Recovering Innovation, Innovating to Recover
Stimulus Plan Provides Critical Support for R&D
SOURCE: flickr/gregclarkephotography
The proposed American Recovery and Reinvestment Act recognizes that science, technology and innovation have long provided the foundation for America’s prosperity, and are crucial to boosting an economy in crisis.
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The American Recovery and Reinvestment Act of 2009 published this week by House Appropriations Budget Committee Chairman David Obey is of the scale and breadth necessary to begin to tackle the economic chaos that President-elect Barack Obama will inherit from President George Bush.
The Act addresses many of the critical areas that politicians and economists alike have been discussing in recent weeks. It makes investments in clean energy that will form a solid foundation upon which to build a 21st-century low-carbon economy. It addresses the creaking infrastructure needs that are slowing down U.S. business competitiveness. It helps those most hurt by the recession, invests in education, lowers health care costs, and provides necessary funds to save vital public services at the state level.
But as outlined in the Center for American Progress report, “A National Innovation Agenda,” the Act also recognizes the importance of science, technology and innovation, which “have long provided the foundation for America’s prosperity.”
A key part of this agenda is ensuring that the United States has the innovation infrastructure necessary for it to compete on the global stage.
Getting the economy back on track is not enough unless the recovery is sustained and living standards once again rise in line with economic growth and increases in productivity. The steps necessary to achieve this were set out in the CAP report, “Progressive Growth.” A key part of this agenda is ensuring that the United States has the innovation infrastructure necessary for it to compete on the global stage. Although the United States remains the world’s most innovative economy, other countries particularly in East Asia are quickly catching up. Underinvestment in recent years has precipitated this decline.
To address this, the Recovery Act announced several critical investments, including $6 billion for broadband and wireless services, $20 billion for health information technology, $1 billion for technology improvements for a more efficient and secure government, $1 billion for education technology, and $11.7 billion for scientific research.
The stimulus proposal also includes significant funds supporting research and development efforts across the physical, environmental, and life sciences. Despite a modest supplemental boost in June, assistance here comes at a time when total budgetary authority for R&D has been dropping in real dollars; adjusted for inflation, it declined 1.9 percent overall in fiscal year 2007-2008. In biomedical research, the situation is more severe. Continuous flat funding for the National Institutes of Health has dropped its inflation-adjusted research budget to a level 13 percent lower than where it was five years ago.
The Recovery Act would allot $2 billion for NIH, the amount CAP Senior Fellow Rick Weiss recommended last October. This funding can support researchers who are working on cures for a healthier country. It can potentially help the younger generation of scientists who have been squeezed out of the NIH funding process because of the tightening budgets. Some 80 percent of grant requests go unfunded at the agency, and the competitive process favors established researchers—the average age of a scientist winning his or her first NIH grant is 42 years.
Additional funding through the National Science Foundation—$3 billion—will expand opportunities for scientists working on America’s energy and health challenges, while investing in research for the future.
But just as grantmaking agencies can create and sustain good jobs with additional funding, they also have to maintain the facilities where scientists work. Just like the highway system, much of our country’s research infrastructure needs upgrading. Chairman Obey’s bill includes construction funds to renovate existing facilities at universities and institutes and build new ones: $400 million for the National Science Foundation, $1.5 billion for NIH, $462 million for the Centers for Disease Control and Prevention, $300 million for the National Institutes of Standards and Technology, and $50 million to repair hurricane-damaged NASA facilities.
Support for basic research in the physical sciences will help maintain U.S. competitiveness in the field. While the Large Hadron Collider at CERN in Switzerland may have blown a gasket before going into operation last September, it nonetheless pulled the gravitational center of particle research away from the United States. The Recovery Act provides $1.9 billion for basic research through the Department of Energy, along with $400 million for the Advanced Research Projects Agency-Energy, which pursues potentially transformative high-risk, high return work—a critical approach that has fallen, all too often, out of federal funding favor.
