Global Tour of Innovation Policy
The Post-Scientific Society
Although science and technology will continue to play a vital role in innovation, the critical ingredients for continued U.S. economic success are likely to come from other disciplines.
The United States is blessed with an extraordinarily successful system for the generation and application of innovation, as evidenced by its world leadership over the past half century or more in developing and putting to use new technologies for commercial, civilian, and national security purposes. Firms in the United States have mastered wave after wave of new technologies, from aerospace and electronics to pharmaceuticals and nanotechnology. These fields of endeavor have been built on strong foundations of new knowledge and understanding of the physical, mathematical, and biological sciences and of engineering. They have benefited from the establishment over time of a highly supportive national innovation system (NIS). The combination of mastery of the scientific and engineering foundations and the smooth functioning of its NIS has enabled the United States to move effectively in little more than a century from an agricultural, to an industrial, to a postindustrial society.
As the 21st century has unfolded, however, radical new challenges and opportunities suggest that the United States is on the threshold of a new era in the development of advanced societies. I call this new era the “post-scientific society.”
A post-scientific society will have several key characteristics, the most important of which is that innovation leading to wealth generation and productivity growth will be based principally not on world leadership in fundamental research in the natural sciences and engineering, but on world-leading mastery of the creative powers of, and the basic sciences of, individual human beings, their societies, and their cultures.
Just as the post-industrial society continues to require the products of agriculture and manufacturing for its effective functioning, so too will the post-scientific society continue to require the results of advanced scientific and engineering research. Nevertheless, the leading edge of innovation in the post-scientific society, whether for business, industrial, consumer, or public purposes, will move from the workshop, the laboratory, and the office to the studio, the think tank, the atelier, and cyberspace.
There are growing indications that new innovation-based wealth in the United States is arising from something other than organized research in science and engineering. Companies based on radical innovations, exemplified by network firms such as Google, YouTube, eBay, and Yahoo, create billions in new wealth with only modest contributions from industrial research as it has traditionally been understood. Huge and successful firms like Wal-Mart, FedEx, Dell, Amazon.com, and Cisco have grown to be among the largest in the world, not as much by mastering the intricacies of physics, chemistry, or molecular biology as by structuring human work and organizational practices in radical new ways. The new ideas and concepts that support these post-scientific society companies are every bit as subtle and important as the fundamental natural science and engineering research findings that supported the growth of firms such as General Motors, DuPont, and General Electric in the past half century. But innovation in these two generations of firms is fundamentally different.
The emergence of the post-scientific society poses a fresh round of challenges to the U.S. NIS. The existing NIS, and it really is a “system” in the strongest sense of that word, has enormous momentum. Some of its elements, such as the great public and private universities, large industrial research laboratories, and federal R&D agencies, dominate the discussion of innovation policy. This is well illustrated by the current strong consensus of these kinds of institutions in support of the recently passed America COMPETES Act and of its antecedents, the National Academies’ Rising Above the Gathering Storm report, the Innovate America report of the Council on Competitiveness, and President Bush’s American Competitiveness Initiative. The focus of the COMPETES Act is authorization of additional federal spending for education in math, science, and engineering, as well as for R&D, especially in the physical sciences and engineering.
The concept of the NIS has been developed and widely popularized by Columbia University’s Richard Nelson, Stanford University’s Nathan Rosenberg, and others. According to Nelson and Rosenberg, an NIS is the set of institutions whose interactions determine the innovative performance of national firms. Although the boundaries of an NIS are not sharp, it has generally been understood to include, among others, the institutions and organizations that finance and perform R&D; that finance investments in technology-based start-ups and new ventures; that attend to the management of the undesirable consequences of new technology, including the establishment and enforcement of standards; a regime of intellectual property rights creation and enforcement; tax and investment policies; and the institutions for the education and training of the scientific and technical work force at all levels.
The task of innovation policy is to ensure that the nation has a coherent, well-managed, and well-funded set of private and public institutions that function well as an NIS. The NIS idea does not provide a cookbook that nations can use to create such a system. Each nation seeks its own best recipe that fits its blend of governance principles, culture, and place in the world. Within nations, there is continual experimentation with the design and elements of an NIS. Policies, programs, practices, priorities, funding, and other aspects change as national goals and challenges change, as experience is gathered, and as new ideas are tested and then incorporated in national systems based on the benchmarking of best practices around the world.
The scientific society
Denoting the emerging new era as the post-scientific society suggests, of course, that the United States is moving ahead from a prior scientific society. I believe that a convincing case can be made that in the second half of the 20th century, the United States became a scientific society.
