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OCR for page 263
Basic Research in the Universities:
How Much Utility?
DONALD KENNEDY
The United States has placed on its universities a responsibility
for basic research larger than that imposed in any other society.
The result is a unique venture which tightly couples research and
research training, improving the quality of both, and is heavily
dependent on public funding. Now, because of the drop in govern-
ment support of the capital infrastructure of university research and
because of the need to spread technology transfer, the relationship
between quality and utility in basic research is being explored anew,
and rzew relationships between universities and industry are being
tested. This renewed emphasis on Pliny is not without promise, but
it should not be perrnztted to drain offthe energies of the best scientists
or to sap the vigor of the university laboratories irz which Journeymen
and apprentices work side by side at the bench.
In his splendid chapter on innovation and science policy in this volume,
Harvey Brooks has said much of what needs sayin:,. His characterization of
the venture of American science spans its entire range, from the publicly
funded basic research that begins the trajectory of innovation to the risk
capital financing of product development at its end. He makes a point worth
amplifying: the dramatic growth of public funding for science after World
War II placed most of the responsibility for fundamental research on the
nation's universities.
The extent of that responsibility, in fact, exceeds what can be found in
any other industrial democracy (In the United States, less than 15 percent
of government research and development expenditures are made in govern-
ment-run laboratones; the vast majority of the rest, including about two-
~irds of the basic research done in the nation, is spent in the research
universities.) Things might well have taken a different course; the government
could have formed a consortium with leading industries to develop indepen-
dent, jointly funded research units; or it could have evolved a set of in-house,
government-run research institutes. But it did not.
263
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DONALD KENNEDY
What is the most significant outcome of that self-denying ordinance? Surely
it is the collocation of research and research training. Most of the basic
science in America today is done by mixed groups of journeymen and ap-
prentices; the result is that the nation's research trainees are being developed
alongside the best scientists. That is the singular feature of our pattern of
government support for basic science in the universities; to it, our most
thoughtful European colleagues usually attribute our special success.
In 1977 Sune Bergstrom, then president of the Swedish Academy, pon-
dered why Americans had just swept all of the Nobel science awards. He
decided that it was because of the "democracy of American science," by
which he meant the fellowship of the laboratory bench.
WlIY NEW UNIVERSITY-INDUSTRY RELATIONSHIPS
ARE DEVELOPING
During the periods of vigorous growth in the 1950s and 1960s, there was
an adaptive mixing of objectives in He expenditure of federal funds. The
primary objective was He support of research programs, but two important
secondary goals were He support of graduate training and the funding of a
stable capital infrastructure to underlie the university-based programs. The
high-water mark for this consolidated approach was probably reached be-
tween 1965 and 1967. After that, the gradual cutting back of the fellowship
and training-grant programs began the decline in graduate support, and the
end of the Health Research Facilities Act in 1968 signaled the onset of capital
wasting. These two events have brought us to a very serious situation.
Of the developments just mentioned, the capital cost disease is surely the
more worrisome. Its several ramifications include the following: (1) Graduate
students and postdoctoral fellows in many fields of science are working under
severe equipment constraints and are emerging from their student days less
able than they should be to work at the most creative edge of their disciplines
(2) The vigor of the research effort itself is attenuated, as scientists either
make do with what they have or spend more and more time searching for
alternative ways to finance and equip their laboratories.
There are collateral problems as well. As deficiencies in the infrastructure
for university research worsen, strains emerge in odd and unexpected places.
For example, equipment and buildings once paid for by the government are
now paid for by private sources instead; this change accounts for the most
significant element in the recent rise in the indirect cost rates at major uni-
versities. Under the rules by which universities are reimbursed for research
costs, depreciation and use charges on such facilities and equipment may be
recovered through the indirect cost rate. At universities like Stanford, indirect
costs associated win such capital facilities have been by far the fastest-rising
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BASIC RESEARCH IN THE UNIVERSITIES: BOW MUCH HIM?
265
component of that rate over the past decade. Because Cat argument has been
set out in greater detail elsewhere, ~ shall not pursue it here.
