The Perils of Complacency


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New Models for U.S. Science and Technology Policy

Reaffirming the 2014 Recommendations

The committee reasserts the prescriptions and implementing actions offered in the American Academy’s 2014 Restoring the Foundation report (see Appendix A). To account for events that have transpired over the past five years, the committee urges that particular attention be devoted to the following recommendations:

  • The nation should increase total R&D investment (public and private) as a fraction of GDP from 2.7 percent to 3.0 percent within five years and to at least 3.3 percent within ten years [RtF1 Action 1.1].
    • Several recent U.S. presidents have called for significant increases in funding for R&D, including Presidents Ronald Reagan,48 Bill Clinton,49 George W. Bush, and Barack Obama.50 In 2009, President Obama stated that total national R&D investment should surpass 3 percent of GDP.51 R&D investment, however, has continued to vary between 2.4 and 2.7 percent for over 30 years. Given the impact of R&D on the nation’s economy, national security, and the accelerating global competition, the R&D target should be increased to at least 3.3 percent, a figure more competitive with leading countries.
  • Federal funding for basic research should be increased at a sustained real growth rate of at least 4 percent per year, with the goal of raising federal basic research funding as a percentage of GDP by 50 percent from the present 0.2 percent to 0.3 percent [RtF1 Action 1.1].
    • Basic research in STEM fields – especially research funded by the federal government – will undoubtedly continue to yield major discoveries that revolutionize technology and fuel innovation. But increases in basic research funding should not come at the expense of applied research. Ideally, investments in the latter would increase at about the same rate. Of course, the boundary between basic and applied research in many fields is not sharp.
  • The White House Office of Science and Technology Policy (OSTP), in cooperation with the Office of Management and Budget (OMB) and government funding agencies, should prepare a rolling five-year integrated federal R&D funding plan for each of the agencies that support R&D, including overall funding targets for the three categories of basic research, applied research, and development [RtF1 Action 1.4].
    • Each federal agency plans its allocation of funds for R&D in the context of its unique mission. But an overall federal strategy for supporting the priority areas of science and engineering requires planning across government. The role of OSTP in the annual budget process is advisory, but OSTP works closely with OMB on the parts of the president’s budget that relate to science and technology. The cabinet-level National Science and Technology Council, which includes the directors of OSTP and OMB, is a critical element in achieving the above goal.
  • A capital budgeting process should be established to provide resources for federally funded R&D facilities [RtF1 Action 1.3].
    • Corporations and other institutions have many decades of experience that demonstrate the value of capital budgeting, based on evaluating the long-term impact of current investments. Multiyear budgeting for the construction and updating of large R&D facilities, including procurement of major research equipment, would avoid wasteful year-to-year fluctuations in agency appropriations.
  • U.S. R&D budgets should be appropriated on (at least) a two-year cycle, rather than annually [RtF1 Action 1.2].
    • Quality research and development are not carried out in one-year segments. In particular, the agencies that support research can best serve the nation’s interest in advancing scientific knowledge by having longer time horizons for making investments. Large year-to-year fluctuations in appropriations waste money and are inimical to the performance of quality research.
  • The number of H1-B visas should be doubled and immediate family members of recipients appropriately accommodated [RtF1 Action 3.7].
    • The U.S. S&T enterprise will require additional talent. Much of that talent, at least in the decade ahead, will have to come from abroad as it has in the past. Young men and women throughout the world continue to be attracted to America’s universities, and the United States should institute policies that encourage them to remain in America after receiving their education and thereby contribute as members of the U.S. STEM workforce.
  • Regulations, policies, and reporting requirements currently imposed on the conduct of R&D should be reviewed with the purpose of eliminating constraints that do not offer demonstrable benefits [RtF1 Action 2.2a].
    • Over a period of decades, many well-meaning rules, regulations, and other polices have been put in place that reduce the productivity of the nation’s researchers but have little or no benefit. Several well-researched reports have described these in detail and have offered specific policy reforms.52 Further studies are not needed; it is time for action by the federal agencies, the OMB, and, in some cases, Congress.
    • As new policies are considered by the nation’s universities and federal agencies to ensure the proper protection of intellectual property, while continuing to encourage foreign-born students and science and engineering researchers to study and establish careers in the United States, any new regulations should not place major administrative burdens on researchers and institutions.
  • Universities should revise their policies on intellectual property to better reflect the original intent of the 1980 Bayh-Dole Act. The act was designed to help ensure that the public received the benefits of federally funded R&D by giving universities ownership of the intellectual property produced by their faculty and encouraging universities to share their discoveries and inventions with industry through patents and licensing agreements. Companies and universities should implement mechanisms that enable more effective partnerships and especially encourage transdisciplinary joint research. The federal government should clarify and, if necessary, revise tax laws to encourage stronger university-industry partnerships [RtF1 Action 3.2].53
    • Over many decades, laws, rules, and other policies and practices have accumulated that hinder university-industry partnerships and defer the potential to be far more powerful components of the nation’s innovation and global competitive strategy.



