DIRECTLY IN NEGOTIATIONS ESTABLISHING INDIVIDUAL SCHOLARLY EXCHANGES WITH CHINA. THE DIRECTORATE NOW FUNDS A SIGNIFICANT PORTION OF U.S. SCIENTIFIC EXCHANGE WITH CHINA.

MY EXAMPLES ILLUSTRATE OUR THREE MAIN ROLES--PROVIDING RESEARCH ON THE INTERACTION OF SCIENCE, TECHNOLOGY AND PUBLIC POLICY; FACILITATING NATIONAL AND INTERNATIONAL EXCHANGE OF SCIENTIFIC AND TECHNICAL INFORMATION TO BENEFIT U.S. SCIENCE; AND ASSISTING IN THE DEVELOPMENT AND IMPLEMENTATION OF FOREIGN POLICY INVOLVING SCIENCE AND TECHNOLOGY.

TWO OF THE DIRECTORATE'S SUBACTIVITIES--INTERNATIONAL COOPERATIVE SCIENCE AND INFORMATION SCIENCE AND TECHNOLOGY-ARE CONCERNED IN DIFFERENT WAYS WITH THE TRADE OR EXCHANGE

OF INFORMATION. THE INTERNATIONAL SUBACTIVITY INVOLVES

INTERNATIONAL TRADE IN SCIENTIFIC AND TECHNICAL INFORMATION. IT PROVIDES SUPPORT AND SERVICES FOR IMPROVING THE INTERNATIONAL SHARING OF RESEARCH APPROACHES, FACILITIES, AND

RESULTS. THE INFORMATION SCIENCE AND TECHNOLOGY SUBACTIVITY

SUPPORTS BASIC AND APPLIED RESEARCH TO IMPROVE THE EFFICIENCY
OF NATIONAL AND INTERNATIONAL INFORMATION FLOW, PARTICULARLY
S&T INFORMATION.

THE OTHER TWO SUBACTIVITES--POLICY RESEARCH AND ANALYSIS AND SCIENCE RESOURCES STUDIES--ARE CONCERNED WITH MONITORING AND ANALYZING SCIENTIFIC AND TECHNOLOGICAL ACTIVITY. THEY SUPPORT AND CONDUCT RESEARCH, ANALYSIS, AND STATISTICAL INFORMATION COLLECTION TO IMPROVE THE BASE FOR PUBLIC POLICY DECISIONS.

TODAY I WILL CONCENTRATE ON SIGNIFICANT NEW INITIATIVES

IN EACH SUBACTIVITY. A MORE COMPLETE DESCRIPTION OF THE

FY 1981 BUDGET REQUEST APPEARS IN THE APPENDIX TO THIS STATEMENT.
FOR WORK IN INTERNATIONAL SCIENCE, WE ARE REQUESTING
$12,900,000, AND AN ADDITIONAL $5,500,000 IN SPECIAL FOREIGN
CURRENCY. PRIORITY HAS BEEN GIVEN TO EXPANDING COOPERATIVE
SCIENCE AND EXCHANGE WITH THE DEVELOPED COUNTRIES, PARTICULARLY
IN WESTERN EUROPE AND JAPAN, AND TO SCIENTIFIC AND TECHNICAL
WORK WITH DEVELOPING COUNTRIES. THE FIRST PRIORITY BUILDS
UPON THE ADVANTAGES THAT DEVELOPED COUNTRIES CAN ACHIEVE
THROUGH COOPERATIVE EXCHANGES IN SCIENCE. SHARING FACILITIES,
RESOURCES, AND EXPERTISE BENEFITS ALL SIDES BY REDUCING THE
COSTS INVOLVED IN DOING SCIENCE. FOR THE U.S., COOPERATIVE
SCIENTIFIC EXCHANGE AVOIDS THE LARGE INVESTMENTS IN HUMAN AND
CAPITAL RESOURCES THAT WOULD BE REQUIRED TO COVER ALL FIELDS

OF SCIENCE EQUALLY.

