Upswing In Industrial R&D Creating Positive Economic Benefits

July 01, 1998

Increases in industrial research and development (R&D) activities are the highest recorded since the early 1980s, according to a new National Science Board (NSB) report to Congress.

The importance of public research to industry is also stronger today than ever, as reported in the newest edition of Science and Engineering Indicators 1998.

According to the 800-page report, the rise in industrial R&D investments is due to intense international competition, the introduction of information technology (IT) and record profits. It also attributes a direct benefit to the economy from both publicly and privately funded research.

The volume says that U.S. industry has turned a corner in the last few years, increasing investments in its own research laboratories while at the same time accelerating connections to universities and colleges for fundamental and applied research.

Patents granted to U.S. inventors and those from a number of key industrialized nations have increasingly cited public research at academic and nonprofit institutions, and government research facilities. And, American inventors more frequently than ever cite articles in research journals written overwhelmingly by U.S. authors.

"These results are striking," said Neal Lane, outgoing director of the National Science Foundation. "We see a documented, direct connection between new knowledge and economic growth. Scientific research, especially that based at universities, is proving to be a major contributor to industrial innovation."

Meanwhile, the report cautions that the recent trends in rising industrial R&D combined with a receding federal government share of investments is slowly shifting the direction of the nation's R&D enterprise. While the health of R&D funding overall remains positive, "there is cause for concern that short-term R&D may be displacing the longer-term quest for new knowledge and breakthrough discoveries," says the book's U.S./international R&D chapter summary.

Other highlights in S&E Indicators 1998 include:

NSB is the governing body for the National Science Foundation, which develops S&E Indicators for NSB through the Division of Science Resources Studies. The final report is submitted to the President, who transmits it to Congress.
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National Science Foundation

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