17.7. R&D EXPENDITURE AND SCIENCE POLICY
The information and analyses presented here should provide an overview of the considerable investment industrialized nations are making in R&D. The importance of this investment in both basic and applied research cannot be overstated. Discussions related to the importance of basic research and the impact of technical innovation on economic development may provide some information useful for developing a national science policy.
Science policy is the nexus of science (in general: basic research, applied research and development, and innovation) and public policy (broadly speaking: public decision-making processes, generalized guidelines, regulatory measures, and funding priorities). Nations will rely on the vitality of the science and technology enterprise to address some of the most challenging issues related to climate change, job creation, economic growth, energy, environmental protection, human health, national defense, and affordable and sustainable food supply.
Nations have evolved different ways of investing in science and technology and developed policies integrating various constituencies in the process. The role of scientists and engineers in this area was highlighted in the Rising above the Gathering Storm report (NAS, NAE, 2007), which stated:
Since the Industrial Revolution, the growth of economies throughout the world has been driven largely by the pursuit of scientific understanding, the application of engineering solutions, and continual technological innovation. Today, much of everyday life in the United States and other industrialized nations, as evidenced in transportation, communication, agriculture, education, health, defense, and jobs, is the product of investments in research and in the education of scientists and engineers.
Some interesting issues related to the global economy and science policy were raised in a publication by the National Academy of Engineering (1993). In this report, relative roles of industry, the university community, and governmental agencies were discussed and goals and policy recommendations to further productivity and growth of the U.S. economy were articulated. Clearly, the performance of the nation's technology enterprise—that is, its total capacity for creating, developing, and deploying new technology—is a key factor in increasing the economic productivity and sustaining the growth rate of the U.S. economy (National Academy of Engineering, 1993).
Some goals and policy recommendations related to science and technology are (National Academy of Engineering, 1993):
Foster the timely adoption and effective use of commercially valuable technology throughout the U.S. economy.
Increase civilian R&D investment in the U.S. economy and close emerging gaps in the nation's civilian technology portfolio.
Access and exploit foreign technology and high-tech markets more effectively to advance the interests of U.S. citizens.
Create a strong institutional framework for federal technology policy in support of national economic development, and integrate the planning and implementation of federal technology policy with that of national domestic and foreign economic policy.
In a general sense, these goals provide a blueprint for creating, developing, and deploying new technology to provide for increased productivity and the sustained economic growth of the economy.
17.7.1. R&D Expenditures and Society
An analysis of R&D investment by the major industrialized countries gives an indication of the emphasis each nation places on its needs and the priorities each nation has established among competing social needs. Since investment in R&D affects the innovation process and thus the goods and services available to consumers, the nature of R&D investment may to a large degree determine the real choices available to society. Consequently, R&D investment at the national level cannot be viewed primarily in terms of profitability.
Freeman and Soete (1997) argued:
The advance of science and technology must find its support and its justification, not merely in the expectation of competitive advantage, whether national or private, military or civil, but far more in its contribution to social welfare, conceived in a wider sense. The funding of R&D is extremely important for these basic goals.
Because of the problems of the commons and other associated issues, there is a tendency for R&D investments in industry and in government to focus primarily on short-term projects and not on problems of the environment, energy sustainability, and the like. As Freeman and Soete (1997) stated:
Present R&D project selection techniques are biased overwhelmingly towards technical and short-term competitive economic criteria. This is true of both capitalist and socialist economies. An extremely important problem for research and social implementation is the evolution of quite new techniques of selection and assessment which could be applied both in the private and public sectors. These should take into account aesthetic, work satisfaction and environmental criteria as well as other social costs and benefits which today are almost excluded from consideration.
Only when a national science policy explicitly recognizes that market rate of return cannot properly account for the investment needed in either basic or applied research can we begin to develop a broader and a more comprehensive approach to investment in research. This argument does not necessarily lead to more investment in research. Instead, it may lead to modifying some of our priorities and may also lead to analyzing both monetary and human capital investments in R&D explicitly.