The United States emerged as a world industrial power in the late 19th and early 20th centuries, largely owing to the inspired work of practical people. Although the United States had pockets of scientific research and expertise in certain fields and sectors, the large manufacturing corporations that were at the center of growing U.S. wealth were based on practical inventions, on technologies borrowed from European companies, and on improvements made on the factory floor through trial and error.
During this early period, a small number of large corporations, such as AT&T, General Electric, DuPont, and General Motors, set up formal R&D departments, inspired by Thomas Edison’s “invention factory” at Menlo Park, New Jersey, established in 1876. However, such laboratories were not common, and U.S. universities produced very few graduates with advanced degrees in the natural sciences and even fewer in engineering.
U.S. experience in mobilizing scientific and technological resources to aid in waging World War II was a watershed in the commitment of federal funds to build laboratories and to support fundamental R&D of technologies for public purposes. Government funds for R&D grew by roughly a factor of 20 from 1940 to 1951. Giant federal laboratories were established, the R&D contract was invented, and government money flowed freely for the first time to support research in U.S. colleges and universities.
As the war wound down, a panel of advisors to the president, chaired by Vannevar Bush, issued the report Science—the Endless Frontier, which advocated sustaining federal support for research at universities and government laboratories after the war to address military, medical, and general needs of society. Central to the vision articulated in the Bush report was a key lesson drawn from the mobilization experience: Generous public support of fundamental research in the sciences yields enormous benefits to the nation. On this idea, the United States built, not without controversy and struggle, several of the major public elements of the current NIS.
The Bush report also set the stage for a radical increase in corporate investment in scientific R&D intended to support innovation in technologies for the commercial marketplace. In the two decades after the war, nearly every large corporation and many smaller ones built laboratories on the Bush model, often locating them far away from centers of manufacturing, operations, and sales. Many were designed to look like university campuses and were placed in suitably bucolic settings, staffed by as many advanced degree holders in natural sciences and engineering as could be enticed to leave academia. Similarly, reforms in engineering education that were widely adopted in the late 1950s and early 1960s put new emphasis on deep understanding of scientific principles as the basis for technological progress.
The importance of science to the U.S. way of life was reinforced by the Soviet Union’s testing of atomic and hydrogen weapons in the mid-1950s and by its launch of Sputnik in 1957. These events were widely interpreted in the United States as signals that U.S. scientific leadership was under threat, and they catalyzed redoubled commitment to scientific research and to the encouragement of young people to make science a career. The study of science and engineering became the clear choice for talented young Americans who were contemplating college and career options in the late 1950s and early 1960s.
Science became the model for many other aspects of U.S. society in the postwar period. Systematic research in the social sciences paved the way for major social changes. For example, the winning side in the 1954 Brown vs. Board of Education Supreme Court case that ended racial segregation in public schools was buttressed by findings by social scientists about how children’s learning was influenced by classroom segregation. Other research provided the intellectual premises of public welfare programs and educational interventions such as Head Start.“Scientific medicine” became the watchword for clinical practice. Science even intruded into the realm of the spiritual as its evident powers of explanation contributed to a rethinking of religious views of reality and the notorious 1966 Time magazine cover question: “Is God Dead?”
By the early 1960s, therefore, the United States had fully embraced its new relationship to scientific research and had truly become a scientific society. Still, the U.S. embrace of science—its findings, its methods, its theories—as the foundation for innovation, for culture, and for the nation’s way of life has never been complete. Certainly, the relationship of science to society has been rocky at times; for example, in the environmental movement, during the Vietnam conflict, and in the recent debates over the use of embryonic stem cells in research. Despite these setbacks, however, it seems quite accurate to me to characterize the United States between about 1950 and 2000 as a scientific society.
The post-scientific society
A post-scientific society will continue to use the latest in scientific discoveries, theories, and data as the foundation for innovation and change. However, producing new science at home will give way to using new science that is developed elsewhere. The new science that underlies innovation in a post-scientific society will often appear in U.S. organizations not as data and theory but as knowledge embodied in devices, components, systems, and routines obtained from anywhere else in the world. A post-scientific society will need fewer researchers than a scientific society, and fewer young people will be drawn into scientific fields by the promise of exciting opportunities and excellent salaries. Firms in a post-scientific society will hire fewer scientific professionals than in the past, and their role will be more to serve as translators and exploiters of new science than as original contributors to the body of scientific knowledge. Firms will reduce their commitments to long-term basic research and will depend more on third-party providers of new knowledge.
