America on Edge: Settling for Second Place?

The United States cannot afford to be complacent about the advancements in science and technology that are needed to power the economy, defend the nation, maintain public health, and combat climate change.

The United States is on edge in ways the nation has rarely experienced throughout its young history. The country’s global leadership is being challenged in a rapidly changing and increasingly competitive world. Meanwhile, the nation’s sustained complacency in dealing with long-festering domestic needs has weakened our institutions from within and placed in grave danger our leadership in the critical fields of science and technology—on which so much of our economy and security is based. America is at a tipping point, in short, and Americans are justifiably unsettled.

The country has faced existential challenges in the past—moments in history that shook its foundation—but has risen to the occasion under strong leadership. Four overarching challenges we face today require comparable leadership and response: competing with China, coping with climate change, maintaining cybersecurity, and combating and preparing for pandemics. There are many causes of the nation’s current dilemmas, and their solutions will require exceptionally wise policy actions across a broad spectrum. But, as in the past, advances in science and technology (S&T) and research and development (R&D), driven by accelerated and focused investments, will be critical to success.

America is at a tipping point, in short, and Americans are justifiably unsettled.

As presidential science adviser Vannevar Bush recognized more than 75 years ago in his pioneering report, Science, the Endless Frontier, efforts in basic research—funded primarily by the federal government—and overall science, technology, engineering, and mathematics (STEM) education will continue to be critical in the future. University-performed basic research, whether purely curiosity-driven or use-inspired, is of special consequence as its products include not only discoveries (made freely available to the world), but also science and engineering graduates, the engines of research and the transfer of knowledge and technology from laboratory to society. Because of the exploratory nature of basic research, progress requires freedom, patience, tolerance of risk, and sustained support. And since nature is global, even universal, basic research prospers best with international cooperation. US researchers need access to sites, facilities, and the best minds from across the globe.

The critical role of S&T has not gone unrecognized in other parts of the world. In 2008, for example, Wen Jiabao, former premier of the State Council of the People’s Republic of China, wrote, “Scientific discovery and technological inventions have brought about new civilizations, modern industries, and the rise and fall of nations…. I firmly believe that science is the ultimate revolution.” On May 30, 2021, China’s president Xi Jinping was quoted by the South China Post saying, “Scienceand technology has become the main battleground of global power rivalry. Competition over cutting-edge technology has intensified to an unprecedented level. We must have a strong sense of urgency and be fully prepared.”

Meanwhile, in the United States, the federal government has cut its investment in R&D over recent decades from 1.5% of gross domestic product (or 12% of the federal budget) to 0.7% of GDP (3% of the federal budget). The portion supporting basic research, as defined by the federal government, now constitutes only 0.2% of GDP—an amount roughly equivalent to what the US population spends every year on beer.

Because of the exploratory nature of basic research, progress requires freedom, patience, tolerance of risk, and sustained support.

While surveys have shown that Americans are generally supportive of scientific research, that support has not prompted elected representatives to give research funding higher priority in government budgets. Too often, the public does not recognize how the products that pervade our daily lives were made possible by basic research that took place in a laboratory often decades before. Examples are ubiquitous: television, microwave ovens, stents, cell phones, laptops, GPS, meteorological and communication satellites, artificial joints, CT scans, all-electric cars, clean water, vaccines for polio and smallpox, a cure for hepatitis C, medications, jet aircraft, solar energy, and much more—including the mRNA vaccines for COVID-19.

More broadly, it is advancements in S&T that power the US economy, the foundation of the nation’s ability to educate its people, provide quality jobs, defend itself, keep its population healthy, sustain social programs, modernize infrastructure, and combat climate change. China is now making many of these advances more quickly and convincingly than the United States and is reaping the rewards. To be sure, in today’s interconnected world a responsible foreign policy with China is far more complicated than a race between two nations. All the same, it is clear that the United States cannot afford to continue on its current path of complacency.

Differing trajectories

Comparison with China illuminates how deeply this complacency has taken hold in the United States. In many respects, China is in the midst of a revolution, managed by the central government and controlled by one political party with a membership of under 7% of the population. This revolution is focused on employing science, technology, and innovation to make China more prosperous, and its government is rapidly growing investments in R&D to provide the necessary new knowledge and tools.

