The explosive growth of the U.S. economy over the last two decades has been fueled in part by new technologies and so-called information companies. Some have dubbed these "knowledge" companies, because their basic resource is not material but ideas and innovation. America's research universities play a major role in feeding this economic enterprise. However, their ability to continue may be jeopardized by attempts to reduce federal funding for basic university research.

While Europe and Japan are marshaling their resources, in the United States -- where private industry is increasingly dependent on public science -- the federal research budget is eroding. Programs such as scientific research, which have a long-term payoff and no well-organized constituency, come under the greatest pressure from budget cutters.

President Clinton's proposed budget for fiscal year 1998 would erode the purchasing power of federal research and development (R and D) funding. While the administration's budget calls for a $1.6 billion or 2.2 percent increase in R and D, the federal investment in R and D when adjusted for inflation will actually fall in real terms from previous levels. Plans would further reduce federal support for R and D by nearly 14 percent in real terms over the next five years. This downward trend would come at a time when our global competitors are boosting their R and D investments.

Such disinvestment at this time is odd and counterproductive. Economic development specialists across the nation clamor for access to research universities. Cognetics Inc. of Cambridge, Mass., identified the five major environmental factors underlying the growth of job creating companies. No. 1 on the list is access to a research university.

Public investment in research at Virginia Tech has resulted in patented discoveries and local jobs. In fact, Virginia Tech is one of the top universities in the nation in the number of new companies established from the discoveries of the university's researchers -- 25 in Virginia. Virginia Tech ranked fourth in the nation for companies formed as a result of university patents, as noted in the most recent study conducted by the Association of University Technology Managers.

Continued public investment in university research is key to maintaining America's economic leadership. During the cold war era, the value of basic research was viewed as the way to build and maintain a strong national defense. We have not yet made the same commitment in the economic battles dominating our peacetime economies.

In the competitive global economy, America's strength will, more than ever, depend upon our ability to produce new ideas. A recent report by the Association of University Technology Managers found that academic research directly contributes an estimated $21 billion to the nation's economy and supports 180,000 jobs each year. A recent study by industry and government of more than 400,000 U.S. patent applications found that more than 70 percent of the scientific papers cited by industry applicants came from research performed at universities, government labs, and other public agencies.

At the Virginia Tech Corporate Research Park, more than 800 jobs have been created or drawn to Blacksburg in the past decade, all because of the university's knowledge power. Today more than 50 firms are doing business connected in some way to faculty research or expertise. And countless firms around the commonwealth and nation benefit from our faculty expertise and university assistance.

At Virginia Tech and most major research universities, about two-thirds of the research is funded by the federal government. If we expect to retain our place in the world, we cannot afford to slow our investment in discovery and innovation. The cost of playing catch-up with the nations that have seen the wisdom of U.S. traditions would exceed any short-term savings. The nation's investment in basic R and D yielded a tremendous return -- victory in the Cold War. Continued federal investment in research will yield economic returns for generation after generation.

Paul Torgersen