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NSF Press Release


NSF PR 00-43 (NSB 98-129) - June 19, 2000

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 Bill Noxon

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 Marta Cehelsky

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This material is available primarily for archival purposes. Telephone numbers or other contact information may be out of date; please see current contact information at media contacts.

Strong R&D Growth Continues to Boost Robust U.S. Economy
S&E Indicators 2000 cites technological growth, among other factors

chart, National R&D expenditures, by source of funds
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Research and development (R&D) in the United States is continuing to provide impetus to a booming economy, according to the latest National Science Board (NSB) biennial report to the President.

The two-volume edition of Science and Engineering Indicators 2000 documents that the U.S. economy approached the end of the 20th century with "unprecedented real growth, miniscule inflation, low unemployment and strong consumer and investor confidence." An indicator of that confidence was seen in the continued rising investments in research and development (R&D), which in 1998, grew by 6.5 percent, adjusting for inflation. Meanwhile, the U.S. Gross Domestic Product (GDP) grew by almost four percent per year for the two-year period 1997-98, bettering historical averages.

Federal support for R&D rose by 2.1 percent inflation-adjusted, in 1998. The much larger percentage increase in industrial R&D, however, helped to lower the federal share of the national total to below 30 percent for the first time since 1953, when the National Science Foundation started monitoring these trends.

S&E Indicators 2000 reports several new trends in international R&D. For example, the U.S. government (among seven federal agencies) took advantage of the "global R&D landscape" by participating in 575 international science and technology agreements with 57 individual countries in fiscal 1997, while also entering into a significant number of international multi-government and multi-organizational agreements.

Within industry, global research partnerships have been used to "strengthen core competencies and expand into technology fields critical to maintaining market share." Since 1990, companies worldwide have entered into 5,100 known multi-firm R&D alliances involving strategic high-tech activities. About a third of these were between U.S. and European or Japanese firms. Over a 12-year period (1985-96), U.S. companies' investments in overseas R&D increased almost three times faster than company-funded R&D performed domestically. Foreign investments in R&D within the U.S. are also on the rise, now roughly equivalent to U.S. companies' R&D investments abroad.

The global nature of science is also reflected in the growing numbers of co-authored scientific papers with international collaborators. By the mid-1990s, nearly one in five U.S. articles in a set of key world journals covered by the Institute of Scientific Information's Science Citation and Social Science Citation Indexes involved international collaboration, compared to just 12 percent only a decade earlier.

"There are practical considerations as well as economic ones for the growing collaborations internationally and nationally," Eamon Kelly, chair of the NSB said. Kelly, an economist, says that the scale, cost and complexity of attacking many scientific and technological questions have increased. Research teams, therefore, have become common, changing the structure of research here and abroad.

Another growing trend within the U.S., reported in the first S&E Indicators of the 21st Century, is the increased patenting activity by universities and their collaborations with industry. The report emphasized that these relationships have given rise to questions about unintended consequences - for universities and academic researchers - regarding potential distortions of academic basic research, contract clauses specifying limitations, delays or suppression of research results, or faculty members' potential for conflicting economic and professional incentives from such arrangements. The questions arise as a backdrop to the vastly increasing numbers of academic patents, which soared from 250 annually in the early 1970s to more than 3,100 in 1998, a ten-fold increase.

Nevertheless, the overall economic impact of a "stimulated" R&D climate has been positive. "There has continued to be a consistent balance between investments in fundamental and applied research, and development within the U.S., and steady increases in these investments since 1980 that have contributed to a strong research system and a vital economy," says Kelly.


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