In the post-scientific society, the creation of wealth and jobs based on innovation and new ideas will tend to draw less on the natural sciences and engineering and more on the organizational and social sciences, on the arts, on new business processes, and on meeting consumer needs based on niche production of specialized products and services in which interesting design and appeal to individual tastes matter more than low cost or radical new technologies.
Businesses will not succeed in the post-scientific society by adopting a fast-follower strategy, seeking to emulate the products first brought to market by firms in other countries. Rather, success will arise in part from the disciplined search for useful new knowledge that, regardless of its origins, can be integrated with intimate knowledge of cultures and consumer preferences. Networks of highly creative individuals and collaborating firms will devise and produce complex new systems that meet human needs in unexpectedly new and responsive ways.
The emergence of a post-scientific society in the United States is, in a sense, simply the latest working out of the logic of comparative advantage among nations. The United States remains a world leader at doing basic scientific research. However, when the costs of doing research in the United States are compared with doing it elsewhere, much of its advantage is lost. Some of the comparative advantage of other countries in conducting science arises from currency misalignments and from government actions, but even accounting for these market interventions, it is often less expensive to do science—world-class science—in other countries.
As more and more nations have achieved a medium-tohigh stage of political and economic development, they have been able to establish the necessary conditions in which scientific research can thrive. These include stable infrastructures for energy, telecommunications, water, and sanitation; a high-quality educational system for at least some of its people; a commitment to challenging the status quo; a source of funds; and a reasonably stable political culture. Bright people are a natural resource everywhere, and if the conditions listed above exist, science can thrive. Throughout the post–World War II period, the United States and other nations, as well as the major international development organizations, have worked to strengthen scientific infrastructures in many countries. It is now becoming apparent that those efforts, as well as the substantial efforts made by developing countries on their own, have been successful in many places.
In view of the increasing sophistication of the scientific contributions of other nations, the United States has become a high-cost place in which to do science. One needs look no further than the recent rush of U.S. companies to establish research laboratories in China and India for confirmation that the costs of research are lower there. Although lower costs are not the only driving force for locating R&D facilities in such places, the financial pressures to do so are clearly an important factor. Furthermore, most U.S. firms have withdrawn from the commitments they made in past decades to conduct fundamental research in their own corporate research centers. They increasingly look to universities, federal laboratories, research consortia, high-tech start-up firms, and overseas laboratories as low-cost sources of new knowledge and new technologies.
Other evidence demonstrates that the United States has lost the unchallenged lead in science and research that it amassed in the decades after World War II. For example, in the 15 years between 1988 and 2003, the U.S. share of published papers in the world’s scientific literature declined from 38% to 30%, and the total number of publications by U.S. scientists remained essentially unchanged throughout this period, even as research funding increased. The shares of U.S. patents awarded to U.S. inventors in important fields such as electronics and heavy machinery have declined in comparison with the shares of Japan and Germany, respectively.
The declining interest in math, science, and engineering careers on the part of U.S. young people has been a subject of widespread discussion for at least two decades. New programs and additional funding to stem this decline are a major focus of the America Competes Act. Remarkably, the public dialogue on this issue has proceeded with relatively limited attention to the workings of the ordinary law of supply and demand. Yet it is not at all unreasonable to presume that prospective students in math, science, or engineering can observe that competition from overseas is rising even as salaries for degree holders in some fields of science have stagnated or declined. Harvard University economist George Borjas has recently shown that a 10% immigration-induced increase in the supply of doctorates lowers the wages of competing workers by 3 to 4%. A student contemplating a career in the sciences, which typically requires a doctorate, must surely be aware of the competition he or she will face in the job market from scientists from around the world, whether they have emigrated into the United States or have been educated and do scientific research in other countries for less pay than their U.S. counterparts. As competence in fundamental math and science has been enhanced around the world, these fields may not appear as attractive to U.S. students as they once did. If, in fact, the United States is on the threshold of a post-scientific future, then today’s young people may be making wise career choices when they focus their energies on something other than mastery of math and science.
