The Path to 3%

bridges vol. 24, December 2009 / OpEds & Commentaries

By Patrick Clemins

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Patrick Clemins

The path to the national goal of investing 3.0% of GDP in research and development, set by President Obama during his April 27th, 2009 speech at the National Academy of Sciences annual meeting, will be challenging.  In 2007, the U.S. invested 2.68% of GDP ($369 billion) in R&D, amounting to a $44 billion shortfall from 3.0%.  While this is not an insurmountable obstacle, these funds are not easily found in the current economic climate.  Industry, which accounts for around two-thirds of the R&D investment, is still struggling to rise out of the worst recession in decades, and with TARP, the Recovery Act, and health care reform, Congress and the American public are growing weary of increased government spending.

Despite these tough economic times however, steps are being taken to move toward the 3.0% goal.  The Obama administration has supported a budget doubling for key basic research agencies (National Science Foundation, the Department of Energy's Office of Science, and National Institute of Standards and Technology laboratories) from just under $10 billion in 2006 to nearly $20 billion in 2016 and Congressional action on the FY 2010 budget places these agencies on or near their projected doubling path.  Additionally, clean energy technology has been made an investment priority and received $31.0 billion in the Recovery Act.

{access view=guest}Access to the full article is free, but requires you to register. Registration is simple and quick – all we need is your name and a valid e-mail address. We appreciate your interest in bridges.{/access} {access view=!guest} Over the next few months, Congress will continue to work through the remaining appropriations measures contained within the FY 2010 budget so there is still time to contact your Congressional representatives to show your support for these scientific initiatives.

But, increased federal investment in R&D cannot make up the entire shortfall.  Industry's two-thirds share in the national R&D enterprise makes it the major source of R&D funding and steps have been taken to encourage more industry investment in R&D.  A bill (H.R. 2965) to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs through 2020 passed both chambers of Congress this summer with increased percentages of agency budgets going toward the programs and increased award size limits.  Additionally, a bill (S.1203) was introduced in June of 2009 to make the research and development tax credit for industry permanent and increase the rate of the credit.

However, this legislation will do little to increase R&D investment by industry without an economic recovery to free up investment funds.  So, while steps are being taken in the federal government to raise the national investment in R&D to 3.0% of GDP, industry is expected to contribute a significant portion of the R&D increase.  This can be accomplished by small businesses capitalizing on the SBIR and STTR reauthorizations and large corporations keeping their R&D pipelines filled with promising technologies.  Industry must overcome the current tough economic climate and serve as a growth engine for the future if an R&D investment of 3.0% of GDP is to be realized.


About the author: Pat Clemins is the director of the R&D Budget and Policy Program at the American Association for the Advancement of Science (AAAS). Since 1976, the AAAS R&D Budget and Policy Program has sponsored studies and public meetings on funding and policy issues affecting federal government support of research and development (R&D). The Program's purpose is to contribute to informed public discussion regarding federal support for R&D by providing timely, objective, and accurate information on federal R&D support. The Program provides statistical and analytical perspectives on R&D funding in one printed annual report and numerous web-based analyses.

The above commentary was originally published in December 2009 in the Illinois Science & Technology Coalition's Catalyst .