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Today, Japan, several European countries, and many emerging nations can 

 take advantage of new discoveries, a position the United States occupied alone 

 several decades ago. Other nations have built technological capacities that rival, 

 and in some areas surpass, those in the United States. They have strong education 

 systems and pursue national policies to foster innovation. But none can match the 

 breadth and depth of U.S. science and the fluidity with which results and people 

 move back and forth between the university and the private sector Federal science 

 and technology, and its connections to a robust private sector, are among this 

 nation's most important comparative advantages. 



Government Support for Scientific and Technical Public Goods 

 Is Central to Creating National Economic Advantage 



Federal funding — for basic research, applied research relevant to government 

 missions, development of technology, and education and training in imiversities — 

 encourages new firms to enter high-technolog>' areas. Applied academic research 

 funded by the federal government has helped produce many small high-technology 

 firms. Students and professors move from the university to existing small firms. 

 Sometimes they start new firms. Often they join well-established firms and rise 

 through the ranks to make critically important decisions. New firms may grow into 

 industrial giants or be swallowed by larger firms that incorporate their technologies. 

 Patent rights for new discoveries derived from federally funded research go to the 

 research institutions, giving them financial incentives for commercial application. 

 Sun Microsystems and Silicon Graphics among computing companies, and Amgen 

 and Genentech in biotechnolog)', did not exist 15 years ago. All were started from a 

 base of academic science. Today they are major firms in their respective industries. 

 These and other successes well up from the science and technology' base supported 

 by the federal government, which fosters competition and helps introduce new 

 firms that champion emerging technologies. 



A fear that the benefits from federal support for universit)' research will flow 

 immediatel) to foreigners is misplaced. Histor}' suggests instead that where re- 

 search takes place has a direct effect on where it is put to use. The high-technolog>' 

 firms clustered along Route 128 in Massachusetts, in the Silicon Valley in California, 

 in suburban Maryland, and in Austin, Texas, all congregated around major federally 

 supported universin- or government research centers. If industrial use and centers 

 of capital were the decisive factors, the foremost centers for biotechnology and 

 computer firms should have located instead near Tokyo, Frankfurt, Paris, London, or 

 New York Cir\-. 