There are two major reasons for seeking to enhance and improve He
linkages between the research university and industry. The first is the need
to fill the void created when the government abandoned its support of capital
facilities and major equipment in the research universities. Turning to another
source of capital assistance when the one failed, many institutions have been
developing new relationships with industry. The second reason is the need-
now broadly perceived—to spread the process of technology transfer. While-
we have built a strong fundamental research base by establishing publicly
supported basic science in the universities, many observers believe that our
record for transferring discoveries from the laboratory bench into human
service has been disappointing. It is hoped that new kinds of institutions built
at universities with help from industry will improve technology transfer. At
Stanford, we have used that argument in persuading 20 corporations to con-
tribute $750,000 each to fund the Center for Integrated Systems, a research
facility for the development of large-scale integrated microelectronic circuits.
There are a number of other examples of such centers in biotechnology as
well as in microelectronics.
These undertakings, engendered by the capital cost dilemma in the research
universities as well as by impatience with the rate of technology transfer,
are full of promise. Buy they also resurrect an old debate among those
concerned win science policy—a debate concerned with the proper balance
between discovery and application, that is, between quality and utility. The
rest of this chapter returns to some of those considerations and reexamines
them in light of the modern developments in university-industry relations.
THE QUALITY-UTILITY DEBATE
Most of us in the university sector have believed firmly that as long as
quaky is kept high, as long as pnucipal investigators are decently supported
and permitted to follow their own noses, quality will beget discovery, and
utilizer will probably follow. That notion, sometimes called the Columbus
theory of research, is actually much older than most people thinly it is. The
eighteenth-century mathematician and physician d'Alembert says in the in-
troduction to Diderot's Encyclopedia of Science: "Another motive serves to
keep us at such work: utility, which, though it may not be the We aim, can
at least serve as a pretext. The mere fact that we have occasionally found
concrete advantages in certain fragments of knowledge, when they were
hitherto unsuspected, authorizes us to regard all investigations begun out of
pure curiosity as being potentially useful to us." He understood grantsman-
ship before there were grants.
Nowhere is the qualit~r-utility issue more clearly encountered Can in heals
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DONALD KENNEDY
research. In that sector, we have seen a rising political consciousness of the
cost of curative medical technology and increasing impatience about the long
diffusion time between well-advertised fundamental science breakthroughs
and the availability of clinical benefits. Other important elements include a
new and growing scientific focus on preventive health and the disciplines
relevant to its practice, and the recent appearance of strong commercial
incentives for the application of new discoveries in molecular genetics.
In 1976 the President's Panel on Biomedical Research, a group of scientists
and medical administrators, presented President Ford with a report the Con-
gress had commissioned two years earlier. Among its recommendations, the
report strongly urged the continuation of federal funding for basic research
in increasing amounts and with greater stability, arguing in a style perhaps
best captured by the following example: "The remarkable science base of
our nation . . . is an indispensable national resource; this science base pro-
vides the only social basis for learning how to prevent and control diseases."2
This part of the report was significant not because it was novel, but because
the time was ripe for it to usher in a sharp debate over the strategy and social
purposes of medical research. At hearings held in 1976 by the Senate Sub-
committee on Health and Scientific Research, a parade of distinguished
academicians testified on behalf of He report and its conclusions. But other
witnesses with equally sound credentials presented a different view. Kerr
White, an epidemiologist Hen at Johns Hopkins University, argued that He
emphasis on the "science base" might be too heavy; he pointed to the need
to apply existing knowledge more effectively in the health care system,
especially in He interest of preventive health:
Are this country's academic medical centers to be concerned only with the provision of
''advanced medical care" for the major diseases that are a small segment of the burden
of illness? What about the other eighty percent of the ills that beset maid? Who is to
undertake the research, education and services that the public seem to demand or expect
for these problems? On whose list of health problems are the behavioral and biomedical
scientists of the country to work? Who draws up the list and on what is it to be based—
the perceived needs of the public, the curiosity of the investigators, or a sensible balance
between the two?3
The differences of interpretation that surfaced before the subcommittee
presented the first serious challenge to a view of the utility of fundamental
science that had dominated research policy in this country for three decades.
