By Norm Augustine, American Security Project
Norm Augustine
America is in grave danger of losing its edge. For over one hundred years, American leadership in science, technology, engineering, and manufacturing has been unrivaled. It has created for us not only one of the highest standards of living any civilization has ever achieved, but also brought American preeminence in the world and a strong national defense.
Now, unfortunately, this is all at risk due to the lack of long-term planning, little political will, and slowing investment in science and engineering research.
Every business leader knows that prosperity tomorrow requires investment today. This is true whether the economy is in a period of boom or bust. The United States will not simply “grow” its way out of economic malaise. We need a rebirth of innovation: new products, new ways of doing things, new scientific achievements.
Let’s looks at the facts about research and development (R&D). As a percentage of GDP, the U.S. ranks eighth, behind countries such as Japan, South Korea, and even Iceland. In one of the most important areas—energy—in 2010 the Department of Energy invested just $2.27 billion on applied R&D, or just slightly more than 1/100th of one percent of GDP. As a point of comparison, that’s nearly $1 billion less than the amount ($3.1 billion) we’ll spend in 2011 providing a tax benefit for employee parking.
R&D is not the only area where we are falling behind. Over the past two decades there has been an 18% decline in the number of students graduating with bachelor degrees in engineering, math, physics, and geosciences in the United States.
In 1986, the U.S. had 52% of the global doctorates in science and engineering. By 2003, that number dropped to a staggering 22%. The U.S. ranks 17th among developed nations in the proportion of college students receiving degrees in science or engineering. It was 3rd just three decades ago.
To give a real-time example of why this matters, in the fourth quarter of 2010, 20% of our trade deficit was created by advanced technology, making it the largest deficit contributor. In that year, the advanced technology trade deficit worsened by $82 billion.
While our investment in our future falls, other nations have learned from the American way, and drastically increased their R&D.
China is investing in science, engineering, manufacturing, energy and transportation. China plans to spend $1.5 trillion in seven strategic sectors, including alternative energy, alternative fuel cars, and high-end equipment manufacturing (including high-speed rail and aviation). It now dominates the U.S. in the manufacture of clean energy technologies. China has leaped over its global competitors, both in the United States and in Europe, in the making of wind turbines and solar panels.
China invested $34.6 billion in clean energy in 2009; in the U.S. it was just $18.6 billion. Why do we wonder why China’s economy is growing so fast?
Fortunately, this isn’t how the story has to end. America can control its own destiny. But to do so, we must increase our investment – both public and private – in R&D.
America has done this before. It put a man on the moon within a decade of the challenge to do so, it built the atomic bomb to help win the Second World War, and it built a waterway to connect the Atlantic and Pacific oceans. New investment should be centered on our transportation networks and next-generation energy technology.
Today, scientists are working on fusion power in many nations. Fusion power would be a safe, affordable, clean, and sustainable energy.
Many scientists believe that an investment of $35 billion over 10 years would build two pilot plants to move forward with commercialization of fusion power over the next 30 years.
Other nations – China and South Korea – are eager to win the race for commercialization of fusion. If we don’t set a national priority ourselves, we are in danger of losing this race, too. If we recommit ourselves to science, technology, engineering, and manufacturing, we will lay the foundations to future growth and a secure American future. The alternative is not pleasant to contemplate.
American Security Project
Americansecurityproject.org
Norm Augustine is a board member of the American Security Project. He was chairman of the Council of the National Academy of Engineering, president and chairman of the Association of the United States Army, chairman of the Aerospace Industries Association, and chairman of the Defense Science Board.
Filed Under: News, Policy, Turbines
While I appreciate Mr. Augustine’s concerns regarding the United States maintaining its historical leadership in technical innovation, I would disagree in how to go about maintaining it. I have read a copy of Mr. Augustine’s classic book “Augustine’s Laws”, and think highly of it. But in this article, Mr. Augustine uses the metric of domestic R&D spending versus domestic GDP as a measure of a country’s technical innovation efforts. He also proposes that the Chinese government’s much greater R&D spending versus that of the US will result in China leaping ahead of the US in technological innovation.
I would argue that neither of these propositions is true. Primarily because they fail to account for return on investment, and they fail to appreciate the primary reason the US became a leader in technological innovation. The Chinese government can continue to spend $trillions each year buying technology, but that won’t create an indigenous culture that fosters innovation. The US economic system naturally fostered innovation because it allowed the innovators to easily raise capital to develop their ideas, and then to prosper financially from their commercial success. Without the individual profit motive, true innovation will stagnate. And the current economic climate in China, with its political cronyism and rife corruption, provides no incentive for the individual to innovate.
Government handouts of taxpayer money to private businesses is no magic bullet either. The return on investment for this type of spending has a very poor track record. The $500M Solyndra debacle is a typical example. Or a typical example that Mr. Augustine should be familiar with, is that of a any DOD aircraft program. Consider the waste of the canceled $1B Comanche helicopter, or the $3B wasted on the back-up JSF engine.
In order for taxpayer R&D dollars to get the best return, all federal research funds should be given out on a competitive basis. That is the government would issue a financial payout to the first company that could produce and demonstrate a device that meets certain published performance requirements.
China can continue to pour money into various technologies. But until the Chinese economic system provides a more attractive profit motive than that of the US, it will never foster any true domestic technological innovation. Unfortunately, that doesn’t mean the US will maintain its edge. If the US government continues on its present course of transferring wealth from producers, risk takers, hard workers and innovators, to those demanding entitlements, the US culture of innovation will quickly evaporate.