Indeed, for many years China’s leadership has been drawn from the ranks of engineers and scientists. In the United States, by contrast, only about 1% of the US Congress has degrees in science or engineering, and only two presidents—Herbert Hoover and Jimmy Carter—have had backgrounds in STEM. An education in science and engineering may not be vital to effective political leadership, but it does help policymakers understand the power and promise of S&T to propel a nation forward.

In today’s interconnected world a responsible foreign policy with China is far more complicated than a race between two nations.

China’s president since 2013, Xi Jinping, himself an engineer, has promised the nation’s 1.4 billion people a share of the “Chinese Dream.” China’s middle class, once miniscule, is now roughly the size of the entire US population. China’s ambitious infrastructure program—the Belt and Road Initiative, announced in 2013—comprises an investment of over $1.3 trillion to connect over 60 countries on land (the belt) and by sea (the road), stretching from East Asia to Europe and Africa.

China assigns a high priority to educating its people, but the gap in educational opportunities between rural and urban children continues to be large. In response, China is rapidly increasing its number of universities and colleges—now numbering more than 2,600, with a new institution opening every week—as well as the quality of faculty and the education provided. In the 2021 US News & World Report rankings of Best Global Universities, China had the second-highest number of the world’s top 100 universities, after the United States. According to the 2021 Times Higher Education World University Rankings, Tsinghua and Peking Universities have now moved up in rank to join the top 25 in the world. China produces more than twice as many engineers and half again as many scientists each year as the United States, and the differential is rapidly expanding.

Moreover, under its Thousand Talents Program, China offers large financial and professional incentives to talented scientists and engineers from around the world to move to China. To date, the effort has not had a dramatic impact in the United States: STEM doctoral students from China attending US universities still have a high stay rate—currently about 83%—even with a difficult process for renewing visas and obtaining green cards. Similarly, recent surveys show that when researchers around the world were asked to what country they would prefer to move were they to leave their home country, about 57% answered the United States and only about 9% answered China. Still, there is no doubt that China is taking very ambitious steps to attract and retain STEM researchers, and countries that wish to compete must take this into account. The anti-China rhetoric that many political leaders routinely include in their statements is not likely to encourage young people to choose the United States as the place to study and establish their careers.

China’s efforts are also reflected in its investment activities. Between 2000 and 2017, the country’s domestic spending on R&D grew by an average of 17% per year, compared to 4% per year for the United States. Though China’s economy has cooled in recent years, it is still making substantial investments in such critical fields as artificial intelligence, semiconductors, quantum information, high-performance computing, 5G communications, genomics, and renewable energy and energy storage.

China produces more than twice as many engineers and half again as many scientists each year as the United States, and the differential is rapidly expanding.

These investments have paid off. Since 2011, the share of US-based smartphone companies and solar panel manufacturers in the global marketplace has fallen from 19% to 15% and from 8% to just 1%, respectively. Meanwhile, China has increased its share in these sectors from 11% to 58% in smartphone sales and from 35% to 67% in solar panel sales. China also holds the clear majority of market share of commercial drones (80% to the United States’ 4%), lithium-ion batteries (projected 2800 GWh production capacity by 2030, to the United States’ projected 500 GWh production capacity), and network infrastructure equipment (36% to the United States’ 9%), led by the telecom giant Huawei. And while the United States still remains the leader in semiconductors (47% of the total, compared to China’s 4%), many US companies do not manufacture these chips, but rather outsource their production to major overseas manufacturers.

The United States continues to maintain a lead in a number of key areas, but the margins are closing. China has now passed the United States in the number of Fortune 500 domestically headquartered companies. It has also overtaken the United States as the top merchandise trading partner among the world’s nations. Of the 19 firms created in the past 25 years that are valued at over $100 billion, nine are in the United States and eight are in China. And of critical importance, China is projected to pass the United States in GDP not long after the United States celebrates its 250th birthday in 2026. Measured by purchasing power parity, China’s GDP has already surpassed that of the United States.

