The R and D portfolio: A concept for allocating science and technology funds

Science

Volumn 274, Issue 5292, 1996, Pages 1484-1485

  McGeary, Michael ^a   Smith, Philip M ^a  

^a NONE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

BUDGET; FINANCE; GOVERNMENT; INVESTMENT; PRIORITY JOURNAL; RESEARCH; SCIENCE; SHORT SURVEY; TECHNOLOGY; UNITED STATES;

EID: 0029846850     PISSN: 00368075     EISSN: None     Source Type: Journal    
DOI: 10.1126/science.274.5292.1484     Document Type: Short Survey

References (15)

1. For a review of current fundamental research questions, see C. Vest. "Report of the President for the Academic Year 1994-1995" [online], Massachusetts Institute of Technology. Available at http://web. mit,edu/president/communications/rpt94-95.html
2. The federal R&D appropriation for fiscal year (FY) 1997 is 4.0% higher than that for FY 1996, but after 3 years of flat R&D budgets, the FY 1997 total is still less than that for FY 1994 after inflation (by 2.0%) [AAAS, FY 1997 Appropriations for R&D [online], 6 November 1996 (12)]. The Administration and Congress project cuts in federal support of civilian R&D of 19 and nearly 23%, respectively, in real terms by FY 2002 [AAAS, Summary Table: Projected Federal Spending on Nondefense R&D, FY 1995-2002 [online], 12 August 1996 (12)]. Those outyear figures are not final and are subject to revision, but the trend toward slower if not negative budget growth is evident.
3. The federal R&D appropriation for fiscal year (FY) 1997 is 4.0% higher than that for FY 1996, but after 3 years of flat R&D budgets, the FY 1997 total is still less than that for FY 1994 after inflation (by 2.0%) [AAAS, FY 1997 Appropriations for R&D [online], 6 November 1996 (12)]. The Administration and Congress project cuts in federal support of civilian R&D of 19 and nearly 23%, respectively, in real terms by FY 2002 [AAAS, Summary Table: Projected Federal Spending on Nondefense R&D, FY 1995-2002 [online], 12 August 1996 (12)]. Those outyear figures are not final and are subject to revision, but the trend toward slower if not negative budget growth is evident.
4. National Academy of Sciences, National Academy of Engineering, Institute of Medicine, National Research Council, Science, Technology, and the Federal Government: National Goals for a New Era (National Academy Press, Washington, DC, 1993).
5. _, Allocating Federal Funds for Science and Technology (National Academy Press, Washington, DC, 1995).
6. Council on Competitiveness, Endless Frontier, Limited Resources (Council on Competitiveness, Washington, DC, 1996).
7. Most studies of the economic impacts of R&D spending find substantial rates of return, especially from fundamental research [National Science Board, NSB 96-21 (1996), chap. 8].
8. Ibid., chap. 7.
9. As one analysis [P. L. Bernstein, Capital Ideas: The Improbable Origins of Modem Wall Street (Free Press, New York, 1992), p. 44] of the original (1952) article on portfolio theory explains, the portfolio approach formally reconciles two traditional adages for investing: "Nothing ventured, nothing gained," and "Don't put all your eggs in one basket."
10. R. E. Gomory, in AAAS Science and Technology Policy Yearbook: 1995, A. H. Teich, S. D. Nelson, C. McEnaney, Eds. (American Association for the Advancement of Science, Washington, DC, 1995), pp. 5-17.
11. As used here, federal R&D refers to investment in the creation of new knowledge and technologies, which has been called the federal S&T budget (4).
12. National Research Council, The Decade of Discovery in Astronomy and Astrophysics (National Academy Press, Washington. DC, 1991); J. N. Bahcalf, Science 251, 1412 (1991).
13. National Research Council, The Decade of Discovery in Astronomy and Astrophysics (National Academy Press, Washington. DC, 1991); J. N. Bahcalf, Science 251, 1412 (1991).
14. Available online at http://www.aaas.org/spp/dspp/ rd/rdwwwpg.htm.
15. We thank J. Bahcall, A. Bernent Jr., H. Brooks, J. Eben, F. Press, N. Reingold, A. Rich, J. D. Roberts, H. G. Stever, A. Teich, and H. Wilder for comments on an earlier draft of this article. The article is based on work for a forthcoming book on science and government, which is supported by grants from the Alfred P. Sloan Foundation and the Carnegie Corporation of New York.