Sci-Finance: No money for the National Science Foundation means fewer business innovations

Entrepreneur, Feb, 2002 by Joshua Kurlantzick

IT GAVE US RADAR SYStems, bar codes that identify virtually every product and numerous other innovations. Yet funding for the National Science Foundation (NSF), the federal organization whose grant money has led to so many business innovations, has fallen behind that of the National Institutes of Health (NIH), which focuses on biomedical research.

During the Cold War, federal R&D money was channeled into physical sciences like engineering that were tied to national defense. But between 1985 and 2001, federal spending on physical sciences as a percentage of GDP plummeted 29 percent. Instead, R&D money has been targeted toward NIH.

Biomedical research is primarily limited to NIH and large drug companies, but NSF gives out thousands of grants through its Small Business Innovation Research Program. Often, these grants are the only seed money smaller companies can obtain.

As this federal funding has declined, private-sector research and development has increased, but primarily among major corporations with money to burn. What's more, even those small businesses that still receive NSF seed money have difficulty finding talented staff. "As the money goes toward biomedical research, more university students gravitate toward biomedical," says Kei Koizumi, director of budget and policy programs at the American Association for the Advancement of Science.

All is not lost. In 2000, NSF got a 17 percent budget increase. And some scientists believe the current preoccupation with terrorism--including bioterrorism--will raise the profile of basic research.

Yet Koizumi notes that, thus far, the attention paid to bioterrorism has not translated into more funding for science research. "Almost all the money in the emergency fiscal homeland security package and the 2002 budget will be used for upgrading our current security infrastructure against a bioterrorist attack," he says, "not for new science research."