To be clear, the United States still invests more in R&D than any other country. But China has been rapidly increasing its R&D spending and can be expected to overtake the United States within the present decade. And China is not alone in assigning a higher priority to investing in R&D than the United States, which now ranks ninth among Organization for Economic Cooperation and Development (OECD) nations, having fallen from second place in a few decades. In terms of the percentage of R&D funded by the federal government, the United States has fallen to 29th in the world. For a half century, the total US fraction of GDP devoted to R&D has remained stagnant, in spite of the increasing impact of S&T on everyday life. Lack of R&D investment is one of the reasons the United States ranks ninth on the Bloomberg Innovation Index. It ranks 21st in the number of professionals engaged in R&D per capita.

Proposed actions

In light of these strategic disadvantages on the part of the United States, we believe the following measures are necessary—not only to compete with China, but also to repair the often self-inflicted damage done to our nation through neglect of public primary and secondary education and decreasing emphasis on S&T. While sustainable growth in federal investment in R&D, especially basic research, is necessary, increased funding alone will not suffice. We must also fundamentally change how we educate young people and how we approach immigration for work in STEM fields. Both increased financial investments and policy reform are urgently needed.

For a half century, the total US fraction of GDP devoted to R&D has remained stagnant, in spite of the increasing impact of S&T on everyday life.

We recognize that federal discretionary spending will be under severe pressure in the coming decades. The Congressional Budget Office has estimated that expenditures already committed under current law for only two general budgetary categories—entitlements and debt interest—will equal total federal revenues by 2042, likely requiring either increasing tax revenue or borrowing to pay for science and nearly everything else the federal government does, from defense to infrastructure to social programs. And this projection does not account for increased federal spending due to COVID-19 or spending legislation now under consideration by Congress. Ultimately, funding decisions are a matter of priorities. We believe that, given the will, the leadership, and the potentially existential nature of the many challenges we face, the following proposed actions are both necessary and politically feasible. They fall into four major categories:increased and prioritized federal investments in R&D; reformed and renewed primary and secondary education; strengthened higher education; and expanded incentives for industry to invest and partner in meeting the nation’s S&T goals.

Increase investment in R&D. For many years the federal government provided about two-thirds of America’s overall R&D funding, based on the understanding that the resulting discoveries, inventions, and technology were beneficial to the American people writ large. In recent decades, however, that share has declined to about one-fifth of the total. Industry, a clear beneficiary of R&D, has increased its share of national funding from about one-third to over two-thirds. But in the face of intensifying demands for rapid and more certain returns, industry has reduced its role in research while focusing on development, and in both cases, such results are proprietary and not shared with the S&T community.

This short-term focus has largely been driven by the fact that, some 50 years ago, the average share of ownership in US publicly traded firms was held eight years before being sold; today that duration is four months. In recent years, half of US market capitalization has been held by firms investing less than their depreciation; 50 years ago, about 5% of market capitalization was held by firms pursuing such a strategy. Perhaps the most striking example of the impact of such practices is the home of the laser and transistor, the renowned Bell Laboratories, whose researchers garnered nine Nobel Prizes. Today, the remnants of that once preeminent US organization are owned by a firm in Finland. Bell Laboratories, while perhaps the most prominent, was not the only major industrial R&D laboratory engaged in basic research; others included General Electric, Sylvania, Texas Instruments, Xerox’s Palo Alto Research Center, Hewlett-Packard, IBM, DuPont, and many more. These laboratories received considerable funding from federal agencies as well as company investments. Even so, they could not be adequately sustained.

Given the will, the leadership, and the potentially existential nature of the many challenges we face, the following proposed actions are both necessary and politically feasible.

US political leadership has recently begun to recognize the peril that exists from current policies regarding S&T. The Biden administration, for example, has proposed large increases in R&D, and related legislation is currently being addressed by Congress on a relatively bipartisan basis. But such legislation, while extremely important, is only the beginning. Momentary infusions of funds have been seen in the past, such as the doubling of the National Institutes of Health budget under Presidents Bill Clinton and George W. Bush, or the Obama-era stimulus bill, all of which soon faded away. Meaningful progress will require a long-term, sustained effort—decades of steady annual real growth in funding R&D, particularly research, and higher education.

