An interesting study by Gregory Tassey, Senior Economist at National Institute of Standards and Technology, is titled "Methods for Assessing the Economic Impacts of Government R&D." An enormously complex topic to evaluate, this analysis is as honest as can be documented but is silent on subjects of whether government should be in the R&D business, its role in distorting market forces through R&D intervention, its competence to assign value to social outcomes, and facts regarding loss to the economy for this government "surcharge" in taking jobs from the private, tax paying sector. This report offers a legitimate exploration, as the title expresses, but is a justification also for what government has usurped from the U.S. industrial economy and academia.
The U.S. gross domestic product has grown 121% in real terms over the past 25 years (1977 - 2002), during which time industrial R&D grew 159%, non-defense R&D by government grew slightly less and at NIST increased only 92%. Over the past decade federal R&D sponsoring agencies have grappled with the nature and quantification of economic inputs, outputs and outcomes of R&D processes and striven to accompany budget requests with impact projections. It has been the policy of both Clinton and Bush Administrations to support budget decision-making via strategic planning and systematic analyses, now done through retrospective and prospective studies. A dicey study element is defining a rationale for government intervention in private markets by assessing the degree of public good achieved. Does the phrase "a hokey deal" come to mind?