The dichotomy of these views is captured in a brief passage from the hearing
in which Senator Kennedy pressed the panel members on how funds should
be allocated between basic and clinical research. He said to panel chairman
Murphy:
In your page 3, you say: "The primary mission of the NIH as constituted today is fostering
and supporting and conducting laboratory and clinical research to the ultimate end of better
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BASIC RESEARCH IN THE UNIVERSITIES: HOW MUCH UTILITY?
267
understanding of disease." The Public Health Service Act seems to describe the alienate
end of the work not to be better understanding of disease, but to be diagnosis, treaunent,
and control and prevention of disease. The Act, itself, is quite clear in this area.4
That fragment of history set the stage for a new political drama, one that
could not have played a decade earlier when public faith in the capacity of
science was still almost unrestricted. The failure of the War on Cancer began
to erode public confidence in biomedical research, making it for the first
time—susceptible to political challenge.
The testimony also illustrates He different views of the state of science
that were held by Hose having different relationships to it. Those who do
science are, in general, convinced that it is damaged and made less effective
by external direction. But, however impressive the accomplishments of un-
guided basic science, one searches in vain for objective support of the view
that it "provides the only . . . basis for learning how to prevent and control
diseases." In contrast, those who have specific institutional responsibilities
to the health care system especially through political roles are apt to
demand more accountability from research and to be concerned that it be
managed to produce specific ends. The difference between these two views
is widening and becoming more public.
CONSIDERATIONS IN FORMULATING RESEARCH POLICIES
The issue of the relationship between quality and utility in basic research
is a difficult one, chiefly because it involves attempting to define policy for
a realm of activity that no one understands. Science has produced enormous
gains for this society, but even when we employ so restrictive a definition
of scientific progress as to measure only intellectual (and not technological)
outcomes, we have great difficulty in discovering what makes it work. For
example, does progress depend primarily on the contributions of a few ex-
traordinary individuals or Is it the cumulative result of smaller efforts by a
larger number of workers? Even so basic a question is hard to answer. The
formal analysis of research productivity seems to show disproportionate con-
tnbutions by a relatively small number of scientists, and the histories of
disciplines always focus on a few giants.5 But retrospective examinations of
many modern advances reveal a complex web of precursor influences in
which dozens of workers have played essential roles. I do not believe that
it is possible at this time to generate a hypothesis about the distribution of
significant work that would be of much use in formulating research policy.
Nor do we know how the presence of directive forces affects the research
enterprise. Does utilitarian influence have a negative impact on quality? It
is widely believed among basic researchers today that it does; but in the last
century splendid science flourished under industrial sponsorship.
Indeed, we do not even understand much about what motivates scientists
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DONALD KENNEDY
to do science. Is it the opportunity to provide some direct benefit to better
the human condition? Is it the search for solutions to a major intellectual
puzzle that impedes human understanding?
With so little knowledge about why scientists do science and about what
kind of guidance for research will therefore work best, what principles can
be brought to the design of research policies that optimize quality and utility?
Obviously I cannot supply a fully formed strategy, but following are some
questions that will be important in developing that strategy.
What Growth and Cost Features Must Be Considered?
Science is an extraordinary growth enterprise, and always has been even
when it was on tight rations. Well before the "golden age" of We 1960s,
the rate of increase in the U.S. research and development budget was above
10 percent per year in real terms. For at least two centuries before ~at, the
literature of science had been growing exponentially, at a rate of about 5
percent per year.6
Obviously, the commitment of new assets to science cannot indefinitely
undergo proportional increases. But Were are good reasons for believing that
the growth rates we have observed are driven by more than the expansion
of resource opportunities. Max Planck observed that "with every advance
in science the difficulty of the task is increased"; not only are the easier
problems solved first, but new discoveries generate new questions that are
inherently more difficult—and more expensive—to answer. For a fixed unit
of meaningful output, then, there is a steady increase in cost. This principle
has been recognized, implicitly or explicitly, in every modem analysis of
the status of the major scientific disciplines. Estimates of the real value of
this escalation range from 3.5 to 7.5 percent per year.
Against that background, the "quality structure" of scientific production
needs to be considered.7 A relatively small number of scientists produce a
disproportionately large share of the work, and an even smaller number
dominate the quality statistics. When the entire enterprise is growing, We
highest-quality results will increase at an inherently lower rate than the av-
erage for science as a whole.
