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R&D Funding Boost Expected

Issue 3 and Volume 102.

R&D Funding Boost Expected

The United States could be reaching a resurgence in the funding of research and development (R&D) according to the annual forecast from Battelle. R&D spending in 1998 is expected to reach more than $215 billion, a 4.66 percent jump from 1997`s $206 billion estimated total. This projected increase follows several years of stagnation in R&D funding. The increase signals a trend expected to last for several years, according to Dr. Jules J. Duga, Battelle senior analyst.

“Industry realizes that changes in operations and structure are not the only roads to profitability. Investment in research and technology is required for long-term survival,” Duga said.

Predictions for 1998 include:

Federal government contributions up slightly to $62.9 billion,

Industry investments of $143 billion, a jump of more than 6 percent, and

Universities and other non-profit investments of approximately $10.2 billion.

Prior to 1980, the federal government was the dominant R&D supporter, funding more than 50 percent. Since then, government`s share has fallen to less than 30 percent, and it is expected to continue falling.

“After a decade or more of downsizing and cost-cutting, American companies are shifting their attention to top-line growth,” said Stephen M. Millett, a Battelle researcher and futurist. “The great challenge of the future is to both grow sales and increase profitability. American companies would like to compete in customer satisfaction rather than lowest cost. So, they are investing more in R&D to realize significant improvements in the benefits providedto customers.” p