17.7.2. R&D Expenditures on Space and Defense
Let us take the case of major research and development efforts that are undertaken to focus on national priorities such as space or defense. Without making any political judgments, although these can be important, it would be salutary to look at investments beyond the monetary aspects—for example, the investment of scientific talent incurred for these activities. Commenting on the desirability of the Strategic Defense Initiative, the Nobel Prize recipient John Bardeen stated that investment in this research program alone could be larger than the entire amount spent by the government for all nonmilitary research, including the National Science Foundation and the National Institute of Health. Perhaps, he stated, the country can afford this multibillion-dollar investment in monetary terms, but not in the diversion of the top talent of scientific manpower to such activities (Bardeen, Daily Illini, April 21, 1986).
Further commenting on a similar experience in the early 1960s, Bardeen (Daily Illini, April 21, 1986) has stated that the Apollo Program in the early 1960s was a great technical success, but the real cost to the United States was far greater than the dollars spent might indicate, because it was during the 1960s that the aerospace industry expanded rapidly to meet military and space needs and drew scarce top technical talent from civilian and other human needs. This, in turn, provided nations such as Japan and Germany the opportunity to establish a lead in civilian-based industries and markets. Large undertakings such as the Apollo Program historically have caused perturbations in the supply and utilization of top technical talent, so that the aerospace or military industry grew faster than could be sustained in the long run. Within a decade of its expansion in the early 1970s, highly trained engineers, ill suited for civilian needs, were being laid off by the aerospace industry.
No one questions the importance of national defense. Indeed, it is one of the most important priorities for a nation and especially so for countries like the United States. As a matter of national policy, however, it is important to consider not only the expenditures in major research programs of the magnitude of space and defense, but also the investment of top scientific talent in such activities. The impact that their programs have on the utilization of scientific talent is an important consideration.
It would seem that a vigorous debate on these issues is essential so that various national priorities are appropriately balanced. Such a debate should bring into consideration a science policy that explicitly addresses the issue of top talent diversion to different national efforts in addition to the monetary aspects. Educational and training programs could then be geared to produce the necessary technical talent, perturbations could be minimized, and essential defense needs, along with other nonmilitary and human needs, could be effectively satisfied. This would produce a more sustainable defense policy, which would be less costly to the nation because engineers and scientists that are highly trained and experienced in addressing military needs would not be rendered useless when there are major funding shifts and the resources and manpower normally wasted in start-ups and wind-down activities for large project undertakings for space and defense would be eliminated or minimized.
17.7.3. Choices among Competing Priorities
As the cost of specific projects (e.g., the supercollider) increases, some critics claim that "big science" threatens to eliminate "small science." Thus it seems that establishing science policy will eventually require making choices among competing national priorities. Is there a role for the science community in making these choices and formulating a national science agenda? In an address to the members of the National Academy of Science, Frank Press (1988) stated that "we must also be willing, for the first time, to propose priorities across scientific fields.... We can do so in a manner that is knowledgeable, responsible and useful. We should accept the challenge." If the scientific community does not get involved in proposing priorities and in formulating a national science agenda, others will set this agenda without critical analysis and proper knowledge. Such a national agenda is not likely to have the support of the science community, the confidence of the public, or the long-term commitment of the nation for financial support.
In making choices among competing national needs and proposing priorities across the scientific fields, a set of credible evaluation criteria is needed. The weight given to various elements of the criteria would naturally differ among scientists themselves and other decision-makers. It should, however, not be too difficult to reach an agreement on the major elements of such criteria.
Dutton and Crowe (1988) have proposed a set of evaluation criteria (see Table 17.7) with a series of questions under each of the main elements. They propose that each major research program of national significance be evaluated using such criteria so that comparable judgments can be made across programs.
Depending on national priorities, each nation, at a particular time in history, will need to develop a thoughtful far reaching and visionary strategy and evaluation criteria for research programs of national significance.