Measuring Research and Development Expenditures in the U.S. Economy (2005) / Chapter Skim
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1 Introduction
1 Introduction
Pages 10-32
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From page 10... ...
A portion of the study was also mandated by Congress in the National Science Foundation Authorization Act of 2002. The panel was asked to look at the definition of ROD, the needs and potential uses of ROD data by a variety of users, the goals of an integrated system of surveys and other data collection activities, and the quality of the data collected in the existing SRS surveys.
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From page 11... ...
Indeed, highlights of the interim report's analysis and recommendations have been carried forward into this final report. The interim report assessed the commitment of the Science Resources Statistics Division of NSF to quality of performance and professional standards and examined aspects of the statistical methodology and accuracy in the SRS portfolio of surveys.
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From page 12... ...
In addition, this final report addresses the continuing issue of the discrepancy between the federal reports on obligations of funds for research and development and the expenditures of federal research and development funding reported by recipients of those funds. Our review of the reporting classifications and definitions used in the differing reports and a reconciliation of the data sources appear in Chapter 6.
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From page 13... ...
Although there were examples of federal investment in basic science, such as the National Bureau of Standards, which was doing critical basic research in a broad spectrum of areas, the sense of mutual dependence with the scientific community had not yet fully blossomed. The tenor of the times, as U.S.
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From page 14... ...
A renewed emphasis on health and biomedical research in the 1950s, an increased focus on environmental and energy issues in the 1970s, a new national commitment to international competitiveness and breakthroughs in information technology in the 1980s and 1990s, and then the robust growth of the health and medical research sector since the 1980s were examples of the global shifts in emphasis and resourcing that needed to be explored and explained. During this same time period, the increasing recognition of the contribution of ROD to economic growth and productivity advanced heightened national interest in ROD and, in particular, innovation.
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From page 15... ...
The rapid exchange of technical information facilitated by academic journals, conferences, the Internet, and licensing agreements has generated knowledge spillovers, which help firms increase productivity more broadly, even with patent protections for the innovating company. Growing Importance of ROD Expenditure Measures Data on ROD expenditures have documented these trends in the size and scope of science and engineering, as well as the contribution of ROD to growth.
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From page 16... ...
It was replaced by the umbrella Scientists and Engineers Statistical Data System (SESTAT) in 1993, which incorporated data from the National Survey of College Graduates, the Survey of Recent College Graduates, and the Survey of Doctorate Recipients.
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From page 17... ...
Some were absorbed into or merged with regular data collections; some simply fell by the wayside. A survey of Science and Engineering Activities at Universities and Colleges was appended to the Survey of industrial Research and Development in 1964 and absorbed into a new annual Survey of Research and Development Expenditures at Universities and Colleges in 1972.
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From page 18... ...
The federal government had accounted for about two-thirds of ROD spending as recently as 1968, but since then the share has fairly steadily declined while industry's share has steadily increased. In 2002, the latest data available, the federal government's total spending accounted for just 26 percent of total U.S.
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From page 19... ...
INTR OD UCTION A 300 2s0 ,~ 200 o o o = 100 so 2s0 ~ 200 ta : = .o 1N so 19 Total R&D ~ industry ......... Federal Other nonfederal 11 ~_~,,,,.,,-...'' ,~ .......
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From page 20... ...
This increasing presence of a dynamic service sector in the economy has had ramifications for many aspects of economic measurement, from necessitating design changes in the economic censuses, to refocusing GDP and employment measurement, to the development of the North American industrial Classification System (NAICS) in 1997 to replace the old Standard Industrial Classification (SIC)
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From page 21... ...
, financial services (NAICS 52 and 53) , computer systems design and related services (NAICS 5415)
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From page 22... ...
But since the early days of the 20th century, there has been considerable doubt in the United States as to whether methods of doing business fell under the definition of patentable subject matter, namely "any new and useful process, machine, manufacture, or composition of matter." While the United States did not explicitly forbid so-called business method patents, as many nations in the French and German legal traditions did, there was still a presumption that they did not fall into these four categories and hence were not patentable. To make matters worse, financial service firms were required by the marketplace and by regulation to make public the broad outlines of publicly registered securities through prospectus disclosure.
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From page 23... ...
The case that ignited this new change in policy pitted State Street Bank against a smaller firm, Signature Financial. When Signature won its suit to stop State Street from infringing Signature's patent on a way of creating mutual funds, State Street's stock fell 2.3 percent or $277 million in one day.
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From page 24... ...
Role of Small Firms in RED Another significant change in the environment for ROD, closely associated with the growth of the service sector, has been the growth in the role of small firms in the generation of innovation and economic growth through ROD. Firms in the service sector that perform RED tend to have fewer employees and smaller RED budgets than those in the manufacturing sector.
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From page 25... ...
In order to understand the effect of this shift, timely information is needed not only on federal spending by budget authority, activity, agency, performer, and field, but also on the associated science and engineering human resource investment. It is difficult to account for the impact of the increasing investment in health-related R8`D in the public sector because of a lack of a common solo al definition.
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From page 26... ...
The fact of clustering and the intense interest in the extent and determinates of clustering put a premium on understanding patterns of R8cD expenditure by geographic area. In an attempt to identify the geographic location of R8cD activity, NSF has developed and published data geographically separated by state on R8cD performance by industry, academia, and federal agencies, along with federally funded R8`D activities of nonprofit institutions.
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From page 27... ...
Despite these recent attempts to put a geographic face on RED activity, the data by state and substate level are not considered sufficiently robust or reliable to support investigation of the extent and impact of geographic clustering. New Organizational Structures for RED The very vibrancy of the RED enterprise owes significantly to the vibrancy of business, social, and political arrangements that initiate, support, integrate, and sustain innovative activity.
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From page 28... ...
To the extent that they fail to identify the new organizational structures, they give a flawed picture of innovative activity. Estimates of total innovative activity by Hollander and Mansfield suggest that focusing on "dedicated" ROD effort may be missing half of all innovative activity.
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From page 29... ...
These firms invested in RED activities abroad either to appropriate relevant knowledge and skills through externalities, or to transfer knowledge and skills within the company from knowledge creation to manufacturing and marketing. His report concluded with a recommendation for more detailed data collection and the standardization of data collection on foreign direct investment in RED across more countries.
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From page 30... ...
For example, government generally makes extramural expenditures. Some that are made through direct procurement, grants, cooperative agreements, or other financial instruments are quite easy to measure and to be reported by the recipient.
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From page 31... ...
In the survey of business enterprise ROD, basic research is defined to include the cost of research projects that represent original investigation for the advancement of scientific knowledge and that do not have specific immediate commercial objectives, although they may be in the fields of present or potential interest to the reporting company. Applied research is to include the Cost of research projects that represent investigation in discovery of new scientific knowledge and that have specific commercial objectives with respect to either products or processes.
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From page 32... ...
Basic research is defined as systematic study directed toward fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications toward processes or products in mind. Applied research is defined as systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met.
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