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long run, the nation as a whole will suffer from the lack of new talent that could have been discovered and nurtured in affordable, accessible, high-quality public schools, colleges, and universities.

Trends in Corporate Research

The US research structure that evolved after World War II was a self-reinforcing triangle of industry, academe, and government. Two sides of that triangle—industrial research and government investment in R&D as a fraction of gross domenstic product (GDP) have changed dramatically. Some of the most important fundamental research in the 20th century was accomplished in corporate laboratories—Bell Labs, GE Research, IBM Research, Xerox PARC, and others. Since that time, the corporate research structure has been significantly eroded. One reason might be the challenge of capturing the results of research investments within one company or even a single nation on a long-term basis. The companies and nation can, however, capture high-technology discoveries at least for the near term (5-10 years) and enhance the importance of innovation in jobs.35 For example, the United States has successfully capitalized on research in monoclonal antibodies, network systems, and speech recognition. As a result, corporate funding of certain applied research has been enhanced at such companies as Google and Intel and at many biotechnology companies. Nonetheless, the increasing pressure on corporations for short-term results has made investments in research highly problematic.

Funding for Research in the Physical Sciences and Engineering

Although support for research in the life sciences increased sharply in the 1990s and produced remarkable results, funding for research in most physical sciences, mathematics, and engineering has declined or remained relatively flat—in real purchasing power—for several decades. Even to those whose principal interest is in health or healthcare, that seems short-sighted: Many medical devices and procedures—such as endoscopic surgery, “smart” pacemakers, kidney dialysis, and magnetic resonance imaging— are the result of R&D in the physical sciences, engineering, and mathematics. The need is to strengthen investment in the latter areas while not disinvesting in those areas of the health sciences that are producing promising results. Many believe that federal funding agencies—perhaps influenced by the stagnation of funding levels in the physical sciences, mathematics, and engineering—have become increasingly risk-averse and focused on


NAS/NAE/IOM. Capitalizing on Investments in Science and Technology. Washington, DC: National Academy Press, 1999.

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