cited by U.S. industry patents as recently as 2002 demonstrated that 73% of those patents were based upon “public” (as in taxpayer-funded) basic research. Despite such a hefty return on investment, government support for basic research has actually collapsed since the late 1980s in virtually all non-life-science disciplines (see figure).

Unfortunately, as policymakers finally begin to grapple with definitions to fit a model of innovation that fits the 21st century global economy, global competition has already accelerated to the point where it is impossible to measure the accuracy of the data being generated by national governments.

Our own government has difficulty maintaining relevant metrics on economic activities, largely because of a statistical collection and surveying process wedded to mid-20th-century definitions of the economy. For instance, “services” constitute at least 70% of U.S. economic activity, but are inadequately measured and tracked. And while we capture adequate data on our domestic manufacturing activities, virtually no data exists on outsourcing, or global activities of multinational enterprises (this includes other governments and hybrid entities).

Nevertheless the “gathering storm” looms, and within it, the “invisible hand” of the global market is already reshaping the U.S. economy in a manner that is disadvantageous for U.S. taxpayers. Markets are not elected to act in our best interests. That’s our elected officials’ job.


ROBERT BOEGE is the Washington, D.C., representative for the International Society for Optical Engineering (SPIE) and the executive director for the Alliance for Science and Technology Research in America, 1155 16th St. NW, Othmer-318, Washington, D.C. 20036; e-mail:

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