R&D: The missing link

While the information technology sector of the U.S. economy has boomed over

the past decade, federal spending on information technology research and

development has declined. And the decrease is likely to hurt IT development

20 years from now, warns Andrew Grove, chairman of the giant computer chip

maker Intel Corp.

From 1990 to 1999, annual federal spending on IT R&D declined from

$75 billion to $62 billion. During the same period, IT industry R&D

increased, but more industry research does not make up for the lost government

research, Grove said.

Industry R&D tends to focus on short-term development of products that will produce profits in the marketplace. Government R&D, however, typically focuses on long-term technology development.

Government R&D performed 20 to 30 years ago "is what's fueling the economy now," Grove

told Congress' Joint Economic Committee June 6. And what is not being done

today will be missed two decades hence, he said.

The $62 billion spent in 1999 on IT R&D should be doubled, he said.