THE SECOND PRIORITY, SCIENCE IN DEVELOPING COUNTRIES, STEMS FROM PRIOR NSF WORK AND FROM THE UN CONFERENCE ON SCIENCE AND TECHNOLOGY FOR DEVELOPMENT. NSF CRITERIA AND ACTIVITIES FOR BROADENING WORK IN DEVELOPING COUNTRIES HAVE BEEN REVIEWED AND APPROVED BY THE NATIONAL SCIENCE BOARD. WE EXPECT PROPOSALS IN RESPONSE TO THE NEW PROGRAM SHORTLY. THIS PROGRAM ENCOURAGES THE DEVELOPING COUNTRIES IN THEIR EFFORTS TO CREATE NEW CAPABILITIES IN SCIENCE AND TECHNOLOGY, AND IT ASSISTS IN INTEGRATING SCIENCE AND TECHNOLOGY INTO PROCESSES OF SOCIAL AND ECONOMIC DEVELOPMENT. THE LATTER IS AN OBJECTIVE OF BOTH THE DEVELOPING COUNTRIES AND THE UNITED STATES.

OUR REQUEST FOR THE POLICY RESEARCH AND ANALYSIS SUBACTIVITY Is $6,650,000, REFLECTING NEW INITIATIVES IN INTERNATIONAL ECONOMIC POLICY AND RISK ANALYSIS. DURING ITS HISTORY, THIS SUBACTIVITY HAS FUNDED RESEARCH ON SUCH ISSUES AS INTERNATIONAL TECHNOLOGY TRANSFER, COMPARATIVE ADVANTAGE AND TECHNOLOGICAL SUPERIORITY CREATED BY R&D, AND SCIENCE AND TECHNOLOGY POLICY FOR DEVELOPING COUNTRIES. BUT THESE SCIENCE AND TECHNOLOGY ISSUES DO NOT OCCUR IN A VACUUM. THEY ARE RELATED TO OTHER ISSUES INVOLVING THE INTERNATIONAL POLITICAL ECONOMY. OUR ESTIMATES OF THE EFFECTS OF SCIENCE AND TECHNOLOGY ON THE U.S. ECONOMY AND THE BALANCE OF TRADE MUST BE CONDITIONED BY OVERALL INTERNATIONAL TRANSACTIONS AND POLICY DECISIONS. THIS INITIATIVE WILL PERMIT US TO RELATE SCIENCE AND TECHNOLOGY POLICY ISSUES TO GENERAL ECONOMIC POLICY.

FURTHERMORE, BECAUSE OF A NEW AND GROWING INTERDEPENDENCE BETWEEN THE U.S. ECONOMY AND OTHER ECONOMIES, BOTH THE EXECUTIVE AND LEGISLATIVE BRANCHES NEED INCREASED INFORMATION ABOUT THE EFFECTS OF CHOOSING AMONG ALTERNATIVE INTERNATIONAL ECONOMIC POLICIES. POLICY DECISIONS ABOUT TRADE, TARIFFS, TAXES, EXPORTS AND IMPORTS, ALL AFFECT TECHNOLOGY TRANSFER AND INNOVATION. INTERNATIONAL ECONOMIC SHOCKS, STRAINS, AND DISCONTINUITY NOW STRONGLY CONSTRAIN OUR DOMESTIC ECONOMIC PROGRESS. WE NEED GREATER ANALYSIS OF THE INTERACTION BETWEEN OUR DOMESTIC ECONOMIC POLICIES AND OUR INTERNATIONAL ONES.

FOR THESE REASONS, WE ARE REQUESTING $750,000 TO BEGIN COHERENT
RESEARCH PROGRAMS ON INTERNATIONAL ECONOMIC POLICY.
OVER THREE

OR FOUR YEARS, WE EXPECT TO DEVELOP ADDITIONAL CAPABILITY IN
UNIVERSITIES AND NONPROFIT INSTITUTIONS TO TACKLE THESE TOUGH
AND VITAL ISSUES ON A PROGRAMMATIC BASIS. THESE PROGRAMS WILL
BE DESIGNED TO PROVIDE INFORMATION FOR DECISIONMAKING ON A
CONTINUOUS BASIS, WHILE THEY ALSO EXAMINE LONGER-RUN ISSUES. WE
BELIEVE THAT THESE PROGRAMS WILL ENABLE THE SCIENTIFIC COMMUNITY
TO PROVIDE IMPORTANT AND TIMELY INFORMATION FOR PUBLIC DECISIONS.
ADDITIONAL RESOURCES ARE ALSO REQUESTED TO SUPPORT EXPANDED
WORK ON RISK ANALYSIS. THERE HAS BEEN SIGNIFICANT GROWTH IN THE
NUMBER OF GOVERNMENT POLICIES AND PROGRAMS CONCERNED WITH
ANTICIPATING AND MANAGING RISK FROM NEW TECHNOLOGIES AND FROM
NATURAL AND MAN-MADE HAZARDS. IMPROVING THE EFFECTIVENESS
AND EFFICIENCY OF THESE POLICIES AND PROGRAMS INVOLVES SOLVING
COMPLEX INTELLECTUAL QUESTIONS. IN GENERAL WE FACE TRADEOFF
PROBLEMS.

