How To Fix America: A Massive R&D Effort

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WASHINGTON – Fareed Zakaria wrote a thought provoking cover story essay in TIME magazine, (“How to Restore the American Dream”, November 1, 2010). His analysis of debt laden America devoting less and less investment to future innovation, if unfortunately depressing, is vividly accurate. US politics are shaped now by a bad mix of left and right populism that invites posturing and grandstanding on issues, this way penalizing focus on serious business.

America: not taking care of business

Indeed, America’s leadership, still inordinately obsessed with gay marriage, creationism v. evolution in text books, or sex education in public schools, or generalizations about “taxing the rich”, or “too much Government”, shows lack of focus and adequate concern for public polices that would nurture the fundamentals, the true underpinnings of current and future prosperity.

These fundamentals include the need to massively re-engage and invest in basic research; the need to make public school teaching a truly challenging and rewarding profession, so that can get better prepared graduates; the need to implement policies aimed at encouraging enterprise, including encouraging brand new Ph.D. graduates from Asia to stay in America and start a business, instead of kicking them out because of outmoded immigration restrictions. If America does not take care of these fundamentals –investments in leading technologies, good education, new enterprises– it is hard to understand what we will basing future wealth generation and therefore prosperity on.

Government role in basic research

In his essay as well as in a companion segment of his CNN show GPS, Zakaria and his guests, (representing a good sample of current  and former global business leaders), reaffirmed what we should already know but somehow forgot. With all the unquestioned national rhetoric on “private sector led development”, here in the US we leave out the enormous contributions made by Federal Government spending in basic science and in a variety of (mostly military) technologies. Without this huge Government spending over many decades for anything like aviation and space technologies, supercomputers, information technologies and more recently all sorts of advanced electronics now constituting the core of all new weapon systems, we would not have had the industrial spinoffs that led to America’s world leadership in many leading technologies in the 1970s, 1980s and 1990s. Think of jet engines, global satellite positioning systems, silicon, and last but not least the internet and all the incredible transformations that it enabled in almost anything we do and the way we organize and conduct all businesses.

The Cold War pushed military related R&D

Much of this spending in defense and defense related sectors, at least at the beginning, was spurred by the Cold War and the attendant national security policies aimed at retaining a technological lead over the then Soviet Union. With the Cold War over in the early 1990s, we also had a significant reduction of Government investments in the basic, open ended research that private industry has a much greater difficulty in supporting by itself.

Government spending fostered innovation

It is clear in hindsight that defense related work pushed the US into new sectors, while it bred many of the great minds working at the National Laboratories and at the eminent science faculties of the most prestigious institutions. These engaged scientists in turn mixed with their counterparts in academia and industry. This innovation friendly “ecosystem” and the ensuing, constant interactions and cross pollinations among smart people who had adequate funds to conduct their research and push the envelope of knowledge is in large measure at the source of America’s ability to be and stay at the forefront of  innovation.

Now Government spends less, while we are facing competition from Asia

Well, notes Zakaria, this was then. But now we are no longer making those huge investments, while well funded scientific endeavors have spread to heretofore unimaginable places. Once sleepy backwaters like India or China, (itself at some point semi-destroyed by the lunacy of the Cultural Revolution), are now very active players, making their own large investments, putting to good use newly produced wealth deriving from their recent massive industrialization. So, the field is more crowded, featuring now eager, dynamic new entrants.

But America has somehow retrenched. Not entirely, but to a noticeable degree. Overtime some rebalancing was unavoidable. The spreading of progress means that others now have the basic know how and the funds to do their own experimentations. They are catching up. But precisely because the field has become more crowded and more competitive, it is time for America to redouble its focus on high value innovation, our only chance really, to stay ahead and maintain a lead in at least some key technological sectors.

If we do not do more, we shall fall behind

The motivation now is not about winning a global contest with a defunct Soviet Union, but it is about retaining or regaining competitiveness in order to maintain a healthy economy, a high standard of living, and in order to continue to be a regarded as “the magnet” that can attract the best and the brightest. Finally, it is about generating the extra resources that will allow America to play a positive leadership role in the world.

A national sales tax to fund R&D

Zakaria makes one key, concrete proposal that should be taken as the opening salvo in a serious national debate about innovation policies. He put forward the idea of a national sales tax, (about 5%), whose proceeds would go exclusively to fund basic research. If a strapped and much indebted Government cannot squeeze more money for R&D from general revenue, then let’s create an ad hoc national fund aimed at acquiring the additional resources to increase the federal funds to be devoted to new scientific endeavors.

Another pork barrel project?

Of course, it is easy to shoot this idea down, claiming that we, (along with the Tea Party), want to give less and not more money to Washington, given Government’s questionable record as a steward of tax payers funds. Creating another pot of gold may indeed become an irresistible temptation for politicians who will somehow “discover” that all the really worthy new scientific research has to take place in their districts or states, take your pick. Given the dreadful Washington track record that easily transforms public money into another pork barrel project, this concern about misuse of funds and squandered resources should not be taken lightly.

If you do not like this, come up with something better

Still, if we shoot this proposal down, then what? America needs to redouble its efforts in basic science and technology. We are not investing as much as we used to. We are falling behind. If we do not like Fareed Zakaria’s idea, we better come up with a workable alternative, and we better do it fast. Progress these days occurs at lightning speed. Time works against us. Once we have missed the boat on renewable energy, other green technologies, or supercomputing (China just clocked a big one, with the new world record in computing speed), it will be very hard to catch up.

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