This past September, the American Academy of Arts and Sciences released Restoring the Foundations: The Vital Role of Research in Preserving the American Dream, - a report on the state of US leadership in science and technology. The report makes the case that over the past half-century, research-based scientific and technological advancements have been the main drivers of economic growth and job creation, and their impact will likely rise in our increasingly complex, knowledge-based society. It further notes that since having a good job is one of the primary factors influencing quality of life and well-being, “research is the lifeblood of a high-tech economy and plays a critical role in the economic and personal well-being of most citizens.”
A good job has long been the foundation of the American Dream, - the possibility that anyone can get ahead and achieve prosperity through talent and hard work regardless of social class or circumstances of birth. But, the report warns that the American research enterprise, - and the American Dream, - are at a critical stage. Federal support for basic research as a percentage of GDP has declined 13% over the past decade. In 1992, the US had the second highest R&D investments as a percentage of GDP among OECD nations. It has now fallen to 10th place. While the US is losing some of its competitive edge, emerging nations are increasing their research investments in order to stimulate economic growth. China is projected to outspend the US in R&D within the next 10 years.
The Academy’s study was based on three basic premises:
- “a strong U.S. economy is vital to the welfare and prosperity of the American people”;
- “competitiveness in today’s accelerating high-tech, knowledge-based economy requires innovation and the rapid infusion of new knowledge and technologies”; and
- “while applied research and applied development are both undeniably important, pathbreaking discoveries are most likely to come from basic research sustained over long periods of time, which is mainly funded by the federal government and carried out in the nation’s universities and national laboratories.”
Research is generally characterized as basic or applied. Basic research seeks new knowledge without necessarily having potential applications in mind, whereas applied research is more focused on addressing specific problems. Research has been primarily funded by federal and state governments, industry, universities and philanthropy, but its investment dynamics have significantly changed over the decades.
Following World War II, government funded roughly two thirds of all R&D, while industry funded one third. Those shares have now reversed. Industry now accounts for over two thirds of all R&D, and given the more intense global competition and the pressures from financial markets, the bulk of its investments are focused on development and short-term applied research. State governments’ support of their public research universities has significantly declined over the past decade given the budget challenges that just about every state has been facing. Philanthropy is an important but relatively small source of funding in specific areas like medical research.
Today, the federal government is far and away the major funder of long-term basic research. It has a natural responsibility to fund research that will serve the public good and enhance the nation’s future prosperity. Federally-funded basic research is mostly performed in universities, research institutes and federal research labs, while the major responsibility for translating the results of that research into economic advances and jobs rests with the private sector. The research ecosystem thus requires close collaboration among government, industry and academia and the smooth flow of ideas and talent among these various institutions.
To ensure the long-term health of the US research enterprise, the Academy study offers three overarching, actionable recommendations.
Secure America’s Leadership in Science and Engineering Research – Especially Basic Research – by Providing Sustainable Federal Funding and Setting Long-Term Investment Goals.
From 1975 to 1992, annual federal investment in basic research grew by an average of over 4% despite serious economic challenges including the 1973 oil embargo and high inflation between 1979 and 1982. Despite political differences, both parties were in agreement that federal funding of basic research should be a high national priority. But research funding has stagnated, since the end Cold War over 20 years ago. It has also become more unpredictable due in part to the increased polarization in Washington, making it harder for funding agencies and researchers to plan longer term programs.
The report recommends restoring the 4% growth rate in federal investments in basic research. In addition, it recommends that the federal government should adopt multiyear appropriations for agencies that primarily support basic research and graduate STEM education.
Ensure that the American People Receive the Maximum Benefit from Federal Investments in Research.
The report discusses a number of obstacles that stand in the way of more effective federal policies, such as the lack of effective prioritization of R&D investments. There are no mechanisms in place to ensure that the American people and policy makers have access to the latest data and analysis on the state of the nations R&D and its implications to the US economy. The report recommends that the President publish a biennial “State of American Science, Engineering & Technology” giving the administration’s perspectives with inputs from all relevant federal agencies.
The report also notes that decades of accumulated rules, regulations and business practices by different federal agencies are placing unnecessary bureaucratic requirements on researchers and their institutions. It recommends that the administration should lead an effort to streamline or eliminate those practices and regulations that have become burdensome while failing to yield appreciable results.
Regain America’s Standing as an Innovation Leader by Establishing a More Robust National Government-University-Industry Research Partnership.
Finally, the study points out that many of the strong research partnerships among government, industry and academia that were established after WWII are no longer working, and their erosion has contributed to the decline of America’s R&D leadership. Other countries recognize this need and have been establishing national R&D programs to improve their global economic competitiveness. The US needs to reestablish these partnerships, and each participating sector should accept its responsibilities in support of the overall research enterprise.
In addition, the report recommends that the nation’s universities should embrace innovative models for technology transfer that better support their research and educational mission while facilitating strong research partnerships with industry. At the same time, it urges chief executives and corporate boards to give higher priority to funding basic research in universities and develop new forms of partnerships that can best justify these strategic investments.
“Basic research replenishes a pool of knowledge and ideas that grows new products and processes that benefit the American people and strengthen the economy” writes the Restoring the Foundation report in its concluding paragraphs. “This process of innovation is not linear, but rather forms a highly interconnected web that engages not only the federal government and universities, but also business, industry, state governments, and philanthropy. If the United States is to take full advantage of this unparalleled period of rapid scientific and technological advancement, then this complex system of research and invention must thrive.”
“The recommendations presented in this report, if acted upon, will move the nation from gliding to propelling research, from an unguided to a strategic enterprise, and from a short-term to a long-term focus by establishing a more robust twenty-first-century research partnership across all sectors and by securing American competitiveness through sustainable federal funding for basic research. It is our hope that Americans from all backgrounds and professions will work together to achieve these goals and ensure that our nation and its citizens continue to thrive for generations to come.”