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.
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