While the United States has steadfastly refrained from implementing what is commonly termed “industrial policy,” at least on the scale of such nations as China, there are many examples of federal agencies’ stimulating important innovation. SEMATECH, created in 1987, was a partnership between the Department of Defense and several US companies to help US industry compete with Japan in the critical semiconductor industry. The US Air Force invested heavily in the industry by purchasing highly sophisticated computer chips that were not then in commercial demand. The rapid growth of companies such as Control Data Corporation and Cray Computer Corporation resulted, in part, from the Department of Energy’s needs for powerful high-performance computers to support its nuclear stockpile stewardship program. The United States has a history of investing federal money in selected industries, as it is now planning to do with artificial intelligence, quantum information, semiconductor chips, automation, and others. We would assert that there is a distinct difference between counter-free-enterprise industrial policy and the government’s supporting select sectors of critical importance to the nation or strategically planning how to invest the taxpayer funds for which it bears a direct fiduciary responsibility.

Four Implementing Actions

  1. Sustain decadal growth in federal investment in R&D, especially in basic research:
    • Over the next five years, increase federal R&Dfundingfrom the present 0.7% of GDP to at least 1.1% and federal research funding from the present 0.4% of GDP to at least 0.8%, with the highest priority given to basic research—both use-inspired and curiosity-driven—largely carried out in universities and federally funded laboratories.
    • Sustain subsequent annual growth such that, within a decade, federal R&D funding reaches at least 1.5% of GDP, and federal research funding reaches at least 1.2% of GDP, with the highest priority given to basic research.
  2. Develop a national strategy for federal R&D, including an annually updated government-wide and agency-specific, five-year R&D plan submitted with each annual budget.
  3. Fund federal R&D activities on at least a two-year cycle (as opposed to the current annual budget process) that includes these actions:
    • Create a capital budget for federal R&D (in order to evaluate and promote long-term investments).
    • Waive selected critical federal R&D activities from established government hiring, firing, and procurement regulations when deemed in the national interest.
  4. Increase the share of federal funding devoted to high-payoff transformational pursuits, as compared with incremental gains and low-hanging fruit.

Growing federal R&D funding to 1.5% of GDP and federal research funding to 1.2% of GDP in ten years will require sustained real annual increases in the respective agencies’ R&D budgets of 10% or more in early years, with even larger increases for research funding. Given all the other demands on the federal budget as well as concerns about the national debt, this increase is likely to be difficult. We believe, though, that these investment proposals reflect the magnitude of the national challenge and the urgent need to significantly alter the US trajectory in S&T by focusing on federally funded research. We note that 1.5% of GDP is below the peak for federal R&D funding during the Apollo program era, a time when funding for development vastly exceeded that for research.

The United States has a history of investing federal money in selected industries, as it is now planning to do with artificial intelligence, quantum information, semiconductor chips, automation, and others.

While policymakers tend to place more emphasis on strategic areas where global competition is a particular concern, we also urge the federal government to dramatically scale up its investments in other fundamental research areas that industry is not able, or chooses not, to support. Important discoveries can come from the most unlikely research projects. The annual Golden Goose Awards, selected by the American Association for the Advancement of Science, provide excellent examples. Moreover, we believe that the nation should not cede its traditionally high standing in fields like astronomy and high-energy particle physics, but rather it should continue to be a global leader and key partner in these fields. While the need for the federal government to plan ahead and provide stability of support is not new, it is increasingly important given today’s immense challenges.

Much budgetary emphasis in the United States has tended to be on near-term consumption as opposed to investment in the future. Congress focuses on elections every two years; business is concerned with next quarter’s profits; investors follow developments by the hour—or less. One survey found that 80% of the chief financial officers of large corporations say they would cut R&D, advertising and maintenance rather than miss the next quarter’s profit forecast. The federal government does not even have a capital budget, let alone a long-range plan.

