tions ranging from telemedicine to entertainment; improved user interfaces to allow the creation and use of ever more sophisticated applications by ever broader cross sections of the population; and the creation of the human capital on which the next generation's information industries will be based. Fundamental research in computing and communications is the key to unlocking the potential of these new applications.

How much federal research support is proper for the foreseeable future and to what aspects of information technology should it be devoted? Answering this question is part of a larger process of considering how to reorient overall federal spending on R&D from a context dominated by national security to one driven more by other economic and social goals. It is harder to achieve the kind of consensus needed to sustain federal research programs associated with these goals than it was under the national security aegis. Nevertheless, the fundamental rationale for federal programs remains:

That R&D can enhance the nation's economic welfare is not, by itself, sufficient reason to justify a prominent role for the federal government in financing it. Economists have developed a further rationale for government subsidies. Their consensus is that most of the benefits of innovation accrue not to innovators but to consumers through products that are better or less expensive, or both. Because the benefits of technological progress are broadly shared, innovators lack the financial incentive to improve technologies as much as is socially desirable. Therefore, the government can improve the performance of the economy by adopting policies that facilitate and increase investments in research. [Linda R. Cohen and Roger G. Noll. 1994. “Privatizing Public Research,” Scientific American 271(3): 73]



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