Measuring capacity for invention. A country’s capacity to produce
useful inventions may be captured by a variety of measures. Government
expenditures on R&D as a percentage of GNP are a particularly
important index, because studies suggest that the annual rate of
return from R&D to society as a whole may be close to 50 percent, a
value assessed to be twice the private return to an individual firm.3
The level of government R&D expenditures in the core technology
areas identified previously represents another, more focused, measure
of inventive potential. Government-level expenditures alone,
however, may not be sufficient to assess the potential for invention,
because these values are crucially affected by the character of statesociety
relations within a given country. Strong states presumably
will spend more on R&D (both generally and in specific technology
areas) than weak states might, but strong societies may in some
instances spend as much if not more on R&D both generally and
specifically in comparison to some strong states. Consequently,
aggregate private R&D expenditures as a function of GNP, as well as
more focused expenditures on critical technology, should also be
assessed as a complementary measure of a country’s inventive potential.