Meanwhile, China is rigorously executing its fourteenth consecutive five-year plan. We believe that the United States must urgently adopt a longer-term planning process that includes an ongoing assessment of America’s overarching S&T priorities in a rapidly changing global environment and examines the strategic importance of particular fields of science and engineering. For example, between 1970 and 2017, federal support for the physical sciences fell from 20% to 10% of federal research funding; yet much of the critical data and most of the materials and devices vital to advancing key technologies, including those used to carry out biomedical research and enable new medical diagnostics, treatments, and cures, come from research in the physical sciences and engineering.

Reform primary and secondary education. There are many outstanding K–12 schools in the United States, and they produce some highly educated and talented young women and men. But too many young Americans, particularly in economically disadvantaged areas, especially minority communities, are not offered adequate educational opportunities and support. Overall, our public schools are simply noncompetitive by global standards, as illustrated by the low performance of American students in the international OECD Program for International Student Assessment (PISA) tests, ranking 25thin combined math, science, and reading scores. American students perform particularly poorly in mathematics, while the highest scorers hail from Beijing, Shanghai, and the Jiangsu and Zhejiang Provinces of China. Moreover, students from many of China’s rural provinces perform at levels comparable with the OECD overall averages. In the National Assessment of Educational Progress, the United States’ own standardized test, 59% of fourth graders rank as “not proficient” in math. By eighth grade, the “not proficient” group has grown to 66%, and by twelfth grade to 76%.

The United States must urgently adopt a longer-term planning process that includes an ongoing assessment of America’s overarching S&T priorities in a rapidly changing global environment.

This enduring failure of US public education as a whole can and must end.The problem today is not a lack of funds: in 2017 US primary and secondary schools ranked high among OECD nations in funding per student. The problem is a broken educational culture that fails to prioritize content over process, that stifles creativity by restricting curriculum and methods, and that fails to realistically measure its performance. The United States places itself at a severe competitive disadvantage when the science and engineering workforce has only 13% underrepresented minority participation (although the group comprises 28% of the workforce) and only 29% female participation (although women represent 51% of the workforce and 58% of college graduates). This talent gap is particularly notable in the physical sciences, computer sciences, and engineering. Making the kinds of transformational changes necessary to improve public pre-K–12 education will be very difficult and take time, of which we have dangerously little.

Three Implementing Actions

  1. Federally fund preschool education for all children; voluntary out-of-school STEM-related programs; and continuing education opportunities, including summer workshops for public school STEM teachers.
  2. Federally fund 10,000 competitively awarded four-year scholarships each year to US citizens to study STEM at a US university, with the commitment to teach at a US public school for at least five years upon receiving a degree. (Five years is the average duration in which US public school teachers currently remain in the profession.)
  3. Implement merit-based pay systems and renewable teacher contracts (phased in to replace tenure) that provide for no-cost continuing education with a focus on subject content; and phase in a national requirement that teachers possess degrees in the core STEM subject they teach, with existing experienced teachers exempted from this latter requirement.

The need to dramatically improve US public primary and secondary education is not new, and there are no quick or easy solutions to the nation’s inadequacies in STEM education. But we believe that these steps could help launch this transformation.

Strengthen higher education. The situation that prevails in US higher education contrasts sharply with that of primary and secondary education. In what is arguably the most respected ranking of the world’s research universities, the United States holds all top four positions and 19 of the top 25, including several public universities. However, American universities have in recent years been subject to enormous pressures from all sides including reductions in state funding, public resistance to rising tuition, inadequate federal academic research funding, growing costs of compliance with government regulations, public loss of confidence in the benefits of higher education, administrative burdens on the faculty, anti-immigrant political rhetoric that is likely to discourage foreign-born talent from learning and settling in the United States, and, of course, the devasting impacts of the pandemic. During the recent Great Recession, per student real funding at state universities was cut by 25% and has only begun to be restored.