The positive side of the transition to a post-scientific society story is that the United States has increasingly turned its attention to matters that are more complex than fundamental science. It is moving up the scale of intellectual and societal complexity by specializing in activities that require the integration of all knowledge and capabilities to better serve the needs of individuals, families, companies, communities, and society as a whole. It still needs to be able to understand and use the fruits of scientific research, wherever it is done, and it will continue to need a significant number of active scientists and other researchers working at the frontiers of knowledge. In key areas where it maintains a solid lead, as in fields of biomedical science, its incredible investments and deep intellectual infrastructure may suffice to enable it to dominate the research activities of other countries. Yet, even in biomedicine, it is increasingly clear that improving the quality of life for the majority of people involves not just applying sophisticated science-based medicine but also the integration of multiple disciplines concerned with human health, from nutrition to exercise physiology to gerontology to social work.
Beyond the question of support for and conduct of science, however, the post-scientific society involves something much more. This is becoming a society in which cutting-edge success depends not on specialization, but on integration— on synthesis, design, creativity, and imagination.
Consider where the action is today in the technology sector of U.S. industry. It’s in information systems, multimedia production, one-click ordering, search engines, music and video downloading systems, multifunctional cellular and wireless telephony, and so on. To be sure, these applications ride on a deeply sophisticated infrastructure of broadband networks, high-performance computers and servers, huge software systems, mass memory devices, and other technologies. These in turn ride on foundations of materials science, digital signal processing, computational algorithms, advanced measurement methods, and other fundamentals. The value added and the wealth generation are happening largely at the top level of this kind of hierarchy, not necessarily because the people and institutions at the top are so much more clever than any others, but because they face less competition from around the world.
It would be overreaching to argue that the United States has completed the transition to a post-scientific society. Instead, as with all such transitions in the past, the characterization of cultural eras is a statement about the leading edge of social and economic development. Just to highlight the point, although we ordinarily think of the Stone Age as the time before our prehistoric ancestors discovered metals, we continue to build in stone to this day and are proud of it. Likewise, if we have left behind the agricultural age, the machine age, and the age of steam, we still grow food, use machines, and depend on steam for our well-being. We will continue to need and nurture science, but it will, like the dominant cultural developments that preceded it, recede into the background as a necessary but no longer defining characteristic of our age.
The next innovation system
From the perspective of innovation policy, the core question raised by the emergence of the post-scientific society is what kind of NIS is required to support economic growth and wealth generation in this new world? Which elements of the current NIS continue to be needed, how should the current elements be modified to take account of the needs of the post-scientific society, and what new elements must be invented and put in place to strengthen the foundations of this new form of economic activity?
The most important part of the NIS is always the part devoted to preparing the next generation of people who can participate successfully through innovation, wealth, and job creation. In the post-scientific society, the demands on innovators are very great. They must have not only a core understanding of scientific and technical principles but an equally strong preparation in business principles, communications skills, multicultural understanding, a foreign language or two, human psychology, and one or more of the creative arts. Their education must emphasize making connections among ideas, people, organizations, and cultures, often across boundaries that no one has thought to try to cross before. Some contemporary observers point with great unease to the networked way of life of today’s young people. I would argue that, even as computer games helped to prepare the current generation of computer-literate Americans, so will their experience in building a hypernetworked world prepare them for the opportunities to come.
I am not arguing for a reduction in the role of science and technology in the education of the next generation; rather, I am arguing that we must find new ways to make scientific and technological literacy a part of the education of all students who wish to play significant roles in the post-scientific society. At the same time, we must avoid making tragic errors in educational practices and policies that would leave our next generation ill-prepared. This could happen if we focus too heavily on the skills our parents needed in the past rather than on the skills our children will need in the future. It is distressing that K-12 school systems are finding it necessary to cut back on education in integrative subjects such as geography and languages, as well as on the arts, in order to focus on developing basic skills in math and reading to meet the demands of the No Child Left Behind Act. It would be most unfortunate if some of our students were left behind in math and reading, but it would put the country’s future at risk if an entire generation were left behind in the race to the post-scientific society. We have to be certain that we emphasize what we want, for we shall surely get what we emphasize.
What about advanced education and research? Again, we need to maintain a cadre of scientific and engineering researchers who can work with confidence at the frontiers of human knowledge. They must, however, be able to do so in a networked world where collaboration across the world is as easy as collaboration down the hall, and is probably more productive because it involves diverse perspectives on problems and their solution. In the next few years, it may be desirable to reinstate the foreign language requirement for the Ph.D. in science and engineering, not to put up additional barriers to success but to emphasize the multicultural basis of good practice. Programs for study abroad should expand their reach to include students in science and engineering as well as the humanities and social sciences. Further emphasis should be given to hybrid educational programs, such as the professional science master’s degree promoted by the Sloan Foundation, that add strong skills in business, public policy, culture, and creativity to the foundation of science laid down in the undergraduate years.
