Sponsorship of Inventions Of the $398 billion that the United States spent on R&D in 2008, industry paid for

9.2.2 Sponsorship of Inventions Of the $398 billion that the United States spent on R&D in 2008, industry paid for

$268 billion, the federal government $104 billion, universities $11 billion, and nonprofits $15 billion. But out of its $104 billion, the federal government makes many grants to industry and universities where the research is carried out. The US government in-house research budget in 2005 showed the following distribution

Department

Obligation (% of total)

Aeronautics and Space

National Science Foundation

Other

Around the globe, the principal public sponsors of research are national governments, who have the responsibility to oversee all aspects of national prosper- ity and power. The research budgets of national governments are usually dominated by military concerns.

The budget of the National Science Foundation, that has general responsibil- ity for basic research and the advancement of sciences, constitutes no more than 3% of the total obligations. The US government becomes even more important to scien- tific research in times of war, such as in the invention and deployment of the atomic bomb, radar, and penicillin. In the battlefield, superior inventions and technology have frequently played and will undoubtedly continue to play critical roles in vic- tory and defeat.

The agendas of corporate R&D are market-driven, toward serving large groups of wealthy consumers that can lead to large sales and generous profits. This is often aimed at domestic consumption first, and then for export to other wealthy countries. This type of investment will be driven by the purchasing power or GNP, of wealthy countries, and by the wealthier consumers. Most market-driven inven- tions concentrate on the needs of high-income groups, and pay little attention to the needs of the low-income groups. If a disease affects less than 1 million patients in the world, it would not be profitable for a pharmaceutical company to set up research and production, as there may not be enough sales and profits to cover the costs involved in research and building new plants. It is said that, for maximum revenues, the ideal drug to invent should not be designed to cure an acute and deadly disease, which would no longer be needed after the patient recovers; but should be designed for long-term chronic diseases, such as high blood pressure and diabetes, so the patient must be dependent on the drug till death.

329 Governments and philanthropic foundations can sometimes step in when

9.2 FUTURE SOURCES OF INVENTIONS

there is not enough market demand, to do good deeds and to compensate with funds. The UN Millennium Development Goals is a list of international objec- tives to eradicate extreme hunger and poverty, achieve universal education, pro- mote equality, reduce child mortality, combat infectious diseases, and ensure environmental stability. Unfortunately, these laudable goals have no funding to support the research activities necessary to meet these objectives. The Bill and Melinda Gates Foundation has an ambitious agenda to provide funding for many similar health initiatives.

Manufacturing is less than one-fourth of the US economy, but it produced nearly all the patents issued. In 1997, there were 111,983 patents issued to residents of the United States. They were dominated by

Electronics and electrical equipment

Machinery, except electrical

Fabricated metal

Transportation equipment

Rubber, plastics

These industries do not have the largest market revenues in comparison with Wholesale and Retail Trade. But their profitability depends more on advances in technology. They have management with optimistic views on technological prog- ress, the opportunity to build on the platform of new scientific advances and tech- nology developments, and can hire research scientists and engineers with the required education and skill. In the future postindustrial society, where services are much more important to the economy than industry, the patents devoted to services are expected to increase, particularly in the high technology sectors of information technology and health care.

The financial support of science education and basic research by governments and companies has been declining steadily in the last few decades in the United States and Western Europe. A sizable segment of the public regard a constant stream of innovative inventions as an entitlement, instead of as a much needed investment of current resources to ensure future prosperity.

The influential study “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future ,” was published in 2006 by the United States National Academies, to explain the necessity of inventions and the need to nurture them for future generations. It was followed by the sequel “Rising Above the Gathering Storm Revisited: Rapidly Approaching Category 5” in 2010. It was written by a committee of outstanding national leaders: presidents of research universities, Nobel laureates, and CEOs of Fortune 100 corporations, and was chaired by Norman Augustine. The reports stressed the importance of edu- cation as the creator of “Human Capital,” and research expenditure as creating “Knowledge Capital,” which are essential for innovation, the creation of quality jobs, economic prosperity, and competition in the world.