The report undercuts its own conclusions again and again, demanding more accountability while cutting support for accountants, asking that scientists propose experiments that are more difficult to justify while demanding they fill out more paperwork, and calling for higher-quality research while interfering in the review process for political reasons. Before cutting a federal agency’s budget, we should understand the agency’s mission, operations, and outcomes. Sen. Coburn’s report makes it clear that despite his protestations, he has little idea how science works, how the NSF supports science, or how scientific knowledge strengthens America.

The report’s central claim that the NSF failed to recover $1.7 billion in unspent grant funds is patently incorrect and is based on a simple misunderstanding of federal statutes, according to NSF officials. In fact, the $1.7 billion figure represents the pot of money obligated for multiyear grants, and the figure drops as research teams draw down their accounts over the course of their projects. “It’s being used for exactly the purpose for which it was intended,” explained an NSF budget official to ScienceInsider.

Beyond the blatant misreading of federal statutes, “Under the Microscope” drives home two main points: First, the NSF is poorly administered; second, the activities that it funds are silly. Coburn has a clear vision for the NSF: It is an agency that should solely fund “transformational research.” Quoting from “Under the Microscope,” which quotes from an NSF memo, transformative research is research that promises extraordinary outcomes, such as:

Revolutionizing entire disciplines; creating entirely new fields; or disrupting accepted theories and perspectives –in other words, those endeavors which have the potential to change the way we address challenges in science, engineering, and innovation.  Supporting more transformative research is of critical importance in the fast paced, science and technology-intensive world of the 21^st century.

The problem is that “transformative research” can only be identified in retrospect. We often don’t know where the next breakthrough will come from, or which scientific theories will prove critical in the long run. The closest we can come to supporting transformative research is looking for what Thomas Kuhn called potentially “paradigm-shifting science.” In The Structure of Scientific Revolutions, Kuhn noted that scientists work within paradigms—broad sets of ideas, concepts, and theories that define what a valid scientific question is and how it can be answered. As scientists fill out various parts of a paradigm, they accumulate inconsistencies, observations that don’t fit their paradigm. Mostly, these inconsistencies are ignored, but at some point they reach a critical mass and a bright mind develops a new theory, which incorporates the inconsistencies.

For example, an Aristotelian astronomer saw his job as observing the stars and accurately describing their motion through epicycles, minor patterns of rotation. As centuries of observation accumulated, the initially elegant and logical geocentric model of the universe required too many arbitrary epicycles to make it work. Copernicus realized that the Earth travels around the sun, Galileo popularized it, and Newton proved it with his theory of gravity, resulting in a paradigm shift in astronomy that led to calculus, modern mechanics, and a host of other scientific discoveries.

Unfortunately for Sen. Coburn’s recommendations, paradigm-shifting science cannot be produced on demand. Until the point at which the new paradigm is confirmed, its theories often sound like sheer madness: matter as both a particle and a wave, invisible organisms causing plagues, mankind descended from apes, the continents moving, the Earth orbiting the sun; at one point all of these accepted scientific truths were the most insane heresies. People were—and in some cases still are—burnt at the stake for proselyting these ideas. Furthermore, new paradigms are often strictly less useful for solving practical problems. For about a century after Copernicus, until the mathematics of elliptical orbits were worked out, the geocentric model of the universe was far better at predicting where stars would be in the night sky.

Trying to get a committee composed of top experts in their field to go against their paradigms and fund “transformative research” is psychologically impractical. Yet the NSF can’t go around handing out money to every crank and charlatan who promises to revolutionize science. Peer review committees serve as gatekeepers, evaluating proposals on the strength of the proposed plan of research, the expertise of the investigators, and likelihood of achieving its aims. Generally, the more ambitious and transformative a scientific theory is, the less likely it is to pan out. The compromise institutional science has made between working on hard problems in the accepted paradigm and creating new paradigms is giving researchers enough time, money, and intellectual freedom to discover something really novel.

Sen. Coburn’s solution to a lack of “transformative research” is more oversight. He complains that nearly 50 percent of NSF grant progress and final reports are turned in late, and 10 percent are never turned in at all, but doesn’t discuss how scientific publications already serve to mark progress. Scientists work to advance the sum total of human knowledge—and their own careers, by publishing articles in scientific journals, not filling out reports that will never see the light of day. Rather than further burdening researchers with government red tape, the NSF should be better equipped to keep abreast of the latest discoveries in the literature.

Of course, all this close oversight of the NSF, according to Sen. Coburn’s staff, is to be done on a smaller budget, since the agency spends too much on office space and airfare. It’s unclear how NSF employees are supposed to conduct site visits without plane tickets; perhaps they can use some of that CIA research on clairvoyance and telepathy.

Likewise, the inspector general’s office is criticized for spending too much of its time investigating porn viewing among senior management as opposed to actual fraud. Of course, the fact that NSF employees view porn during working hours is worthy of three pages in the report. As a very angry Steve Silberman says in his take on Sen. Coburn’s report, “They’re [scientists are] making fools of American taxpayers while indulging their liberal — indeed, sinful — excesses.” Sin and excess is a big theme of the report, including tales of porn surfing at work and lurid photos of Jell-O wrestling at the NSF-funded McMurdo Antarctic Station (what happens in Antarctica stays in Antarctica). The excess goes so far as to include an evening of pizza and bowling for undergraduates at an NSF-funded summer research internship. Responsible use of taxpayer funds is important, but let’s keep a sense of perspective here. McMurdo is an isolated research station; you can’t just go out on the town, and some kind of recreation is necessary to keep the crews’ morale up. We might also want to begin asking hard questions about the softball leagues and ice cream socials afforded to congressional interns.

Somehow, I find it hard to work up much outrage about fraud in the NSF, given that Minerals Management Service employees were caught up in a massive sex/drugs/corruption scandal with oil company representatives, or that 25-year-old stoners defrauded the Department of Defense on a $300 million arms contract, or that contractors in Afghanistan funneled military money to the Taliban, or pretty much everything connected with the Great Recession of 2008.

But “They’re more corrupt than me” is no defense, and scientists should hold themselves to a higher standard than arms dealers, oil prospectors, and bankers. While Sen. Coburn’s report makes a case for better accounting standards to ensure grant monies are spent, it also relies heavily on the work of the NSF’s own internal inspector general for its examples of fraud, and in several cases, the employees in question were fired for their transgression. It appears that the NSF is already capable of detecting and dealing with corruption, and that extra investigators might be more efficiently used in other areas of government.

But corruption and government oversight is not my forte. Let’s return to the science policy side of the report. Sen. Coburn’s “staff spent several years reviewing hundreds of NSF research awards” and picked the 50 or so of the least transformative, most ridiculous ones to share with the public. Thirty-six of these grants are in the social sciences, five are in education/public outreach, five are in biology, and one is in mechanical engineering. These numbers are in no way representative of what the NSF does, as science policy expert Dan Sarewitz[1] put it in his response, “The entire social and behavior science budget at NSF ($252 million) amounts to all of 3.6% of the total NSF budget, 0.3% of the civilian R&D budget, and 0.006% of the federal budget. Attacking social science is good conservative politics, but it has nothing to do with serious budget policy.” The NSF approves tens of thousands of proposals each year, and rejects countless more.

Why does this report overwhelmingly focus on such a small section of the NSF, to the exclusion of 96.4 percent of its activity? If I were to hazard a guess, the reason why social science projects predominate is not that the GOP dislikes the social sciences more than climate science or evolutionary biology, as Steve Silberman argues, but that it is very hard for congressional staffers to evaluate the worth of proposals like “Nodulin Intrinsic Proteins at the Plant-microbe Symbiotic Interface: Multifunctional Roles in Metabolite and Water Transport in Nitrogen Fixation and Stress Responses,” or “The ISM of Luminous Infrared Galaxies: Tracing Gas Properties, Dynamics and Starburst/AGN Activity,” to pick two grants at random from this week’s approvals. As the selection of projects in this report demonstrates, scientific peer review is done by experts because lay people can’t tell the difference between good and bad science just by examining grant proposals.

The social science work that the NSF does is far from frivolous. One study that Sen. Coburn calls out is one that examines the reasons why Turkish women wear veils. According to the study, rather than submission to Islamic law, many middle-class Turks wear the veil as an act of “fashion rebellion” against an authoritarian secular regime. Given current volatility in the Middle East, and Turkey’s traditional role as bridge between East and West, it seems useful to gain information about how radicalized 50 percent of the Turkish population is.

Studies on video games and virtual worlds are a particular bugbear of Sen. Coburn; however, video games are now a major entertainment industry on par with television and movies, with more than $10 billion in sales. Internet fundraising and activism has the potential to be a transformative force in politics, both at home and abroad. Children are effectively growing up in virtual worlds, and if Google is truly making us stupid, or if rumors spread through Twitter can bring down dictatorships, then it is important for us to understand these phenomena.

Another science policy issue that the report touches on is duplication, or the notion that NSF-funded activities are being done elsewhere. According to the report, research that might cure disease should be done in the NIH, while energy research is the sole province of the DOE, and training for scientists should be moved into the Department of Education. This attitude, however, is far too reductionist. Science cannot simply be divided into categories of basic and applied, or NSF and agency-mission based. Research into solid-state physics can probe both the fundamental properties of matter and improve the efficiency of solar panels. Studies on cell division might lead to a cure for cancer but will certainly advance biological knowledge as well.

“Science: The Endless Frontier,” the NSF’s informal constitution, makes explicit that the justification for basic research as conducted by the NSF is that it will eventually improve the security, prosperity, and health of the United States and its citizens. NSF proposals are ranked both on their intellectual merit and their broader social impacts. Recommending that the NSF no longer fund research on issues like health, energy, and jobs would separate the scientific community from problems of public concern, and likely lead to more of what Sen. Coburn derides as “silly science.”

Duplication of effort is an inherent problem for distributed organizations like the NSF. Scientists, working independently, tend to find the same problems interesting. Similarly, the need to continually present results and “publish or perish” leads to some amount of obvious and trivial science. But duplication of effort is strength rather than a weakness. Diverse approaches increase the chance that a solution to a given scientific question will be found. Rather than big pork-barrel research centers, the NSF funds scientists working in every state, creating a flexible and adaptive community of scientists.

At the cutting edge of science, there is no clear divide between research and education. Scientists learn by doing; the core of graduate training is planning, conducting, and writing up your own original research. The NSF’s education and outreach efforts are targeted not toward the general public but those students with exceptional potential who may go on to become award-winning scientists. For students, there is no substitute for imparting the excitement and importance of science like directly interacting with leading scientists, a mission better fitting the NSF than the Department of Education.

Of course, the decentralized style of the NSF is not the only way for the government to fund science. One proposed solution toward reducing duplication is a stronger development of a national innovation system, which would support all aspects of science and technology, from primary education to product development, and parcel scientists out based on identified national needs. A more centralized, activist role for the federal government in science, however, is an uncharacteristic policy for a small government conservative like Sen. Coburn to advocate.

Sen. Coburn wants a leaner NSF that is better at advancing American interests. This is an admirable goal for anybody who believes we need to innovate to maintain future economic competitiveness, military dominance, and even ecological survival, but the report is crippled by internal contradictions and blatant misrepresentations. As he calls for eliminating the NSF’s education and outreach efforts, Sen. Coburn wants a strong scientific enterprise without paying for the necessary human capital. Similarly, he approves of the role science plays in protecting us from natural disasters like tsunamis and earthquakes, while ignoring the many disasters—like  financial collapses, wars and conflicts, and anthropogenic climate change—whose human origins,might benefit from scientific investigation. Eliminating the Social, Behavioral, and Economics Directorate, as Sen. Coburn recommends, would dramatically reduce research into the human dimensions of scientific and technological issues.

The place of science in Sen. Coburn’s world is not that of an active participant that helps businessmen, politicians, and activists solve problems, but a miraculous force that constantly transforms society out of its existing problems. Science may appear smooth and monolithic from a distance, but at its bottom-most level, it is a very human endeavor, run by ordinary people who make mistakes, who have bad ideas, and who prefer working on their experiments to dealing with red tape. More than malfeasance in the NSF, or a failure to fund the right kind of science, this report reveals that Sen. Coburn believes he can score points with voters and the conservative punditocracy by attacking a pillar of American scientific excellence on any grounds he can gin up.

Science policy and government oversight deserve better.

Michael Burnam-Fink is a PhD student with the Consortium for Science, Policy and Outcomes at Arizona State University.

Amid the bitter and protracted negotiations over this fiscal year’s federal budget, U.S. investments in science and innovation were largely spared from the deepest cuts some federal programs faced. But they may not be safe for long as Congress considers making further spending cuts in the fiscal year 2012 budget beginning in October against the backdrop of debate this summer over raising the national debt ceiling.

That’s why it is critically important that members of Congress on both sides of the aisle distinguish between federal “spending” and “investments.” What many fiscally conservative lawmakers omit in their zeal to slash spending is that many federal programs actually have positive rates of return, meaning they bring in more revenue—to the government, economy, or both—than they cost the taxpayer. To put it another way, some federal investments are profitable to the public balance sheet and save the taxpayers money in the long run.

Need proof? Look no farther than two reports released last week, which looked at the economic benefits and return on investment in the Human Genome Project, and the National Institutes of Health, respectively, and showed that both federal programs have had a tremendously positive economic impact. Let’s examine each in turn.

The National Institutes of Health and economic growth

The first report “An Economic Engine: NIH Research, Employment, and the Future of the Medical Innovation Sector,” published last week by a consortium of science and research medical organizations, looked at the consequences of the public investment in the NIH on employment and economic output. The study, authored by Dr. Everett Ehrlich, a leading business economist and former Clinton-era undersecretary of commerce, found that the NIH directly and indirectly supported nearly 488,000 public and private sector jobs, and generated $68 billion in new economic activity in 2010 alone. Meanwhile, NIH research grants in FY 2010 cost the taxpayers only $26.6 billion. This would represent a 150 percent single-year return on public investment, counting total economic output from the research as revenue.

The economic activity and jobs supported by the NIH are not limited just to the NIH’s Bethesda campus outside Washington, D.C. They are spread across every state and territory in the country. In 2010 NIH research awards supported 12,000 public and private sector jobs in Georgia, 5,300 in Iowa, 1,300 in Alaska, and 31,000 in Texas, just to name a few.

