The Changing Nature of U.S. Basic Research: Trends in Funding Sources

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What will happen to U.S. economic competitiveness if federal funding for research and development (R&D) continues to decline? According to Eduardo Porter of The New York Times, the very foundation of American innovation will become even more unstable. As a share of GDP, federal funding for basic research is stagnant. In fact, these funding levels fell by nearly 10% from FY 2012 to FY 2013.
Future increases are projected, but Porter and others remain concerned. Maria Mazzucato, an economist from the United Kingdom, argues that U.S. government investments financed early scientific breakthroughs that led to important but subsequent innovations. During the Cold War years of the 1960s and 1970s, writes University of Washington professor Margaret Pugh O’Mara, federal spending largely funded science.
Now, in the second of a multi-part series about basic research, the State Science & Technology Institute (SSTI) raises a new concern. What will happen to U.S. economic competitiveness if private industry – rather than the federal government – continues to pay for a growing share of shrinking R&D? Federal sources once financed the majority of basic research, but 63% of U.S. spending on R&D came from industry sources in 2012.
Will private companies finance high-risk, long-term investments that offer significant unknowns but potentially large rewards? Will public companies that are driven by shareholder value seek to avoid uncertainty and high costs in favor of shorter-term gains? As a manufacturer, how much do you invest in basic research – and what assistance (if any) do you expect from federal sources?
Image Credit: © Rawpixel/Dollar Photo Club


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