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Science and Engineering Indicators 2004
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Chapter 4:
National R&D Trends
Federal R&D Performance and Funding
Technology Linkages: Contract R&D, Federal Technology Transfer, and R&D Collaboration
International R&D Trends and Comparisons
R&D Investments by Multinational Corporations

U.S. and International Research and Development: Funds and Technology Linkages

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The resurgence in R&D investment in the United States from 1994 to 2000 slowed almost entirely by 2002. An uncertain economy rocked by turbulence in financial markets and terrorism led to reduced output in both the manufacturing and service sectors as well as subsequent slowdowns in R&D expenditures in many sectors. At the same time, the Federal Government's role grew in terms of both R&D funding and performance, reversing the decade-long divergence of private and public funding of R&D.

Recent acts of terrorism and military mobilizations have reversed a declining trend in the U.S. Government's share of defense-related R&D. Other countries throughout the world have maintained their focus on nondefense R&D and have attempted to take proactive steps toward intensifying and focusing their national R&D activity. These steps range from increasing general government spending to fostering high-technology industrial clusters.

The locus of R&D activities is also shifting as a reflection of broad technological changes and new scientific research opportunities. Industrial R&D is increasingly undertaken in service (versus manufacturing) industries, and much of the industrial R&D growth has occurred in biotechnology and IT. Moreover, Federal research funds have shifted markedly toward the life sciences during the past several years.

In addition to R&D performance and funding, the organization of R&D activities also has undergone substantial change. At the corporate level, R&D activities are increasingly globally driven by the need to support or develop markets and foreign production sites and the need for science-based technologies. A parallel trend is the increasing reliance on external technology sources and R&D alliances to share costs, risks, and resources and promote the development of innovative capabilities, increasingly relevant for long-term competitiveness.

These issues not only affect the performance and policy implications of R&D activity in the United States and overseas but also present new challenges for the development of S&T indicators (National Research Council 2000). In part to address these challenges, NSF, through the Bureau of the Census, which conducts the NSF Survey of Industrial Research and Development, and BEA, which conducts the international investment surveys, have initiated a statistical linking project to further explore the international composition of R&D activity in the United States. Fuller investigations and tracking of the apparent growth in the web of partnerships among firms, universities, and Federal agencies and laboratories in conducting R&D are warranted. An understanding of this dynamic and changing scenario is essential in a U.S. economy increasingly driven by the production, diffusion, and exploitation of science-based knowledge.

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