The ‘‘swing of the pendulum’’ from public to market support for science and technology: Is the U.S. leading the way? Pedro Conceic ßa ˜o a , Manuel V. Heitor a, * , Giorgio Sirilli b , Robert Wilson c a Center for Innovation, Technology and Policy Research, IN+, Instituto Superior Te ´cnico, Lisbon, Portugal b Institute for Socio-Economic Studies on Innovation and Research Policies, CNR, Rome, Italy c LBJ School of Public Affairs, The University of Texas at Austin, Austin, TX, USA Received 20 February 2004; received in revised form 15 March 2004; accepted 16 March 2004 Abstract The structure and financing of science and technology activities are undergoing a slow, but profound, change. This change can be briefly characterized as a shift from relying and supporting public science to a stronger emphasis on ‘‘market-based’’ incentives for science and technology. In this paper we analyze this shift in a historical perspective, discussing both the theoretical explanations and the empirical trends of the ongoing change. While we do not claim to provide a comprehensive and exhaustive identification of the causes of this shift, we argue that it is largely driven by the perception of a shift of the U.S. policy towards market-based, rather than publicly supported, incentives for science and technology. This, in turn—given the strong economic performance of the United States over the 1990s—has influenced policies in most OECD countries, especially in Europe. We conclude by analyzing the evolution of research in U.S. higher education and find two major trends: an increasing diversity in the number of institutions of different types other than universities and a steady and continuous public funding of the leading U.S. universities. This has allowed the construction of an infrastructure now used largely by the private sector, but it also noted that the United States has not compromised public support for core areas or in those fields in which there is a clear perception that market incentives are not sufficient for meeting the strategic targets of the 0040-1625/$ – see front matter D 2004 Published by Elsevier Inc. doi:10.1016/j.techfore.2004.03.002 * Corresponding author. Tel.: +351-1-841-7379; fax: +351-1-849-6156. E-mail addresses: pedroc@ist.utl.pt (P. Conceic ßa ˜o), mheitor@ist.utl.pt (M.V. Heitor), sirilli@isrds.rm.cnr.it (G. Sirilli), rwilson@mial.utexas.edu (R. Wilson). Technological Forecasting & Social Change 71 (2004) 553 – 578