As a complement to the $73 billion the stimulus package proposes for clean energy projects, the Act provides for Earth sciences research to better understand the state of our planet. This includes $400 million for NASA Earth scientists and $600 million for National Oceanic and Atmospheric Administration satellite equipment and climate modeling, which will be crucial for global warming mitigation and adaptation policy.
To help translate discoveries from lab to market, there are also funds that can support regional technology-based economic development: $100 million for NIST labs to coordinate manufacturing standards, and another $100 million for the Technology Innovation Program and the Manufacturing Extension Partnership.
As Science Progress contributors explain in several recent features on regional centers of innovation, developing prosperous regional innovation clusters yields dividends to the domestic and world economies—whether it be information technology or life-saving medical advances. Regional centers also benefit local communities by attracting a talented and high-paid workforce, cultural organizations, and start-up businesses that generate tax revenue and support the cycle of growth—all key stepping stones on the path to economic recovery.
Will Straw is the Associate Director for Economic Growth at the Center for American Progress. Andrew Plemmons Pratt is the Assistant Editor for Science Progress.
Comments on this article
Long ago, the Soviet decided to catch up with the West and started Science City (Novosibirsk) – it was a huge waste of money and was part of the fall of the Soviet.
Can you train innovators? How can you teach what, by definition, is not known!
I am very, vary, impressed by your “out reach” efforts.
Whether you read or use parts from whatever is written is not as important as the personal feeling that
at least we tried to respond and participate.
Of course, you cannot read everything and certainly you cannot agree will all the pro and con statements you get
but I thank you for your efforts at advancing the degree of participation, see? It is not thankless effort, I thank you.
There is one issue where I think you missed the mark:
“Building Innovation Centers” is like building Temples to the God of Staffing.
If it was a good idea, why is it that only the Soviet tried it?
Personally, many innovators claim that it was the “challenge” that motivated them.
Edison, some say, was his persitance until he found the metal needed. No great analysis, just a great amount of work.
Could DoD ever produce a Microsoft or Intel Companies? I do not think so.
NACA/NASA is, by far, the most technically innovative organization and, you can get great testimonials for them, form each and all the Airplane Companies -even foreign.
But, it never tried to build a bomber or a passenger plane.
The atomic development efforts are not cost-effective, at all.
Look at the way USAF used the “Skunk Works”, well, you look at it, it is all classified, except it was run by Lockheed, probably in cost-plus basis. This is not a practical example of developing commercial products.
But, there is a model used by DARPA and X-Prize, very effectively, to develop new innovations at a very low cost.
Their approach was to provide incentives by using contests and cash prices..
The X-Prize has its goal to deliver cargo in orbit at a tenth, or less, the prize of NASA. They will soon go to the Next Step, not the final but the next.
To my knowledge, the cash reward to the winner is provided from private funds. One major contributor was a co-founder of Microsoft.
Another example is the Google efforts to send something to the moon.
Google is paying for a medium altitude satellite network to bring the Internet to the rest of the world,
to the other 3 Billion people, it is called O3B.
If the idea is good, smart business people do not wait.
Another example,
INTEL is building a network that will bring the Internet to people without land telephone lines using WiiFi
technology that has been around for 2 or 3 years and few have used it. It will revolutionize teaching, health care, etc.
So you have the failure of Novosibirsk and the success of X-Prize and DARPA.
I find it hard to believe that you have decided to follow the Soviet failure.
Remember, the Soviet had other failures, too long to list.
There is another failure worth paying attention: The Space Shuttle.
Its original goal was to REDUCE the cost of payload, per pound, in orbit by a factor of 100.
The final result produced an INCREASE on the cost of payload by a factor of 100, or much more (1000?).
NASA wisely dropped this dollar measure long ago.
No amount of money is too much for the first photo of the earth, from the moon. Or, the photo of the Brazilian rainforest, with 2,000 forest fires visible from orbit.
The historical evidence is that contests to deal with new problems are cost-effective.
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A practical way to put a lot of people to work within a couple of months:
Issue Coupons redeemable to pay part of the cost of a car. You may want to use an scale to give more rewards to Electric Plug-In cars.
