out in colleges and universities (NRC-I3). Each of those 

 factors is discussed in detail later in this section. 



Signs of stress are even more apparent in the tech- 

 nological sphere. The United States currently maintains 

 its leadership position in several high-technology fields, 

 including aviation, microelectronics, computers, and ad- 

 vanced materials technologies. However, there are other 

 areas — automotive design, consumer electronics, steel- 

 making, ship construction, rail transportation, and. sig- 

 nificantly, scientific instrumentation — where the once 

 dominant position of the United States has eroded. While 

 the United States continues to maintain its leadership in 

 most basic technologies critical to national defense, the 

 Soviet Union is closing the gap in such key areas as 

 electro-optical sensors, guidance and navigation, hydro- 

 acoustic technology, optics, and propulsion (NS). 



There is no general consensus about the causes of the 

 erosion of our international technological position. Few 

 believe it is a result of a decrease in the inherent capacity 

 of U.S. scientists and engineers to innovate. Rather, there 

 appears to be a notable failure to implement innovations 

 once they have been developed. Many of the most dramat- 

 ic technological developments abroad are actually based 

 on American developments that we simply failed to com- 

 mercialize or otherwise implement. Most industrial obser- 

 vers believe that the technological lag in many U.S. 

 industries is not attributable solely or even primarily to 

 weaknesses in the research and development (R&D) sys- 

 tem. They argue that many contributing factors are exter- 

 nal to industrial control . The problem of industrial innova- 

 tion and its relationship to scientific and technological 

 activities is discussed in more detail in the next section of 

 this chapter 



In short, although the American science and technol- 

 ogy enterprise is generally healthy, several problems that 

 are appearing on the horizon could result in serious ero- 

 sion of that enterprise. This section highlights trends 

 likely to have important effects in the near future on the 

 capacity of the United States to maintain its international 

 leadership in scientific research and take advantage of the 

 social and economic potential provided by its scientific 

 and technological resources. The focus in this section is 

 on the major elements of the science and technology base: 

 the financial resources needed to sustain its activities, its 

 personnel resources, and its institutions and facilities. 



FINANCIAL SUPPORT FOR SCIENCE AND 

 TECHNOLOGY 



The financial resources available for science and technol- 

 ogy programs are, obviously, a critical element determin- 

 ing the vitality of the U.S. science and technology 

 enterprise. Policy questions associated with the allocation 

 of financial resources include these: At what levels should 



Generic Policy Issues 3 



different science and technology programs be supported? 

 Toward what ends? How should responsibility for support 

 be divided between the public and private sectors? 



Figure 1 shows trends in U.S. R&D expenditures in 

 both current and constant dollars. During 1981, total na- 

 tional expenditures for all R&D activities were estimated 

 to be $69.1 billion, with the Federal Government's share 

 estimated at 47 percent and private industry's share 49 

 percent. National expenditures for basic research during 

 1981 were estimated to be $8.8 billion, with the Federal 

 and industrial shares estimated to be 68 percent and 16 

 percent, respectively {Sl-SO). 



It is interesting to compare U.S. R&D expenditures 

 with those of some other major industrialized democ- 

 racies.' In doing so, two points are noteworthy: 



(1) The United States invests more in R&D than France, 

 West Germany, and Japan combined. Although the 

 percentage of Gross National Product (GNP) com- 

 mitted to total national R&D investments in the Unit- 

 ed States peaked in 1964 and generally declined 

 through the early to mid-1970s, it is still higher than in 

 most other countries except the Soviet Union and West 

 Germany (Figure 2). That percentage has also de- 

 clined or leveled off since 1967 in the United Kingdom 

 and France, while it has risen appreciably in West 

 Germany and Japan. Whether economic conditions 

 will permit those countries to increase or even main- 

 tain their investments is a subject of considerable 

 interest abroad, as noted in Section I-D. In most 

 cases — including the United States — changes in the 

 percentage of GNP committed to R&D since about 

 1975 have been fairly small. 



(2) The U.S. civilian R&D/GNP ratio continued to in- 

 crease through 1970 and, after a temporary decline in 

 the early 1970s, rose to a percentage level of 1.6 in 

 1979. However, the percentage is still considerably 

 below that of West Germany and Japan. 



Considering, second, the Soviet Union, available evi- 

 dence indicates that the percentage of Gross National 

 Product committed to R&D rose above that of the United 

 States in 1967 and now is the largest in the world. Al- 

 though the percentage dropped slightly since 1975, it was 

 estimated to be 3.5 in 1978, compared with 2.2 in the 

 United States, 2.4 in West Germany, and 1.9 in Japan. 

 Since U.S. GNP is approximately twice that of the Soviet 

 Union, the United States still invests more in R&D than 

 the Soviet Union in absolute terms. In addition, the 

 quality of Soviet R&D activities is not always believed to 

 be equal to that of American R&D. Details on the exact 

 proportion of Soviet R&D investments devoted to military 

 and space applications as compared to that in the United 

 States are not available. It is clear, however, that a much 

 higher percentage of Soviet R&D is devoted to military 



