This Congressional Budget Office (CBO) study, prepared at the request of the Ranking Member of the Senate Committee on the Budget, examines recent trends in federal support for research and development and the current state of knowledge about the economic effects of that support. Private businesses are the largest sponsors of research and development (R & D) in the United States; however, the federal government has long provided significant support for R & D activities to both supplement and encourage private efforts. The government finances research and development through spending and tax benefits that give businesses an incentive to increase their R & D spending. This study addresses questions such as whether the current level of spending is appropriate, what returns taxpayers receive for public investment in R & D, and whether funds are allocated to areas of inquiry and projects that will provide the highest return on that investment.--Preface.

This report examines the portfolio of research and development (R&D) expenditure surveys at the National Science Foundation (NSF), identifying gaps and weaknesses and areas of missing coverage. The report takes an in-depth look at the definition of R&D, the needs and potential uses of NSF's R&D data by a variety of users, the goals of an integrated system of surveys and other data collection activities, and the quality of the data collected in the existing Science Resources Statistics surveys.

The United States faces a new challengeâ€"maintaining the vitality of its system for supporting science and technology despite fiscal stringency during the next several years. To address this change, the Senate Appropriations Committee requested a report from the National Academies of Sciences and Engineering and the Institute of Medicine to address "the criteria that should be used in judging the appropriate allocation of funds to research and development activities; to examine the appropriate balance among different types of institutions that conduct such research; and to look at the means of assuring continued objectivity in the allocation process." In this eagerly-awaited book, a committee of experts selected by the National Academies and the Institute responds with 13 recommendations that propose a new budgeting process and formulates a series of questions to address during that process. The committee also makes corollary recommendations about merit review, government oversight, linking research and development to government missions, the synergy between research and education, and other topics. The recommendations are aimed at rooting out obsolete and inadequate activities to free resources from good programs for even better ones, in the belief that "science and technology will be at least as important in the future as they have been in the past in dealing with problems that confront the nation." The authoring committee of this book was chaired by Frank Press, former President of the National Academy of Sciences (1981-1993) and Presidential Science and Technology Advisor (1977-1981).

Two surveys of the National Science Foundation's Division of Science Resources Statistics (SRS) provide some of the most significant data available to understand research and development spending and policy in the United States. These are the Survey of Federal Funds for Research and Development and the Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions. These surveys help reach conclusions about fundamental policy questions, such as whether a given field of research is adequately funded, whether funding is balanced among fields, and whether deficiencies in funding may be contributing to a loss of U.S. scientific or economic competitiveness. However, the survey data are of insufficient quality and timeliness to support many of the demands put on them. In addition the surveys are increasingly difficult to conduct in times of constrained resources, and their technological, procedural, and conceptual infrastructure has not been modernized for procedure or content. Data on Federal Research and Development Investments reviews the uses and collection of data on federal funds and federal support for science and technology and recommends future directions for the program based on an assessment of these uses and the adequacy of the surveys. The book also considers the classification structure, or taxonomy, for the fields of science and engineering.

The internationally recognised methodology for collecting and using R&D statistics, the OECD's Frascati Manual is an essential tool for statisticians and science and innovation policy makers worldwide. It includes definitions of basic concepts, data collection guidelines, and classifications ...