Getting R&D Back on Track

An editorial in Chief Executive joins the chorus.

Increasingly, U.S. researchers in industry, academia and government are playing it safe. The kind of freewheeling basic research that spawned new industries—from genetic engineering and the integrated circuit to wireless telephony and e-commerce—is in serious decline.

Industrial basic research has failed to demonstrate a return on investment that satisfies the ravenous appetite of Wall Street for quarterly earnings growth. So companies have increasingly directed capital to applied research and development, rather than basic invention and innovation.

This is no secret. But what is less well known is that university basic research has withered in many important fields, especially in the physical and information sciences, and engineering. The federal budget deficit is likely to stagnate recent growth in funding medical research.

In short, we are losing our collective will to fund basic science. When the visible fruits of these investments may not pay off for 20 years or more, we tend to forget why we need to make these investments in the first place. These days, shareholders keep stock only about eight months. Is it any wonder that investors have no interest in backing basic research for the long term?