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ahead of public agricultural research expenditures about 1950 and have 

 continued to grow mora rapidly. From 1980 to 1990, total public agricultural 

 research expenditures grew at an average 'atlhual rate of 0.4 percent (In constant 

 prices) while private agricultural R£d) grew at 3.1 percent. For 1990, we 

 estlnat* that private R&D was about twice as large as public R&D. As a 

 consequence a good picture of U.S. agricultural research cannot be obtained 

 by focusing only on the public component. 



Of course the U.S. public and private sector research activities are 

 generally different, and we believe they should not compete directly. In fact 

 they should be compleaentary activities with the public and private sectors 

 engaging In research for which they have a comparative advantage. The public 

 sector R&O activities are heavily focused on advances In science or Icnowledge. 

 The new Information Is largely published In professional Journal articles, 

 scientific bulletins, and books and recorded In other materials, e.g., plant 

 variety protection certifications, patents. Some of this material Is protected 

 by copyrights, PVPCs, patents, but much is not. Historically the public sector 

 has made Innovations available to users at minimal cost. Intellectual 

 creativity and imagination are required for university scientists to have 

 long-term productivity. These characteristics are partially innate ability and 

 partially skills created by investing in human capital. Economic incentives 

 and Institutional factors appear to play a major role in affecting the 

 productivity of public (and private) R&D. 



Private sector firms tend to be engaged in R&D activities only to 

 maintain a competitive edge over other businesses. They frequently develop 

 new products and processes that they can sell commercially or have the 

 potential to be licensed for profit to others, e.g., new genetic materials, 

 new crop varieties, agricultural chemicals, pharmaceuticals, machinery. 