In California, a company called Syntouch LLC is developing synthetic tactile sensors for prosthetics thanks to NIH-funded research. In Alabama, a company called DiscoveryBioMed, Inc. is using principles discovered by NIH-funded research to identify new therapeutic compounds for respiratory, metabolic, inflammatory, and hyperinflammatory diseases. West Virginia-based Protea Bioscience, Inc. is developing technology based on NIH research that improves the quality, reproducibility, and speed of processing protein samples, a technique that will aide with drug development across the board. See the map below for the number of jobs supported in each state by NIH federal research awards.

Source: Map by Science Progress with data from United for Medical Research

Critics of federal investment in R&D programs often argue that public programs like the NIH crowd out private investment. But a recent study conducted by the National Bureau of Economic Research found that the opposite is in fact true for the NIH. Each dollar of federal investment leads to a 32-cent increase in private medical research investment as discoveries diffuse out of academia and filter into the market. Another study found that NIH-sponsored research was more likely to be considered “advanced,” “novel,” or be related to “orphan diseases” than entirely privately funded drug research. This means that the NIH not only supports an ecosystem of business and innovative companies, but the innovation that comes out of this research is more likely to be novel and substantial.

The evidence in this report contradicts an oft-repeated fiscal conservative argument that public investments cannot create jobs. To quote the report, “simply put, NIH—and the research, jobs, technology, and businesses surrounding it—is nothing less than…an economic engine.”

The Human Genome Projects’ incredible return on investment

The second report, published by the Battelle Memorial Institute, is even more stunning. The report looked specifically at the economic impact and return on the federal investment of the Human Genome Project, an iconic federal science research program begun in the late 1980s.

The findings of the study speak for themselves: the public investment of $3.8 billion spread between1988 and 2003 yielded $796 billion (three-quarters of a trillion dollars), in economic output, and created nearly 4 million job-years over the 23-year period between 1988 and 2010. In 2010 alone, while it costing the government nothing, this farsighted, bipartisan investment in genomics research added $67 billion to U.S. gross domestic product, created $20 billion in personal income for American families, and sustained 310,000 public and private sector jobs.

If looking at these public investments from the point of view of a business, these numbers would represent phenomenal growth and profitability. If the total public investment in the Human Genome Project were a private investment fund, and the total public benefits thought of as revenue, the investments made in it would be said to have a return on investment, or ROI, of 14,000 percent over the 23-year period. A return like that would be enough to make any investor drool. Or, to look at it another way, imagine a family that put just $1,000 of their savings into the Human Genome Project in 1988. Today, they would have $140,000.

These figures are remarkable in and of themselves, but they don’t even take into account the intangible fact that these investments lead to innovation in medical treatments, medicines, and technologies that save lives and improve our public health. NIH research made possible the implementation of the Human Genome Project and genetic sequencing. It has also led to new cardiovascular treatments, neurotransmitters, and monoclonal antibodies, which were a component in 5 of the top 20 best selling drugs in 2010, generating worldwide revenue of $35 billion.

The project also had a tremendous impact not just on economic growth and job creation, but on innovation that is helping save lives. This research has helped launch an entirely new industry around personalized medicine and direct-to-consumer genetic testing, both making it easier to target specific medicines and treatments to patients’ needs. A 2009 study showed that 15 percent of healthcare providers reported at least one patient brought them results from a direct-to-consumer genetic test in the previous year, and 75 percent said they changed some aspect of the patient’s care based on the information. This new technology and the fast-growing industry around it were made possible entirely thanks to the research directly funded and indirectly catalyzed by the federal investment in the Human Genome Project.

The takeaway is that while these public investments have led to jobs, growth, and new technologies, more important is that the product of all this is new medical knowledge that benefits the public good. In the words of Greg Lucier, the chief executive officer of Life Technologies, whose foundation sponsored the Battelle analysis:

“From a simple return on investment, the financial stake made in mapping the entire human genome is clearly one of the best uses of taxpayer dollars the U.S. government has ever made. This project has been, and will continue to be, the kind of investment the government should foster…one with tangible returns.

“The initial dollar investment has already been returned [12 times over] to the government via $49 billion paid in taxes. Now we sit at the dawn of the ‘Genomics Revolution’ and all humankind will reap the benefits as we transfer what we now know about the human genome into major breakthroughs including: new forms of ‘personalized medicine’ and genetics therapy better suited to solving the problems we all care so much about, such as cures for cancer, cardiovascular diseases, Alzheimer’s, HIV/AIDS, and many more terrifying diseases. These major advancements are rapidly creating multiple new industries and companies and those companies are creating quality jobs for thousands of people. Life will be even better for all of us thanks to the HGP.”

Conclusion

When times are tough and budgets are tight, everyone—families, businesses, and yes, even the government—must make difficult choices and prioritize the things they really need while giving up some of the things they don’t. This process of economic recalibration, while painful, is a necessary and healthy step in making our economy more efficient in the long run.

But advocating cuts to government investments that bring in more revenue throughout the economy than they cost to run is self-defeating in terms of both deficit reduction and job creation. Cuts to these high-performing programs would be like a business cutting its best-selling product lines in the name of cost reduction. McDonalds doesn’t cut french fries from its menu just to save a buck. They know their french fries are profitable and draw customers to their restaurants. Such cuts would make McDonalds’ balance sheet worse—not better.

Similarly, cutting programs such as the NIH that demonstrably create jobs, catalyze private investment, and drive economic growth in excess of their public cost is misguided. As we proceed in the discussion of how best to make our government more efficient, and reduce our mounting foreign debt, our lawmakers need to adopt the same mentality. Investments in innovation—fundamental science and the research, development, and commercialization of new technology—have long been shown to have not only a positive return on investment for the government, but also great spillover benefits for private enterprise, small businesses, consumers, and ultimately for American families. Congress can’t forget this as it debates government investment targets for FY 2012 this fall.

Sean Pool is the Assistant Editor for Science Progress.

Two scientists brought this suit to enjoin the National Institutes of Health from funding research using human embryonic stem cells (ESCs) pursuant to the NIH’s 2009 Guidelines. The district court granted their motion for a preliminary injunction, concluding they were likely to succeed in showing the Guidelines violated the Dickey-Wicker Amendment, an appropriations rider that bars federal funding for research in which a human embryo is destroyed. We conclude the plaintiffs are unlikely to prevail because Dickey-Wicker is ambiguous and the NIH seems reasonably to have concluded that, although Dickey-Wicker bars funding for the destructive act of deriving an ESC from an embryo, it does not prohibit funding a research project in which an ESC will be used.

To translate this a little, Lamberth held that all federally-funded ESC funding violates the Dickey-Wicker Amendment, which prohibits the use of federal funds for “research in which a human embryo or embryos are destroyed.” Even though no federal money goes to studies that actually destroy an embryo, Lamberth concluded that such research requires scientists to build upon previous research that involved the destruction of an embryo, and that this is not allowed.

Lamberth’s decision, however, cannot be squared with Supreme Court precedent. Under the Supreme Court’s decision in Chevron v. NRDC, judges are normally supposed to defer to an agency’s reading of a federal law unless the agency’s interpretation is entirely implausible, and the Obama administration quite plausibly read the Dickey-Wicker Amendment to only prohibit federal funding of the actual destruction of an embryo — not federal funding of subsequent ESC research. Accordingly, the court of appeals reversed.

Today’s decision is a very hopeful sign that Lamberth’s questionable understanding of this law will no longer undermine stem cell research. Both of the judges who joined today’s majority opinion are conservative Republican appointees. Judge Douglas Ginsburg is a hardcore tenther who once called for a return to an Depression-era vision of the Constitution that struck down child labor laws and other very basic legal protections. Judge Thomas Griffith was appointed by George W. Bush.

Their decision did leave open a slight possibility that Lamberth could try to suspend stem cell research once again. The appeals court expressly decided not to weigh on two alternative claims by the plaintiffs, including a claim that federal ESC funding is illegal “research in which a human embryo or embryos are . . . knowingly subjected to risk of injury or death,” because these claims were not first considered by the court below. Nevertheless, the appeals court made clear that “the plaintiffs have not identified, nor have we found, any precedent for upholding a preliminary injunction based upon a legal theory not embraced by the district court.”

So it appears very likely, if not entirely certain, that stem cell research will ultimately be upheld against all challenges.

Ian Millhiser is a Policy Analyst and Blogger at American Progress. This is reposted from the Wonk Room.

Vibrant entrepreneurial markets such as those in and around Boston and Silicon Valley are nationally recognized for their high-octane venture capital fuel. Perhaps less well known is the degree to which the federal government has served as something of a “venture catalyst” by providing nondilutive grants, equity, contracts, and resources to high-growth startups. Some examples include:

• The Department of Defense, which supports, with research contracts, important technologies that support military (and, subsequently, commercial) applications, particularly its legendary Defense Advanced Research Projects Agency, or DARPA
• The Small Business Investment Company program, or SBIC, a more-than-50-year-old program that complements private-sector capital in support of growth companies
• The Small Business Innovation Research, or SBIR, program, a nearly 30-year-old program that provides grants to small businesses in support of federal needs for research that also have commercial corollaries
• The Department of Energy, which most recently added a Defense Department-inspired energy-centric version of DARPA called the Advanced Research Projects Agency—Energy, or ARPA-E, to its private-sector support suite for energy innovation

For decades, the federal government has  partnered with the private market to advance public product or service innovation needs related to defense and energy security—and, of course, to serve its agenda for jobs, competitiveness, and economic growth. For the most part, programs from Small Business Administration (SBIR, SBIC) and defense technology spending have been well supported on both sides of the political aisle. Most of these programs are agnostic to the demographics of an applicant—whether location, gender, race, or income. Whether applying from VC-hub Boston, MA, or Biloxi, MS, individuals and companies of all variety have access to some form of federal grant, loan, or equity.

But during the last two decades, two of the past three presidents have focused particularly on underserved communities and people. The Clinton administration’s New Markets Tax Credit and New Markets Venture Capital programs (run by the Treasury and SBA, respectively) seek to fill the capital gap that exists and persists for these target places and people. The Obama administration has continued the tradition, adding new initiatives that focus on underserved people, regions, and sectors. These programs provide resources from multiple agencies to women, minorities, Native Americans, veterans, and low-income communities.

A few examples include the Small Business Administration, with both existing and new programs that support loans and mentoring for small businesses, and the Treasury’s Community Development Financial Institution, or CDFI, Fund, which supports loan and equity pools that focus on targeted rural and urban low-income communities. SBA recently announced a chair for its new Advisory Council for Underserved Communities. The Advisory Council was formed to look across SBA’s assets (and others of the government) to align similar initiatives that serve targeted low-income people and places. Even the Obama administration’s multiagency Regional Innovation Cluster push—covered in SP in February—includes specific callouts for addressing underserved in each of the SBA and EDA cluster funding initiatives.

Indeed, the Economic Development Administration by mandate has always been about addressing low-income, high-unemployment, and otherwise challenged communities in disaster zones, regions with substantial outmigration of population, or those suffering from the loss of industries. The EDA’s recently announced i6 Green competitive grant for innovative Proof of Concept Centers mirrors a number of similar Obama initiatives in that it seeks to drive the innovation ecosystem (in this case on the green economy) but does so with EDA’s emphasis on distressed regions. The program enables existing grantees from SBIR programs at the National Science Foundation, the U.S. Department of Agriculture, and the Environmental Protection Agency that are part of winning i6 Green consortia to share half of the $12 million program award. This unprecedented flexibility and multiagency approach—with a single agency leading and other agencies contributing—are emerging hallmarks of Obama’s efforts to reduce silos and to align resources at the federal level.

As I noted in February, two new $1 billion SBA capital access programs are intended to drive debenture-funded risk capital into underserved inner cities and into clean energy, respectively. While clean energy is a pretty hot area for VCs in their traditional hunting grounds of Silicon Valley and Massachusetts, it’s still very much an emerging sector in other communities. Driving more risk capital into this strategic sector will make a difference for U.S. competitiveness—especially with countries like China plowing far more government money into this strategic high-growth sector.

Providing incentives for venture capital and mezzanine investors to drive capital into underserved regions that don’t normally see private investment dollars, too, is smart strategy. Our tech-and-innovation economy cannot be just about the rich city centers like Boston or the Silicon Valley. Other metropolitan regions need to develop the patterns of innovation and entrepreneurship that drive long-term economic growth. Consistent with its democratic roots, the Obama administration attends—if not equally, then meaningfully and substantively—to the underserved rural regions of our country that need essential capital and innovation infrastructure as much or more so than their rich city brethren.

At risk of appearing self-serving, let me share with you one emerging success story that speaks to the importance and impact of public-private partnerships such as those described above. Since 2000, I have managed one of six Clinton-era venture capital funds—part of the so-called New Markets Venture Capital, or NMVC, funds licensed by SBA  in 2000-2001. The NMVC program is an SBA initiative that matches 1-to-1 venture capital raised in the private sector for the purpose of directing this innovation rocket fuel in regions that lack the kinds of assets one finds in Boston. The fund I’m involved in backed nine companies, eight of which saw their first professional capital from this specialized pool, and all of which leveraged each dollar from the fund 5-to-1 with private follow-on capital.

One of the fund’s two remaining investments is Nanocomp Technologies, an advanced nanomanufacturing  company that has subsequently received several DOD contracts, SBIR awards, and recently a special designation that is given to a handful of companies in the United States deemed “essential to national defense.” This designation comes with additional federal funding—which will leverage additional private capital to help get this technology to scale to solve real problems related to both national defense and  commercial customers.

The product is an advanced material with game-changing structural, thermal, and electrical properties that has applications in aviation, electrical transmission, thermoelectric power generation, and commercial electronics, among others. It is among the lightest, strongest, and most electrically and thermal conductive materials known to man, and was presented in 2010 by the Office of Science and Technology Policy to President Obama as one of the three most significant nanotechnology innovations of 2010. Since I led the company’s first professional round of capital in late 2006, the company has grown from 2 to 40 staff and looks to grow to a few hundred in the next five years. With the help of the NMVC program, the company was able to locate its headquarters and manufacturing facility in an economically distressed region in New Hampshire.

