Edited by Dominique Foray
Chapter 8: A Policy-shaped Research Agenda on the Economics of Science and Technology
8. A policy-shaped research agenda on the economics of science and technology1 Irwin Feller PROBLEM STATEMENT 8.1 Sometime during the 1970s, the late United States Congressman George Brown, California, chair of the House of Representatives’ science committee and a stellar congressional supporter of federal government support of basic research, observed that economists had made significant contributions to national policies for science and technology. Specifically citing the work of Solow and Mansfield, if I recall correctly, he said they had done this by demonstrating that research and development (R&D) had made significant contributions to the American economy’s long-term growth and that social rates of return to R&D could exceed private rates of return. In particular, the latter finding was indicative of market failures in private sector investments in non-defense-related R&D; it thus provided a generic case for combating then politically powerful opposition to public sector support of fundamental science and pre-competitive technology. He also remarked however that these findings provided little guidance to policymakers with respect to the optimal total level of support for R&D or its allocation among competing uses, agencies or programs as budget proposals ran the gauntlets of executive and legislative branch appropriations processes. Fast forward to recent years, and we find in the Salter and Martin review of the economics benefits of publicly funded basic research, the observation: ‘the research reviewed in this paper does not suggest how much public support should be provided nor in what areas it should be invested’ (Salter...
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