Federal Reserve Chairman Ben Bernanke said Monday that the United States and other countries need to better understand the most effective ways to use government money for research and development projects.
"We know less than we would like about which policies work best," Bernanke said in prepared remarks to a conference on innovation at Georgetown University.
Bernanke listed options available: direct funding to research institutions, grants to universities or private-sector researchers, contracts for specific projects and tax incentives. But he offered no preference to which is best. He said that varies based on the type of project.
The federal government accounted for roughly 26 percent of total U.S. spending on research and development in 2008. That's down from around 50 percent in the prior three decades.
Bernanke also said government support for research and development funding is most effective if it is seen as a long-term investment in the economy.
Lags from basic research to commercial applications that can benefit the economy can be very long, he said. For instance, the Internet revolution of the 1990s was based on scientific investments made in the 1970s and 1980s.