Extramural R&D Expenditures

Extramural R&DIn the mid 1960s when I was most active in military intelligence, the United States’ internal orientation was reflected in its R&D expenses—more than 90% of private R&D expenses in the United States were for internal operations, and the tools and techniques for technology management were applied inside the R&D lab.

However, between 1965 and 1995, R&D managers in other nations (such as Japan, Germany, France, the Netherlands, and Finland) vastly improved the positions of their firms, at least in part, by focusing more on technical intelligence. The success of these efforts is evident in industries such as automobiles, specialty-chemicals, textiles, electronics, and pulp and paper. Responses by United States businesses began shifting R&D expenditures: in 1995, Industrial Research Institute estimates were that only about 60% of private U.S. R&D dollars were for strictly internal operations. U.S. firms continue to increase their commitment to alliances, joint ventures, and a variety of external networking mechanisms and scanning activities. This trend is a sign cant adjustment in the attitudes and outlook of technology development managers from the previous century.

The graph to the left is for Federal R&D spending, but it is certainly in line with the extramural spending on the part of firms worldwide. What percentage of the extramural dollars spent on legitimate research versus intelligence gathering, as is not surprising, is hardly reported by anyone.

 

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