124 



Let me raise a similar question to what Chairman Walker raised 

 about this division of what we now call the R&D budget into two 

 categories here. 



We have been using now for a generation comparisons between 

 the U.S. R&D budget and generally measured as a percent of GNP, 

 with the budgets of our major international competitors, such as 

 Japan and Germany. And we've seen over that period of time that 

 they have raised their budget in terms of percentage of the GNP 

 until it is roughly equivalent to ours. And ours including that 50 

 percent, approximately, that goes to the category you no longer 

 want to consider as part of R&D. 



Under those circumstances, and then, if that is done, our meas- 

 urement which will reflect significantly civilian basic research, will 

 be compared with theirs, which has all along represented largely 

 civilian R&D because they don't have the big military budgets that 

 we do. And we're going to look like we're spending about half as 

 much measured as a percent of GNP. 



To the figures that we've been using as a rough guide to what 

 proportion of our national resources should be devoted to R&D, all 

 of sudden, they're going to be deflated by 100 percent, and we're 

 going to look like we're spending half as much as our competitors. 



Did you do that deliberately so that we could argue that we now 

 raise it back up to par with them, based on the new measure- 

 ments? 



How do you react to this situation? 



Dr. Press. Mr. Brown 



Mr. Brown. And what is the value of this international compari- 

 son, as a matter of fact, as a rough guide to how much we should 

 invest in our country? 



Dr. Press. The GNP comparison — that is percentage of GNP that 

 R&D constitutes — could be a faulty indicator. A number of criti- 

 cisms have been made of that indicator. 



For example, a country like ours that has so much of its GNP 

 in financial services or in the service sector, which doesn't have 

 that much R&D, will look bad compared to other countries, bad 

 compared to Germany, where manufacturing is a big factor and 

 therefore, research is a bigger portion. 



I'm not sure that the use of this indicator, the way you have de- 

 scribed it, adequately describes how well we do compared to other 

 countries. 



I think that if we compared all of the countries in terms of their 

 FS&T budgets, in terms of the impacts of their research, what 

 kinds of discoveries they were making, how they translated those 

 discoveries into the needs of their people, we would have a much 

 better indication of how we're doing than simply this old statistic 

 of fraction of GNP, which economists criticize very much. 



Mr. Brown. Well, you haven't enlightened me very much because 

 you haven't suggested what better measure of international com- 

 petitiveness we could have. 



But I have a similar question with regard to your suggestion that 

 we eliminate the infrastructure investments in the Department of 

 Energy and NASA. 



Here, you're saying things like the infrastructure for a fusion 

 machine or a high-energy physics machine, or a space transpor- 



