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United States government support for scientific and technological research and development (R&D)—across sectors including but not limited to energy, agriculture, and health—has the potential to save lives, reduce global poverty, and help address the most pressing global challenges. Traditionally, the US government has funded most R&D via grants and contracts (“push” funding), directly subsidizing and defraying the up-front R&D costs. An alternative approach—“pull” funding—would use the promise of future sales and/or other revenue to indirectly justify up-front expenditures in R&D, thereby “pulling” innovations to market.
Despite several theoretical and practical advantages of “pull” funding, US government use of this approach has thus far been limited, in part due to regulatory and legal barriers. Yet across the entirety of the US government, there are nonetheless creative and interesting approaches to support innovation which include pull elements.
To help the US government make broader use of pull approaches, this policy paper surveys the ways in which US government authorities, budgetary rules, and procurement approaches either facilitate or constrain use of pull mechanisms to support R&D. It specifically focused on the budgetary “scoring” issues that can affect, and sometimes hinder, the use of such mechanisms. It concludes with a discussion of potential legislative changes and workarounds to budgetary scoring challenges that might facilitate expanded use of these mechanisms.