30 



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those science and technoloi^) activities that produce or expand the use of new 

 knowledge and new or enabling technologies (for examples, see Table I.l). 



The committee recommends that, in the future, government support for basic 

 and applied science and technology be presented, analyzed, and considered in 

 terms of an FS&T budget. The current FS&T budget of S35 billion to S40 billion, 

 including both training and research and development, represents about 0.5 percent 

 of the nations gross domestic product (see Box II. 3 for background and definition). 

 The distribution of funds for research and development as traditionally reported, 

 compared to FS&T. illustrates the difference between the two concepts. Private 

 industry performs the largest share of federalh funded research and development as 

 traditionalh reported, but most of this work is downstream product demonstration, 

 testing, and e\ aluation that is excluded from the committees recommended new 

 measure. W hen the F.S&T measure is used instead, industn,' drops from first to third. 

 Federal laboratories (both in-house and contractor-run) account for the largest share 

 (39">i) of FS&T. followed by academic institutions (31%), industrv' (21%), and non- 

 profit and other institutions (9"i>). (See Supplement 2 for additional details.) 



The committee s definition of FS&T deliberately blurs am- distinction between 

 basic and applied science or between science and technology' (see Table I.l). A 

 complex relationship has evohed between basic and applied science and technol- 

 (>g\. In most instances, the linear sequential view of innovation is simplistic and 

 misleading. Basic and applied science and technology are treated here as one inter- 

 related enterprise, as they are conducted in the science and engineering .schools of 

 our universities and in federal laboratories. For further explanation of why the com- 

 mittee aggregates these activities within a single budget, see Supplements I and 4. 



Structure and Approach of This Report 



Part I of this report focuses on the committees 13 recommendations for 

 improving the process of allocating federal fimds for science and technology. The 

 conclusions, recommendations, and discussion are organized and presented to ser\'e 

 the following five purposes: 



1. Make the allocation process more coherent, systematic. and comprehensive; 



2. Determine total federal spending for federal science and technolog), based 

 on a clear commitment to ensuring US. leadership; 



3. Allocate hinds to the best projects and people; 



-4. Ensure that sound scientific and technical advice guides allocation deci- 

 sions: and 



5. lmpro\e federal management of research and development activities. 



Part II contains four supplements that provide critical background for and 

 explain the rationale behind the committee's recommendations. Supplement 1 

 briefly sur\'eys science policy and the impact of federal support since World War II; 

 Supplement 2 describes the derivation of the FS&T budget number; Supplement 3 

 outlines the existing process for allocating fimds; and Supplement -t treats the 

 distinction between basic and applied research and the interplay between federal 

 and industrial fimding. Four appendixes give details that bear on committee pro- 

 cess and background. A fihli lists the acronyms used in this report. 



