. "2 Why Are Science and Technology Critical to America's Prosperity in the 21st Century?." Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future. Washington, DC: The National Academies Press, 2007.
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Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future
FIGURE 2-2 US farm labor productivity from 1800 to 2000. There was a 100-fold increase in US farm labor output, much of it brought about by advancements in science and technology.
SOURCE: S. Moore, J. L. Simon, and the CATO Institute. “The Greatest Century That Ever Was: 25 Miraculous Trends of the Past 100 Years.” Policy Analysis No. 364, December 15, 1999. Pp. 1-32.
ductivity depends on more than labor and capital.7 Intangible qualities— research and development (R&D), or the acquisition and application of knowledge—are crucial.8 The earlier national commitment to make a substantial public investment in R&D was based partly on that assertion (Figure 2-3).
Since Solow’s pioneering work, the economic value of investing in science and technology has been thoroughly investigated. Published estimates of return on investment (ROI) for publicly funded R&D range from 20 to 67% (Table 2-1). Although most early studies focused on agriculture, recent work shows high rates of return for academic science research in the
R. M. Solow. “Technical Change and the Aggregate Production Function.” The Review ofEconomics and Statistics 39(1957):312-320; R. M. Solow. Investment and Technical Progress. In Arrow, Karlin & Suppes, eds. Mathematical Models in Social Sciences, 1960. For more on Solow’s work, see http://nobelprize.org/economics/laureates/1987/index.html.