not have been sequenced without the benefit of progress in computers and robotics, and modern medical imaging would not have been possible without advances in computers and mathematics. Correspondingly, promising new fuels could not have become serious candidate energy sources without accomplishments in biology and agriculture.

One might argue that investment in research should be the province of industry because industry is often a principal beneficiary of research and its direct descendant, innovation. In fact, during the past 40 years, as the fraction of the nation’s R&D spending provided by the government steadily declined from two-thirds to one-third, industry made up the difference, increasing its share of the total investment from one-third to two-thirds. Significantly, however, the composition of industry’s effort changed markedly during this period: development, not research, became industry’s priority. Although overall federal investment in research in constant dollars has been increasing, the growth has almost entirely been focused on the life sciences.

There are several reasons for industry’s perhaps counterintuitive behavior. First, there is the inherent possibility that an investment in research may produce no new knowledge at all; research is a risky business. One study in information technology concluded that only one new research “idea” in 500,000 results in a commercially profitable product. Furthermore, even when an effort is successful, there may be uncertainty as to the applicability of a particular research project to a firm’s own competence and business interests. For example, while working in the composites laboratory of an aerospace company—the same firm at which I was later employed—Howard Head conceived the idea for the skis and tennis racquets produced by the firm that now bears his name. The return to society as a whole from investment in research often far exceeds the rewards to the corporate underwriter or performer of an individual piece of research.

In addition to the implicit riskiness and uncertain applicability of investment in basic research, there is always the matter of its long-term nature, not uncommonly involving a decade or more of effort before results can be introduced into the marketplace. That constitutes a significant deterrent to investment by industry, which tends to have a “next-quarter” focus.

One might ask, Isn’t that short-sighted? The answer, of course, is yes; it is very short-sighted. But before condemning industry, consider the following incident that occurred a few years ago at the company where I was employed. Motivated by an unusually large stable of highly promising research opportunities, the company’s management conducted a briefing for Wall Street analysts to inform them of a planned increase in investment in research and the promise this would offer for the company’s future growth and profitabil-

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