of undergraduate and graduate students are changing (there is less interest in science and technology careers, and among those who do go into science or engineering, there is more interest in jobs outside academia). In this chapter of the report, the committee addresses what it believes will be among the most salient elements in shaping the environment over the next several years for science and technology in the United States.

A useful starting point is a brief summary of what the system looks like today and how it evolved. The R&D enterprise in the United States had grown to an estimated $265 billion a year in 2000 from a starting level of less than $5 billion a year in the years shortly after World War II.1 Until 1980, federal funding exceeded industrial funding, but by 2000, industry accounted for 68 percent of R&D expenditures and carried out 75 percent of the work, measured in dollars spent. Most of those expenditures, however, could be categorized as development; basic research comprises only 18 percent of the total spent nationally on R&D and the patterns of funding for and performance of basic research were and continue to be entirely different from those of development.2

Federal support of R&D is provided by a number of agencies. Much of the funding, especially for applied research and development, is provided by the mission agencies that are users of the results, for example, the Department of Defense and the National Aeronautics and Space Administration. Some, including the National Science Foundation and the National Institutes of Health, conduct or support research for its own sake, including basic long-range research, although funding is generally predicated on the historical contributions of research to national well-being. Some R&D agencies exist to support the private sector, such as the Cooperative State Research, Education, and Extension Service in the Department of Agriculture and NIST in the Department of Commerce. NIST not only supports technology development, it is also responsible for metrology, the science of weights and measures, which underlies the development of technical standards relied on by industry.

In 2000, the federal government provided 49 percent of the funding for basic research, industry contributed 34 percent, and another 18 percent was provided by the universities, other nonprofits, and nonfederal governments. Although the federal government was the largest funder of basic research, it was not the largest performer. Universities and university-based federally funded R&D centers (FFRDCs) carried out 49 percent of all basic research in the United States in


Research and development data in this and the following paragraph are from National Science Foundation, National Patterns of R&D Resources: 2000 Data Update. NSF 01-309. Arlington, Va.: National Science Foundation, 2001.


The categorization of R&D expenditures into basic research, applied research, and development has a certain element of arbitrariness and has been the subject of much discussion. Therefore, these figures should be treated as no more than approximate.

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