Federal Support for Research and Development

U.S. Competitiveness & Innovative Capacity FEDERAL SUPPORT FOR Out Innovate RESEARCH & DEVELOPMENT Economic growth results from several factors, but among the most important in recent decades has been innovation. Although it has helped spawn many inventions that, in turn, have led to new firms, new industries, and new jobs, Federal funding of research cannot drive innovation by itself. A healthy private sector must act in partnership with university and research labs to fund the transfer of new technologies to the market, creating new businesses built on innovation. It is also crucial for institutions to encourage research, such as through a strong education system and up-to-date infrastructure. Federal Support for R&D in the 21st Century POLICY INITIATIVES The knowedge generated by basic research often shares the characteristics of what is known as a "public good. The social benefits (those that accrue to society as a whode) from innovative activities likely exceed the private benefits (those that accrue just to the entity conducting the research). The Federal government has been the primary funder of basic research, but only conducts a small fraction of all basic research. The private sector, meanwhile, funds and conducts most of the applied research and development activity. The following efforts push toward maintaining the U.S. as a world leader in innovation: -Continue and sustain federal funding for research In 2008, of total public and private R&D spending... "The key to our success- as it has always been- will be to compete by developing new products, by generating new industries, by maintaining our rode as the world's engine of scientific discovery and technological innovation." -President Barack Obama, November 17, 2010 -Enhance and extend R&D tax credit -Continue to increase government funding for 17% 22% 60% basic research -Unleash a clean energy revolution -Speed the movement of ideas from labs to commercial application 16 Green Challenges -Develop ways to measure the value and effectiveness of research investment Basic Research Applied Research Development Sources of Funding for Basic Research (2008) Amount of Basic Research Federal Other Conducted by Location (2008) Govt. 14% 7% Other Universities 14% & Colleges Federal DID YOU KNOW? Universities & 11% Government Colleges 57% 58% Industry Federal investments in 21% Industry 18% atomic physics in the 30's and 50's gave rise to the creation of our GPS systems. Prepared by the U.S. Department of Commerce in consultation with the National Economic Council