While it’s early to declare this investment a victory, this emerging company funded through a public-private partnership makes a hell of a case for specialized federal programs that support innovation and entrepreneurship in underserved regions. These kind of public-private partnerships catalyze private-sector innovation to develop game-changing technologies of national priority, move private investment dollars, and create jobs in underserved regions. That’s a good thing for future U.S. economic competitiveness and broad-based prosperity.

Michael Gurau is a venture capitalist with CEI Community Ventures and is also president of Clear Innovation Partners, a company formed to catalyze and accelerate regional innovation clusters.

We here at CAP and Climate Progress have been keeping close tabs on House Republicans’ efforts to make the country more vulnerable to extreme weather events. If Congress refuses to fund new environmental monitoring satellites to replace aging spacecraft that could fail at any time, it will undoubtedly expose Americans to increased risk from storms, floods, blizzards, and hurricanes. Meanwhile, more and more science is emerging that strengthens the link between unprecedented weather phenomena and human-caused global climate change.

The GOP-controlled Congress took steps to eliminate $700 million in funding for NOAA’s satellite program in its bill to fund the federal government for the remainder of the fiscal year (until October 2011). Though that bill is still being negotiated, the three-week continuing resolution that keeps the government open until April 8 also contained cuts to NOAA’s vital satellites.

As I have written, making these short-sighted cuts now will force taxpayers to spend three to five times as much to buy exactly the same equipment 18-months down the road—a delay extremely likely to leave the nation without coverage since our current satellites are approaching the end of their projected service lives. Failing to replace these vital sources of data is simply not an option. This is because these satellites are critical to our ability to predict and prepare for high-impact weather phenomena.

How critical? The graphics below show a “with” and “without” comparison of how forecasts for the “Snowmageddon” storm of 2010 would have been impacted by the loss of NOAA’s satellites. The first set of maps shows actual rainfall experienced in the central Gulf Coast; NOAA’s rainfall predictions; and the predictions that would have been filed without satellite data. The second set shows the same progression for the snowfall forecast in the mid-Atlantic region.

(click to enlarge)

Without the satellite data, NOAA’s forecasts lose as much as 50 percent of their accuracy, underforecasting snowfall in Washington, D.C. by almost foot, and rainfall in the Gulf by up to an inch. The resulting failure to prepare for flash floods, roadside strandings, air traffic delays, and transit interruptions could halt all commerce. Even worse, failing to maintain our satellite network, according to NOAA, would reduce future flood preparedness time from days to mere hours, putting human lives at risk.

Does it snow where you live? Does it rain? The GOP wants you to wait a year and a half and then pay five times as much to eventually get a reasonable estimate of how much wet stuff is going to fall from yonder cloud. Apparently their intention is to boost the economy through sales of bottled water, batteries, and toilet paper so everyone is prepared when the next big storm hits. Absent a substantial investment to maintain our environmental satellite network, it could happen any time—without warning—so you better start shopping.

Michael Conathan is Director of Ocean Programs at American Progress. This article is cross-posted at Climate Progress.

On Tuesday, in its latest three-week extension of government spending, the GOP, apparently not content with the depth of its evisceration, upped the ante by voting to cut an additional $115 million from NOAA’s Acquisition account.

As we wrote in February after the initial cuts passed the House:

At least an 18-month gap in coverage will be unavoidable without adequate funding for new polar-orbiting satellites this year. More troubling, taking an acquisition program offline and then restarting the process at a later date would lead to cost increases of as much as three to five times the amount the government would have to spend for the same product today.

So here’s the choice: Spend $700 million this year for continuous service or $2 billion to $3.5 billion at some point in the future for the same equipment and a guaranteed service interruption.

The tragic events in Japan serve as the most recent reminder that betting against Mother Nature is a losing proposition, yet House Republicans seem intent on insisting they can protect Americans without adequate information. They know the hurricanes, tornadoes, and floods are coming. Apparently we simply can’t afford to know when.

Michael Conathan is the Director of Oceans Policy at the Center for American Progress. This is cross-posted at Climate Progress.

Weather predictions used to be a frequent punchline but they have improved dramatically in recent years. More often than not you’ll need an umbrella if your local television channel or website of choice tells you to bring one when you leave the house. But we could take a huge step back to the days when your dartboard had a reasonable chance of outpredicting Al Roker if House Republicans have their way with the 2011 federal budget.

The House of Representatives is debating the Full Year Continuing Resolution Act (H.R. 1) to fund the federal government for the remainder of fiscal year 2011. The Republican leadership has proposed sweeping cuts to key programs across the climate change, clean energy, and environmental spectrum. They have also decided that accurate weather forecasting and hurricane tracking are luxuries America can no longer afford.

The GOP’s bill would tear $1.2 billion (21 percent) out of the president’s proposed budget for the National Oceanic and Atmospheric Administration, or NOAA. On the surface, cutting NOAA may seem like an obvious choice. The FY 2011 request for the agency included a 16 percent boost over 2010 levels that would have made this year’s funding level of $5.5 billion the largest in NOAA’s history.

Even this total funding level, however, is woefully insufficient for an agency tasked with managing such fundamental resources as the atmosphere that regulates our climate, the 4.3 million square miles of our oceanic exclusive economic zone, the ecological health of coastal regions that are home to more than 50 percent of all Americans, response to environmental catastrophes including the Deepwater Horizon oil spill, and fisheries that employ thousands of Americans and annually contribute tens of billions of dollars to the national economy.

More than $700 million of the president’s proposed 2011 increase in NOAA funding would be tagged for overhauling our nation’s aging environmental satellite infrastructure. Satellites gather key data about our oceans and atmosphere, including cloud cover and density, miniscule changes in ocean surface elevation and temperatures, and wind and current trajectories. Such monitoring is integral to our weather and climate forecasting and it plays a key role in projections of strength and tracking of major storms and hurricanes—things most Americans feel are worth keeping an eye on.

In fact, NOAA has been making great strides in hurricane tracking. The average margin of error for predicting landfall three days in advance was 125 miles in 2009—half what it was 10 years prior. This data translates into a higher degree of confidence among the public in NOAA’s forecasts, which means individuals will be more likely to obey an evacuation order. Further, since evacuating each mile of shoreline costs approximately up to $1 million, greater forecasting accuracy translates to substantial savings.

The United States needs these satellites if we’re to continue providing the best weather and climate forecasts in the world. The implications of the loss of these data far exceed the question of whether to pack the kids into snowsuits for the trip to school. The concern here is ensuring ongoing operational efficiency and national security on a global scale. In some cases it can literally become a question of life and death.

Consider the following numbers:

• The $700 billion maritime commerce industry moves more than 90 percent of all global trade, with arrival and departure of quarter-mile long container ships timed to the minute to maximize revenue and efficiency. Shipping companies rely on accurate forecasts to set their manifests and itineraries.
• Forecasting capabilities are particularly strained at high latitudes and shippers have estimated that the loss of satellite monitoring capabilities could cost them more than half a billion dollars per year in lost cargo and damage to vessels from unanticipated heavy weather.
• When a hurricane makes landfall, evacuations cost as much as $1 million per mile. Over the past decade, NOAA has halved the average margin of error in its three-day forecasts from 250 miles to 125 miles, saving up to $125 million per storm.
• Commercial fishing is the most dangerous profession in the country with 111.8 deaths per 100,000 workers. A fisherman’s most valuable piece of safety equipment is his weather radio.
• When disaster strikes at sea, polar-orbiting satellites receive emergency distress beacons and relay positioning data to rescuers. This resulted in 295 lives saved in 2010 alone and the rescue of more than 6,500 fishermen, recreational boaters, and other maritime transportation workers since the program began in 1982.
• Farmers rely on NOAA’s drought predictions to determine planting cycles. Drought forecasts informed directly by satellite data have been valued at $6 billion to 8 billion annually.
• NOAA’s volcanic ash forecasting capabilities received international attention last spring during the eruption of the Icelandic volcano, Eyjafjallajökull. The service saves airlines upwards of $200 million per year.
• NOAA’s polar-orbiting satellites are America’s only source of weather and climate data for vast areas of the globe, including areas key to overseas military operations. Their data are integral to planning deployments of troops and aircraft—certain high-atmosphere wind conditions, for example, can prohibit mid-air refueling operations.

All of these uses will be compromised if the Republicans succeed in defunding NOAA’s satellite program. At least an 18-month gap in coverage will be unavoidable without adequate funding for new polar-orbiting satellites this year. More troubling, taking an acquisition program offline and then restarting the process at a later date would lead to cost increases of as much as three to five times the amount the government would have to spend for the same product today.

So here’s the choice: Spend $700 million this year for continuous service or $2 billion to $3.5 billion at some point in the future for the same equipment and a guaranteed service interruption.

Environmental satellites are not optional equipment. This is not a debate about whether we should splurge on the sunroof or the premium sound system or the seat warmers for our new car. Today’s environmental satellites are at the end of their projected life cycles. They will fail. When they do, we must have replacements ready or risk billions of dollars in annual losses to major sectors of our economy and weakening our national security.

That’s an ugly forecast. Tragically, it’s also 100 percent accurate.

Michael Conathan is Director of Oceans Policy at American Progress. This is cross-posted at the Center for American Progress.

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Event: Regional Innovation Clusters: Advancing the Next Economy

Amid today’s stumbling economic recovery, policymakers are examining a variety of measures to help businesses compete and grow their workforces. As part of this effort, it is critical that they understand how regional economies across our country stitch themselves together from the bottom up—what makes them tick and what they need to grow and thrive in the 21st century. Alas, federal innovation policies aimed at boosting the competitiveness of our economy through investments in science and technology commercialization are often grounded in 20th-century economic development strategies that overlook the importance of regional economies and no longer match the needs of the 21st-century global economy.

Academics and policymakers alike understand the limitations of our current policies at the macroeconomic level. Federal funding for these commercialization programs, at less than 10 percent of the $150 billion a year we invest in basic scientific research, is “small beer”—a trivial amount given the challenges our nation faces from our global competitors. And federal programs designed to implement these policies are divided into a chaotic array of “silos”—policy speak for mutually unconnected programs— that make it exceedingly hard for the federal government to act upon any strategy designed to overcome our nation’s economic policy limitations.

At the regional level, however, many businesses and universities, state economic development agencies and community colleges, venture capitalists and commercial bankers all depend on current federal innovation policy funds to pay for or complement their own efforts to boost commercialization of game-changing discoveries, incremental manufacturing, and service innovation alike. Despite the clear limitations of existing federal innovation programs, they remain important to our national economic competitiveness. So understanding the efficacy of these federal innovation programs is the first step toward understanding how to improve them or replace them.

That is what we set out to do in this paper in one regional economy of our country—the eastern Midwest region that includes Pittsburgh in western Pennsylvania; and Cleveland, Akron, and Youngstown in northeast Ohio. The region, anchored by its major cities Pittsburgh and Cleveland, faces distinct challenges and opportunities. Regional economic growth, of course, is everywhere local and interconnected, but how much so depends on the vibrancy of each region’s innovative ecosystem. Silicon Valley in California, or the Route 128 corridor around Boston are famous “regional innovation clusters” in which businesses large and small, universities, federal labs, and financiers interact every day in a heady mix of creativity that powers our nation’s innovation economy. Places that have tried to copy their unique recipes, however, have not been very successful. And those places that succeeded at creating a high technology regional economy, such as North Carolina’s Research Triangle Park and San Diego’s Connect project, found that they needed to pave their own path.

In similar vein, Hollywood has a different mix of players who achieve the same thing in southern California for our entertainment industries. And Nashville serves the same purpose for country music. The upshot: Every successful regional innovation cluster defines itself idiosyncratically and specifically to its own context, depending on its own defining economic activity—be it entertainment, biotechnology, information technology, or advanced manufacturing.

But older industrial areas such as Pittsburgh, Cleveland, Akron, and Youngstown are places with substantial infrastructure and a proud industrial heritage that are struggling to redefine themselves in the global economy. The large corporations headquartered there that served as the backbone of the region’s 20th-century industrial economy are neither as numerous as they were 50 years ago nor as central to the region’s core economic competitiveness. In many different ways these companies have squandered their competitive advantages or watched as the forces of globalization overwhelmed those advantages.

This leaves entrepreneurship (defined as new firm formation and scale-up) and innovation (defined as the creation of value in an economy no matter the size of the company or the source of the idea) as the most viable strategies for the economic future of the region. Our study sought out these new players in this region’s innovation ecosystem to ask them not only about the efficacy of federal innovation programs but also about how they interact with each other—how much they felt they worked and lived in an emerging regional innovation cluster. Along the way, we also asked these players about the region in search of the strengths and weaknesses of this once-thriving, metal-bending region of our country in the 21st century.

Our survey of these firms and players on these subjects is the first one ever conducted. And our one-on-one interviews with dozens of key players in this new ecosystem only buttressed what we learned from our survey. We found in the eastern Midwest of our country an ecosystem of innovation and entrepreneurship that is emerging and vibrant, but also fragile, requiring the sustained efforts of local, state, and federal agencies working together to help firms survive and thrive. Problem is, we also found that local innovation programs that connect well with entrepreneurs are limited in scale, and the handoff with federal programs can be problematic at best because these programs are also limited as well as disconnected from each other.

Within this one region, we find examples of companies that have worked well with the limited resources available to them. But many others still have a ways to go. We also find universities and state economic development agencies that thoroughly understand the role they need to play in developing a thriving regional innovation cluster. But we also learn about the limitations these institutions face.

In the pages that follow, we will detail the results of our survey then present our overarching analysis of this seminal and difficult data-gathering effort accompanied by our on-the-ground interviews. The information we gleaned is admittedly difficult to assemble into succinct categories. The complexity of the region’s rolling transformation from industrial heartland to a new innovation-driven ecosystem for the 21st century is very hard to capture in clean “snapshots.” Briefly, however, we discovered that:

• Financing is lacking both for young innovative companies and for established medium-sized companies as they try to carry promising new or incremental technologies to market.
• Accessing federal innovation funds is exceedingly time consuming, often self-defeating, and in the end usually too small to be of enduring use.
• State and local innovation funds are pursued to a greater degree than federal programs but are too small for the needs of the region’s firms.
• Federal, state, and local funding programs nonetheless can be useful in attracting private financing even though these programs are not well-coordinated.

