R&D: Two Letters America Can't Afford to Skimp on Research-and-Development Investment Is Crucial to Competitiveness

Article excerpt

AS a budget-minded Congress sets priorities, bent upon cutting nonessential programs and closing tax loopholes, various scientific groups are voicing legitimate concern about preserving the nation's competitive research-and-development (R&D) base. The latest example: The American Association for the Advancement of Science recently warned of the harmful long-term effects of reduced federal financing of nonmilitary scientific research.

To be sure, the importance of R&D to America's fundamental economic growth encompasses both the public and private sectors. This nation's "Top 8" research-based industries, for instance, pay for 70 percent of all industrial R&D conducted in the United States and provide an annual net trade surplus of more than $50 billion. These high-tech industries, along with federal and university laboratories, are vital mainstays for this country's global competitiveness, quality jobs, good wages, balance of trade, and standard of living.

The Institute for the Future's just-released study on the health of this nation's R&D community should give everyone serious pause. "The Future of America's Research-Intensive Industries" - which examined the top eight US research-based sectors as well as government's role in basic research - concludes that US economic leadership and millions of jobs are in jeopardy. The reason is that our companies and our government no longer can invest in R&D as they once did.

The cycle of innovation

The report ominously concludes that our rate of R&D investment has significantly declined in recent years, from 3 percent of gross domestic product to 2.6 percent. This is a decline of $25 billion in real dollars. And it threatens the future of America's growth.

Research is being undervalued at a time when it is needed most. If the cycle of innovation stalls, the United States will face new risks.

The importance of R&D to fundamental economic growth cannot be overemphasized. America's research-intensive industries employ 5.2 million people, pay $244.6 billion in compensation, add $418.9 billion to the national GDP, and produce $866.2 billion of total industry output.

Research and development has affected all Americans in multiple ways. Thanks to defense R&D, we won the cold war. Thanks to chemical R&D, the "green revolution" has dramatically increased the amount of food we produce and export. Thanks to computer R&D, we're leading the world in the information age.

In short, our global economic leadership, standard of living, and the "American way of life" - envied and emulated throughout the world - are the fruits of the commitment made to and the investment in science and technical R&D by our country decades ago.

But the inevitability of this kind of success continuing into the future is being sharply questioned. …