Also, you may want to assign a substantial payment for cars with high fuel efficiency, etc.
Support for hybrids and, even, natural gas, and whatever else, would get much support now and benefits later. You already probably have the analysts that can provide the numbers.
If the results exceed your expectations, you can expand the Coupons to buy other products.
The initial test could be for 100,000 coupons and you would want to know how fast they are redeemed.
Verified and redeemed, there are too many out to make a quick buck by buying with coupon and selling in the market.
An announcement that only a limited number of coupons would be available, say 3 million, would help expedite sales and production and keep foreign carmakers unruffled.
Also, there is no reason to omit another coupon issue for trucks, vans, trolleys, busses, etc.
And another for equipment for hospitals, transit, construction, etc., etc.
This was the original concept of “PUMP PRIMING”, enough coupons to promote early production, with an small amount of funds (water) and
smart economists to determine future steps and even optimize the cash amount and coupon number.
The final goal is to stop giving, after full and proper verification, more coupons.
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I find it hard to speak out against Innovation centers but
perhaps you might wonder how would Beethoven, Einstein and Von Braun, in modern American clothes, fit into your plans.
I spent all my life involved in innovation.
In my opinion, the computer power is growing far faster than the software that could allow them do other jobs.
Computer technology is underutilized.
But, can you imagine an innovation center for the production of new software, that is not in competition with a dozen commercial companies, like IBM?
(my nephew does that for them).
Einstein produced most of his work while working for the Berlin post office.
Some say he produced almost nothing in his last 45 years.
Are you willing to fire somebody because they have not invented anything for five years?
Could you get anyone that thinks themselves qualified to join under such conditions.
My guess is that it is possible that what killed Novosibirsk was the high costs and little benefits.
January 19th, 2009 at 10:10 pmRemember, many inventors produced only one thing worth remembering in their entire life.
The idea that one can plan on developing what does not exist is, at least, illogical.
Do reconsider. Great innovators were great at reconsidering and improving projects, over and over.
Good Luck!
You ARE doing a terrific job!
One trusts that the new, intelligent U.S. administration will forego the holocaustic use of animals in scientific experiments: one only needs to learn about the Safer Medicines campaign to realize that we are presently wasting too many precious health care dollars and both human and animal lives
January 22nd, 2009 at 2:44 amPUBLICATION VS PRACTICAL INNOVATION
I applaud the intent of measures like the America Competes Act and the Bill discussed above. However I want to call to your attention to longstanding problems with the “linear theory of basic research” that was embedded in the NSF Act of 1950 and continues to have influence in the above legislation. The linear theory assumed that basic research would spawn useful spinoff innovation and other benefits to society.
However, as summarized with considerable documentation in Chapter 2 of my book, due for release this month,(www.springer.com/economics/environmental/book/978-0-387-75876-3) investment in basic research has yielded consistently disappointing practical results over the years. Exceptions occur primarily in medical and pharmaceutical research. It also had other insidious damaging effects.
competitive awards for discretionary research, supported by federal dollars, conveyed prestige. Combined with other external support for growth, a system of largely self-contained and peer-controlled research was nurtured in U.S. academic institutions. Voluminous research publication was directed into peer-reviewed specialty journals and books that served increasingly fragmented subdisciplines.
A corollary effect of conferring the highest status to basic research was that applied research and development acquired second-class status – something of a stigma. Much of the nation’s best science talent became recruited into the ivory tower, where it remained largely isolated from the practical life of the nation (even if the subject of research was related to national needs)
The problem has long been known. It was described with often caustic humor in many articles and two books over decades by the distinguished science policy editor for Science Magazine, Daniel S. Greenberg. However, because of its sensitivity with respect to academic funding, the problem, if mentioned, tended to be couched in academese.
If you’re not familiar with this issue, I can offer a striking illustration of the problem. Since the 1960s the U.S. has maintained significant dominance of basic over applied research investment, along with increasing total outlays with time. During the same time period it has suffered disproportionate loss of industrial capacity and productivity, including many of the industries that it created or pioneered in.
