• Science and technology play a vital role in the Alaskan economy. Although R&D funding represents only about 0.5 percent of Alaska's gross state product, compared with 2.5 percent for the nation as a whole, R&D provides critical support to the state's fishing and resource industries while helping preserve Alaska's unique natural environment and cultural heritage.
• Federal funding for nondefense R&D has special importance to Alaska's future. As both Congress and the President proceed with plans to balance the federal budget by FY 2002, funding for nondefense R&D risks being reduced by up to one fourth. The impacts on Alaska could be profound.
• Federal R&D obligations in Alaska totaled $157 million in FY 1994, up sharply from their $95 million average of the previous several years. The increase is attributable to a one-time $47 million allocation from the Department of Energy devoted to developing energy resources for Native Alaskans in remote areas. In other years, the Department of Commerce's National Marine Fisheries Service has been the primary source of federal R&D funding in Alaska.
• Federal funds account for nearly three-quarters of Alaska's R&D, while industry and universities and colleges each provide about 13 percent of the total. This breakdown contrasts sharply with the national picture, in which industry is the principal source of R&D funding (about 60 percent nationwide) and the federal government provides just over one-third of the total.
• Alaska's industrial firms performed $14 million in R&D in 1993, mainly in areas related to environmental sciences, engineering, and resource development. Most of this work was supported by company funds.
• The University of Alaska ranked 25th among state university systems in terms of overall federal R&D funding, recording a total of nearly $36 million in FY 1994. Among federal agencies, the largest sponsors of academic R&D in Alaska are the National Aeronautics and Space Administration (NASA) and the National Science Foundation (NSF).
• The University of Alaska Fairbanks, with 90 percent of the state's federal funding for academic R&D, is the system's major research campus. Among its world-class research centers are the Geophysical Institute, the School of Fisheries and Ocean Sciences, the Arctic Region Supercomputing Center, and the Institute of Arctic Biology. Although the Anchorage campus receives only six percent of federal R&D funds allocated to the state's academic institutions, it also maintains several internationally recognized research centers, including the Institute of Social and Economic Research.
• Several federal laboratories are located in Alaska. The largest is the Auke Bay Laboratory, a facility of the National Oceanic and Atmospheric Administration's (NOAA's) National Marine Fisheries Service within the Department of Commerce. Situated in Juneau, Auke Bay's interests include Pacific salmon as well as impacts of ecosystem stresses on fisheries.
• The Alaska Science and Technology Foundation (ASTF), a state-funded public corporation established in 1988, provides small grants that support basic and applied research intended to enhance technological innovation and economic development in the state.
• Other organizations involved in the planning, coordination, and implementation of Arctic research activities include the U.S. Arctic Research Commission, the federal Interagency Arctic Research Policy Committee, and the Arctic Research Consortium of the United States.

The unique economic and geographical features of Alaska create an enormous potential for research and development activities. Although Alaska is by far the largest state in the Union geographically, it ranked forty-eighth in population (606,000) in 1994. However, Alaska ranked forty-first in gross state product, at $26 billion, and ninth in per capita personal income at $23,788, well above the national average of $21,809. (See the Alaska R&D Profile.)

Much of the state's economic activity results from its abundant natural resources. Petroleum is the most important revenue-generator for the state. Oil royalties have given the state government an important source of income and enabled it to maintain an extremely favorable tax structure for Alaska's citizens, although declining oil revenues have taken their toll on this structure in recent years. The natural gas industry is another significant component of Alaska's economy, as is the lumber industry. Important mining products include coal, gold, and other precious metals, as well as sand and gravel. Alaska's fisheries produce the most valuable commercial catch in the nation. Manufacturing in Alaska is relatively small. The state's breathtaking scenery and recreational opportunities, however, offset this economic disadvantage to some degree by attracting an important tourist industry.

Most of the economic activity in the state is located in Anchorage, Fairbanks, and Juneau. Alaska's topography leaves many communities inaccessible by road, so major transportation links employ ships and aircraft, leaving the state with an unconventional transport network.

Although research plays a major role in supporting Alaska's basic industries, the direct economic role of R&D in the state is relatively small. R&D accounts for about 0.5 percent of Alaska's economy, compared with about 2.5 percent in the nation as a whole. Federal R&D funding amounted to $153 per capita, compared to $242 nationwide (1993 data).

During the first four fiscal years of this decade, annual federalR&D obligations in Alaska averaged around $95 million. In FY 1994, however, obligations rose sharply to $157.5 million due mainly to an increase in Department of Energy (DOE) obligations which jumped from about $0.5 million to over $47 million. According to DOE, this was a special allocation devoted to developing energy resources for Native Alaskans in remote areas, and further funding at a similar level is not expected in future years. As a result, DOE was the largest sponsor of R&D in Alaska among federal agencies in FY 1994, accounting for 30 percent of total federalR&D obligations in the state (Chart 4). In second place was the Department of Commerce (the leader in recent years), at $32 million. The Commerce support went to laboratories of the National Oceanic and Atmospheric Administration, a bureau of the department, in support of fisheries research.

Of the $130 million spent on R&D from all sources in Alaska in 1993, the federal government provided 72 percent, industry 13 percent, and universities and colleges 13 percent (Table 1 and Chart 1). However, the federal government actually carried out only 37 percent of the total R&D, while universities carried out 52 percent, and industry carried out 11 percent (Chart 2). This ratio is in marked contrast to situation in the rest of the country, where industry carried out 71 percent, universities carried out 12 percent, and the federal government carried out only ten percent of the R&D activities in 1993.

State funding for R&D-apart from that appropriated to the University of Alaska-is small, but important nevertheless. The Alaska Science and Technology Foundation (ASTF) was created by the state legislature in 1988 to provide small grants to projects that carry a scientific or technical idea forward to application or commercialization for the benefit of the state. In 1994, the duties of Alaska's Science and Engineering Advisory Commission were transferred to ASTF, bringing together the state's science and technology activities. ASTF funds proposals (totaling $2.6 million in FY 1995) that would not normally be within the mission of a particular state or federal agency. The Foundation is discussed in more detail below.