These findings are troubling for a variety of reasons. Many entrepreneurial business ventures depend on these government programs as they discover, develop, and begin to move innovation toward the market. Without critical public support, these entrepreneurs may not be able to survive. For a long time, economic development policymakers have recognized that the infamous “valleys of death,” where good ideas lack the financing to become companies that hire well-paid workers, seriously threaten the creation of new firms and the expansion of existing firms. This debilitating financing gap is compounded by current economic conditions and a banking crisis. The result: The entire spectrum of small- and medium-sized firms and even larger firms in the region face a crisis in securing expansion and working capital.

But our survey turned up some promising news, too. Specifically:

• Finding management, engineering talent, and well-trained workers in the region is not a significant challenge for companies.
• Startup companies and established small- and medium-sized firms are building on the region’s historical strength in industrial activity to create new products and services in emerging industry clusters within the region.
• These companies recognize they operate in clusters and would welcome a regional innovation cluster coordinator who could bring together private sector companies; nonprofit organizations such as universities; and federal, state, and local government officials to better align economic policy with the needs of companies in the region.

These core findings underscore the need for the federal government to overhaul its innovation policies and to work more closely with state and local leaders in the public and private sectors to sort out what works and what does not. Our study also points to the need to completely rethink how we go about encouraging regional economic development in the 21st century.

Proposing specific policy proposals based on one survey of one regional economy would not be wise, but there is enough academic research and policymaking experience about innovation to support a set of policy principles that are buttressed significantly by the research we have just completed. We will detail these, too, in the pages that follow, but briefly we believe that:

• Bottom-up, locally organized innovation programs that stitch together federal, state, and local economic development programs would serve our national economy best in the 21st century. This should be financed through public-private partnerships that include all the players in a given regional innovation cluster.
• The federal government has a major facilitating role to play in this process— one that includes significant increases in financing without monopolizing decision making.
• Each locally organized cluster will be different and thus will need region-specific support from federal, state, and local governments.

We believe our survey and our analysis demonstrates the need for the Obama administration and especially Congress to embrace these principles as they go about reforming our economic development programs to meet the needs of the 21st-century innovation economy. Pittsburgh, Cleveland, Akron, Youngstown, and their surrounding communities are changing rapidly because of globalization and in reaction to globalization. Our policymakers in Washington, in statehouses, and in municipal town halls need to give them the tools they need to succeed.

Maryann P. Feldman is the S.K. Heninger Distinguished Chair in Public Policy at the University of North Carolina, Chapel Hill, and Lauren Lanahan is a graduate student in the Department of Public Policy at the University of North Carolina, Chapel Hill.

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Event: Regional Innovation Clusters: Advancing the Next Economy

Small companies are the nation’s primary drivers of job creation. A few of today’s small companies will grow to become our next 21^st century Googles and Genentechs. These young companies could become the next big publicly traded companies on the cutting edge of innovation, and many more could become the not-as-big but just as prosperous companies with the ability to raise equity and debt capital to expand their businesses and job opportunities. This kind of “bottom-up” innovation and entrepreneurial company creation is what defines our unique U.S. venture capital-driven economy, the world’s top performer that over the past several decades produced tremendous results.

But something important has changed since then—the pool of venture capital is dramatically smaller today, crimping the creation of new ideas into new businesses ready to hire Americans by the score. The headline in a recent Wall Street Journal article tells the tale: “Venture Capital Could Shrivel Away” because “fund raising has now come to a near halt.”

Indeed, in a recent presentation in the National Venture Capital Association’s Venture Capital Industry Update, October 14, 2009, NVCA president Mark Heeson shows that the steady, though historically slow, growth in VC fundraising from 2002 to 2007 began a considerable decline in 2008 such that the VC industry is at a new and much lower level.

Why is venture capital fundraising important to jobs growth? Well, a recent NVCA report shows that:

“In 2008, venture capital-backed companies employed more than 12 million people and generated nearly $3 trillion in revenue. Respectively, these figures accounted for 11 percent of private sector employment and represented the equivalent of 21 percent of U.S. GDP during that same year. These findings extend trends regarding venture capital’s outsized impact – or “ripple effect” – on the U.S. economy that stretch back to the first edition of this report, published in 2001.”

The upshot: Our nation’s unique strength, its venture capital industry, is in danger of drying up just when we need it the most.

Yet equity capital for small business remains key to growing the competitive companies that can create the millions of jobs we need for broad-based economic prosperity. Without equity capital, jobs will lag and the jobless recovery will continue. America needs to focus on jobs-ready, entrepreneurial-driven companies by providing equity capital for their growth. And yes, the federal government can help.

Today there is a special opportunity for the federal government to have a significant impact on job creation by joining forces in a public-private venture capital partnership. Together, the private and public sectors can invest equity in competitive, jobs-ready businesses—equity that can also enable other private and public sector debt financing for small businesses to work more effectively.

Before detailing how this public-private partnership would work, let’s first listen to what the co-founder of one of the 20^th century’s most successful venture capital-backed companies sees as the key problem plaguing jobs growth in our nation today. Andy Groves, Intel Corp.’s co-founder, CEO and chairman, recently in Bloomberg Businessweek pinpointed the strategic decline in jobs creation in the United States. He says our economy is suffering from the ability to take technology “from prototype to mass production.” Grove rightly notes:

“This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter. The scaling process is no longer happening in the United States.”

He’s right, of course. Jobs and scaling are two sides of the same coin. And it’s the equity capital piece, the most powerful driver in jobs creation, that’s missing from public discussion about how to solve the problem of America’s severe jobs problem. America has hundreds of these companies, all now job ready. It is these companies that equity capital can help and the ones that are ready to be a part of an American jobs strategy.

Here’s how an “equity jobs” program would work. Public and private venture capital funds would go directly to companies at the top of the list as potential jobs producers.  They would only go to companies that are ready to hire new employees to support their growth, whether the company employs only a handful of workers but is poised to launch a groundbreaking new product or service that can be quickly scaled up, or employs 300 hundred or more workers but needs the equity investment to expand their operations across the country or overseas, mostly likely in tandem with public and private debt financing, too.

As an investor, the federal government would be a limited partner in these funds, so all public money would be returned to the U.S. Treasury along with dividends as companies went public on U.S. stock exchanges or were acquired by other companies looking to expand their operations or tap new technologies with homegrown production. This would be a positive “double bottom line” for America.

Making this program churn out jobs would require a rigorous selection of savvy fund managers with track records of strength and quality of work. They would need to boast a variety of company building skills alongside financial and entrepreneurial acumen, but also the basic skills metrics of a good VC such as speed of exits, cash-on-cash returns, investment volume, and ability to build “home run” potential in their portfolios.

To provide investment services in regions in all 50 states, the program would employ 25 fund managers. Each would be required to show that they possess operational experience in firms with top quartile internal rate of return performance, and cumulative experience of ten years or more as board members of invested companies. Further they would have to demonstrate the capability to commit to and provide both return on investment and jobs creation outcome metrics.

The successful applicants would select jobs-ready companies on two key criteria. The first would be according to highest levels of order backlogs and current demand, one way venture investors select their most promising investments in companies close to “break out.” Consider an Orange County, CA-based technology company that recently failed to qualify for either bank or Small Business Administration financing because of lack of sufficient equity capital. The company, Applied Cardiac Systems, in business for 30 years, makes in America and sells worldwide its wireless devices to monitor heart functioning. Recently a change in government requirements of devices of this kind opened up a market of nearly $500 million. The company is a very strong global competitor in this market, and with adequate funding to support expansion, the company could scale up and add new local jobs. But the recent economic downturn reduced the company’s cash flow, disqualifying it for a loan. Equity capital is the only source of funds that can jumpstart this company’s growth.

Why is equity financing as a public policy priority so important to debt financing? Because the federal government right now is making strenuous efforts to direct debt capital to small businesses, but in many cases it isn’t working. Banks are reluctant to lend after the U.S. housing and financial crises, and banks are facing more stringent regulatory requirements precisely because of the lending excesses of the past decade. Elizabeth Warren, who overseas the $700 billion Troubled Asset Relief Program, or TARP, for Congress says ”there’s no evidence that the $700 billion bailout boosted lending to small business.”

Warren is concerned that the market can’t find qualified companies and worries that the government incentives to lend are not strong enough. And in fact, banks are less willing to grant loans to small- and medium-sized companies. But with an infusion of equity capital these companies become much more promising credit risks. The key is equity capital, a way to address these issues and to provide growth capital to those companies that have a future potential and who have a strong backlog of business and need to hire.

The second investing criteria for these new public-private venture capital funds would be in market-ready products based on disruptive technologies that meet rapidly emerging global demand. Everyone in America knows the rags-to-riches stories of venture capital backed companies such as Google and Yahoo Inc., but there are many other companies like them who boost job growth every day in our country. Cases in point where equity has ignited world class companies:

• In 1987 Silicon Valley venture firm Sequoia Capital invested $2.5 million in data network gear maker, Cisco Systems Inc. for 30 percent ownership of the startup—within 10 years after going public Cisco employed 26,140 people.
• Ebay Inc. received $6.7 million from Benchmark Capital in 1997, which provided them the opportunity to go public in 1999, and then further expanded by purchasing Paypal, creating thousands of jobs.
• Intuit Inc. started with 2 guys working out of a modest apartment in Palo Alto, CA in 1983—venture backing helped it grow to $3.4 billion in revenues with approximately 7,800 employees today.

We need to support companies with disruptive technologies such as these—technologies that will define the 21^st century global economy—by ensuring adequate equity capital for entrepreneurs with breakthrough applications in alternative energy, clean energy technology, life science, medical technologies and personalized medicine, cybersecurity, and more. America has an abundant supply of these technologies just waiting to be commercialized at a scale that creates jobs upon jobs. We just need to find them, provide the capital they need, and help them grow and create those jobs.

Those who understand the direct connection between equity capital and jobs creation know they need to make it happen. In 2009 a House of Representatives’ committee passed the ‘‘Small Business Early-Stage Investment Act of 2009’’ (H.R. 3738) co-sponsored by Reps. Blaine Luetkemeyer (R-MO) and Glenn Nye (D-VA) by voice vote that would establish an equity investment program for small business. Later almost identical sections appeared in the‘‘Small Business Financing and Investment Act of 2009’’ (H.R. 3854, Title VII), sponsored by Rep. Kurt Schrader (D-OR), which built around the idea of serving certain small businesses needing equity investment because they had “attributes of being highly capital-intensive enterprises whose business models are generally not amenable to financing through lending programs.”

This bill passed the House of Representatives on October 29, 2009, by a vote of 389-32. Alas, the bill was sent to the Senate and referred to the Committee on Small Business and Entrepreneurship, and its status as reported by Govtrack.us is “would seem to be abandoned.”

This year, however, a new bill, Small Business Jobs and Credit Act of 2010

(HR 5297), sponsored by Rep. Barney Frank (D-MA) recently passed the House of Representatives with the main features of H.R. 3854, but with an increased equity funding level to $1 billion (HR 5297, Title III). A companion bill “The Small Business Jobs Act of 2010” (H.R. 5297), stripped, unfortunately, of any provisions for improving equity capital for small business, is now before the Senate.

All this legislative effort has been a step in the right direction, but all, alas, lack a direct focus on jobs creation. We need the new legislation to establish a program now that can create jobs through job-ready companies. We need to amend HR 5297 to include strong provisions for jobs creation. These provisions should establish our proposed public-private partnership venture capital program that will reflect a tested venture investment model that has been shown to be successful for decades.

The new program should learn best practices from successful state programs and also mirror federally implemented venture investment programs, and in particular, In-Q-Tel, the venture capital arm of the Central Intelligence Agency. Such a program would start the near-term creation of jobs now critically needed to bolster the U.S. economy.

And we can learn from the states. The Iowa Capital Investment Corporation, Utah Fund of Funds, Oregon Investment Fund, Invest Michigan, New Mexico Private Equity Program, and other state fund of funds initiatives show that equity capital attracts equity capital and accelerates company growth along with new jobs. Most funds are capitalized from $200 million to $400 million and target investment opportunities in venture capital and small buyout stage companies with growth characteristics across a range of sectors. The immediate effect of establishing the funds is to boost the amount of risk capital available to entrepreneurs.

Economics 101 defines capital formation as the creation of productive assets that expand an economy’s capacity to produce goods and services. In short, equity drives the economy. But it’s a paradox of sorts that though equity has mammoth power to drive the economy, the amount needed is relatively small. On the floor of the New York Stock Exchange in the first hour on the first trading day of a new year more money changes hands than VC’s invest in an entire year.

Now the nation is faced with a sea-change in the underlying structure of our economy and capital markets. Equity capital resources are shriveling at a time when more is needed. We need now to establish regional investment funds all across the United States with mandates to invest in jobs-ready companies. It would put funds to work immediately to help launch exciting new companies with disruptive technologies run by brilliant entrepreneurs, creating whole new industries. And it would enable older companies with high growth potential to work with banks to scale up and double and triple the number of their employees.

Today we must have access to and greater availability of equity financing because only a few hundred institutions and venture capital firms invest each year in the nation’s new companies, and that number is shrinking every year. We can make it happen with a national fund of funds that will serve every state and every region. Waiting in the wings for us to act are America’s best companies that will create 21^st century jobs and stop the jobless recovery.

Thomas Gephart is managing director of Catalyst Fund and founder and managing partner of Ventana Capital. As one of the first venture investors in San Diego and Orange County, he was a member of USC’s School of Engineering Board of Counselors for six years, working with new technologies and technology transfer. Currently, he advises multinational firms in search of innovative acquisitions.

Dan Loague is the Washington representative for Catalyst Funds. He is also a principal of Global Tech Exchange LLC, a company that provides technology commercialization consulting to venture capital and private equity investors, and executive director, Capital Formation Institute, Inc., a nonprofit organization serving a national network of leading seed and early stage investors, licensees, and commercialization professionals.

