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research funding

Page history last edited by Brian D Butler 15 years, 2 months ago

Research Funding

 

Global R&D

 

China increasing spending 23% between 2001 and 2006, with the US and Europe only increasing 1-2% over the same period.

 

Every year around $1 trillion is spent on research and development (R&D) in computing, telecoms and electronics; America accounts for over one-third. But while corporate R&D in America and Europe grew by 1-2% between 2001 and 2006, in China it soared 23%. China is now close to surpassing Japan in total research spending, from almost nothing a decade ago. And as a percentage of GDP, China’s corporate R&D spending is almost on a par with the European Union’s (around 1%).

 

there is a rivalry between “new Asia” and “old Asia”, says Sacha Wunsch-Vincent of the OECD, one of the report’s authors. Regional stalwarts such as Japan and Taiwan are being challenged by China, India and South Korea.

 

different focus:  The amount that American firms spend on research in computer services as much as trebled over the past decade. Japanese and South Korean firms, meanwhile, spend hardly anything developing services, and prefer to concentrate on more tangible, if less lucrative, hardware.

 

 

read more:  http://www.economist.com/business/displayStory.cfm?story_id=12863581&source=hptextfeature

 

 

Why is it important?

 

 

Capital to fund research with the objective of clarifying the market opportunity, identifying competition, and defining the factors that will determine success.

Benefits: research funding may be necessary during the planning phase

Drawback: seeking funding so early in the businesss, you may give up more control than you need to.

Potential sources of research funding: (list companies that fund research:)

 

General information:

Research funding is a term generally covering any funding for scientific research, in the areas of both "hard" science and technology, and social science. The term often connotes funding obtained through a competitive process, in which potential research projects are evaluated and only the most promising receive funding. Such processes, which are run by government, corporations or foundations, allocate scarce funds. Total research funding in most developed countries is between 1.5% and 3% of GDP; Sweden is the only country to exceed 4%. 1

Most research funding comes from two major sources, corporations (through research and development departments) and government (primarily carried out through universities and specialised government agencies). Some small amounts of scientific research are carried out (or funded) by charitable foundations, especially in relation to developing cures for diseases such as cancer, malaria and AIDS.

In the OECD, around two-thirds of research and development in scientific and technical fields is carried out by industry, and 20% and 10% respectively by universities and government, although in poorer countries such as Portugal and Mexico the industry contribution is significantly less. The US government spends more than other countries on military R&D, although the proportion has fallen from around 30% in the 1980s to under 20%. 2 Government funding for medical research amounts to approximately 36% in the U.S. The government funding proportion in certain industries is higher, and it dominates research in social science and humanities. Similarly, with some exceptions (e.g. biotechnology) government provides the bulk of the funds for basic scientific research. In commercial research and development, all but the most research-oriented corporations focus more heavily on near-term commercialisation possibilities than "blue-sky" ideas or technologies (such as nuclear fusion). One of the most famous exceptions is the innovation-favouring environment of the 1970s at Xerox Parc, where various ideas including the computer mouse were developed. Similarly, IBM's research into quantum computing has been going on for some years, and it will likely be some years more before it yields commercialisable technology.

Government-funded research

Many governments of developed countries provide considerable funds (primarily to universities) for scientific research (in fields such as physics and geology) as well as social science research (in fields such as economics and history). Much of this is not intended to provide concrete results that may be commercialisable, although research in scientific fields may lead to results that have such potential. Most university research is aimed at gaining publication in peer reviewed academic journals.

In some countries (notably the United States) government funding for research into defence-related technological research has historically been significant. Some of this takes place in public research institutions such as DARPA, whilst much else is carried out by major defense contractors in expectation of being able to sell the results to the government (so is funded privately, but on the basis of implicit or explicit agreement of costs being recouped from the government).

