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Origins of Dated Federal R&D Policy

The federal government has a long history of supporting innovation as a means of international competition, yet policies over the years have diminished its potential. In a recent article in Technology in Society, veteran science policy expert and Science Progress adviser Neal Lane highlights two pieces of legislation which are essential to understanding science and technology policy: the 1973 Mansfield Amendment and the 1980 Bayh-Dole Act. The United States needs forward-thinking federal science and technology policies like these to drive the innovation economy in 21st century.

Following the Soviet launch of Sputnik I under President Eisenhower, federal funding of R&D skyrocketed. In addition to space-related R&D, defense R&D funding also grew substantially during this period, and again during the Reagan years. Lane explains that the second jump in defense R&D funding, away from basic science research and toward applied science and product development, was due to the Mansfield Amendment enacted in 1973.

U.S. Defense and non-defense R&D spending
[US federal government spending on defense and non-defense R&D, FYs 1955–2007 (in billions of constant FY2007 dollars)]

The Mansfield Amendment stipulated that all defense research be correlated with military application. This led to a departure from successful basic science research partnerships between defense agencies and universities immediately following World War II. After the war, funding was mostly funneled into the development and testing of large weapons and defense systems. Lane writes that in the decades following WWII, the Mansfield Amendment reflected “the public’s desire for practical outcomes.” In his national innovation agenda, Science Progress adviser Tom Kalil is critical of this overemphasis on short-term results at the expense of high-risk, high-return research at agencies like the Defense Advanced Research Projects Agency. He points out that DARPA “is now making ‘go, no-go’ decisions about whether continue a research project a mere 12 to 18 months after its inception,” and university researchers are increasingly serving “as sub-contractors to defense companies.” As a result, they can no longer pursue long-term research projects that have the potential to yield breakthrough discoveries.

[Distribution of total annual research funding—percentage for selected federal agencies for FY2007. The figure is based on the President’s budget request, not the final appropriated amounts, however, the differences are small.]

Another result of this focus on immediate results is that the research community has changed the way it categorizes components of R&D. For example, “basic” research now includes “applied” science in the DoD budget. This change means the development of defense weapons can be categorized under basic research.

Private funding of R&D overtook federal investment in 1979 and the 1980 Bayh-Dole Act helped to widen this gap. Bayh-Dole allows universities, faculty researchers, small businesses, and nonprofits to obtain intellectual property rights covering inventions and discoveries resulting from federally funded research. This allows them to commercialize new technologies and streamlines the path to the marketplace. Although industrial support of university research is a small component of academic research expenditures, private industry now spends approximately $220 billion per year on R&D, about 70 percent of the total national investment in S&T. Because companies must demonstrate to stockholders the value of their R&D investments, they tend to focus more on short-term applied R&D, where useful results are highly probable. Together, these two pieces of legislation have long contributed to an increased focus on short-term R&D solutions and a widening gap between private and public funding of research.

[US R&D funding by source: federal government and private industry (non-federal funds) FYs 1953–2006 (in $ billions of constant FY2006 dollars).]

The effects of these policy restrictions on research funding for different priorities is apparent in the funding distribution to various federal agencies. Of the federal government’s $137.1 billion in 2007 funding allocated for the conduct of R&D, $81.7 billion was dedicated to defense-related work and $55.5 billion for nondefense R&D. Clearly then, the Department of Defense receives the most R&D funding. However, looking only at basic and applied research funding allocations, which total $54.8 billion, approximately $29 billion was set aside for the Department of Health and Human Services (and subsequently, the NIH), whereas only $6 billion in basic and applied research was set aside for the Department of Defense.

Lane argues that a reason for these funding decisions derives is the public’s desire for practical outcomes. As large returns on investment for new technologies became increasingly important to the public, the government became supportive of a funding dynamic that supported applied research. While federal agencies involved in research might govern as separate entities, they often change their focus to reflect national priorities set by the president and Congress.

Without strong presidential leadership and a White House Science Advisor who will prioritize long-term, federally funded research, Lane suggests that the United States cannot to maintain its global leadership in innovation.

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