The administration is asking for $75 million “to support the creation of regional innovation clusters that leverage regions’ competitive strengths to boost job creation and economic growth,” a goal Jonathan Sallet, Ed Paisley, and Justin Masterman championed in the Science Progress report, “The Geography of Innovation.” Part of the key to this approach is that is allows policymakers to pay close attention to regional strengths. As the report authors explain: “Geographic regions that are bound together by a network of shared advantages create virtuous cycles of innovation that succeed by emphasizing the key strengths of the local businesses, universities and other research and development institutions, and non-profit organizations.”

As well, the Department of Energy budget includes substantial investments in research and development to spur clean energy innovation. That includes $107 million for three existing and one proposed Energy Innovation Hub. The Hubs, as the full DOE request says, “establish larger, highly integrated teams working to solve priority technology challenges that span work from basic research to engineering development to commercialization readiness.” These hubs, write the “Geography of Innovation” authors, are forward-thinking centers that will “spur the development of the innovation clusters that will help solve our national energy challenges, create jobs, and promote widespread economic growth.”

The president paid a visit to the NIH campus in Bethesda to announce what officials hinted at a few weeks ago: the agency has so far distributed $5 billion in American Recovery and Reinvestment Act funds. As of today, that means that the ARRA has funded more than 12,000 projects, and 1,800 of those grants have gone to researchers who have never before gotten a major NIH award, according to Collins.

According to a video posted posted on the White House blog, NIH estimates that the $10.4 billion in Recovery Act funds will support approximately 50,000 jobs. In his speech today, Collins said the new funds have gone to “some of the most innovative and creative directions for research that I have seen in 16 years at NIH” and that the galaxy of new grants “is not just about ‘doubling the recipe.’”

Obama emphasized the dual benefits of the “the single largest boost to biomedical research in history”: advances in treatments for life-threatening diseases and job creation. He pointed specifically to projects aimed at cancer, heart disease, and autism research.

Remarks from the director and president are available via streaming video; the Washington Post has a transcript of the president’s speech. (HT: Jocelyn Kaiser at ScienceInsider)

The President recognized that “When we fail to invest in research, we fail to invest in the future.” For decades, we have underinvested in our nation’s R&D infrastructure. The $22 billion in research funding I worked to include in the American Recovery and Reinvestment Act was a down payment on our economic future. I look forward to working with the administration and my colleagues in Congress to ensure that we meet the President’s commitments to doubling the R&D budgets of our basic science agencies and investing at least 3 percent of GDP in public and private research and development.

The President also said, “I firmly believe that the nation that leads the clean energy economy will be the nation that leads the global economy.” I could not agree more. As Congress continues to weigh a response to the challenges of climate change and energy security, we must make robust investments in the research and development that will transform our energy sector. We can and should be the nation that creates and produces the energy technologies that are necessary for a sustainable future.

The United States retains an unlimited potential for discovery, entrepreneurship, and prosperity. If we choose to unleash that talent, we can lead the world in innovation and dispel the uncertainty that has gripped us in recent years.

Rush Holt represents the 12th congressional district of New Jersey.

Hudson, who co-authored a popular SP article on how to engage the scientific community with the American public, was formerly head of the Johns Hopkins Genetics & Public Policy Center. She told The Scientist that talks were ongoing about how to manage the additional $10.4 billion dollars in NIH funding provided by the American Recovery and Reinvestment Act, but the Institutes are wasting no time in getting money to researchers. “Five billion dollars are going out the door this month,” she said.

In talking to NEJM, Collins acknowledged the tension between supporting “big science” projects like the Human Genome Research Project and investigator-driven studies. He offered this synthesis: “The foundation of advances in biomedical research will continue to be the bright ideas of individual investigators, but if they are empowered by tools and databases and technologies that big science has made available, then we can go faster,” he said.

Collins also said that the question of what happens when the ARRA funds run out weighs heavy, saying: “There is much discussion about the NIH falling off a cliff. Scientific research is not a 100-yard dash. It is a marathon. Two years is way too short to take a cool idea and develop it to some sort of end point.”

Ensuring a smooth funding transition in 2010 should be a priority for Congress, and that process begins now, by ending the five-year streak of flat baseline funding for the NIH. There’s no shortage of good science to fund, and biomedical research creates good jobs as it improves the health of Americans and the economy.

“Many of the discoveries we make, we make together,” he said, but some staffers in his lab drew paychecks from a federal training grant, whereas the state stem cell funding could only support research, not their salaries. For them, working on cell lines outside the federal guidelines would constitute a misuse of federal funds.  “Uh-oh,” Civin remembers thinking, “can’t do that.” Unable to collaborate with others in their lab, the conundrum disrupted the traditional team-oriented approach to research.

His solution to the incongruous rules was to essentially divide the lab into two color-coded halves. On one side were “blue” staffers, on the other half, the “red” staffers, and each had corresponding red and blue media for culturing cells.

That solved a functional problem, but what was to happen at the next lab meeting if researcher working with Maryland-approved cells that didn’t meet the Bush guidelines said he or she has made a step forward and could use some help to develop the work? In traditional lab culture, a colleague’s instinct might be to say, “That sounds interesting, I can help.” But again, those with salaries funded by federal dollars couldn’t help. “This constrained our natural interactions,” Civin said, “In Maryland, it also constrained our interactions with colleagues at the National Institutes of Health.”

Fortunately, the straight jacket of Bush administration rules came off in July, as new NIH guidelines went into effect, paving the way for an expansion of the number of lines available. Civin joined Bernard Siegel, executive director of the Genetic Policy Institute, to talk with Science Progress about the state of stem cell research and the new possibilities opened up by the Obama administration rules. Both are co-chairs of the World Stem Cell Summit, which will come to Baltimore, Maryland September 21-23.

Siegal compared the constraining effect of the NIH guidelines under Bush on the field to an orchestra that lost its conductor just moments before a performance. “You can’t underestimate the difficulty and challenges that are the result of a paucity of funding on fundamental human embryonic stem cell research over the past eight years,” he said.

Enthusiastic about the new federal rules and advances in research, Siegal warned that fights over stem cell science are not over and will continue on the state level. “The foes of embryonic stem cell research did not disappear,” he said.

To listen to the podcast of the conversation, see the audio player in the sidebar, download the mp3, or subscribe via iTunes.

Dr. Keith Yamamoto, Executive Vice Dean of the University of California San Francisco School of Medicine and member of the NIH Advisory Committee to the Director, explained the process at a briefing of the Congressional Biomedical Research Caucus on “Finding and Funding the Best Science: Peer Review at NIH” last week.

The peer review system has “intrinsic complexities,” but it is a “terrific system” and “works extremely well,” said Yamamoto, a veteran reviewer. However, he went on to say that there is always room for improvement.

The NIH’s $30.5 billion annual research budget, which saw a $10.4 billion boost included in the ARRA, supports a large variety of biomedical science projects, but each proposal must undergo peer review to be considered for funding. The NIH Center for Scientific Review oversees expert scientists across the country who review 70 percent of the applications, Yamamoto explained. The institutes review the remaining applications in a very similar process.

Applications are divided into 23 review groups based on subject, such as AIDS & Related Research or Immunology. Each review group further separates the applications into more specific study sections. Study section scientists assess the scientific merit of each proposal. Applications are then sent to the institute councils, comprised of both scientific and nonscientific members. Patient advocates often serve as nonscientific members, Yamamoto said. The councils, which hold the grant dollars, evaluate each project’s relevance to the institute.

There are five core review criteria: impact, approach, innovation, investigator, and environment. Peer reviewers evaluate how important each project is to “advancing the ball,” Yamamoto explained. Experimental designs must be sound and principal investigators and their collaborators should be well trained to execute them. Institutional support and the project’s potential to “challenge existing paradigms” are also valuable attributes for approval, he said.

Although Yamamoto believes the NIH peer review system is the “best system in the world,” he says it is hard to escape from “intrinsic conflicts of interest and conservatism.” Reviewers are likely to assess proposals similar to their own work, which may create a conflict of interest. Conservatism is a concern if reviewers follow the “if you think like I think, then I think you’re really smart” philosophy Yamamoto said—complexities that are “likely to require new policies.”

In an effort to address these concerns and enhance the quality of their peer review, NIH conducted a year-long system evaluation, culminating in a final report released in March 2008. Currently, NIH is focused on supporting early stage investigators, attracting and retaining the best reviewers, maintaining the 60:25:15 ratio of clinical to translational to basic research, and shortening the length of research plans while de-emphasizing preliminary and experimental data, Yamamoto said.

More numbers from the poll here.

SBIR is the single largest federal program dedicated to support of our nation’s innovative small businesses, making over $2.2 billion in annual competitive grants to small businesses engaged in the innovative research and development. The smaller Small Business Technology Transfer (abbreviated STTR) program funds R&D partnerships between small businesses and universities.

The House version of the bill modernizes SBIR by increasing Phase I award sizes to $250,000 from $100,000 and Phase II awards to $2 million from $750,000. The Senate version makes more modest increases, to $150,000 for Phase I and $1 million for Phase II. The grant sizes are important given the dearth of seed-stage and early-stage risk capital from angel investors and venture capitalists amid the economic downturn.

Both bills, however, allow venture capital-backed small businesses to once again apply for awards, repealing a restriction on these businesses that had been in place since 2003. A comprehensive study of the SBIR program by the National Academies found that venture capital-backed small businesses were often the most innovative and successful and that shutting VC-backed startups out of SBIR funding was ill-advised.

The two bills open the funding to venture capital-backed small businesses in different ways and to different extents. The House version allows SBIR grants to small companies so long as no single VC firm has a majority stake in the company. The Senate version deals with the issue differently, opening only a limited number of awards to small businesses with venture capital funding, specifically directing the National Institutes of Health to award no more than 18 percent of its SBIR awards to small companies majority-owned by VC firms and directing the other agencies to award no more than 8 percent of theirs to such companies.

Both bills were passed in an overwhelmingly bipartisan fashion, so crafting compromise legislation in conference committee should not threaten final passage of the legislation by the full Congress. President Obama is expected to sign the legislation since his administration is keen to implement more coordinated innovation policy involving not just the SBIR and STTR programs but also the array of other innovation programs. The reason: Innovative small businesses are one of the primary sources of economic growth, jobs, and the development of the technologies that will help us solve pressing national challenges such as health IT, clean energy, advanced manufacturing, and high-speed transit. Stronger and more sustained support for innovative small businesses is a smart choice for America as we deal with the recession and a more competitive global economy.

For more on SBIR/STTR and its crucial role in the national innovation infrastructure, see the features on Manufacturing Innovation and on a National Innovation Framework. Also, check out the Science Progress series on Innovation Clusters for an in-depth look at how they can play a central role in national innovation policy.

But a dearth of transformative work isn’t the only thing missing from the biomedical system in the United States. As Merrill Goozner reported here on Science Progress, there’s a lack of data-driven clinical trials that compare what works with what doesn’t.

Of course, the question of how to develop better cancer treatment’s isn’t either-or. We need both more transformative research and more evidence-based medicine. But as funding for the National Institutes of Health increases, a re-think of the grant review process will be necessary to get resources to promising but untried ideas and to the younger generation of scientists.

Lead author Kenneth Manton at Duke University and colleagues looked at four four significant causes of death over the period from 1950 to 2004: cardiovascular disease, stroke, cancer, and diabetes. They estimate that investments in NIH funding helped avoid more than 35 million deaths over that period, and that for the first three ailments, death rates started dropping more rapidly about ten years after a significant increase in research investment.

NIH funding supports public health, they conclude, as well as workforce competitiveness:

Evaluation of the level of investment in research suggests that a significantly greater, and more prolonged, investment in NIH, and indeed all, federal research would provide a greater stimulus to U.S. economic growth.

Jocelyn Kaiser at ScienceInsider grabbed the study’s closing recommendation for her headline yesterday: “Need More U.S. Workers? Quadruple the NIH Budget.” Or as Manton et al. put it: “To compensate for the slower future growth of the U.S. labor force (e.g., from 1.2% per annum in 1996 to 2006 to 0.3% after 2017) on economic growth, the size of NIH expenditures relative to GDP should quadruple to about 1% ( $120 Billion) and be done sufficiently rapidly (10 years) to compensate for the slowing growth of the U.S. labor force.” Proponents of merely doubling the budget over ten years now have that proposal to consider.

Heidi Ledford, reporting for Nature, notes that the study was of course funded by a grant from the NIH. But she also spoke with Cary Gross at Yale’s School of Medicine, who points out that evidence that biomedical research improves public health and economic growth is important, but the conclusion should not allow observers to lose sight of the importance of basic research: “The opposite of that argument is that if scientific research does not directly relate to health, then it’s not important.”

The beauty of the NIH is that it supports both critical basic research and applied work on the interventions that help U.S. citizens live healthier lives.

Image: The NIH campus in Bethesda, Maryland (NIH)

20,894: The total number of Challenge Grants applications received by the NIH.

At least $200 million of Recovery Act funds will support these new grants. These applications come on top of the 16,312 regular applications received for the current funding cycle. Some 18,000 reviewers will help read and score them all, a workload that has NIH Center for Scientific Review Director Antonio Scarpa worried about the time it will take for each reader and the inevitable low acceptance rate. The projects that are funded will generate jobs, grow the economy, and support the search for cures.

49,015: The total number of comments the NIH received on its draft Guidelines for Human Stem Cell Research.

Jocelyn Kaiser at ScienceInsider reports that the Institutes’ policy chief estimates the amount is roughly equivalent to when the NIH issued draft guidelines on the same issue in 1999.

$5,000: The threshold for earnings that should trigger mandatory disclosure under financial conflict of interest rules for NIH-funded researchers, as recommended by the Association of American Medical Colleges and the Association of American Universities.

The two major academic associations, which both represent significant proportions of the institutions where scientists conduct NIH-funded research, submitted their joint comments in a letter Wednesday. NIH grantees are currently obliged to report a financial interest if they earn more than $10,000 in income or own more than $10,000 in stock plus 5 percent interest in a company, but the AAMC and AAU believe the threshold is too low to ensure research integrity. The recommendations were in response to the NIH’s request for comments on promoting objectivity in research. Patti Tereskerz recently explained the complexity of managing the conflicts of interest that result from the necessary mix of public and private research funding in Science Progress—including those that arise from corporations funding research through foundations and nonprofit institutes.