In contrast, Japan chose the opposite research policy, funding almost only applied research until recently. Yet, from a GDP per capita a quarter of that of the U.S in 1964, by 1986 Japan actually passed the U.S. in GDP per capita. Thereafter, it fell back owing to its massive banking problems for more than a decade.
In short, the U.S. has enormous output of paper productivity, planning efforts, endless hype in magazines and various formal documents. Google Scholar lists 35,000 conferences with the theme of GLOBAL WARMING but with with little technological action to show. Last February the DOE abamdoned our sole demonstration project for CSS, Futuregen, after six years of research, talk, and hype. we In contrast, with very little talk the Canadians implemented the world’s largest carbon sequestration project in two years – taking CO2 from a coal gasification project in Wyoming. The Canadian government provided no direct initial research subsidies. no initial direct government outlays.
Cordial regards, Frank
January 23rd, 2009 at 1:51 amCertainly investments in technology and various sources of innovation have been a key driver in our economic developent since WWII. The huge invetments made in the defense areas in the 50’s, 60’s and 70’s drove our innovations engines in those years and during the 80’s and 90’s. Digital communications, satellites, information technology and the Internet are only some of the examples of the innovations that have helped grow our economy during those years. Unfortunately, as it is well known, the R&D spigot dried up some since the 80’s, with defense R&D leaning to development of near term needs. Industrial R&D, which also helped lead our innovations during those years also dried up some, with most of the dollars diverted to applied development, for structural and financxial reasons in our industrial economic structures. As a result we’ve lost some of our leadershoip positions in various areas to the rest of the world, and in those we have not the innovations have tended to dry up.
One example is our lack of leadership in broadband communications, including wireless. Market pressures have led the US industry to be very short term focused, and fall behind the EU and some Asian countries in broadband penetration and advanced wireless services. There are other examples.
A program to improve that situation such as the broaband initiative in the recovery plan is of value, if implemented right. Other technology related investments will also be useful, such as additional funding for researchers and the NSF.
But there’s more that’s needed. It is the transition from science to technology and applications that detemrines whether soemthing has value. Pilot programs in various areas can be a great way to do this, as well as the creation of various S&T initiatives to help industry make those leaps by demonstrating the viability of soem of those technologies and setting some of the infrastructure in place. Incentives to industry with higher R&D tax incentives can also help, if those are structured to incentivize R&D beyond that currentlt done, ie, not to serve to finance existing R&D but new.
There was an article or editorial in the Washington Post a few days ago arguing that what is needed is more engineering, that science is not the way to develop the technoloy and applications. On Sunday Febr. 1 there were two letters to the editors, basically saying that it is the combination of science and engineering that does the trick. It is in fact well known in the S&T and R&D world that both are needed, and that scince withoiut engineering leads to laboratory curiosities that go nowhere, or are exploited by a competitor, and that engineering without science quickly dries up. The US has been generous in the past in funding basic research, with applied research and development only funded for defense purposes.
It is time to fund on the basis of what the S&T management community and practitioners knows works: a hybrid model that funds research and some early development, pre-competitive, that develops the S&T, and is completed through demonstrates in pilot programs the viability of the technology. There are many ways to do this. One way is a commerical ARPA. DARPA in DOD has been a great model and incubator for innovative defense technolgies (and by the way the creator of the Internet). This, and other approaches for S&T investments is needed to stimulate the new innovation process.
This is not to say that industry should not be incentivized to invest as well. But their models for R&D have suffered in the last 30 plus years due to the very short term financial focus of the markets. Patient investment can help, and Gov’t programs or incentives, or subsidies, in certain areas of S&T, can make a difference.
One way is to invest or incentivize in some major areas in S&T, such as those related to renewable energy and energy efficient transportation transportation as the administration will do. Broadband is also a good place, to establish faster pipes for our information-based economy. There are other areas, and possibly a Commerce-led agency charged with medium to long term innovations invetments, along with a commercial ARPA, can be a way for the Gov’t to identify and fund promising areas for innovation.
February 2nd, 2009 at 3:15 am