BY iHE U . S . GENERAL ACCOUNTING OFFICE Report To Senator Lloyd Bentsen United States Senate Regulatory Effects On R & D Are Better Assessed As Part Of The Innovation Process

GAO reviewed numerous studies of effects of Federal environmental, safety, and health regulations on R&D and innovation. These studies indicate that investment in innovation activities depends on the expected profits the innovation will produce, Anything that tends to lengthen the time before benefits can be realized, limit those benefits, or increase the cost of investment, tends to reduce the rate of return to innovation, and therefore can reduce the amount of R&D performed. Regulation can do all of these things.