Still, you have to admire the “Rock Stars of Science” campaign—Rock S.O.S.; hat tip Mary Spiro—which launched with a four page portfolio in GQ magazine that paired up musicians with scientific “celebrities” (none of whom are household names) for a high-end photo shoot. The idea seems to be that having Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, and Harold Varmus, co-chair of the President’s Council of Advisors on Science and Technology, groove with Sheryl Crow will reflect some of the latter’s rays on the former. The campaign—which advocates for increased funding for biomedical research—is sponsored by Geoffrey Beene Gives Back, the philanthropic arm of the clothing design company. In case it isn’t obvious already, they know how to make anyone, even frumpy scientists, look good.

I am not nearly snooty enough to pooh-pooh this kind of initiative. Rather, I applaud it. For after all, I’ve long felt that when it comes to the cultural standing of science in America, our problem is a lot bigger than a poor educational system, bad test scores, or rampant scientific illiteracy. It is at least as troubling that very few Americans can name Fauci, Varmus, or Francis Collins, former director of the National Human Genome Research Institute—and that very few American kids want to be them. A scientific research career, if you can get it, is a pretty good life—one could set one’s sights far, far lower. But it’s not clear that as a culture today, we recognize this.

Rock S.O.S./Geoffrey Beene Gives Back

Anthony S. Fauci, M.D., Director of the National Institute of Allergies and Infectious Diseases, Sheryl Crow, and Harold Varmus, M.D., President of the Memorial Sloan-Kettering Cancer Center and Co-Chair of the President’s Council of Advisors on Science and Technology

Other countries do: The crashing down of South Korean stem cell researcher Hwang Woo-Suk amid fraud allegations in 2006 was shocking precisely because Woo-Suk had become a nationally known figure, a celebrity, by virtue of his scientific success. The sense today that America may be “falling behind” in science isn’t just about the numbers of researchers we produce: It’s also based on the accurate recognition that in South Korea, or in China, there is a very different perception of science as central to the national future. It’s a perception we ourselves had 50 years ago, inspired in large part by those dreaded Sputnik bleeps. But times have changed, and it’s an open question as to whether we as a nation can ever go back there again—without, I hasten to add, abandoning any of the lessons learned since.

Initiatives like the Rock S.O.S. campaign, or the National Academy of Sciences’ Science & Entertainment Exchange, suggest that maybe we can. Finger to the wind prognostications aren’t worth much, but one gets the sense that with the Obama administration, the place of science in American culture may be changing—improving. Maybe we were at an artificial low under the Bush presidency.

Yet one also wonders whether the GQ spread does enough to combat prevailing stereotypes of scientists as nerdy, as weird and anti-social, or as mean and condescending religion bashers. Some of the researchers featured in GQ get beyond the geek, but mostly, the contrast between them and the rock stars is sharp and heightened.

It is particularly difficult to miss the fact that while the rock stars are far more diverse, the scientists are all older, white, and male. Yes, it catches your eye to see such scientists rocking out. But it would be even more bracing to see female and racially diverse young researchers—with tattoos! Believe me, they’re out there.

Nevertheless the Rock S.O.S. initiative makes several unforgettable points: Billions of dollars of scientific research can remain invisible without a good marketing campaign. And scientists, while undeniably respected, simply do not sit atop the totem pole of American culture—celebrities, musicians, and sports figures do.

Next stop for Geoffrey Beene: In the pages of Sports Illustrated, I want to see young, athletic scientists catching passes from Peyton and Eli Manning.

Chris Mooney is contributing editor to Science Progress and author of several books, including The Republican War on Science and the forthcoming Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. He and Kirshenbaum blog at “The Intersection.”

But Science Progress Editor-in-Chief Jonathan Moreno looked back over the history of science policymaking in the United States Friday at a CAP event celebrating the release of Science Next, and noted that we’ve come a long way. “Today there is virtually no debate,” he said, about the fact that the government should invest in science. But the direction of science has felt adrift, he said, and “as progressives, we can’t just be science boosters. We need to worry about where it’s going.”

That’s a question our former colleague Rick Weiss, a co-editor of the book and now the director of communications at the Office of Science and Technology Policy, indicated is central to the Obama administration. Science-based decision making now enjoys a “very high profile,” he said. Speaking specifically of the current discussions on responding to the H1N1 flu outbreak, he said “science,” and concern for public health, “is at the core of every one of those decisions.” He emphasized the commander-in-chief’s own interest in technical details. “The president wants to see the science and he wants to see the evidence,” he said.

Henry Kelly (pictured above), president of the Federation of American Scientists and a contributor to Science Next, addressed the importance of considering where science is going in light of a competitive international economy. “We’re trying to compete in a world where jobs require a high level of skill, but the United States is falling behind,” in science and technology education, he warned. Moreover, he said that the country can’t hope to slow the widening gap in social inequality without workforce improvements. Among Kelly’s suggestions is using research to develop better educational tools—an approach he wrote about in the SP article on educational video games that was the basis for his chapter in the book.

Though President J. Q. Adams might have been ahead of his time in championing federal support for basic research, later proponents could not have predicted the power of successful investments like those that formed the foundation of the Internet. And as radically as the web as changed the way  private enterprise works, Jim Turner, director of the Association of Public and Land-Grant Universities Energy Initiative and contributor to Science Next, argued that the government has not yet realized that the technology actually has implications for the future of federalism itself.

“Not only does the Internet change the way government works,” he said, “but it changes the relationship between federal and state government,” allowing for information sharing that can improve the quality of public services. Turner explained the idea of “public policy quality management” in the article he authored with Maryann Feldman that found its way into Science Next, drawing lessons for the work of Joseph Juran, who pioneered the manufacturing processes that first transformed the Japanese, and then the U.S. industrial sectors.

You can read Weiss and Moreno’s introduction to Science Next, “Time for Science to Reclaim Its Progressive Roots,” or order the book online.

Full video from the event is available here.

On campuses across the country one can hear a near-audible sigh of relief among academic faculty who hope the new funding boost will provide stability for ongoing research projects or the chance to pursue new ones. The National Science Foundation alone has received an extra $3 billion this year and is putting nearly $2 billion towards funding backlogged research proposals, with the other $1 billion divided among instrumentation, infrastructure, and educational programs.

Funding for the first round of proposals accepted by the NSF will expire in a staggered fashion starting in 2012. Although the 2010 budget has not been finalized, the Obama administration has asked for expanded science funding for several agencies including the National Science Foundation, the Department of Energy, the Department of Health and Human Services, and the Environmental Protection Agency—a signal that the administration will continue to support more federal research funding.

This is all to the good, of course, yet with social expectations high that these new funds will ensure our nation’s long-term scientific preeminence, now it is a good time to think about how to make the business of research sustainable in the long term, too. A good place to start may be an often-unacknowledged workforce that together contributes untold hours to U.S. research output.

Who are these Samaritans of science? They are U.S research technicians. This workforce provides long-term research continuity, stability, and expertise at our nation’s scientific institutes and universities. They train incoming students, manage and update extremely expensive and delicate equipment, and ensure that laboratories meet demanding health and safety regulations. Yet despite their importance, no formal training, career path, or job security exists for this crucial science-and-technology workforce.

Because of our nation’s grant-based culture of scientific funding, graduate assistants are preferred over professional research technicians because they are cheap and do not require health and retirement benefits. And even when research technicians are funded to manage and run new equipment and new technologies that underpin most basic research, they are frequently the first to be let go when soft money dries up.

Problem is, cutting-edge research requires increasingly state-of-the-art technologies that are exceedingly costly, requiring professional care and maintenance. Equipment such as scanning electron microscopes, which allow for the visualization of surface structures at the micro-scale, or automated crystallization robots (which perform reproducible solution set-up for protein crystallography), or Raman spectrometers (which are used across many fields to measure molecular vibrations) can be extremely pricey, often costing the equivalent of an entire budget for a principal investigator (the lead researcher) for a single instrument.

Unfortunately, because of our grant-based funding culture, high-tech instrumentation is often purchased with no thought toward the need for long-term professional personnel to operate and maintain this equipment. As a result, sophisticated equipment is abandoned and both principal investigators and other university researchers suffer the loss of technical know-how and support. Most importantly, this vicious cycle it is a colossal waste of money for our federal government.

In order to stay globally competitive, the federal government must invest in developing a sustainable and professional technical research workforce to supply research demands at both our nation’s institutes and universities. This could be undertaken by:

• Boosting job stability in this sector by increasing the number of state and federal positions for permanent university research staff
• Restructuring the grant process with an emphasis on personnel and service contracts in conjunction with new equipment
• Sponsoring the creation of university degree programs for technical training in the laboratory sciences.

What’s more, there’s an existing model for doing so that is common at many universities across the country—nursing programs. Nurse Practitioners, for example, have different degree certifications than Registered Nurses and Licensed Practical Nurses, and job responsibilities and salaries that reflect these differences. Nurses provide technical support to the medical field by performing routine procedures, managing patient records, and helping to educate medical staff and the public. Experienced nurses with advanced degrees are involved in hospital and clinical administration, which often involves dealing with insurance companies and supervising the training of new nurses.

In much the same way, a professional structure for U.S. research technicians would facilitate the sustained work of scientists by providing a workforce with the specific job of overseeing day-to-day research tasks, managing equipment, and training new students. Additionally, like nursing programs that benefit associated medical schools, degree programs for technical research training would also provide a readily accessible and qualified workforce for affiliated universities. Technical certifications and degree programs could be tailored for a wide variety of fields, including molecular biology, chemistry, polymer science, engineering, or agricultural technology. Similarly, career benefits, job titles, and pay scale could be determined to appropriately reflect training levels.

The American Recovery and Reinvestment Act takes an initial step in this direction. The new law authorizes the National Science Foundation to fund Professional Science Master’s degrees at 128 universities across the country. The PSM degree program targets students to work at the interface of science and business, industry, government, or communication. These degree programs are absolutely crucial for sustaining the profession of science and helping to translate research for broader social goals.

Yet, they must also address our national needs to create a knowledgeable and well-trained workforce that can provide both interdisciplinary and disciplinary research support in multiple fields. Perhaps the next step would be to use the PSM initiation to promote more technically focused masters programs. These masters programs could be tacked onto departments with existing doctoral degree programs. Senior faculty could translate their wisdom to the next generation by spearheading efforts to develop curricula with a focus on techniques, instrumentation, and research.

Support of these initiatives by senior academics would help change the perception that a masters program is a “consolation prize” in route to (or in lieu of) a doctorate degree. Additionally, new technical masters-level programs will attract students that have a passion and interest in research but may be dubious about pursuing a stressful career as an academic faculty member.

Major funding agencies such as the NSF, the Department of Energy, the National Institutes of Health, NASA and the National Oceanic and Atmospheric Administration could do their part by requiring proposals, particularly those involving new instrumentation, to include provisions for technical support. Instead of three-to-five year, project-oriented grants, these agencies could develop a special division designed to specifically support grants for technical personnel, and could apply these “special funds” for eight-to-nine year contracts to support technical staff for specific instrumentation or department goals.

The United States still leads the world in intellectual productivity and scientific achievements, but our position is by no means assured. Sustaining a viable workforce to support our “brain industry” is crucial for 21^st century innovation. Investing government funds in a technical research workforce will increase productivity, limit wasteful government spending, and provide alternatives to the standard academic career path for college students interested in advanced science and technology degrees. The skills, time, and focus of this workforce to see research implemented and carried out in a thoughtful manner would additionally bring practical know-how to many of the new funding initiatives that tend toward high-risk, high-reward, and interdisciplinary research.

Perhaps most importantly, a trained technical workforce would support primary research that will benefit universities, national laboratories, and the private sector. With the new infusion of cash from the federal government, U.S. research funding agencies have a real opportunity to influence the course of scientific research for decades to come. Instead of supporting the same grant-based system of research funding, it is time for the science community to think carefully and critically about the best ways to build research infrastructure to address crucial long-term innovation needs for national development.

Estella Raulfs is an NSF-IGERT graduate fellow and a Ph.D. candidate in Biochemistry at Virginia Tech.

This morning, President Obama addressed the National Academies of Sciences, laying out the imperative for sustained government investment in scientific research. He said his administration would commit more funding to R&D than during the Apollo program (see Update below):

I am here today to set this goal: we will devote more than three percent of our GDP to research and development. We will not just meet, but we will exceed the level achieved at the height of the Space Race, through policies that invest in basic and applied research, create new incentives for private innovation, promote breakthroughs in energy and medicine, and improve education in math and science. This represents the largest commitment to scientific research and innovation in American history.

He also took the opportunity to explain the necessity of such investment in grappling with matters like the current outbreak of swine flu:

But one thing is clear – our capacity to deal with a public health challenge of this sort rests heavily on the work of our scientific and medical community. And this is one more example of why we cannot allow our nation to fall behind.

The renewed commitment to long-term science funding, building on the down payment in the American Recovery and Reinvestment Act, will ensure a healthy economy and populace in the years to come.

Here’s a look at the past three decades of federal R&D support in terms of GDP, as well as the full audio from the President’s remarks:

Here’s the full audio of the speech, as offered by the NAS:

Update: The 3 percent of GDP investment in R&D that Obama touted would include federal and private investment, a point this post originally confused. Here’s an explanation from our former colleague Rick Weiss about the necessary government investment to reach that goal:

Obama pledged to raise the country’s R&D budget to 3% of the national gross domestic product from today’s nearly 2.7% — an increase of roughly $46 billion annually. The government currently picks up about one third of the tab. Assuming that trend continues, public funding would need to increase by about $15 billion annually, says Rick Weiss, a spokesman for the White House Office of Science and Technology Policy.

Image: AP/Gerald Herbert

In one of the videos, the camera zooms in on a personnel manager at the Bronx Zoo delivering bad news to an off-camera character. “I’m sure you’ve heard that Governor Paterson’s proposed budget will mean severe cuts here at the Bronx Zoo and the New York Aquarium,” the somber official says. “So … even though you bring record numbers of people to New York and help the economy, we’re going to have to let you go.”

Only then does the camera pan to the dejected victim of this lay-off—a porcupine from one of the exhibits. A damn cute one at that.

