This year, Battelle’s annual collaboration with R&D Magazine , in which we analyze U.S. and global spending trends in government and industrial R&D, reveals a changing landscape—one that reflects the inextricably linked areas of energy and environment, health and life sciences, and national security.

For example, rising energy demand is being supplied primarily by fossil fuels which, in turn, pose serious consequences for the environment and human health. The potential for a pandemic that could disrupt national and community infrastructures, including commerce, utilities, transportation, and public safety, increases with adverse changes to climate. Dwindling energy resources create potentially grave implications for global security, including civilian casualties and the destruction of economic infrastructures.

As noted in the 2009 Forecast, we recognized the need to redefine Battelle’s organizational strategy around these converging areas, to refocus on our core strengths and, by doing so, to ensure our agility and responsiveness to the global marketplace. Today, our restructured businesses are centered on energy technology, health and life sciences, and security serving industrial, government, and international customers.

Clearly, R&D plays an essential role in addressing these interwoven challenges. Recent increases in federal R&D investment from stimulus funds, especially for basic research, are being met with a decline in overall industrial R&D spending over the past year. Yet it is encouraging to see that even during the current economic downturn, many major companies throughout the world continue to invest in innovation activities. They recognize, as we do, that R&D is the source of innovation from which economic growth and prosperity develop. Investing now, despite these challenging economic times, not only fosters economic recovery, it also positions us for future success while helping solve major global challenges.This recognition is borne out in the forecast as industry R&D investment returns to a growth path in 2010.

At Battelle, we are investing for the future by strengthening our safety and efficacy evaluation capabilities. We will leverage our new and upgraded facilities and world-class scientific expertise to advance important biomedical research for pharmaceutical and biotechnology companies, as well as research for the U.S. government. In addition, in other areas we will continue to invest in R&D facilities and capabilities dedicated to advancing solutions that make the world a healthier and safer place.

This year’s forecast provides an opportunity for readers to hear from the leaders of Battelle’s global businesses, who share their points of view on these universal challenges and how investments in innovation can help solve them.

While R&D is essential, we also must develop the next pool of technological talent. As an employer of thousands of scientists and engineers, Battelle has a keen interest in helping foster science and technology careers among the next generation of students. That requires investing in education, especially in the United States.