1998 Science & Technology Congressional Visits Day
Participant Briefing Materials

R&D Briefing Papers

R&D Is An Investment

Note for CVD Participants . . .

At the heart of S&T Congressional Visits Day is the belief that federal support for R&D is an investment in the future of our Nation and its citizens. When push comes to shove and budget decisions are made, federally-funded activities such as R&D are often viewed as expenses, with little or no understanding of its long-term nature and the benefits produced. The key word is understanding. The fact is -- most people do appreciate S&T and the recognize its key role in the quality of life we all enjoy. And, most legislators want to do the right thing. The missing piece - or some would say "misunderstood" piece, is how much today's science and technology funding decisions can affect our future, and how vital each stage in the research chain is. This is the single most important message for all CVD participants to convey because it -- regardless of the program there would The task of CVD participants is to engage legislators in the topic of R&D and make this point: Research is an investment, not an expense.

Invest: "To spend or utilize time, money, or effort for future advantage or benefit."

Expense: "The cost involved in some activity; a sacrifice; a price."

The federal government supports a unique world-class research and education enterprise that fuels the American economy. It provides the underpinning of high-technology industries, expands the frontiers of knowledge, and trains future generations of scientists, engineers, and mathematicians. The federal investment in R&D has led to job growth in new and old industries and has produced a standard of living that is unparalleled in our Nation's history.

Today, Congress is challenged with developing a plan that will bring the federal budget into balance. That goal, however, cannot be reached unless the American economy continues to grow, productivity continues, and inflation is held in check. Technology is the key. According to many economists, Technology is largely responsible for the enduring strength of the current economic expansion and the low rate of inflation that we have experienced in recent years. Federal support of research is, in reality, critical to almost any balanced budget plan.

Return on Investment

Technology builds on science which builds on technology -- in other words, a continuum. The list of achievements is long and changing minute by minute. Results happen - sometimes by serendipity and sometimes by design, sometimes in a few years and sometimes not for decades. Whether the applications are broad and enabling, or part of a new product or process, public science is at the core of our society today. Achievements such as computer modeling of chemical structures to design drugs, the Internet, lasers, magnetic resonance imaging, and global environmental monitoring and management are well known. What may be less evident is the extent to which industry is dependent on public science in developing industrial products and processes. A 1997 study prepared for the National Science Foundation by CHI Research found that 73% of scientific articles cited in patent applications are based on research funded by government or foundations.[1]

Public Priorities

Although the forecast for federal R&D funding has improved over past budget proposals, the long-term trends are still uncertain as the Administration and Congress press for a balanced budget. Between FYÕs 1994-1998, R&D funding declined by 2.5% in constant dollars. Last year, the President's R&D budget for FY 1998 would cut the federal investment by an additional 14% (in inflation-adjusted dollars) by 2002.[3] Two years ago, Congress proposed an even sharper reduction in R&D by the year 2002. This year, the President has requested significant increases for science and technology over the next five years, indicating that the message of investment for the future is being heard. For FY 1999, the President has requested a 2.6 percent increase for overall federal R&D and an increase of 5.8 percent for nondefense R&D. It is particularly important that federal support for academic research continues to grow at a time when industry is increasingly focused on shorter-term results in areas of known industrial needs rather than on the long-range needs of the Nation.[4]

The budget challenges facing Congress are exceedingly difficult. Certainly, leading for the future is no easy task. But tomorrow, without sustained federal support for R&D, our economy and quality of life may no longer be world-class. Can the Nation afford it?

R&D Rates of Return

(extrapolating from the private sector)

"Economists have found high rates of return to private R&D investment, averaging 20-30 percent annual return on investment to firms, and approximately 50% to society overall. For some specific products, rates of return have been remarkably high. One study of information technology found that returns are estimated to have exceeded 80 percent per year between 1987 and 1991."
NSF FYI - Backgrounder on Economic Impact of R&D, 2/6/97

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1 The Increasing Linkage between U.S. Technology and Public Science, by Francis Narin, et al, CHI Research, Inc., March 17, 1997.

2 Results of focus groups conducted by Public Opinion Strategies and Luntz Research and Strategic Services - commissioned by a group of high-tech companies.