A second video (both were made at virtually no cost by zoo staffers) features the jobless porcupine—whose real-life name, it turns out, is “Wednesday”—visiting the unemployment office as part of her sorry search for work. “Alright,” the case worker asks, looking up from Wednesday’s resume, “how are you with PowerPoint?”

Maybe I wouldn’t have been so touched by the plights of these institutions and their resident menageries had I not just spent the breakfast hour reading newspaper articles about the way the federal bailout’s been going. Those bonuses going to fat-cats was galling, of course. But also the news that AIG is suing the U.S. government (that’s right, suing its majority owner) because—catch this—it is peeved that the IRS did not give it a big enough tax break for its offshore tax havens. What sheer testicular chutzpah, using bailout money to pay lawyers to sue the government that saved you!

Even an unemployed porcupine knows better than to bite the hand that bailed it.

It was while I was mulling the unfairness of it all—the squandering of wealth on the one hand and, on the other hand, the squeeze being put on New York’s living museums of nature—that I learned a final detail about the bailout that really sent me, lemming-like, over the psychological edge:

Section 1604 of the American Recovery and Reinvestment Act of 2009 makes it explicitly illegal to appropriate even a dollar of bailout money to aquariums or zoos (or any “gambling establishment,” either, though I don’t get the connection. Maybe they meant “gamboling,” which some zoo animals do).

That is when it really sunk in for me that human beings are the problem, and that the way to make the most of this bailout is to earmark it exclusively for non-human species.

Consider that the Bronx zoo, which is the largest single employer of youth in the Bronx and brings in millions of dollars every year to one of the most underserved neighborhoods in the country. Consider, too, that taken together, the 76 New York zoos, botanical gardens and aquariums sponsoring Wednesday-the-Porcupine’s viral video debut attract more than 12 million visitors each year—people who spend large sums in surrounding enterprises during their visits. Under the 2008-2009 budget, the state will contribute a mere 35 cents or so per visitor in support of these institutions—surely a tiny investment relative to the economic payoff, not to mention the educational and entertainment value of these venues.

Nationally, according to the Association of Zoos and Aquariums, the group’s 200 member institutions generate a whopping $7.6 billion in economic activity every year, while employing 100,000 people (not to mention a small army of porcupines and other critters). As for the ancillary benefits, the prestigious National Research Council concluded in January that informal science education venues such as zoos and aquariums are “integral” elements of the nation’s science education system. “We’re actually out there informing people about science,” said John Calvelli, a vice president with the Wildlife Conservation Society, which runs the zoo and the New York Aquarium. “We help people understand complex science issues.”

It isn’t cheap to run these joints, either. It costs real money, for example, to remove the 500 pounds of elephant waste produced per pachyderm per day. Talk about shovel ready…

Of course, zoos and the like should not be the only beneficiaries of my Biodiversity Bailout. Arguably, far more should go to non-human species living in the wild. Heaven knows—as does a growing cadre of environmental economists—that Mother Nature is on the verge of planetary homelessness and could use a handout. At $780 billion, the bailout pales in comparison to, say, the $2 trillion to $5 trillion dollars that, according to a European Union analysis, is the value of annual forest loss around the world.

Or look at it the way Jaboury Ghazoul does. In an article in the January 23 issue of Science (subscription required), Jaboury, of the Institute of Terrestrial Ecosystems in Zurich, calculated the benefits of distributing a $700 billion bailout evenly among Earth’s estimated 10 million species. The resulting $7,000 per species could easily make the difference between survival and extinction for some.

“Consider the jellyfish tree Medusagyne oppositifolia from the Seychelles,” Jaboury wrote. “Even $70,000 should be enough to save its few remaining individuals … by investing in simple nursery facilities and a modest propagation and planting program.”

And what a bonanza for communities of multiple species. “The intertidal bryozoans of Scotland’s West Coast would alone receive more than $3 million,” Jaboury concluded. “The 43 species of ants from E. O. Wilson’s single leguminous tree at the Tambopata Reserve in Peru could pool their resources to buy about 150,000 hectares of Amazonian forest (at $20 per hectare).”

Well, maybe and maybe not. But one thing’s for sure: These animals are not going to use the money to sue you.

Rick Weiss is a Senior Fellow at the Center for American Progress and Science Progress.

Just a few weeks ago, some conservative policymakers and commentators were questioning the value of using stimulus funds to invest in scientific research. Fortunately, Congress and the Obama administration ignored their backwards logic and instead made a down payment on our scientific future of $21.5 billion. But in doing so, lawmakers were listening to citizens, 79 percent of whom support government investment in science.

That number comes from a report released last week by CAP Senior Fellow John Halpin on American political ideology. From the full survey results:

You can check out the full report here: “State of American Political Ideology, 2009.”

Cartoon by Clay Bennett from the Cartoonist Group.

The importance that the Obama administration places on strong government support of these efforts is clear, and reflects an encouraging change from the Bush administration. According to the proposed budget, the Department of Commerce is to receive $295 million for programs that invest in America’s competitiveness and promote innovation, in addition to the hundreds of millions of dollars allocated for similar purposes in the stimulus legislation passed last month.

The budget calls for:

• “$70 million for the Technology Innovation Program, which invests in high-impact research that will address critical national needs and advance innovation”

• “$125 million [to the Hollings Manufacturing Extension Partnership] to enhance the competitiveness of the Nation’s manufacturers by facilitating the adoption of more efficient manufacturing processes”

• “$50 million in regional planning and matching grants within the Economic Development Administration (EDA) to support the creation of regional innovation clusters that leverage regions’ existing competitive strengths to boost job creation and economic growth”

• “$50 million [to launch an] initiative in EDA that will create a nationwide network of public-private business incubators to encourage entrepreneurial activity in economically distressed areas”

Congress should not reduce or eliminate these commitments. Investment in our young businesses and the local and regional innovation structure that supports their creation and development is essential to the short-term as well as long-term health of America. These investments will provide the capital that young companies need in these times of anemic support from institutional investors reeling from losses in the capital markets. The proposed support of innovation clusters across the country will build long-lasting tech-based economies in these regions that can generate new growth and provide jobs to local residents.

American economic geography is changing: to read about how innovation clusters will spur economic development across the new landscape, see our “Regional Centers of Innovation 101.” For more on why business incubator support is a good idea: Incubators Boost Job Creation.

SP contributor Beryl Benderly tackled precisely this issue in her January piece, reporting that mismanagement of future NIH growth could have devastating ramifications for the long-term health of the research community in the United States:

Labor market experts agree that without major structural reforms in how research is organized, additional funding will not remedy—and could substantially worsen—a central failing of the nation’s scientific enterprise. That failing is the dismal and worsening career prospects of young Americans who want to spend their lives doing scientific research. Like other students with the talent and drive to excel at rigorous studies, the scientifically gifted hope for a profession that will afford them at least a comfortable middle-class lifestyle and reasonable financial security. The current university-based research structure severely inhibits that quest.

Pharmboy is equally blunt: “We’ve got to show restraint and responsibility by not training another few thousand postdocs who still won’t have faculty slots to pursue in three years.”

In their recent SP column, Neal Lane and Leslie Berlowitz expand on this to argue that funding high-risk, high-return research, along with young scientists, should be a priority for situations just like this:

Federal agencies should set up, or in some cases expand, programs that are devoted exclusively to funding early-career investigators and the most innovative, potentially transformative research. If the research budget increases, then these programs should be the first to get new funds.

With swift deadlines and lots of funding to move, readers may have their own applications open in front of them. Any additional thoughts on ways to ensure that we support up-and-coming researchers?

Science Insider: NIH details are sketchy, but include increases; NSF would see 8.5 percent bump; more for scientific facilities though DOE’s Office of Science; earth science research funding and Orion money for NASA; 37.5 percent increase for EPA.

The Intersection and Yale e360: spending initiatives assume passage of cap and trade legislation, a significant political maneuver.

The Washington Post has a useful comparison graphic (article) showing the 2007-2008 budget and the 2009-2010 with stimulus funds side-by-side for several agencies and departments.

Also notable: the budget outline includes $1.3 billion for NOAA “weather satellites and climate sensors”; $50 million to support creation of regional innovation clusters; and says that the Patent and Trademark Office will be granted full access to its fee collections, a problem because Congress has previously dipped into the funds, which are the source of operating funds for the overburdened office.

As the Science Insider reporters point out, the format of the release as a pdf is “decidedly old-school style for the digitally minded Obama Administration.” Let’s be honest: this information needs to be available in a fully machine-readable format. They could take some cues from the NYT’s unveiling this week of its API.

Image: flickr.com/afagen

Conservatives with a limited understanding (or, it seems, interest) in economics have decided that do-nothingism is a fair 21^st century complement to know-nothing ancestors. But not only do economists agree that funds injected into the economy is exactly what is needed now, investments in science and technology are perhaps among the most stimulative for the long and the short term. Among the package’s goals are to preserve and create jobs and promote economic recovery and to provide investments that will increase economic efficiency by spurring technological advances in science and health.

As we recently pointed out, a raft of studies has shown that science and technology incubators are among the best ways to create jobs, most recently one from the Department of Commerce. But basic research not only leads to technologies that can be applied, it also creates and supports jobs right away. As Senator Harkin emphasized during the Senate debate on the president’s proposal, “[E]very time a researcher gets a grant, it supports an average of seven jobs.”

Dr. Kington’s pointed out that the responsibility of all the agencies receiving these funds is to ensure that their effects are felt within the next two years. Among the buckets he described will be short-term grants, targeted supplements to current grants, and new challenge grants with expectations of progress within two-years.

This unprecedented opportunity for American science has been met with great excitement in universities around the country, many of which are experiencing severe retrenchment that will make it difficult for them to fulfill their missions, even as more people decide to seek degrees until the recession passes. At the same time, talking with colleagues around the country, I note the grave sense of obligation to meet the president’s goals.  Over the next few weeks we will continue to follow the plan’s specifics and the scientific community’s progress in meeting the goals of the package.

Image: flickr.com/gregclarkephotography

Senate-House conferences are closed door affairs, and a clear picture of the horse-trading that went on in that room (with record-breaking speed, we might add; amazing what Congress can do when a holiday week is nigh) may not leak out for some time. Moreover, not every segment of the U.S. scientific enterprise came out ahead. The Centers for Disease Control, a perennial Congressional stepchild (when it’s not a full-blown whipping boy) got largely stiffed, despite a frightening array of looming public health issues on the horizon. And NASA is going to have to trim a few celestial sails.

But the end-product of this harrowing political process—$ 21.5 billion, or the equivalent of about a 15 percent “tip” on top of conventional, government-wide, annual science appropriations—reflects with gratifying fidelity President Obama’s oft-repeated commitment to get science and technology back on track after eight years of government-inflicted starvation and abuse.

Things were looking grim a few days ago. The National Science Foundation, for example, which is the major government funder of physical sciences and science education-related research in this country, had been in line to get $3 billion under the House plan, until the Senate trimmed that figure to $1.2 billion. But when conferees came out of their huddle, squinting in the limelight like a gaggle of groundhogs in Punxsutawney, Pennsylvania, funding had been restored—not to some compromise level but to the full $3 billion.

That bolus of money represents about half again what the NSF typically gets appropriated per year, and it is in line to be spent immediately—to fund grants that have already passed peer-review, to support science, technology, engineering, and mathematics education programs, and to purchase equipment and finance building construction.

The Department of Energy enjoyed a similar reprieve. After the House voted to authorize $1.6 billion for that department’s Office of Science and an additional $400 million for the new Advanced Research Projects Agency for Energy, or ARPA-E, the Senate reduced the science office allocation by about four-fifths to a mere $330 million and totally zeroed out the ARPA-E budget. At the end of the conference, however, both were fully funded again.

“I’m especially glad to see funding that will establish ARPA-E eighteen months after it was signed into law,” Rep. Bart Gordon (D-TN), chairman of the House Committee on Science and Technology, said in a news release suffused with an almost palpable sense of relief. ARPA is designed to mimic the renowned Defense Advanced Research Projects Agency, or DARPA, which has successfully pursued especially creative, blue-skies initiatives for the defense community. “Besides pursuing the high-risk, high-reward research, I believe ARPA-E is uniquely positioned to be the bridge to the new energy economy—and, with it, the ‘green’ jobs we need, the same way DARPA formed the underpinnings of the multi-billion dollar defense industry,” Gordon said.

The National Institutes of Health also pulled a rabbit out of its hat—though in this case it was the Senate language that saved the day. The House had promised $3.9 billion, and the Senate had upped that ante to $10.4 billion—a one-time boost amounting to more than a third of that agency’s standard operating budget. In the end, the Senate language carried the day, providing a long-needed cash infusion for the nation’s premier biomedical research agency, which has been flat-funded for the past five years.

These are important victories and, we can hope, down-payments on a debt to science that America is at last poised to repay. But the work of rebuilding the nation’s scientific infrastructure is far from complete.

NASA, for example, did not fare as well. The embattled agency, which faces tough decisions in the next few years as the shuttle program winds down and as other priorities—including climate-change-related earth observation research—orbit aimlessly as though weightless in limbo, was in line to get $600 million from the House while the Senate had pushed for fully $1.3 billion. In the end, it was told to settle for a compromise of $1 billion.

Worse, the National Oceanic and Atmospheric Administration, which has important responsibilities in the arena of climate research and monitoring and whose leader, the widely renowned marine scientist Jane Lubchenco, is poised to be confirmed by the Senate any day now, had been in line to get $1 billion under the House plan and a tad more under the Senate plan but came out of conference with just $833 million.

Similarly, the ever-inadequately funded U.S. Geological Survey—the only science office within the Interior Department, responsible for earth science, as well as research on earthquakes and other natural disasters—had hopes of getting $200 million under the House plan but is now in line to get just $140 million, just a hair above the penurious $135 million recommended by the Senate.

And the Centers for Disease Control and Prevention, which has long had a deserving hand extended for physical plant improvements, and was at last in line to get either $462 million (House) or $412 million (Senate) for buildings, ended up with not a penny from the conferees.

