Private sector ought to take the lead in research funding

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Government-funded research during the cold war and even World War II produced technological inventions that still help drive the private economy. To some extent we are living off of capital investments in research made decades ago.

The consensus surrounding basic research in science and technology back then no longer exists. We've lost the challenge of a national emergency that gave direction to our research.

So a policy question has arisen: What will the new arrangements be to spur and ensure scientific innovation for coming generations?

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It is becoming clearer and clearer that business and industry must be at the heart of invention and change, both in terms of funding and - even more important - in terms of planning for the longterm.

Few, however, are articulating that point of view - and the discussion has centered largely on federal spending. The government now funds two-thirds of "basic" research - work that is thought to be at the very heart of the economy's future. Private industry funds only a third of such research.

Federal funding, however, won't be enough for what's needed. And worse, no plan exists to target where federal research funds will do the most good - partly because there's no government agency with the capacity to oversee the complexities of prioritizing funding allocations. The market economy does have that capacity.

What happens now with federal research funding is that the best lobbying efforts win the lion's share. That lobby is biomedical research.

Congress understandably cut federal research and development right after the cold war. Since then, federal funding for research and development actually has come back fairly strongly, but not in proportion to the growth of the economy.

Physics, chemistry, math, engineering, and computer science have become poor cousins to the life sciences.

Biomedical research now gets the largest share of federal research money. The National Institutes of Health (NIH), which channel most federal biomedical research dollars, now receive 48 percent of all federal funds spent on basic research in the sciences, compared with 37 percent a decade ago. Since 1994, NIH's total budget is up 28 percent, to $15.6 billion a year, after adjusting for inflation.

Basic research funds for the physical sciences remain 6 percent below what they were in 1994, after adjusting for inflation.

Of course new biological discoveries are important. But the whole research and development arena needs to be reevaluated, and new priorities need to be established.

Several developments point the way. Business and industry spending on research and development is going up rapidly. The amount spent will be around $157 billion this year, 9 percent more than 1998. However, this private sector money goes largely for development of products for the market, not to innovation. And more of this nongovernment money needs to go to basic research that is innovative and will lay a solid base for future growth.

The Rand Corp. now regularly does a National Critical Technologies Report, in which various industry members state which technologies they believe are most important to economic growth. This work could serve as a point of departure for identifying areas where more basic research money should be spent.

Business developed a bad habit during the cold war: relying on federal money to do most of the basic research for the market economy. Setting of priorities and achieving consensus also were neglected by private business.

The private sector now has the opportunity to take the lead. It will demand some giant men and women with grit and character to do the job - they may already know what it means to find consensus in their organizations, but now they need to formulate a national consensus on innovation for the future.

Thomas Edison defined the process of invention as "bringing out the secrets of nature and applying them for the happiness of man." This touch of 19th-century philosophy still rings true today, compared with the tired old arguments about the need for "more" federal money.

The discussion needs to be about the creative process, not just about money. Hard work, idealism, and honesty spark the ability to generate new knowledge, the insight to read basic long-term trends, and the power to act freely and positively in response to new knowledge and significant trends.

Some federal money will still be spent. But how appropriate for a new millennium if the private sector were to come alive for the future.

*David Mutch, a former Monitor reporter and editor, is a freelance writer in Harwich, Mass.

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