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Prospects for Growth In the decade ahead, the following factors are likely to affect industrial R&D (see Appendix B): · Public policies that affect cropping patterns, natural resource stewardship goals, and the manner in which food safety and environmental problems are addressed. Corporate consolidations and methods of financ- ing mergers.· Public sector R&D priorities and accomplish ments. Various scenarios for the relationship between these policy and economic factors, on the one hand, and sales, profits, and private sector R&D, on the other, are presented in Appendix B.
Even if private sector R&D were to increase, however, its priorities would not fully match or encompass national needs because of product de- velopment and proprietary considerations.
Level of Export The capacity of private firms to support R&D is a function of their gross sales, their profits, and the percentage of either gross sales or pretax profits that a company is willing to invest in R&D.
Rather, it will increase the fundamental understanding of basic biological and physical phenomena that relate to agriculture, food, and the environment, thus contrib- uting substantially to the national base of knowledge for the agricultural system and strengthen the national infrastructure of that system.
Private Sector INVESTING IN RESEARCH search investments may retrench somewhat in the years ahead.
Rather, a continued period of little or no increase in commodity prices is more likely, which may hold down increases in production levels.
In addition, public policies and regulations may impose new costs related to food safety and 19 natural resource stewardship.
Second, and even more important, the research to be funded by the program proposed here is of national importance rather than of directly local or state importance.
Mainly through their land-grant universities, the states already do more than half of all research related to the agricultural, food, and environmental system.
This repre- sents the lowest level of R&D by all industries sur- veyed except for nonbank financial institutions.
Not surprisingly, high-technology industries with patent protection and proprietary technologies were found to commit 30 to 50 percent or more of pretax profits to R&D (aerospace, 86.7 percent; chemicals, 31.8 per- cent; computers, 60.3 percent; health care, 52.6 per- cent). Gross and net farm Income, and export demand and performance.