If in fact the slowdown in productivity was caused at least partially by a fall in public spending on R&D, it is evidence that today we would be much richer if we had maintained a higher level of scientific investment. And also marks the dangers of today’s proposed cuts. “Based on our research,” says Fieldhouse, “I think it is unequivocally clear that if it really reduces the NIH budget by 40%, if it reduces NSF’s budget by 50%, there will be a slowdown in the growth of the productivity of the United States during the next seven to 10 years that will be measurable.”
Out
Although the 2026 budget proposed by the Trump administration would reduce scientific budgets in an unusual title, the public financing of R&D has actually been a slow decrease for decades. The federal financing of science is at its lowest rate in the last 70 years, which represents Only about 0.6% of GDP.
Even when public financing has decreased, business R&D investments have increased constantly. Today companies spend much more than the government; In 2023, Companies invested around $ 700 billion in R&D, while the United States government spent $ 172 billionaccording to data from the NSF statistical agency. You could think, Well, substitute companies investigate. It is more efficient. It is more focused. Keep the government out of it.
But there is a big problem with that argument. It turns out that research with public funds tends to lead to relatively more growth of productivity over time because it leans more towards fundamental science than work applied normally carried out by companies.
In a new working document called “Public R&D growth and productivity growth“Arnaud Dyèvre, assistant professor of Economy of Hash Paris, documents the wide impacts already often of the so -called knowledge spills: the benefits that flow to others of the work carried out by the original research group. Dyèvre found that the side effects of R&D financed with the public have three times more impact on the growth of productivity between companies and industries than those of the R&D of the R&D private
The findings are preliminary, and Dyèvre is still updating the investigation, much of which he did as Postdoc in the MIT, but says he suggests that the United States “is subvestable in fundamental R&D”, which is strongly funded by the Government. “I could not tell him exactly what percentage of R&D in the US. But, he adds, “empirical evidence” suggests that “we are out of balance.”
The big question
Obtaining fund balance for fundamental science and applied research is only one of the great questions that remain around the financing of R&D D. in mid -July, open philanthropy and the Alfred P. Sloan Foundation, both non -profit organizations, jointly announced that they planned to finance a five-Yor “Emerging Magazine“That would try to answer many of the questions that still revolve how to define and optimize the ROI of research financing.
“There is a lot of evidence consistent with a really high return to R&D, which suggests that we should do more,” says Matt Clancy, Open Filanthropy senior programs. “But when you ask me how much more, I don’t have a good answer. And when you ask me what types of R&D they should get more funds, we don’t have a good answer.”
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