Modest growth in spending is expected.

Investment in research and development in the U.S. will show a modest increase in 1996, according to the annual Battelle-R&D Magazine forecast. Expenditures are expected to reach about $174,000,000,000, a 1.7% rise over the $171,000,000,000 the National Science Foundation estimates was spent in 1995.

"Despite the fact that industry and the Federal government are doing battle with their respective budgets, and changes are being forced by major trends in the global economy, the commitment to today's research is critical to tomorrow's economic strength," says Jules J. Duga, Battelle research scientist and the forecast's principal author. Major predictions for 1996 include:

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* Federal R&D spending will decrease by about 0.5% from 1995 to $60,400,000,000.

* Industry will increase spending by approximately three percent to $104,600,000,000.

* The remainder of R&D expenditures--$8,800,000,000--will be supported by universities and nonprofit organizations.

* A key to industrial investment is that long-anticipated real growth--spending that will outdistance inflation--will occur in 1996.

* An increasing share of U.S. industry's R&D will be performed offshore, primarily in facilities owned by the same industry.

* The Federal government's efforts at budget-cutting, coupled with significant philosophical changes toward the national science policy, broadly will affect Federal R&D support and the Federal laboratories.

Duga notes that the outlook for future Federal support of R&D could be considerably bleaker. At present, there is significant Congressional opposition to programs that foster closer Federal/industrial ties in areas that stress commercialization of new technology. Furthermore, proposals have been made to discontinue a number of programs that presumably could be absorbed by private industry. These range from basic energy research to the privatization of some Federal laboratories.

Budget proposal estimates, projected to the year 2002, call for constant dollar reductions--as high as 33%--in non-defense R&D. Few agencies have escaped significant proposed reductions in the...