Reverse America's R&D Slide
The case for increased public spending on basic research has never been stronger. Since the onset of the pandemic, the demand for innovation in vaccine development, semi-conductor technologies to ease shortages, power storage to support various forms of renewable energy, and cyber networking capable of defending against digital attacks are among the numerous examples that have underscored the need for the US to return to being the uncontested leader in science and technology. Increased investment is made all the more urgent if we are going to successfully meet the challenges of a post-pandemic economy.
Other countries, particularly China, are making leaps to catch up. Though the U.S. has steadily increased its total R&D spending over time, its global share of R&D expenditure has fallen significantly. Left unchecked, that deterioration will inevitably lead to a corresponding economic decline. We need to reinvest now, smartly and decisively, to ensure our economic future.
American technological leadership is in jeopardy also because the composition of US R&D has shifted. We have let the federal government’s traditional role diminish. Government or public funding of R&D has decreased, and business investment in R&D has become more important. The government’s role is principally to fund basic, or foundational, research — the type that seeds scientific breakthroughs like the internet, mRNA vaccines, the Google search engine, and the Human Genome Project. Yet its contribution to basic research has been declining steadily since 1980. The responsibility of increasing the country’s stock of available scientific knowledge has increasingly shifted away from the federal government and toward business.
Companies favor research focused on enhancing or commercializing existing technologies, more so than discovering new ones. They seek safer, product-centric investments with shorter-term returns, while the government can make bolder, riskier investments that deliver breakthroughs in general purpose science and technologies that, in turn, can spur innovation-driven economic growth across multiple sectors.
Government spending on basic research and development peaked in 1964 at 1.9 percent of gross domestic product before steadily sinking, reaching a low of 0.6 percent of GDP in 2016. And while our government is spending proportionately less on R&D, foreign competitors have grasped its 21st century importance and stepped it up. The US share of global R&D spending has dropped consistently for this entire century. If current rates hold, China will inevitably eclipse it. That country has made epic-scale investments to hasten technological progress.
The results of R&D-neglect are stark. This year, the US slid out of the top 10 most innovative countries — a dizzying fall from number one, when the Bloomberg rankings debuted eight short years ago. Educational underachievement in the STEM sector has partially driven this decline. US students rank 18th in math and 37th in science among 78 industrialized nations, according to international assessments. Failing to invest in STEM education and hands-on learning risks leaving today’s youth further behind their international peers, jeopardizing the economic prosperity of future generations.
We must reverse this slide before we really start to feel its effects. There are three ways we can restore ourselves as the world’s premier scientific country.
First, we need to get back to basics. The US must renew its traditional investment in basic research, but, given our fiscal problems, cannot indiscriminately spend. Policymakers should carefully consider basic research proposals across a broad range of disciplines with the potential to ensure national security and public health while enhancing economic resilience and competitiveness. Sectors such as semiconductors, biotech, power storage, artificial intelligence, quantum computing, and advanced cyber networking will be the foundational areas of the next generation of technology.
We also have to leverage what’s worked. Public-private partnerships are at the heart of the US innovative ecosystem. Policymakers should develop a long-term roadmap for American innovation and technological leadership which takes full advantage of that tradition. They must collaborate with industry, universities, and nonprofits to prioritize research areas and to strategically disperse R&D investments across US geographies and populations.
Finally, we must grow the STEM workforce. Policymakers must solidify wide, inclusive pathways into the STEM workforce by focusing education on the requisite skills and increasing access to employee-connected internships and apprenticeships. Building STEM skills starting in K-12, increasing exposure to applied technologies, and offering stackable credentials that can build toward higher degrees are the first steps in developing the next generation of American entrepreneurs, inventors, and researchers.
Cultivating the STEM workforce also means promoting immigration policies that capitalize on the knowledge and skilled capacity of immigrants. While immigrants are roughly 10 percent of the US population, they account for almost a quarter of total patents produced.
US competitiveness is at stake. Now is the time to invest in our future.
Peter Altabef is Chair and Chief Executive Officer of Unisys. Reece Kurtenbach is President, Chairman and Chief Executive Officer of Daktronics. The authors are Trustees of the Committee for Economic Development of the Conference Board and co-chair its Technology & Innovation Committee.