Higher education is beginning to respond to the demands for new kinds of programs to meet the needs of students and employers interested in multidimensional, multidisciplinary educational experiences. For example, an increasing number of universities are offering degrees and concentrations in fields such as information technology, multimedia production, entrepreneurship, service science, innovation studies, creativity, and other cross-disciplinary fields. Whereas just a couple of decades ago universities tended to treat interdisciplinary work as an intrusion into the “real” work of the institution’s disciplinary departments, today the ability to inspire and lead such work has become a standard expectation of university administrators. Companies are stepping up the hiring of social and behavioral scientists, artists, designers, and poets. In recognition of some of these trends, the National Science Foundation (NSF) has expanded its collection of data on industrial R&D to include activities in the service sector and on academic R&D to include more nonscientific fields.
There will be increasing interest in a post-scientific society in developing new international structures to support the conduct of basic research around the world. As the country increasingly depends on basic research conducted elsewhere, Americans will want to have direct influence over what research is done and by whom, and they will increasingly seek to encourage other nations to cooperate with the United States in bearing the costs of that research. The positive spillover effects of basic research provide the fundamental economic rationale for public support, and the movement of science does not heed national borders. New knowledge becomes available to all the world at little or no cost, so it makes sense for countries to take full advantage of the research paid for by others. And it makes sense to organize countries in joint support of basic research, as is happening now in Europe for small science and as has been happening for decades in “big science” projects such as the space station and particle accelerators.
The post-scientific society needs an intellectual property protection system that respects the fact that increasing portions of all industrial wealth lie in intangible property— in business processes, ideas, plans, designs, software, and human networks—and that protecting inventions manifest in hardware or materials will be a decreasing proportion of the work of the Patent and Trademark Office. The Copyright Office has become increasingly important to a wider variety of industries as software and media content seek protection to sustain their value in a world of creativity. Somewhat paradoxically, the open-source software movement suggests that new modes of networked creation can flourish where traditional notions of ownership and control of intellectual property are turned on their heads.
The federal research agencies such as NSF should be at the forefront of the new directions in marrying science, engineering, culture, and economy. NSF can be slow to acknowledge its role in new areas, and it should take a leadership role in helping to shape these trends. NSF should not respond only to “proposal pressure” but also stimulate new modes of research and thinking about how to thrive in a post-scientific society. Simply redoubling our efforts to fund more research and to prepare more scientists and engineers along the models of the past is unlikely to be sufficient to meet the new needs. Contrary to the consensus embodied in the America COMPETES Act, it is not so much that we need more scientists and engineers but that we need new kinds of scientists and engineers.
Many other aspects of the U.S. NIS will need to be modified to come into alignment with the realities of the post-scientific society. For example, the scope of the incremental research and experimentation tax credit is quite narrow; it should be expanded to include a wider range of activities than were covered when it was adopted at the height of the scientific society era. New recognition awards should be given to those who excel in the marriage of creativity, systems improvement, and research, even as they are now given to those who excel in just one of these.
A key issue of our time, and one that is related to my thesis about the post-scientific society, has to do with the importance of place in the innovation of new ideas, technologies, works of art, politics, and so on. On the one hand, in a world of networked individuals and institutions where everyone is accessible to everyone else in seconds, place hardly seems to matter. On the other hand, the agents of the new post-scientific society tend to congregate in places that have a number of desirable attributes. To some analysts, clusters of similar technology-based firms and industries seem to thrive. To be sure, encouraging the formation of clusters is a major tool of economic development officials today. Yet if rapid economic change in response to a rapidly changing, ever-networking world is the key to success, then clusters built around single industries may offer no greater assurance of long-term economic success today than the auto cluster offered Detroit or the steel cluster offered Pittsburgh. Instead, places should seek to be attractive to a range of creative businesses, not just to clusters of firms in one industry or another.
Substantial changes in the U.S. NIS will be needed in the future to support the generation of wealth, growth, and opportunity for the next generation of Americans. The concept of an emerging post-scientific society is a compelling framework in which to think about profound changes now under way in the United States and in its relationship to the emerging industrial and scientific powers in Asia. It suggests new approaches to innovation and competitiveness policies that go well beyond the latest incarnation of time-worn proposals that amount to “just do more of the same.” The post-scientific society needs a great deal of further investigation and elaboration.
Christopher T. Hill (firstname.lastname@example.org) is professor of public policy and technology in the School of Public Policy at George Mason University in Fairfax, Virginia.