Developing a national research strategy that took these forces into account
would be a complicated business. It would require cognizance of complex
interactions among size, cost, and grown rates; and, because We distribution
of quality across participants in the enterprise changes with size, any formula
developed for blending quality and quantity would have to change with grown.
How Is Quality To Be Recognized and Measured?
In the end, history with the longest possible view is the most reliable
judge of scientific quality. But the policymaker is seldom in a position to
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BASIC RESEARCH IN THE UNIVERSITIES: HOW MUCH HIM?
269
take advantage of that perspective. The time of interest is the present and
the filture, and the past is useful only for its general lessons about how quality
is recognized and about how to determine the level of quality of an individual
work. The task of evaluating, quality is made more difficult by our failure
to agree on what criteria should be used in judging it. It is relatively easy,
for example, to establish a consensus that a piece of work is elegant, but
much harder to decide whether the problem itself or the avenue of approach
IS Important.
One of the authentic successes of modern science policy is the process of
peer review, in which to employ the term literally—scientists examine and
evaluate the research proposed by other scientists in their own quality cohort.
Ironically, dunug the early days of "peer review," when it received the
most active and enthusiastic support from the scientific community, the
process probably did not fit that definition. Members of the early National
Institutes of Health study sections and National Science Foundation panels
were, for the most part, extraordinarily accomplished scientists, drawn from
the very top of the quality spectrum; their judgments may have been respected
in si=,nif~cant part because these scientists were viewed not as peers but as
the very best. Now that peer review has become, more literally, review by
peers, it is, perhaps not accidentally, being subjected to much sharper chal-
lenge from within the scientific community.
The populist criticism of peer review that it reinforces tradition even
when it is maladaptive to do so and leads to growth in elegance at the expense
of both importance and utility—contains elements of truth. Nevertheless,
some system of peer review is the only means He scientific enterprise has
yet found that permits contemporary judgment of the quality of a particular
piece of research—as opposed to the quality of the researcher, which can
(at least in principle) be judged historically.
How Is Utility To Be Recognized and Measured?
We need to know much more than we do about how the research process
works in particular, about how different kinds of research interact and about
what propositions and relations ought to be established between them. It is
not easy, however, to distinguish "basic" research from the rest. Basic
research is usually described as "seeking an understanding of the laws of
nature without initial regard for utilitarian value" or as being undertaken
"win no predetermined use in mind." In these and all over definitions of
the term that I know, the intentions of the research play a significant role.
It is easy to recognize some important social values in such work. There
is a value attached to increasing human understanding and dispelling igno-
rance. Extraordinary scientific accomplishments, irrespective of application,
lift the imagination and provide important points of intellectual contact and
consensus for societies that often have too little of both. Because research
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DONALD KENNEDY
activity contributes to the intellectual skills of persons who are often doing
other things (e. ,., teaching) that have social utility of their own, He research
may have "overhead" value.
Although all these arguments have been advanced as rationale for the
social support of research, never has such an argument played a significant
political role in determining this support. Instead, in this society and in all
others like it, the allocation of public funds has been based on the prospective
social utility of research outcomes. Thus, He accumulated result of research
initiated by independent investigators is viewed as a "knowledge bank"
against which society may draw for useful applications. It is in these teas
that basic research has always had to justify itself by showing, in effect,
how quality begets utility. The traditional keystone of the argument for basic
research is a version of the aforementioned Columbus theory: we must pro-
ceed on all possible fronts, because (to quote Derek Bok's argument for
basic research) "it is so difficult to perceive in advance what particular
knowledge will prove important to the solution of a particular practical prob-
lem."8
The difficulty is that, although the Columbus theory has widespread sup-
port, the evidence for it is almost entirely anecdotal and usually concen-
trates on a very few historic examples. For a long time, it was accorded
almost theological respect by the Congress, especially when offered by dis-
tingu~shed scientists; but, as indicated earlier, that attitude has chanced.
Perhaps in response to the political harbingers of that change, there has
been a growing tendency to cite more analytical or quantitative approaches.