Many studies and reports have drawn attention to the increasing burden on academic researchers and their institutions due to the accumulation over decades of research regulations, many of which are outdated and unnecessary. In addition, the lack of uniform rules and processes used by different federal research agencies adds additional administrative costs in both time and overhead. Because federal research funding has been stagnant for many decades aside from a few short-lived spurts, the quality of researchers and their ideas has steadily increased while success rates for proposed funding are low and the average grant size and duration are small. To maintain funding, researchers must write more proposals, which reviewers then have to assess and agency program officers have to process and prioritize. One survey found that faculty researchers are spending 44% of their research time dealing with administrative matters.

Competition, of course, is at the heart of the federal grant process, and expert peer review of unsolicited proposals has proved to be a strong method of ensuring excellence. But spending more and more time writing proposals rather than doing research and mentoring students is wasteful of talent, funds, creativity, and progress.

America’s present leadership in higher education is possible to a considerable extent because of immigration of scientists, engineers, and mathematicians from across the globe. Indeed, it can safely be argued that not only America’s research universities, but the nation’s entire scientific and technological enterprise would barely function today were it not for immigrants, especially the large number coming from Asia. But the nation makes little effort to systematically retain talented individuals who come to the United States for college or graduate school and wish to establish their careers in this country. To the contrary, artificially low caps are placed on the number of visas that allow foreigners to work here, forcing United States-educated foreign-born graduates to take their skills abroad and concomitantly encourage US companies to move their research laboratories there as well.

As summarized by a 2020 report by the American Academy of Arts and Sciences: “In 2017, 42% of US S&E faculty were foreign born. Since 2000, 38 percent of the American awardees of the Nobel Prize in Physics, Medicine, or Chemistry were immigrants. Fifty-five percent of US startup companies valued over $1 billion in 2018 were founded by immigrants, many of whom first came to the United States as science and engineering students. An openness to accepting immigrants and welcoming them into US society has been a major reason for the success of the US S&E enterprise, both in academia and industry.”

The nation’s entire scientific and technological enterprise would barely function today were it not for immigrants, especially the large number coming from Asia.

To be sure, the question arises whether educating foreign-born individuals, in particular those from China, poses a military or commercial security risk. China has engaged in espionage, as have other nations, and will undoubtedly continue to do so. But there appear to be few, if any, cases of espionage involving faculty or students on US university campuses, although several academic researchers have been accused of inappropriate activities and have forfeited their jobs. In some other cases, faculty researchers have violated administrative policies by failing to properly disclose formal relationships with certain institutions in China or funding from the Chinese government, including its military. In other cases, faculty members did nothing wrong but lost their jobs anyway. In the past, suspected infractions of regulations have been handled by the federal agencies involved (e.g., the inspectors general) and by universities through normal administrative procedures that did not require intervention by the Department of Justice, except in cases where there was substantive evidence of violation of federal law.

There is little evidence to date that university research practices pose a significant risk to the nation’s economy or security. To begin with, almost all university-conducted research is openly published, and relatively quickly, to maximize its public benefit and advance related research. Policies that broadly discourage foreign students from coming to the United States or make international research collaboration more difficult are likely to do more harm than good. The Department of Justice’s “China Initiative,” begun under the previous administration, has unfortunately led to profiling and investigative overreach that has destroyed the careers of scientists never found guilty of committing a crime. The nation grappled with many of these same issues during the Cold War but concluded that basic academic research should be free of government restraints unless it is deemed “classified,” a position that was encoded in President Reagan’s National Security Decision Directive 189.

Four Implementing Actions

  1. Restore, at least to 2001 levels, states’ real funding per student at public universities; repeal the tax on endowment gains of private research universities implemented under the 2017 Tax Cuts and Jobs Act; and double the maximum allowable size of Pell Grants.
  2. Significantly reduce administrative burdens on faculty researchers by eliminating outdated regulations; establish greater uniformity in funding agency regulations, rules, and processes; increase the average size and duration of grants; and allow pre-proposals for researchers to receive quick feedback on the likelihood of their work being funded.
  3. Universities should themselves investigate and resolve suspected research misconduct by university faculty, staff, or students (e.g., violation of disclosure policies). When federal funds are involved, funding agencies should conduct investigations except in the event there is discernible evidence of illegal activity, in which case regular government enforcement agencies should assume authority.
  4. Universities should include broader impacts of faculty research—e.g., technology transfer from the laboratory to industry or other translation of discoveries to societal use—among the criteria for tenure in STEM fields.

