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The National Science Foundation's annual report on R&D funding and the state of American science and engineering.
Forum guest Michael McGeary and his partner, Phillip Smith, argue for a balanced R&D portfolio in Science.
Dr. Nicholson, the author of this essay, is executive director of AAAS and publisher of the journal Science.
The term R&D covers a spectrum of activities, from "basic research" aimed at discovering new knowledge to "development," which is the systematic use of knowledge and understanding to produce useful things. It is estimated that the U.S. annually spends about $170 billion on R&D, or about 2.5 percent of our GDP. About 60 percent of the R&D is supported by industrial firms with their own company funds. Most of the balance (35 percent) is supported by the federal government. Only a small part of the R&D supported by the federal government is carried out in the government's own labs. The largest share is performed in industry, with a significant amount also conducted at colleges and universities under federal grants.
It has long been agreed, on a bipartisan basis, that support of R&D, and especially basic research, is a legitimate role of government. For example, the results of basic research are often unpredictable and only reliably accrue to the society as a whole. Economists have estimated that the returns to society from past investments are very large. R&D is considered a primary source of new ideas and new technology, and many believe it will increasingly be a major factor in our competitiveness in the global economies of the future.
In the U.S. the majority of basic research is conducted at universities by teams of faculty and graduate students. This so-called "graduate research" has two beneficial outcomes: simultaneous creation of new knowledge and training of young scientists. Many observers, both in the U.S. and abroad, believe that our use of graduate research is one of the key reasons for the strength of U.S. science.
The federal support of R&D currently is about $70 billion annually. Interestingly, however, there is no explicit U.S. budget for R&D. Rather, expenditures for R&D are contained, along with other types of expenditures, within the budgets of more than 20 federal agencies. The reason for this approach, which is somewhat unique to the U.S., is the concept that federal R&D should be "mission-oriented," that is, it should serve the goals and objectives of the agency that provides the funds. The only exception is the National Science Foundation (NSF), whose mission is to support basic and applied research, primarily in academic institutions across a wide range of disciplines and problem areas.
Since the federal government does not publish an R&D budget, the American Association for the Advancement of Science (AAAS) has for more than 20 years, in collaboration with some of its affiliated societies, annually conducted and published an analysis of the R&D components of the federal budget. These analyses are now available-and kept up to date-on the World Wide Web (go to "www.aaas.org" and click on "science & policy programs"), which is an excellent source of additional information about the R&D budget.
Of the approximately $70 billion federal support for R&D, about 55 percent is from the Department of Defense in support of its mission. It is common, therefore, to consider this separately from the nondefense R&D budget, which is currently about $34 billion. This separation is usually necessary to make valid comparisons with other nations that typically do not make significant investments in defense R&D.
Federal support for R&D has grown very substantially since WW II. Trends have closely followed trends in so-called discretionary spending, with R&D hovering around 14 percent through most of the past four decades. Thus, as total discretionary spending in the federal budget has shrunk in real terms since peaking in FY 1991, total outlays for R&D peaked two years later and have been headed down since then. Both Presidential and Congressional plans for balancing the budget by 2002 do so primarily by making cuts in discretionary spending. Thus, in mid-1995, AAAS estimated that under the then-current congressional budget plan, nondefense R&D would suffer a 33 percent reduction in constant dollars by FY 2002. Earlier this year, with inflation expectations moderating, Congress and the President issued new projections as part of their FY 1997 budget plans. In these, the projected reduction was a bit less-19 percent in the President's plan and 23 percent in Congress's.
The issue of funding for research seems today far from the top of the list on the nation's political and social agenda. With discretionary money tight and so many pressing problems facing society, the research community, it is said, must take its place among the many claimants on public funds. However, for those who believe that the advancement of scientific knowledge is essential to human progress and to the solution of those pressing problems, maintaining the vitality of the research enterprise seems more critical than ever.
A close look at the numbers shows that funding in much of the research community is already in decline and, apart from the singular area of biomedical research, is well along on the downward track. Moreover, within the total, National Institutes of Health funding has continued to grow while the rest of nondefense R&D has declined. The exceptional increases in NIH's budget in the past two years have surprised even seasoned science policy observers. NIH is the only agency in the federal government to show significant real growth in its R&D during the 104th Congress.. NSF is up about one percent and DOD is essentially level during this period. All other agencies are down, some substantially. Obviously, if NIH continues to receive favored treatment while other agencies' R&D programs are ratcheted downward, its share of the R&D picture will continue to grow. While biomedical research is a high priority for all citizens, it is important to understand that many practical advances rest on research in a wide range of disciplines like physics and chemistry. Thus, maintaining a broad portfolio, especially in basic research, is in the long-term interests of the U.S.
Little by little, the research enterprise is shrinking. The changes each year a re taking place at the margin, but the long-term outcome, assuming the nation stays with the plan to balance the budget by 2002 primarily by reducing discretionary spending, is likely to be close to what the budget projections suggest-a 20 percent reduction in real spending power.
This brief summary raises several issues that merit consideration in the context of a discussion of the future structure of U.S. science:
- For its federal funding to grow, the research community will have to increase its share of a shrinking pie. Is this possible? What are likely to be the most effective strategies?
- Or, should the research community develop strategies that accept the prospect of reduced federal funding and seek to adapt to this situation by finding alternative sources of support, or orderly downsizing, or some combination of the two?
- What are the implications of the de facto shift in priorities toward the life sciences and away from most other areas of research? Is it consistent with the views of the research community in terms of national needs and scientific opportunities and other criteria for priority-setting in science?