Basic research: It beats dumb luck

Bill Roberts -- Electronic Business, 10/1/2004

For most of human history, innovation occurred through trial and error, bolstered by keen observation and dumb luck. Scientific inquiry can be traced to the ancient Greeks, but basic research as we know it—as a wellspring of innovation and a driver of economic growth—dates from the Industrial Revolution during the mid-19th century.

Basic research, as the National Science Foundation (NSF) defines it, is directed toward fuller knowledge of the fundamental aspects of phenomena without specific applications in mind. In contrast, applied research seeks to gain the knowledge necessary to determine the means by which a specific need can be met. The second half of R&D, development, represents the systematic application of knowledge directed toward the production of useful materials, devices and systems or methods to meet specific requirements.

The federal government has been the primary investor in basic research since Lewis and Clark set out on their expedition. According to the Alliance for Science & Technology Research in America (ASTRA), the federal government today funds about 60 percent of all basic research and industry funds about 15 percent. The rest is financed by state and local governments, foundations and universities.

The results of federal basic research find their way into corporate labs in many ways, primarily via a steady stream of scientific papers. An NSF study in 1997 found that 73 percent of scientific papers cited by U.S. industry patents were based on publicly funded research.

Savvy electronics companies, even small ones, develop ties to research universities. CEO Howard Witt of Littlefuse, which makes fuses and circuit breakers, sits on the advisory board of the McCormick School of Engineering at Northwestern University, which has a federally funded nanotechnology center. “Without the center, it would be harder for me to keep my finger on developments in that field,” Witt says.

And classic entrepreneurs are one-time graduate students or professors who worked on basic or applied research in a university before launching a VC-backed startup to commercialize their work. This model is not limited to Silicon Valley. The Massachusetts Institute of Technology (MIT) has spun off 4,000 companies with 1.1 million employees and annual revenues of $232 billion, according to ASTRA.