Washington, D.C. – A new report released today by the U.S. Congress Joint Economic Committee (JEC) highlights the role of government investment in research and development (R&D), especially in the area of basic research. The report, entitled “The Pivotal Role of Government Investment in Basic Research,” concludes that the United States needs to identify and support the next generation of innovations that will create new industries, spur job creation, and fuel economic growth. Because basic research plays a critical role in sparking innovation, it may be prudent for the government to increase its expenditures towards basic research now.
Basic research—such as the process of uncovering the structure of DNA—is one of three components of R&D, the others being applied research and development. Expanding the stock of knowledge by investing more in the basic research component of R&D funding can lead to the development of an even larger array of technologies – such as genetic tests for specific diseases or gene therapies to cure diseases.
The JEC report findings include:
- If research and development were to rely on the private sector alone to fund R&D, many socially beneficial research projects would not be undertaken. This is especially true for basic research projects.
- Federal support for basic research is particularly crucial because the lack of direct commercial applications from basic research projects can deter businesses from performing basic research.
- From 1958 to 2008, total expenditures on R&D as a share of gross domestic product (GDP) have generally hovered around 2.5 percent. However, overall spending on basic research has been substantially smaller, reaching 0.3 percent of GDP in 2008.
“Investments in basic research expand our scientific
knowledge, but just as significantly, they promote our economic competiveness
and contribute to our economic growth,“ said Congresswoman Carolyn B.
Maloney, Chair of the JEC. “Standing here today, we do not know what
the next round of innovations will be, but the federal government must continue
to provide funding for projects that improve our lives and help keep America competitive.”
Senator Charles E. Schumer, Vice Chair of the JEC, said, "Investments in basic research are a down payment on future job creation and economic growth. Shortchanging these types of investments is a penny wise and pound foolish, because over time, they pay for themselves."
The Joint Economic Committee, established under the Employment Act of
1946, was created by Congress to review economic conditions and to analyze the
effectiveness of economic policy.