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A resurgence in R&D investment in the United States in the mid-1990s has continued through to the beginning of 2000. A prosperous economy invigorated companies in both the manufacturing and service sectors, enabling them to allocate more resources toward the discovery of new knowledge and the application of that knowledge toward the development of new products, processes, and services. An upsurge in innovation is further contributing to a buoyant economy.
At the same time that the private sector’s role in maintaining the health of U.S. R&D enterprise has been expanding, the Federal Government’s contribution has been receding, as the Federal share has become less prominent in both the funding and the performance of R&D. Similar developments have been seen in many countries throughout the world. As a result of these two divergent funding trends in the United States, the composition of the nation’s R&D investment is slowly shifting. For example, a growing percentage of the nation’s R&D total has been directed toward nondefense activities.
Concurrent with these broad patterns of change, the locus of R&D activities is also shifting as a reflection of broad technological changes and new scientific research opportunities. For example, a growing amount of industrial R&D is now undertaken in services (versus manufacturing) industries, and much of the industry R&D growth has been in biotechnology and information technology. Reflecting the political reality of tremendous increases in research funding for NIH relative to other Federal agencies, the composition of these Federal funds has shifted markedly toward the life sciences during the past several years. Whereas industry has focused its R&D on new product development, the Federal Government historically has been the primary funding source for basic research activities.
As part of the changing composition of R&D activities, the organizational process of conducting R&D also has undergone substantial change. Greater reliance is being placed on the academic research community, and all sectors have expanded their participation in a variety of domestic and international partnerships both within and across sectors. The rapid rise in global R&D investments is evident from the expansion of industry’s overseas R&D spending and the even more rapid rise in foreign firms’ R&D spending in the United States. These domestic and foreign collaborations permit performers to pool and leverage resources, reduce costs, and share the risks associated with research activities. In addition, such alliances and international investments open a host of new scientific opportunities for R&D performers that undoubtedly will continue to redefine the R&D enterprise into the future.
Each of these developments creates further challenges in terms of data measurement and indicator improvement. Indeed, there are a number of specific areas of interest that could benefit from expanded data collections and analyses (National Research Council, 2000). Most notably, better information is needed on structural changes in industrial R&D (including research on the nature of R&D in the service sector and obtaining finer detail by industrial classification and geographic location). More extensive data could improve our understanding of the relationship between R&D and innovation to address the manner in which science and technology are transferred among firms and transformed into new processes and products. Fuller investigations and tracking of the apparent increase in the web of partnerships among firms, universities, and Federal agencies and laboratories in conducting R&D are warranted, as is more research on the extent and role of multidisciplinary research in science and engineering. Both of these latter topics, research that involves multiple partners and multiple fields, illustrate directly the growing complexities that characterize the R&D enterprise.
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