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78 / SUPPLEMENT 4 



cally, a large fraction of federally funded research has been directed at applied 

 problem solving and fundamental technology. For example, when the Department 

 of Defense funded the creation of computer science as a new academic field, it 

 accurately anticipated real national security needs. Government support for the 

 development of new problem-solving tools and technically trained people differs 

 from the support for basic physics provided by the National Science Foundation, 

 but it nonetheless has profound effects on fulfilling national needs, sustaining our 

 economy, improving our way of life, and contributing to all areas of scientific inves- 

 tigation. 



Government Has Traditionally Supported Enabling 

 Technology and Education 



There is no reason to abandon the historical balance between support for 

 science on the one hand and enabling technology on the other. Industrial funding 

 builds not only on basic research, but also on federally funded R&D aimed at govern- 

 ment functions. The productivity of industrial R&D depends on a balanced federal 

 R&D portfolio that spans a broad range of applications. A strategy that focuses 

 federal support unduly on basic science risks losing the benefits of applied research 

 supported by mission agencies, which historically have been important in generat- 

 ing public benefits. That is one reason that the committee did not distinguish be- 

 tween basic and applied research when defining the FS&T budget. 



In the division of labor between the public sector and the private sector, the 

 private sector ultimately will be responsible for the final stages of commercial 

 application and product development. On this there is no disagreement. Because 

 of its efforts in these areas, the private sector will provide more support for applied 

 research and technology development than the federal government does now or 

 could at any time in the foreseeable future. But there can be confusion about the 

 federal role in supporting applied research versus its funding of commercial technol- 

 ogy development in industry, whether through individual firms or in consortia. This 

 is an area of active controversy that the committee addresses in Part I of this report. 

 It is imponant to point out here that the debate about federal funding, or subsidies, 

 to industry is conceptually different from that about federal support for basic versus 

 applied research for public missions, to foster enabling technologies, and to educate 

 leaders in science and engineering. 



A distinction between "basic " and "applied" generally is not useful as the 

 decisive criterion that defines a proper federal role, except when the application 

 area is an existing commercial market where industrial applied research usually will 

 predominate. Federal leadership is indeed essential for basic research, because 

 industry does not support it except in a limited way and under unusual circum- 

 stances such as near-monopoly positions that are now rapidly disappearing." Five 

 decades of history make clear that the federal government is positioned uniquely to 

 support the training of people and the development of new technologies that are 

 not specific to a particular product or service. Private firms, responding to forces 

 that operate through the market, will determine what specific products and services 

 result and will support their final development and conrmiercialization. 



