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3 

 computer software. The private sector has generally been more strongly 

 interested in strong property rights to its intellectual property than 

 the public sector. Establishing and enforcing property rights in intellectual 

 materials is costly because of associated transaction costs. When transaction 

 costs are extremely high, few new technologies are privately developed. This 

 is a major reason that private firms undertake very little research in the 

 general and pretechnology sciences. 



In the U.S., the institution of patenting has existed for over two 

 centuries, and during the past 25 years, new legislation. Judicial decisions 

 (e.g. , Diamond v. Chakrabartv and ex parte Hlbberd court decisions) and 

 technologies of enforcement have strengthened property rights in intellectual 

 materials (also see OTA 1992; Huffman 1992). This has improved the profit 

 potential for much of private R&D and has contributed we believe to the 

 relatively rapid growth in private R&D expenditures and demand for scientists 

 and technicians (see Huffman 1993). In general, skills for successful private 

 sector scientists are similar to those of university and USDA sciences, except 

 that ability to cooperate across fields of science and technologies and to stay 

 focused on potentially profitable innovations are more important. 



The Social Economic Payoff to Agricultural Research 



Expenditures on agricultural research (public and private) represent 

 largely an investment which creates an R6iD stock. Economists have frequently 

 used statistical techniques to identify the impact of research and extension 

 stocks (and other policies). This is their equivalent to the biological 

 scientists' controlled experiments. For example, Huffman and Evenson (1993, 

 ch. 7) summarize empirical evidence showing positive impacts of public and 

 private R&D on U.S. multifactor agricultural productivity covering more than 



