Allocation of Research and Development Resources in U.S. and Israel Industry

This paper considers the allocation of national technological resources to different sectors of the economy. The impact of economic investments in technology is related to national, industry, and company growth. In some sectors of the economy investments in research and development (R and D) are well below the saturation level, where increasing the investment level and fraction of scientific and engineering manpower devoted to R and D may be expected to yield increased economic growth. A comparison is made of the sources and consumers of R and D funds in the U.S. and Israel, particularly as related to size of firms. Conclusions are obtained in the form of magnitude and allocation of R and D investments and utilization of scientific and engineering manpower for industrial R and D in Israel.