US universities continue to be centers of intellectual activity and creativity and, as such, constitute a crucial national asset. They can play an increasingly important role in helping America meet the unprecedented challenges it will face in the coming decades, as long as they receive the necessary support and are allowed to maintain their historical independence.

Incentivize industrial cooperation. US industry and universities have essential and complementary roles in helping the nation meet its needs. Industry is where innovation largely takes place, where the fruits of federally funded research—discoveries and new technologies—are further refined, developed, and applied to produce new products and services that people and institutions need and want to buy. Academic research is the vital element that enables the nation’s universities to produce the best scientists and engineers in the world.

But universities could even better educate students if there were stronger cooperation between companies and campuses, particularly in STEM fields. Barriers include current immigration policies that encourage foreign-born university graduates to leave the country, as well as tax laws and IRS regulations that discourage companies from investing in research and make it difficult for universities to form mutually beneficial partnerships. For example, existing US tax laws, remarkably, identify “long term” as one year. Collaboration between university faculty, students, and company engineers provides the opportunity to work in a transdisciplinary environment where many of the most important current breakthroughs are sought.

Four Implementing Actions

  1. Provide green cards to foreign-born individuals receiving PhDs in STEM fields from US universities, as well as to members of their families; and increase the number of H-1B visas based on annual assessments of workforce needs.
  2. Increase and extend corporate R&D tax credits, giving special attention to encouraging stronger cooperation with universities and federally funded laboratories; tighten regulations governing extension of patents; and remove barriers created by current tax laws and IRS regulations affecting universities.
  3. Substantially increase federal tax rates on short-term capital gains; and substantially reduce tax rates on long-term gains to encourage investment in the future, accompanied by an expanded timeframe of gains affected by the laws and the number of steps in related tax rates.
  4. Create a federally funded independent entity (comparable to the government-funded nonprofit venture capital firm In-Q-Tel in goals and operating practices) to promote both government and industry efforts to translate new technologies from researchers at US universities and federal laboratories to the US business sector. Such an entity would be not-for-profit, have an independent board of directors, and follow normal business practices rather than government internal regulation.

Academic research is the vital element that enables the nation’s universities to produce the best scientists and engineers in the world.

Some current federal policies work against US progress and future competitiveness. Immigration policies do not properly recognize that the United States must continue to rely on STEM talent from abroad if it is to remain a global competitor. Current tax polices encourage CEOs, directors, and investors to favor short-term gains over long-term investments. Readers may consider the proposal about capital gains to be outside the focus of this essay; however, it is offered here to highlight the fact that if there are few incentives for shareholders to be concerned about the longer-term future of companies in which they invest, there will be little reason for those companies to invest in such endeavors as research.

The key role of international scientific collaboration

Looking beyond these four key areas, we must also recognize the pivotal role of international cooperation in fostering advances in S&T. Among the United States’ greatest assets are our established alliances with other nations, and these relationships could prove decisive in retaining leadership in S&T as well as ensuring our nation’s security. It is noteworthy that China and its three most significant allies—North Korea, Iran, and, putatively, Russia—have a combined GDP that constitutes only 17% of the world’s GDP. Also, the recent crackdown by Chinese government authorities on several large technology firms that have fueled much of that country’s economic growth raises questions about its future economy. By contrast, the United States and just two of its many allies, Europe and Japan, provide half of the global GDP. When democratic nations work in concert, they become a formidable force and provide a global opportunity that should be high among national priorities.

Furthermore, successfully coping with truly global challenges will require all nations, East and West, working together. We cite three examples of fundamental challenges that depend on R&D to a considerable extent for their solution and also require global cooperation, both in R&D and policy.

Pandemics. Throughout the devastating COVID-19 pandemic, scientists from across the globe have put their regular projects aside and quickly come together, applying the results of decades of research in cell biology and disease to understand the virus and create vaccines in record time. Similarly, industry has quickly focused on vaccine development and production. None of this could have been accomplished were it not for the knowledge provided by many decades of basic research conducted in universities and federally funded laboratories throughout the world and made openly available through publication in peer-reviewed journals. The 2021 Lasker-DeBakey Clinical Medical Research Award went to two scientists, Katalin Karikó and Drew Weissman, for precisely this kind of early research.

