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Scientists and engineers whose education and training have included 

 opportunities to conduct research in universities have served 

 the nation well 



Linking federally funded research and development to the education of scien- 

 tists and engineers has powerfully enhanced both. Universities are the core 

 strength of the U.S. R&D system. They are by far the most important source of men 

 and women educated and trained in advanced science and engineering. Such 

 people, as they establish their own universin- careers, join industr\', or start their 

 own companies, are the most effective and efficient agents of technology transfer. 

 Experience demonstrates that the excellence of the next generation of researchers 

 and leaders depends directly on the excellence of graduate education that includes 

 first-hand participation in innovative research and development. Over the last 

 several decades, federal support for academic research has been crucial to maintain- 

 ing that linkage. 



ne existing U.S. research and development system works well in 

 periods of continued expansion in missions and funding but is 

 not as appropriate in periods of static or declining budgets. 



The U.S. R«SJ) system is largely the creation of a period of unprecedented 

 growth in private economic activin- and government programs in the United States. 

 The current federal R&D budgeting process evolved to accommodate new missions, 

 and the performing institutions grew to meet the challenge of growing federal 

 expectations and increased appropriations. Flexibility' was achieved mainly by 

 building new structures, not by devising means to change old ones. The research 

 and development system is conditioned on growth and is now challenged by the 

 new environment that requires downsizing of both missions and budgets. 



Scientists and engineers can respond fairly quickly to new research 

 opportunities and changes in funding emphases. Similar flexibility 

 is more difficult for large research institutions to manage. 



The U.S. research and development system is changing in response to chang- 

 ing national circumstances. DOD has combined a number of its R&D facilities and 

 has closed others. Many major firms have refocused their corporate long-range R&D 

 laboratories on more immediate business needs and opportunities. Such changes 

 reflect shifts in the federal research portfolio, which has changed dramatically over 

 the decades since the onset of World War II, both in launching new programs, such 

 as planetary- exploration, and in reducing others, such as the breeder reactor pro- 

 gram. But flexibilitA' of project funding in some areas has not been matched by 

 flexibility- in large R&D institutions and facilities. The nation now carries an excess 

 of facilities, many established during World War II and the Cold War, whose missions 

 may no longer be appropriate or whose programs may not be as competitive as 

 others. Their continued support will detract from more effective or more important 

 programs, inhibiting a vigorous research enterprise in an era of limited resources. 



