88 



64 / SUPPLE.\IEAT 3 



may emerge from the congressional budget and appropriations processes in a form 

 quite different from that initially proposed in the budget. 



International Comparisons Offer Imperfect Insight into 

 the Desirable Level of Total U.S. National R&D Spending 



Judgment, experience, and a willingness to take risks play key roles in estab- 

 lishing an optimal level of national R&D spending, by the federal government or by 

 private firms, philanthropies, and other levels of government. Comparisons with 

 R&D efforts of other leading nations offer some insights. For example, the propor- 

 tion of gross domestic product (GDP) that is devoted to R&D is of some interest. In 

 recent years, most of the larger and wealthier industrial nations have spent between 

 2.5 and 3 percent of GDP on R&D, including both government and private industry' 

 funding. Figure II. 8 shows the percentages for Japan, Germany, and the United 

 states through 1991. 



In 1994, the Clinton administration articulated a "reasonable long-term goal" 

 for total national R&D spending of 3 percent of GDP, ' as compared with the present 

 level of about 2.6 percent.' However, nations face different circumstances and value 

 their national goals differently; as a consequence, they do not all spend their funds 

 for the same purposes or in similar institutions. For example, if private industrial 

 R&D spending is adjusted to account for the smaller role of manufacturing indus- 

 tries in the economy of the United States as compared with Japan or Germany, then 

 the United States compares adequately with those nations in the ratio of R&D to 

 GDP. ^ On the other hand, the United States has for the past 5 decades supported a 

 large national defense R&D effort that has not existed in Germany or Japan, as well 

 as newly emerging sectors that are research intensive but are not included in manu- 

 facturing, such as software and communications. Similarly, the United States spends 

 a great deal more on health-related R&D than do other major nations, even when 

 adjustments are made for the relative sizes of countries. 



3.5 



3- 

 2.5- 



c 2 



0} 



o 



S 1-5H 



1- 



^^^ United Stales 



Japan 



Germany* 



1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 

 'German data are for West Germany only 



FIGURE 11.8 Funding of R&D (both public and private) as a percentage of GDP for three 

 leading nations, 1970 through 1991. 



SOURCE: National Science hoar6. Science and Engineering Indicators: 1993, NSB 93-1 (Washing- 

 ton, D.C.: National Science Foundation), p. 375. 



