performing ?rms were curtailed following the stock market decline and the subsequent economic slowdown of 2001 and 2002. The Federal Government was once the main source of the nation’s R&D funds, funding as much as 66. 7 percent of all U. S. R&D in 1964. The Federal share ?rst fell below 50 percent in 1979, and after 1987 it fell steadily, dr- ping from 46. 3 percent in that year to 25. 1 percent in 2000 (the lowest it has ever been since 1953). Adjusting for in?ation, Federal support decreased 18 percent from 1987 to 2000, although in nominal terms, Federal support grew from $58. 5 billion to $66. 4 billion during that period. Growth in industrial funding generally outpaced growth in Federal support, leading to the decline in Federal support as a proportion of the total. Fig. 2. Doctorates awarded in Engineering, Physics, and Mathematics: 1995–2002 [Source: National Science Foundation NSF 04–303 (October 2003)] Figure 1 explains the most signi?cant change in the industry which occurred in the early sixties. The industry, with pressure from Wall Street, could not ?nance long-range and risky basic research. The objective of basic research is to gain more comprehensive knowledge or understanding of the subject under study without speci?c applications in mind. Basic research advances scienti?c knowledge but does not have speci?c immediate commercial objectives. Basic research can fail and often will not bring results in a short period of time.

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