Advances in the scientific understanding of infectious diseases such as COVID-19 and their origins, biological characteristics, societal impacts, treatments, and eventual eradication will necessarily require that nations, including China and the United States, work together—from laboratory bench to clinic to communities, small and large. There will be future pandemics, and they may be worse than COVID-19. All the world’s scientific talent and understanding will be needed to cope with such events.

Climate change. The earth’s climate system is extraordinarily complex. Advances in scientific understanding of climate change and its impacts, including regional variations, will be necessary for effective mitigation and adaptation. The 2021 Nobel Prize in Physics went to Syukuro Manabe, Klaus Hasselmann, and Giorgio Parisi for their groundbreaking contributions to understanding such complex systems as the earth’s atmosphere. In addition, a more aggressive program of research is needed to develop new carbon-free energy technologies; lower carbon emissions; and capture, store, and remove carbon from the atmosphere. The climate challenge is global, and the research to address it will require nations, including China and the United States, to share data and ideas and together explore new approaches. Geoengineering is viewed as a last resort; but if it becomes necessary, collaborative R&D involving experiments in all parts of the world will be essential.

Cybersecurity. Market forces are driving the ever-increasing connectedness of everything in our lives: power grids, pipelines, banks, security systems, communications, hospitals, state and federal agencies, online commerce, the World Wide Web, and more. Of relatively recent origin is “the network of things”—physical entities linked together on a large scale by massive computing and communication systems. Such complex networks of hardware and software can potentially be highly vulnerable to outside interference and cascading malfunctions. As but one example: in 2003 a tree fell on a power line in Ohio and produced propagating failures that put 50 million people in the northeastern United States and southern Canada in darkness for up to four days. And that was an incident with no malevolent human intervention.

There will be future pandemics, and they may be worse than COVID-19. All the world’s scientific talent and understanding will be needed to cope with such events.

More recent events, such as the shutdown of the Colonial Pipeline by Russian criminals using ransomware and, in early October, the six-hour worldwide Facebook outage, are suggestive of the possibilities for disruption in an age when cars are in essence computers on wheels and people’s door locks and thermostats—not to mention health records and bank accounts—are accessed from smartphones. When dealing with cross-border incidents, governments have few options other than cooperation, and that includes R&D as well as many areas of policy, including international standards and regulations.

The need for global cooperation in R&D poses something of a conundrum for the United States. While we must take bold steps to compete with China and other nations as new powerful technologies emerge and find application, cooperation is also vitally important in many fields of basic research, for at least three reasons. First, science in support of the common good is advanced by engaging the best minds with the best ideas and skills wherever people live and work. Second, some fields of science require expensive instrumentation—telescopes and particle accelerators, for example—that require sharing costs and use. Third, some research fields require access to specific geographical locations (e.g., studies of earthquakes or ecosystems) or to shared data (e.g., health information necessary to study pandemics, cancer, and other diseases).

Time is short

Today’s challenges threaten the economy, security, and well-being of all Americans. For many decades, the United States has been complacent, reaping the benefits of earlier investments and efforts—taking for granted that the country will continue to be the unchallenged world leader in R&D and applications, always making breakthrough scientific discoveries, inventing new technologies, improving opportunities for all, creating the world’s greatest companies, maintaining the world’s strongest economy. The rapid rise of China has demonstrated in stark terms that these assumptions are wrong, and business as usual is a sure path to failure.

There remains a brief window of time during which US leaders can take the necessary actions to reverse the downward trends described herein. For the benefit of all our children and grandchildren and future generations of Americans, we urge our political leaders to respond thoughtfully and energetically—and to sustain that response. America is on the edge, but as history has shown, the country can cope with challenges and emerge even stronger.

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Cite this Article

Augustine, Norman R., and Neal Lane. “America on Edge: Settling for Second Place?” Issues in Science and Technology (October 22, 2021).