These are very few in number, but—despite conspicuous inadequacies-
they have had a striking influence on the politics of research policy. The
first was a 1969 study of weapons systems done by the Department of Defense
in an effort to satisfy the Congress about the value of research and exploratory
development. The study, called Project Hindsight, examined the development
of 20 weapons systems and concluded that the critical events identified by
the Deparunent of Defense participants were primarily the result of work in
applied areas having specific systems requirements as objectives.9 The sys-
tems were not selected using criteria established in advance, nor was the
evaluation of critical events done by persons unconcerned with the outcome
of the study. The result nevertheless had an important impact on defense
research policy in the late 1960s and early 1970s.
Comroe and Dripps, in an effort to improve the objectivity of such historical
analyses, studied innovations in medicine that related to diseases accounting
for over half the yearly deaths in the United States. A Groups of physicians
and specialists nominated and then evaluated He top clinical advances in
cardiovascular and pulmonary medicine and surgery in the preceding 30 years
and selected 10; art independent group of consultants Den identified the
"bodies of knowledge" essential for their development. Finally, a bibliog-
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BASIC RESEARCH lN THE UN,IVERS=IES: HOW MUCH CILIA?
271
raphy of articles contributing to these advances was narrowed to 529 key
papers that were then categorized by goal and type of research. About 62
percent of this underlying scientific work was classified as basic research,
and in over 40 percent of the work there was no evidence of clinical interest
on the part of the investigator at the time the research was done.
The Comroe-Dripps study contains a number of features that should be
followed in the design of future evaluations of basic research. The sample
of important advances is generated by practitioners, not by the investigators
or people concerned with demonstrating a connection to research An ex-
~aordinanly large sample of possible precursor events was examined, again
by expert observers disinterested in the outcome. These ought to be the
minimal standards for any such design. Further improvements could probably
be made, but even without them the Comroe-Dripps design provides a means
through which an objective assessment of the contribution of basic research
to socially useful application can be judged. It deserves much wider appli-
cation, but probably because it is extremely expensive and time-consum-
ing it has scarcely been applied at all.
Are Commercial Incentives Good Devices for Generating
Utility From Quality?
Whatever the status of the "science base" or "knowledge bank," it is
clear from studies like the one by Comroe and Dnpps that the time delay
between laboratory discovery and first practical application is often disn~rb-
ingly lone,. Both government agencies and He universities have been urged
repeatedly to reduce such applications delays, and much recent legislative
attention has been given to incentives of commercialization including re-
visions of the tax treatment of industrial contributions to university research.
However laudable these efforts may have been, the emphasis on com-
mercialization incentives is producing some farther-reaching institutional in-
novations that should be examined carefully for side effects. No more vivid
example can be found than in the fevered corporate activity surrounding
genetic technology.
To an unexpected degree, the commercial push behind that activity in-
volves the scientists who are themselves responsible for the basic discoveries,
and often the academic institutions to which they belong. That has raised
problems both for He scientists and for their universities.
Most institutions retain the rights to patents resulting from inventions made
by faculty on university-compensated time in university laboratories. A few
places give these rights to the faculty member; usually, as at Stanford,
incentives are created to encourage the reassignment of these rights to the
university through individual patent agreements. The university may then
license them, usually nonexclusively if federal funds also contributed to the
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DONALD KENNEDY
support of the research. But neither tradition nor rules at most universities
prevent the investigators from joining with others In a venture entirely outside
We university—or the university from participating in that endeavor at the
urging, of the investigators. And, of course, individual scientists are also
involved in less formal relationships with the commercial sector via con-
sulting and collegial interaction, which may stimulate the movement of ideas
from the laboratory toward application.
In the early phases of this new opportunity, most major research univer-
sities adopted institutional arrangements to help them support continuing
research activity by retrieving some of the rewards generated by the successful
efforts of their faculty in the laboratory. The arguments in favor of this
position are strong: the financial return is there and someone is going to get
it; the universities have sponsored the research and nurtured the climate in
which it took place, so a share should go to them in order to replenish their
capacity to do more; and donors and trustees, who characteristically press
hard for sound and aggressive financial management, insist Mat legitimate
sources of income for these purposes be tapped. The spectrum of possible
institutional solutions, beginning with the simplest, could be represented as
follows:
1. University as licenser, collecting royalties directly.
2. Separate corporation as licenser, developer, and supporter of research;
no relation to university except through agreed sharing of royalty income.