New Recommendations for 2020

In addition to the recommendations originally made in the 2014 Restoring the Foundation report and reiterated above, which focused on R&D priorities, we append the following recommendations focused on strengthening U.S. STEM education and the American workforce:

  • The recommendations in the 2005 National Academies of Sciences, Engineering, and Medicine’s Gathering Storm report pertaining to pre-K-12 education should be implemented, including creating each year 10,000 federally funded four-year scholarships in STEM fields to be competitively awarded to U.S. citizens in exchange for a commitment to teach STEM in a public school for at least five years following graduation.
    • The nation’s pre-K-12 public education system has been in crisis for decades, and the urgent need to improve student achievement was one of the seven priorities listed in the “Innovation: An American Imperative” call to action that was supported by over 500 organizations across the country.54  The National Academies of Sciences, Engineering, and Medicine, in its Gathering Storm report, laid out a strategy to address the crisis.55
  • States should return to, and then sustain or increase, pre-Great Recession levels of public university funding, as measured per full-time equivalent (FTE) student.
    • Restoring state funding for universities will enable those institutions to better serve the educational needs of the state’s citizens, raise the skill level of the workforce; support full employment; form stronger partnerships with local companies; and contribute to the country’s S&T enterprise and economy.
  • The recent tax placed on the earnings of endowments of (private) universities represents an altogether counterproductive trend and should be repealed promptly.
    • Repealing this punitive tax will help universities control tuition, provide more financial aid, and maintain modern research and teaching facilities. Doing so will also, hopefully, discourage further such narrowly targeted, counterproductive approaches.

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The above recommendations are offered as an integrated package. For example, it would not make sense to significantly increase the number of researchers if the funds are not made available to support their research. America’s future leadership in science, technology, and innovation will require both. Further, the committee is acutely aware of the budgetary constraints faced by the federal government and the trend toward growing deficits. Many of the committee’s recommendations will require additional funding. But the committee does not accept the notion that, for example, the recommended additional 0.1 percent of GDP cannot be allocated to the federally funded basic research that is so vital to the health, security, and overall well-being of Americans.

The issue at hand is principally one of priority.

U.S. citizens currently enjoy a GDP per capita that is nearly six times that of the average of all other citizens on the planet. This is substantially a consequence of American ingenuity and past investments in R&D, higher education, innovation, and related domains. The declining position of the United States in science and technology has not occurred overnight, nor has it been imposed upon the United States by others. It is not China that restrained the nation’s investment in R&D; that allows the continuing decay of our pre-K-12 education system; that reduced the number of foreign graduates from U.S. universities who can remain and work in America; or that disinvested in our public universities.

Decisions made, or not made, at this inflection point for America’s competitiveness will determine whether we, unlike all prior generations of Americans, leave to our children and grandchildren a lower standard of living and fewer opportunities than we ourselves enjoyed. Will today’s adult Americans one day be referred to as America’s “Most Selfish Generations,” treasuring consumption above investment?