In the United States, inventions "conceived or actually reduced to practice" in the performance of government-funded research may be subject to the Bayh-Dole Act.

edit Corporate and private research

In the eighteenth and nineteenth centuries, as the pace of technological progress increased before and during the industrial revolution, most scientific and technological research was carried out by individual inventors using their own funds. A system of patents was developed to allow inventors a period of time (often twenty years) to commercialise their inventions and recoup a profit, although in practice many found this difficult. The talents of an inventor are not those of a businessman, and there are many examples of inventors (e.g. Charles Goodyear) making rather little money from their work whilst others were able to market it.

In the twentieth century, scientific and technological research became increasingly systematised, as corporations developed, and discovered that continuous investment in research and development could be a key element of success in a competitive strategy. It remained the case, however, that imitation by competitors - circumventing or simply flouting patents, especially those registered abroad - was often just as successful a strategy for companies focused on innovation in matters of organisation and production technique, or even in marketing. A classic example is that of Wilkinson Sword and Gillette in the disposable razor market, where the former has typically had the technological edge, and the latter the commercial one.

edit Criticism and support of government-funded and privately funded research

Occasionally there are particular examples of government-funded research that are held up by the media as examples of a waste of taxpayers' money - for example on the mechanics of the interaction between milk and cornflakes. Occasionally some research is politically controversial; in the US, there have been cases of controversy over research into sexually-transmitted disease.

More generally, (government-funded) research into such matters as the nature of quantum mechanics or the existence of water on Mars is considered by some to be a waste of money which might be better spent elsewhere (for example on education), or even on tax cuts. Since the value of such knowledge is often difficult or impossible to judge, and no commercial benefit (at least on any relevant time horizon) can be derived, an extreme free market or libertarian position is that therefore such knowledge should not be pursued. However, even in the most theoretical of fields, it is often difficult to determine in advance where research may lead. For example, decades of research into quantum mechanics have made possible work on quantum computing, which is now expected to be an even greater leap forward in computing technology than the development of the microchip, which in some areas is beginning to reach the limits of what is physically possible with this technology (although it remains to be seen whether the inherent technical difficulties in quantum computing actually allow for a widespread application of this technology).

As with virtually all government activity that is not directly concerned with protecting freedom, non-defense-related government-funded research is considered unethical and/or inefficient by libertarians, as it necessarily involves taxation (which is considered coercive) and the allocation of resources by non-market means, which is considered to be always inferior to the alternative of leaving the matter to the free market. An often-quoted example used to illustrate the difference in efficiency between government-funded and privately funded research projects is the quest of mapping the human genome. The U.S. government was funding such a mission, called the Human Genome Project, while at the same time the quest was being pursued separately with private venture capital by Celera Genomics. Celera Genomics used a newer, albeit riskier technique and proceeded at a faster pace and at a fraction of the cost of the tax-funded project (approximately $3 billion of taxpayer dollars versus about $300 million of private funding). Some HGP researchers claimed Celera's method of genome sequencing "would not work," however that project eventually adopted some of Celera's methods.

A characteristic of privately funded research is that it is almost always profit-oriented. In other words, private corporations tend to devote a relatively small investment to fund research into a field that shows little prospect of being profitable in the near future, even if such research could lead to highly beneficial results (for example, drug companies may not want to invest in finding the cure for a disease if most of the people affected by that disease are too poor to be able to afford such a cure). Some protest that cures and treatments for rare diseases are not pursued due to the lack of profit potentional. Detractors of this criticism make a utilitarian argument, saying that the fact that profit potential directs investment in treatment for diseases that afflict the many individuals rather than few individuals is a good thing, since it results in alleviating the greater amount of human suffering.

A 2005 study in the journal Nature surveyed 3247 US researchers who were all publicly funded (by the NIH). Out of the scientists questioned, 15.5% admitted to altering design, methodology or results of their studies due to pressure of an external funding source. In a contemporary study published in the New England Journal of Medicine, a similar proportion of the 107 medical research institutions questioned were willing to allow pharmaceutical companies sponsoring research to alter manuscripts according to their interests before they were submitted for publication.

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