3. Separate corporation as licenser, developer, and supporter of research
university faculty or administrators involved in governance.
4. Separate corporation as licenser, developer, and supporter of research;
might also engage in final production. University faculty or administrators
involved in governance; university has equity position.
Nearly every major research university has a patent office and is active at
level 1. A number have proposed or helped form special institutions, like
that at level 2, through which research support could be undertaken on a
venture basis and royalty income received by the university. At level 3 a
measure of university control is added through participation of university
faculty members (the researchers) or administrators in the governance of the
corporation. The latter's work would stop at Me stage of development; there
might be feasibility tests of production at Me pilot-plant level, but no income
related to product sales. At level 4 there is a full-fledged production company
win university participation in equity.
Most universities have decided that levels 3 and 4 present problems of
equity and conflict of interest that loom unacceptably large. But, particularly
at level 2, there has been some interesting institutional innovation. For ex-
ample, some nonprofit corporations have been created as independent re-
search organizations with prof~t-making spin-offs, generating royalties Mat
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BASIC RESEARCH IN THE UNIVERSITIES: LION MUCH UTILITY?
273
support basic research programs at one or a group of several universities.
The governance of such entities can be clearly separated from that of He
university or universities that benefit, so that real or perceived conflict of
interest can be avoided.
In addition, consortium efforts by companies have increasingly recognized
the desirability of supporting more applied research in on-campus locations.
That recognition has given rise to such ventures as the Center for Integrated
Systems at Stanford. The support of on-campus university research programs
by corporations is also increasing, and research-intensive firms from the
energy, chemical, and pharmaceutical industries have all established capital
and program support for laboratories at research universities.
The combined impact of these new commercial incentives has been con-
siderable. It has increased, Tough not by a great proportion, the total par-
ticipation of private resources in fundamental research. It has provided some
possible models for overcoming the impediments to rapid diffusion of basic
research advances into human use. Thus, although I continue to worry about
the variety of individual commercial arrangements being made by university
scientists in biotechnology, I believe that most of He institutional responses
to the new commercial incentives have been encouraging steps. Potentially,
then, He answer to He question that opened this section—Are commercial
incentives good devices for generating, utility from quality? is a qualified
yes.
.
CONCLUSION
In concluding, let me return to a point emphasized at the beginning of this
chapter. The great strength of American basic science is the tight coupling
of research and research training. The main Great posed by overemphasis
on utility is to the integrity of that linkage: a set of utilitarian incentives can
drain off the energies of the best scientists and sap the vigor of He university
laboratories in which journeymen and apprentices work side by side at the
bench. The universities should be especially vigilant guardians of the union
between research and research training because Hey are its proprietors. But
Hey are not its ultimate beneficiary; society is.
NOTES
1. Donald Kennedy, Government policies and the COSt of doing research, Science 227(1985):480-
484.
U.S. Department of Health, Education and Welfare, President's Biomedical Research Panel
Report. Pub. No. (OS) 76-500 (Washington, D.C.: U.S. Government Printing Office, 1976).
Basic Issues in Biomedical and Behavioral Research. Hearings before the Subcommittee on
Health and Scientific Research, Committee on Labor and Public Welfare, U.S. Senate, June
16 and 17, 1976. Committee Print, p. 161.
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274
L)ONALD KENNEDY
4. Ibid., p. 16.
5. A thorough account of this matter can be found ~ N. Rescher, Scientific Progress (Pittsburgh:
University of Pittsburgh Press, 1978). Much of He original analysis is due to Derek J. de
Solla Price.
6. Derek J. de Solla Price, Science Since Babylon (New Haven: Yale University Puss, 1961).
7. Rescher, Scientific Progress.
8. Derelc Bok, The critical role of basic research, Advancement of Science and Technology
(Washington, D.C.: May 1976).
9. Office of the Director of Defense Research and Engineering, Project Hindsight: Final Report
(Washington, D.C.: U.S. Department of Defense, 1969).
10. Julius H. Comroe, Jr., and Robert D. Dripps, Scientific approach to a national biomedical
science policy, Science 192:(1976)105-111.
r
Representative terms from entire chapter:
commercial incentives
