R&D competition has two potential benefits. The first is that it provides the supporter of research with performance benchmarks that improves its ability to manage the research organizations, as well as spurs each competitor to be more efficient and so reduces the need for intensive monitoring of performance. The second is that it facilitates parallel R&D projects that take radically different approaches to solving the same problem.

The primary disadvantages of competition are that it can sacrifice economies of scale and scope. If a large physical facility is needed for experiment and testing, duplication can be excessively costly. In addition, if projects have strong complementarities, separating them into competing organizations can increase the difficulty of facilitating spillovers among projects, and cause duplication of effort as each entity separately discovers the same new information. In addition, competition has a political liability: parallel R&D means that some projects must be failures in that they lose the competition. Scandal-seeking political leaders can use these failures as an opportunity to look for scapegoats, falsely equating a bad outcome with a bad decision.

The decision about how to downsize the national laboratory system requires an assessment for each area of work whether competition is, on balance, beneficial or harmful. This issue is fundamentally factual, not theoretical, and constitutes the most difficult question to be answered before a reasonable proposal for downsizing the laboratories can be developed.

1. National Science Board (1993) Science and Engineering Indicators: 1993 (U.S. Government Printing Office, Washington, DC), Rep. NSB-93–1.

2. National Science Foundation (1995) Federal Funds for Research and Development, Fiscal Years 1993, 1994 and 1995 (U.S. Government Printing Office, Washington, DC), Rep. NSF-95–334.

3. National Science Foundation (1994) Federal Funds for Research and Development, Fiscal Years 1992, 1993 and 1994 (U.S. Government Printing Office, Washington, DC), Rep. NSF-94–311.

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6. U.S. Office of Management and Budget (1995) The Budget of the United States, Fiscal Year 1996 (U.S. Government Printing Office, Washington, DC), Chapter 7.

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8. National Science and Technology Council (1995) Interagency Federal Laboratory Review, Final Report (Executive Office of the President, Washington, DC).

9. Department of Defense (1995) Department of Defense Response to NSTC/PRD 1, Presidential Review Directive on an Interagency Review of Federal Laboratories (U.S. Department of Defense, Washington, DC), The Dorman Report.

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11. Task Force on Alternative Futures for the DOE National Laboratories (1995) Alternative Futures for the Department of Energy National Laboratories (U.S. Department of Energy, Washington, DC), The Galvin Report.

12. Ad Hoc Working Group of the National Cancer Advisory Board (1995) A Review of the Intramural Program of the National Cancer Institute (National Institutes of Health, Bethesda, MD), The Bishop/Calabresi Report.

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14. Bozeman, B. & Crow, M (1995) Federal Laboratories in the National Innovation System: Policy Implications of the National Comparative Research and Development Project (Department of Commerce, Washington, DC).

15. Markusen, A., Raffel, J., Oden, M. & Llanes, M. (1995) Coming in from the Cold: The Future of Los Alamos and Sandia National Laboratories (Center for Urban Policy Research, Piscataway, NJ).

16. Committee on Criteria for Federal Support of Research and Development (1995) Allocating Federal Funds for Science and Technology (National Academy Press, Washington, DC).

17. The Council of Economic Advisors (1995) Supporting Research and Development to Promote Economic Growth: The Federal Government’s Role (Executive Office of the President, Washington, DC).

18. Rosenberg, N. (1982) Inside the Black Box: Technology and Economics (Cambridge Univ. Press, Cambridge, U.K.).

19. Cook-Deegan, R.M. (1995) Survey of Reports on Federal Laboratories (National Academy of Sciences, Washington, DC).

20. Cohen, L.R. & Noll, R.G. (1995) The Feasibility of Effective Public-Private R&D Collaboration: The Case of CRADAs (Institute of Governmental Studies, Berkeley, CA), Working Paper 95–10.

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