3 American Association for the Advancement of Science, Preview of AAAS Report XXII, R&D FY 98 (3/24/97)

4 Results of an Industrial Research Institute Roundtable, August 1995.

R&D - A Continuous Process

Basic and applied research and development constitute a continuum. They share a common goal in the development of new products, new processes, and new knowledge. They contribute to new understanding, ideas, and methods and often share the same personnel: the same people may contribute, at any given time, to all parts of the R&D process. Researchers in universities, government laboratories, and industrial design and testing departments may perform basic research part of their time, engage in applied research as their main activity, and act as consultants in the development stage. In addition, all parts of the R&D spectrum form part of a common program.

What is important is that all three parts are crucial to the whole. In particular, basic research must be recognized as providing an indispensable underpinning of the full R&D picture. A complex, highly interactive progression often exists from basic to applied research, to development and implementation. Although it is true that basic research can drive applied research and development, it is often the other way around. The interplay is multidimensional, reinforcing the sense of R&D as a continuum of activities where each of the three main parts have important, interactive roles to play.

In the post-Cold War era, the Nation's research enterprise faces many challenges - but none is greater than the uncertain role of the federal government. Today's legislative priority is balancing the budget. When it comes to decisions about federal support of R&D, the interrelationship between different stages of research and the long-term implications of today's decisions for our Nation's economy and people must be taken into account. R&D is the reason that we have a world-class lifestyle and economy. To assure a future with the same cutting-edge medical, environmental, communications, educational, industrial and other capabilities we have today, we must maintain the proper balance among the elements of basic research, applied research, and development and we must sustain the whole. The components of the research chain may be described as follows:

Basic research
Involves study and discovery of fundamental phenomena in science and technology as they relate to the development of new knowledge and improved applications. Basic research also renews our S&T workforce, and shapes the direction of subsequent R&D.

Applied research
Involves examining and analyzing scientific and technological applications in terms of the underlying principles, as well as verifying new concepts. As with basic research, applied research also can lead to new concepts and methods.

Development
This is the process by which a new or improved applied research concept is incorporated in a device which is scheduled for production. Here, the design becomes highly specific. As with both basic and applied research, technological development and innovation can lead to new concepts and techniques.

The benefits of basic research, applied research, and technology development flow across sectors, and a box cannot be drawn around any single element. Public- and private-sector institutions that participate in the performance of R&D all directly benefit from the transfer of new knowledge, new concepts and techniques, and new processes gained through R&D. In addition, other public- and private-sector groups reap rewards. Many government laboratories and agencies have programs and policies in place that promote the process of technology transfer--whether it is improved curriculum or books for educational institutions, the creation of new businesses and partnerships, or the dual-use of technology across agencies. Industry translates innovation into products and processes, solving national problems (energy, environment, medicine, to name a few), and creating economic growth and jobs.

Some examples from the National Academy of Science's Beyond Discovery series and other sources:

Electronic mail, the World Wide Web, and better international telephone communications all depend on tiny strands of glass Ð optical fibers thinner than a human hair yet stronger than steel Ð and light in the form of tightly focused laser beams. These world-shrinking developments came from fundamental discoveries into the nature of light nearly a century ago.

Basic research into atomic clocks combined with satellite navigation technology led to development of the global positioning system (GPS). With the ability to locate an object with pinpoint accuracy, GPS has a wide range of civilian and military uses including aircraft navigation and collision-avoidance systems, rescue of ships lost at sea, and monitoring forest fires. This new technology has also become an important tool for basic research into earthquakes and volcanoes.

Ecological observations of rotating crops and livestock and animal husbandry, combined with technological advances such as better irrigation and more efficient plow design, have led to our ability to feed hundreds of millions of people. Mathematical modeling Ð combined with the research efforts of biologists, geologists, and chemists Ð is helping to tackle daunting environmental challenges ranging from acid rain to the effects of the world's oceans on global climate.

The Coalition for Technology Partnerships and the Science-Engineering-Technology Work Group encourage legislators to take into account the continuous nature of research, and to take a long view when making decisions about federal support for R&D.

Posted: December 31, 1997; Revised February 13, 1998