NCPA - National Center for Policy Analysis

Technology R&D Subsidies Aren't Needed

June 3, 1998

The private high-tech sector doesn't need government handouts to subsidize research and development, according to a sizable group of Silicon Valley executives. They contend plenty of private money is available and invite the government to get out of the process.

At least three major programs could be axed by Congress, they say, and few would mourn their demise:

  • The Advanced Technology Program, established in 1990 to help pay for commercially promising new technologies, is expected to transfer $193 million to private companies this year.
  • The Manufacturing Extension Partnership provides technology consulting to small manufacturers at a cost of around $111 million this year.
  • The Small Business Innovation Research program specializes in handing out federal R&D funds to small businesses -- at a cost of $1 billion this year.

T.J. Rodgers, chief executive of Cypress Semiconductor Corp., calls such programs "techno-pork." He and 78 other Silicon Valley business leaders last year signed a "Declaration of Independence" from corporate welfare and called on Congress to appoint a panel changed with drawing up a list of corporate welfare programs to be scuttled.

According to the National Science Foundation, private industry spent more than $113 billion on research and development in 1996 -- up 3.5 percent after inflation from the previous year.

The tech sector alone spent $40 billion on R&D in 1995.

Source: Anna Bray Duff, "Does High Tech Need Handouts?" Investor's Business Daily, June 3, 1998.


Browse more articles on Tax and Spending Issues