the 1060-74 period, although the annual in- 

 crements were smaller after the late 1960's — the 

 same years in which inflation grew fastest. As a 

 result of these trends, funding by all sources 

 except nonprofit institutions declined in con- 

 stant dollars with the largest absolute reductions 

 occurring in Federal Government support. 

 Funds from this source in 1974 were down 16 

 percent in comparison with the peak funding 

 year of 1968. Funds supplied by universities* 

 continued tooutpace inflation through 1972, but 

 declined more than 13 percent between then and 

 1974. Industry's funding for basic research 

 peaked in 1966 in constant dollars, then fluc- 

 tuated around a somewhat lower level through 

 1974. Universities, on the other hand, raised 

 their share of support from 6 percent in 1960 to 

 11 percent by 1974. Federal support, as a 

 percentage of the total national expenditures, 

 increased from 59 percent in 1960 to a high of 72 

 percent in 1967 before declining to 68 percent of 

 the total in 1974. 



Federal support of basic research 



The Federal Government assumed prime 

 responsibility for support of basic research after 

 World War II. This policy recognized the decisive 

 role played by scientific knowledge in the war 

 effort, and sought to strengthen the Nation's 

 basic research capability for peacetime pursuits. 

 Over the past 30 years, the policy has come to be 

 predicated on the broad and varied role of basic 

 research in advancing the country's defense, 

 economy, health, and technology, as well as 

 upon its general cultural value, in education and 

 in the intellectual life of the Nation. During this 

 period, many Federal agencies came to support 

 basic research as an instrument in fulfilling their 

 missions, and a new agency — the National 

 Science Foundation — was created for the ex- 

 press purpose of supporting scientific research 

 and strengthening such capability. 



5 Includes funds from State and local governments, as well 

 as the universities and colleges themselves. 



" Federal obligations for basic research may differ from 

 federally provided expenditures in the same year for a 

 number of reasons. A sector which performs research, for 

 example, may report expenditures for research projects 

 which it regards as "basic research," whereas the Federal 

 agency providing the support may report the same projects 

 as consisting of "applied research." In addition, obligations 

 made in a given year may actually extend over several later 

 years in terms of the availability of the funds for expen- 

 diture. Moreover, the withholding of obligated funds may 

 produce discrepancies between obligations and reported 

 expenditures. 



Six of these agencies accounted for 95 percent 

 of all Federal obligations" for basic research in 

 Fiscal Year 1974." 



Percent of total Federal obligations for 

 basic research, by agency, 1974 



Federal agency Percent basic 



National Aeronautics and Space 



Administration (NASA)' 29 



Department of Health, Education, and 



Welfare (HEW) 23 



National Science Foundation (NSF) . 16 



Atomic Energy Commission (AEC) .. 11 



Department of Defense (DOD) 10 



Department of Agriculture (USDA) . 6 



Basic research and total R&D. Basic research 

 funded by each of these Federal agencies, and 

 performed intramurally or by other sectors, is a 

 part of the overall R&D effort of that agency. 

 The magnitude of the basic research component, 

 in relationship of the total R&D program, 

 suggests the relative importance assigned to 

 basic research by the agency. This ratio is shown 

 in figure 3-4 for each of the six agencies. 



For all agencies as a whole, the ratio has 

 increased slowly, reaching 15 percentof all R&D 

 obligations in 1974. Obligations for basic 

 research increased 20 percent between 1971-74, 

 compared with a 14 percent increase for all R&D 

 obligations. 



The NSF has the largest ratio by far, as would 

 be expected in view of its designated role in the 

 support of basic research. Recent declines in this 

 agency's concentration on basic research — down 

 from just over 90 percent of its total R&D 

 obligations in the mid-1960's to approximately 

 80 percent in 1974 — are due to initiation of such 

 new and largely applied research programs as 

 "Research Applied to National Needs." 



Two other agencies — NASA and HEW — show 

 sizable changes in recent years in the fraction of 

 their total R&D expenditures which is directed 

 to basic research. The fraction for NASA has 



fetieral fundi [or Research, Devt'lopmeut, ami Other Scientific 

 AcUvtlies, Fiscal Yean 1973. 1974 ami 1975. Vol. XXIII, National 

 Science Foundation (NSF 74-320-A). 



* NASA considers all of its activities to be R&D, or in 

 support of R&D. The agency's obligations for basic research 

 (as well as for applied research and development) include the 

 related costs of spacecraft, launch vehicles, tracking and data 

 acquisition, and the pro rata costs of ground operations and 

 agency administration. 



55 



