Research And Development Investment

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Nicholas J. Cannon
Gregory W. Ulferts
Terry L. Howard


R&D, Research, Investment


The United States has long enjoyed a leadership role in research and development investment and they invest more in both basic and applied scientific research than any other country. The U.S. preeminence in R&D investment, however, is at a critical point. U.S. R&D investment has been declining as a percentage of the nations GDP since 2009, and in 2013, U.S. R&D investment is expected to decline in real dollars as well. Declining investment in R&D is the result of budgetary constraints and the lack of political consensus as to the economic value of the governments continued commitment to R&D programs. This decline in U.S. investment comes at a time when global R&D investment is increasing significantly. Economic rivals, led by China in particular, have made investment in R&D a core component of their plans for economic growth and have committed themselves to increasing and substantial R&D investment. U.S. policymakers need to take action now to reverse what could become a policy trend of decreased government investment in R&D, which has both a short-term and long-term impact. R&D spending is an economic and employment driver and ultimately employs 8.27 million U.S. workers, generating $1.238 trillion dollars to the U.S. economy. In addition, government investment funds the majority of basic scientific research which, in the past, has led to such innovations as digital recording technology, communication satellites, global positioning systems (GPS), and the Internet. It is unclear if the private sector alone can make up the difference in government R&D investment. If the U.S. fails to protect its leadership position in R&D investment, it consequently risks its leadership in science, technology, productivity, and innovation which is the basis of the nations employment and economic activity.


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