USUALLY LACKING COMPLETE INFORMATION ABOUT CAUSE

AND EFFECT, WE CAN ACT NOW AND RISK BEING WRONG, OR WAIT FOR
MORE INFORMATION AND RISK BEING TOO LATE, OR TOO COSTLY.
THUS, THE QUESTIONS: HOW SHOULD OUR STANDARDS BE SET WHEN
OUR CURRENT KNOWLEDGE OF EFFECTS IS UNCERTAIN AND EVOLVING?
WHAT RULES SHOULD SOCIETY USE IN DISTRIBUTING BENEFITS, RISKS,
AND COMPENSATION AMONG DIFFERENT GROUPS AND LOCALITIES?
OVER THE LAST FEW YEARS PROMISING ANALYTICAL TOOLS HAVE BEEN
CREATED TO HELP ANSWER THESE QUESTIONS, AND WE REQUEST
INCREMENTAL FUNDS TO ADVANCE THE STATE OF THE APT AND TO
ADDRESS CURRENT ISSUES.

SOUND POLICY RESEARCH AND ANALYSIS REQUIRE VALID DATA
AND INFORMATION. THE SCIENCE RESOURCES STUDIES SUBACTIVITY
COLLECTS, MAINTAINS, ANALYZES, AND REPORTS STATISTICS ON
THE SCIENCE AND TECHNOLOGY ENTERPRISE. IN FY 1981 WE ARE
REQUESTING $3,400,000 FOR THIS WORK. PRIORITY IS GIVEN TO

CONTINUING THE DESIGN AND PLANNING OF THE POST-CENSAL SURVEY

OF SCIENTISTS AND ENGINEERS. EACH DECADE THIS SURVEY PROVIDES
THE BASELINE FOR THE NSF SYSTEM THAT REPORTS REGULARLY ON THE
MAGNITUDE AND CHARACTERISTICS OF THE NATIONAL POOL OF SCIENTISTS
AND ENGINEERS. IN TURN, THIS FORMS THE BASIS OF NATIONAL
ESTIMATES AND PROJECTIONS FOR THE DEMAND AND SUPPLY OF SCIENTISTS
AND ENGINEERS. THESE DATA HAVE A SIGNIFICANT IMPACT ON GOVERN-
MENT POLICY AND ON EXPECTATIONS IN EDUCATION AND PRIVATE
ENTERPRISE. THEY ALSO CAN AFFECT INDIVIDUAL CAREER DECISIONS.
PRIORITY IN FY 1981 IS ALSO GIVEN TO SEVERAL PERIODIC
SURVEYS ON FUNDING AND SCIENTIFIC PERSONNEL. THESE ARE:
A SURVEY OF R&D ACTIVITIES OF INDEPENDENT NONPROFIT INSTITUTIONS;

A SURVEY OF SCIENCE AND ENGINEERING EMPLOYMENT IN INDUSTRY;
AND A SURVEY OF THE WORK AND ACADEMIC EXPERIENCE OF RECENT
SCIENCE AND ENGINEERING GRADUATES. EXECUTION OF THESE SURVEYS
IN FY 81 IS NECESSARY TO MAINTAIN CONSISTENCY AMONG OUR TIME
SERIES AND TO IMPROVE OUR DATA BASE.

AT ANY POINT, OUR WORK IN SCIENCE AND TECHNOLOGY DEPENDS UPON THE INFORMATION AVAILABLE AND UPON OUR ABILITY TO RETRIEVE, PROCESS, AND DRAW INFERENCES FROM IT. THIS DEPENDENCE LEADS