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s I. INTRODUCTION ECONOMIC COMPETITION, RESEARCH, AND THE NATIONAL SCIENCE FOUNDATION This nation's preeminence in scientific innovation is a major and durable strength. In looking to the future, however, many knowledgeable observers have raised serious concerns about our ability to sustain a high rate of innovation and to transfer new knowledge rapidly to industrial and social needs. The National Science Foundation has a crucial role to play in addressing these concerns. In view of its mission "to promote the progress of science and engineering" and "to address the national health, prosperity, and welfare," the Foundation has responsibility for the creation of new scientific knowledge and for providing students with the quality and breadth of instruction required to meet the changing needs of science and society. The Foundation must ensure that today's scientific frontiers are being explored vigorously and that the results of this research are made available to society as rapidly as possible. As many of today's new industries represent the harvest of research in former decades, today's basic research sows the seeds for new industries of future decades. Any strategy for economic competitiveness that fails to recognize the importance of a long-term commitment to basic research will be self-defeating. GOALS Viewed in the aggregate over the long term, the economic payoff of Investment in education and research is enormous, but its sources and timing are uncertain. In some cases, science evolves along fairly predictable lines whose benefits can be largely anticipated; but

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6 revolutionary discoveries of much greater long-term economic signif icance usually depend on knowledge whose utility was unforeseen. No one envisioned that basic studies in the microwave spectrum of ammonia would lead to the invention of the laser, whose contemporary uses range from printing documents to long-distance communication to ship welding to repairing detached retinas. Similarly, no one anticipated that research on magnetic moments and nuclear spin would lead to nuclear magnetic resonance, which today finds countless uses ranging from chemical analysis of compounds to medical diagnostics; or that work on the molecular biology of bacterial viruses and intestinal bacteria would create a new industry. And who would have predicted that research on perovskites, a common class of mineral insulators, would lead to the discovery of high-temperature conductivity, whose potential applications seem enormous? The lesson of these and other examples is that the United States must continue to support a wide variety of research activities -- short and long term, basic and applied -- organized in the many different ways that are appropriate to the various research problems and opportunities. The principal rationale for the NSF Science and Technology Centers is to ensure continued preeminence in science and an adequate base of trained scientists -- two ingredients essential to our success in economic competition. They should not be intended to respond to government or industry perceptions of what is required to remedy deficiencies in U.S. competitiveness in the short term. BALANCING MODES OF RESEARCH The major issue in inaugurating a new program of Science and Technology Centers is one of balance among modes of research support. The single investigator with a small research team remains the appropriate mode for many fields of scientific inquiry. This mode has the advantages of pluralism, decentralization, and flexibility to move in new directions as opportunities unfold. Individual investigator support has been enormously successful for the National Science Foundation and productive for the nation. Its preeminence must not be diminished. Although not identified separately in the NSF budget, group projects receive a growing share of NSF research funding. They are concentrated in

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7 the materials, physical, and biological sciences. Groups typically involve a few researchers collaborating or simply sharing equipment. They usually lack an administrative structure, an educational mission independent of university departments, and the ability to fund promising new projects; but they have many of the virtues of single investigator projects and should be treated as favorably. The term "center" implies a larger scale activity with a formal management and organizational structure. Centers are not a new idea for NSF. On the contrary, they are already an important part of the Foundation's funding portfolio. In view of the need to support more collaborative research and build university infrastructure in many areas where progress is otherwise limited, centers should be expanded a component of increased research funding. It is in the context of the President's intention to double the NSF budget over five years that the panel supports the Foundation's Science and Technology Centers initiative. At the outset of its deliberations, the NSF Director assured the panel that, although he envisages a three-fold increase in the total number of NSF centers during that period, the centers will still represent only about 10 percent of the Foundation's budget. Awards to principal investigators for single and collaborative projects will continue to represent about 60 percent of the budget for research. In the event that the additional funds are not appropriated as anticipated, the panel believes that the Science and Technology Centers program should be reduced proportionately. s one

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