AbstractPanama spends a very small proportion of its annual budget on R&D. Agriculture is the sector which has had most research funds. The industrial sector, including the exploitation of mineral resources, has received little attention.Universities have concentrated on their role as teaching institutes and undertake very little basic research. Small countries are at a disadvantage because they have few resources, so cannot support research in all sectors. They have to be selective, and to co-operate with foreign companies in their research programmes, thus improving their skills and updating their knowledge.