US High-Tech Economy Slipping

In the wake of the Bush administration’s fiscal year 2006 budget proposal that left federal support for most basic research flat or declining, a coalition of industry, academic, and science groups has developed a broad set of benchmarks to persuade policymakers that US leadership in technological innovation is slipping.

The Task Force on the Future of American Innovation, formed last year to cast in economic terms the political discussion of federal funding of basic research, released benchmarks in mid-February with the hope of influencing this year’s science funding debate on Capitol Hill. “The object of this is to try to get policymakers in Congress to understand how the competitive world economy has changed,” said Doug Comer, director of legal affairs and technology policy for Intel Corp, an industry member of the task force. “The US government is falling behind in its commitment to basic physical sciences research, which is a critical part of our competitive future.”

Nils Hasselmo, president of the Association of American Universities, another task force member, said, “We have trend lines and they are disturbing as far as US leadership in research and innovation are concerned. We have downward trends in the participation of American citizens in science and technology while at the same time there is a dramatic increase in [S&T] competition from elsewhere. The handwriting is on the wall and in the statistics.”

Although the president’s basic research funding proposal was causing angst in the science community, Nobel physicist Burton Richter attributed science funding woes to both political parties. Speaking on behalf of the task force, Richter said, “What they [political leaders] are doing to the physical science budgets is bipartisan shortsightedness. It was no different under the Clinton administration than it is under the Bush administration, and we’ll suffer for it in the long run because the rest of the world is accelerating their R&D while we seem to be decelerating ours.”

The benchmarks include “signs of trouble” indicators for education, the US workforce, knowledge creation, R&D investment, and the high-tech economy. Several other benchmarks focus on specific high-tech research fields, including nanotechnology, information technology, energy, aerospace, and biotechnology. David Peyton, director of technology for the National Association of Manufacturers, called the benchmarks “the latest iteration of a process that’s been going on for a number of years, but this is the most comprehensive set of numbers and we’ve tried to be careful to present the state of the world in a snapshot and in trend lines.” They will be used, he said, to “work the hill” and to persuade policymakers in both Congress and the administration to provide stronger funding for basic science.

The benchmarks, created with data from a host of studies and reports, include the following findings:

Education

• ▸ Undergraduate science and engineering degrees are being awarded in the US at a lower rate than in other countries. The ratio of college undergraduate degrees in the natural sciences is only 5.7 per 100 college students in the US, while Finland, France, Ireland, Spain, Sweden, and the UK award between 8 and 13 degrees per 100 students. In Asia, Japan awards 8 per 100, and Taiwan and South Korea each award about 11 per 100.

• ▸ The US has a smaller share of the worldwide total of science and engineering doctoral degrees awarded each year than either Asia or Europe. In 2000, about 89 000 of the 114 000 doctoral degrees given in science and engineering were earned outside the US.

Workforce

• ▸ From 1994 to 1998, the number of Chinese, South Korean, and Taiwanese students who chose to pursue PhDs in their own countries nearly doubled. By contrast, over that same period, the number of students from those countries pursuing PhDs at US universities dropped 19%, from 4982 to 4029.

• ▸ Since 1980, the number of science and engineering positions in the US has grown at almost five times the rate of the US civilian workforce as a whole.

Knowledge creation

• ▸ The US share of science and engineering papers worldwide declined from 38% in 1988 to 31% in 2001. Europe and Asia are responsible for the bulk of the growth in scientific papers in recent years.

• ▸ From 1988 to 2001, the US increased its number of published science and engineering articles by only 13%, while Western Europe increased its article output by 59%, Japan by 67%, and East Asia by 492%. Though both Japan and East Asia started from a far smaller base in 1988 and still do not publish as many articles as the US, their dramatic growth rates are striking.

R&D investment

• ▸ From 1995 through 2001, China, South Korea, and Taiwan collectively increased their gross R&D investments by about 140%, while the US increased its by 34%.

• ▸ US federal funding of basic research in engineering and physical sciences has experienced little to no growth over the last 30 years. As a percentage of gross domestic product, funding for physical sciences has been in a 30-year decline.

High-technology economy

• ▸ From 1980 to 2001, the US share of worldwide high-tech exports fell from 31% to 18%. At the same time, the global share for China, South Korea, and other emerging Asian economies increased from 7% to 25%.

• ▸ During the 1990s, the US maintained a trade surplus for high-tech products even as the trade balance for other goods plummeted. But since 2001, even the trade balance for hightech goods has fallen into deficit.

The benchmarks note that even in nanotechnology, a heavily supported US research priority, Japan and China may have already surpassed the US. While the US is “supplying 25% of the global federal funding for nanotechnology,” the benchmarks say, “Japan makes certain that its national nanotechnology initiative meets or exceeds the funding levels approved in the US. The European community is doing the same.”

In energy research, the benchmarks state that the US significantly scaled back its fusion-energy science program in the mid-1990s, “essentially ceding scientific dominance in fusion research to Europe and Japan.” The US has fallen behind in traditional nuclear power as well. “Current expansion and growth prospects for nuclear power are centered in Asia,” the benchmarks say. “Twenty of the last 29 reactors to be connected to national grids are in the Far East and South Asia, and, of the 31 units under construction worldwide, 18 are located in India, Japan, South Korea, China, and Taiwan.” In the US, no nuclear power plants have been ordered since 1978.

Peyton said the benchmarks will be updated annually to keep the connection between basic research and economic growth in front of policymakers. Intel’s Comer said that clarifying that connection is critical. “The idea, of course, is to put more resources in the physical science research, but it goes beyond money,” he said. “The whole problem in Congress is the leaders often say, ‘We put all of this money into research and what good does it do?’”

The benchmarks, Comer said, “go to raising the level of consciousness and understanding on the part of members of Congress about the key connection between research and new ideas, new technology, new industries, and high-value jobs.”