Finally, in an especially worrisomely short-sighted decision, House-Senate conferees zeroed out the $420 million that the House had recommended for pandemic flu preparations under the Department of Health and Human Services, despite accumulating evidence that a terrible emergency is brewing in Asian chicken farms. They also offered no funding at all for HHS biodefense countermeasures.

When it comes to bird flu, it seems, Congress has its head in the sand, hoping to get by on two wings and a prayer.

Rick Weiss is a Senior Fellow at the Center for American Progress and Science Progress.

All data from the AAAS R&D Budget and Policy Program.

Among the cuts to the recovery and reinvestment package that the Senate is considering today:

• $6.6 billion in energy expenditures, including $1 billion from the Department of Energy’s energy efficiency and renewable energy programs
• $5.2 billion for prevention and wellness programs, which would save money by catching health problems early or keeping them from happening in the first place
• $1.4 billion in funds that were slated for the beleaguered National Science Foundation

Let’s just consider the NSF, which is a marvel of funding efficiency (it invests 94 percent of its budget directly into supporting research in colleges and universities in all 50 states), but which today can afford to fund only 25 percent of the proposals that pass scientific review. At the funding level proposed by the House stimulus bill, that percentage could rise to 32 percent, about the same as it was back in 2000. But the Senate seems to want to kill that goose.

What difference would it make? One way to think about it is that each NSF grant directly creates 4 to 5 good jobs, according to government statistics. So as initially proposed by the House, NSF stimulus funding would have created nearly 13,000 jobs directly. Affiliated construction and facilities stimulus money stood to create another 12,000 jobs, for a total of 25,000 additional Americans employed.

But that is just the tip of the science-jobs multiplier-effect iceberg. Consider the $4.5 million NSF grant that went to Stanford University in 2004. Four years later, that program had morphed into Google Inc. ‘Nuff said.

Economists understand the value of investment in the physical sciences, which are the cornerstone of nuts-and-bolts technology that we all use everyday. Consider an analysis done by the Council for Chemical Research, which found that a $1 billion federal investment in chemical sciences research and development gets amplified into a $40 billion boost to the nation’s gross national product and can create or maintain 600,000 jobs. Which federal agency hands out those kinds of grants? The NSF, above all others.

Compare that kind of payoff to the proven poor track record of tax cuts as job creators. There is no contest here.

Congress knows—or at least, once knew—that science and engineering are the nation’s principal drivers of innovation and economic growth. In a nearly unanimous vote a few years ago, it passed the America COMPETES Act, which promised to double NSF’s budget over seven years. Yet year after year, appropriations have not been forthcoming. Now is the time to correct, not exacerbate, that wrong.

A boost this significant would go a long way towards stabilizing an agency that has seen flat funding for five years, and a concomitant 13 percent decrease in buying power as a result of inflation.

Hopefully, a new policy on that lifts restrictions on federal funding of human embryonic stem cell research will follow passage of this stimulus. Increased NIH funding will give greater heft and meaning to the new stem cell policy. Indeed, some scientists have expressed skepticism about real change in the research environment if the policy shift opens up new stem cell lines to non-existent federal funding. Paul Basken reports in the Chronicle of Higher Education (subscription): “If Mr. Obama promises a policy reversal without finding significantly more money, ‘it will tend to ring hollow’,” according to Dr. Arnold R. Kriegstein of the University of California at San Francisco.

The article goes on:

A move by Mr. Obama might even bring scientists a counterproductive renewal of attention to the politics of stem cells. For all the attention Mr. Bush attracted with his 2001 order, stem-cell research has largely been redirected rather than blocked.

For more on the positive economic impact of NIH work and biomedical research in general see our recent post: “Data Bank: NIH Funding By the Numbers.”

A recent analysis by the Information Technology and Innovation Foundation found that 77 percent of the award-winning innovative technologies in 2006 were derived from ideas generated from federally funded scientific research. Those innovations substantially improve the productivity of our economy, as Federal Reserve Board researchers found that two-thirds of productivity growth between 1995 and 1999 was a result of innovation and capital investment in technology.

A century ago, the New Jersey inventor Thomas Edison perfected the light bulb, an invention that created a new industry and radically improved the quality of life for millions of Americans. A little over a decade ago, two graduate students working on a National Science Foundation project discovered an innovative method for webpage searches. Those students, Sergey Brin and Larry Page, went on to found Google, now one of the dominant American companies.

Investing in a new generation of researchers and innovation would create jobs now. According to Families USA, grants from the National Institutes of Health supported more than 350,000 jobs in 2007. A recent report by the Information Technology and Innovation Foundation estimated that an additional $20 billion investment in research in the recovery package would create approximately 402,000 Ameri­can jobs for one year. Those jobs would go to scientists in white coats, but also to graduate students, electricians, construction workers, and clerical staff.

Recognizing the centrality of innovation to our national prosperity, I hosted a roundtable in December with Speaker of the House Nancy Pelosi and Princeton University President Shirley Tilghman. That roundtable included senior members of Congress, university presidents, industry leaders, and research scientists, who were all brought together to look at the state of basic research. What we concluded was that our innovation infrastructure, which has served our nation so well for 50 years, is showing signs of age and disrepair. In fact, the American share of world research investment has been falling since 1998 and our R&D intensity, as measured by the percentage of our GDP invested in research, trails many other nations.

Last week, the House of Representatives took an important step in reversing this trend by including $15.7 billion for scientific research in the American Recovery and Reinvestment Act. That funding, directed to the National Institutes of Health, National Science Foundation, and the Department of Energy, would repair decaying research labs, manufacture new scientific instruments, and accelerate projects that save energy and create new sources of energy. I urge the Senate to maintain this robust and historic investment in science.

In his inaugural address, President Obama said, “We will restore science to its rightful place.” That rightful place is at the center of our economic recovery strategy to help America get back on its feet and keep it strong for decades to come.

Rush Holt represents the 12th congressional district of New Jersey.

Plaudits from a galaxy of research luminaries indicate that there’s a lot in the new administration’s statements and actions for senior scientists to like. But the strains of “Happy Days Are Here Again” are harder to hear among the people who do most of the actual labor of American science—the poorly paid post-doctoral researchers and graduate students putting in years of 70-hour-weeks at the bench. Despite the change in administrations, their future still looks bleak. The reason: Channeling substantially more money—as much as 100 percent more over the next 10 years—through the existing university-based research structure ignores the fact that in certain crucial respects this structure is severely dysfunctional.

This mismatch between effort and outcome is, according to leading labor force economists, the central obstacle discouraging many of America’s most talented young people from pursuing advanced scientific studies.

Labor market experts agree that without major structural reforms in how research is organized, additional funding will not remedy—and could substantially worsen—a central failing of the nation’s scientific enterprise. That failing is the dismal and worsening career prospects of young Americans who want to spend their lives doing scientific research. Like other students with the talent and drive to excel at rigorous studies, the scientifically gifted hope for a profession that will afford them at least a comfortable middle-class lifestyle and reasonable financial security. The current university-based research structure severely inhibits that quest.

Training as a research scientist takes a demanding decade and starting a real career today generally requires landing a faculty position. Such openings are so painfully few, however, and each one available already draws hundreds of qualified applicants. These days, therefore, the investment of time, effort and opportunity needed to prepare for a research career very rarely pays off in the desired result.

This mismatch between effort and outcome is, according to leading labor force economists, the central obstacle discouraging many of America’s most talented young people from pursuing advanced scientific studies. This problem is so grave and so intrinsic to the way America’s academic research system is now organized that fundamental reform is needed to fix it. Simply providing more funding for basic scientific research won’t solve this fundamental problem.

A Decisive Choice

For several decades now, the United States has in fact pursued policies that systematically destroy the incentives that could draw America’s best—and very plentiful—homegrown talent into research careers. Despite claims of a shortage of Americans capable of doing topflight science, education statistics clearly show that the nation produces an abundance of young people with the ability to do science and math at the very highest levels. But, in the words of a foreign postdoc who has spent years working in American university labs on a temporary visa, “no American in his [or] her right state of mind would get into a career in academia. You can end up very easily in your 40s without a future ahead of you.”

Today’s crisis is not accidental. It grew out of decisions made, with little thought about labor force consequences, in the years after World War II.

Bright undergraduates at the nation’s universities see the grad students and postdocs laboring in their professors’ labs and the lives of penury, toil, and insecurity that await those who follow in their footsteps. In response, many of our best math and science students chose medicine, law, finance, or other careers over scientific research. Rebuilding the incentives that can once again make research a career of choice for Americans with the potential to do outstanding science is essential to assuring the nation’s future as the leader in innovation.

Today’s crisis is not accidental. It grew out of decisions made, with little thought about labor force consequences, in the years after World War II. In that dawn of massive federal research budgets, policymakers chose to finance science by awarding grants for specific projects to university professors who would use their students and, eventually, their postdocs, to provide the labor. This system worked well for a while.

But it had a hidden—and ultimately fatal—flaw that in the end turned it into an intellectual pyramid scheme. In addition to a stream of new findings, these “self-replicating” professors also produce a constant stream of new PhDs seeking to start research careers of their own. As American higher education expanded rapidly through the mid-1960s, young scientists could generally find the opportunities they sought. But when the growth in faculty openings drastically slowed, the production of new PhDs did not. Universities continued to give fellowships and postdoc appointments based on the amount of research money they received, not on the career opportunities awaiting their graduates.

By the mid-1970s, PhDs seeking faculty jobs far outnumbered the available career opportunities. Where once scientists had generally moved into faculty posts by age 30, now they went in large numbers into low-paid, temporary, postdoctoral “training” positions while they searched for assistant professorships. Before long, five or more years as a postdoc became “normal” in many fields. But even as the typical postdoc period grew, the chances of getting that faculty post shrank and labor force observers began calling extended postdoc training “disguised unemployment.”

Smart undergraduates began noticing the poor professional and financial payoff from science graduate study, and their professors began importing large numbers of PhDs and graduate students from abroad to provide the highly skilled but low-paid labor that keeping their grants required. Today, the majority of the nation’s estimated 60,000 or more postdocs are foreigners on temporary visas.

A New Ladder Needed

Pouring more money into this same dysfunctional system will obviously do nothing to attract more young Americans to careers in science. It will only, as our foreign postdoc puts it,  “create more postdoctoral training jobs when we have thousands and thousands of people who have already been trained for many years under the present system” who can’t start careers. But don’t get me wrong. The nation needs increased research funding to meet our ambitious goals in health care, energy independence, green energy, and more. Doubling expenditures over a decade makes excellent sense.

But how the we spend that money is as important for the nation’s future as how much we spend. The last sharp hike in research funding, when the National Institutes of Health budget doubled between 1998 and 2003, produced some excellent research. But it also did real damage to countless careers because it led to a large number of new researchers who cannot get permanent jobs or grant funding.

This time, we must spend the increased funds in a way that builds, not destroys, long-term career opportunities for scientifically talented young Americans. Instead of the failed strategy of simply giving professors more money to pay more postdocs and grad students, we need to start constructing new career ladders that provide appealing long-term opportunities for large numbers of gifted young scientists. Small programs that provide special grants to a few hundred handpicked young investigators will not suffice, because the odds of winning them are too low to motivate people who have many options to persevere through a decade or more of demanding training.

Instead, we need to break from the present system of tying career opportunities in research to winning one of the tiny number of faculty openings available each year—a number that appears to be shrinking even further as today’s cash-strapped universities impose budget cuts and hiring freezes. In place of the old, counterproductive job structure, the nation needs a new one with plenty of solid, professional, career opportunities that offer young PhDs salaries, status, security, and chances for advancement that befit their long training and specialized skills. These jobs need not carry the title “professor” or to be at universities, but they must provide talented young Americans who choose graduate school in science, and hope to spend their lives doing research, a reliable chance of realizing their dreams.

Experts suggest various of ways of accomplishing this, all of which involve dismantling the current pyramid scheme. Instead of depending for labor on a constant stream of cheap, temporary students and postdoc “trainees,” labs need to establish many long-term positions that offer workers a realistic income commensurate with their education and experience as well as opportunities for advancement within predictable career tracks. A model that many experts favor is staffing labs primarily with bachelors- or masters-level career technicians and PhD-level permanent staff scientists while using much smaller percentages of grad students and postdocs.

Because these new-style labs would not depend on student labor, they would not need to be in universities. Rather than continuing to limit competitive research funding largely to university-based professors, major U.S. funding agencies would, like many European countries, encourage the development of freestanding research institutions based not around the teacher-and-disciple academic model, but around a staff of career scientists and technicians. The legendary Bell Laboratories, for example, supported for decades by the monopoly profits of the regulated U.S. telephone industry, worked on such a model and produced some of the 20th century’s major technological advances, as well as six Nobel Prizes for basic research.

In our own time, Janelia Farm, the Howard Hughes Research Institute’s innovative new research facility in Ashburn, Virginia, eschews university-style hierarchy and places a strong emphasis on employing long-term PhD staff scientists. These are only two of the possible arrangements that America should consider, experts say.

Building this new career structure will take bold thinking and strong leadership, but anything less cannot achieve President Obama’s goal of keeping American science pre-eminent in the 21st century. Our nation must do more than satisfy the clamor of today’s senior scientists for additional money for their labs. The time is overdue for the nation to recognize and take seriously the vital long-term challenge of ensuring the career opportunities that will motivate our best young people to make the commitment needed to do the great science of the future.

Beryl Lieff Benderly, a Washington journalist, writes the monthly “Taken for Granted” column on science labor force issues on the website of Science.

In particular, the American Recovery and Reinvestment Act would allocate $2 billion for biomedical research through the National Institutes of Health. The NIH will determine how to distribute the funds based on the merit-based grant applications they receive, and there are no shortage of projects ready for the infusion: currently 80 percent of grant requests currently go unfunded by the Institutes.

Annual increases that doubled the NIH budget between 1998 and 2003 grew the federal support for biomedical R&D across the country. But since FY2004, funding for the NIH has been flat; inflation has driven purchasing power down 13 percent in real dollars.

(Source: AAAS Budget and Policy Program)

For a full historical view of how the flat funding impacts grants to states, check out this motion chart, in which the period of contraction is readily visible. (Data from NIH.)

The proposed stimulus package is a way to simultaneously fund those biomedical projects-in-waiting, support the younger generation of researchers who must wait years to win independent funding, and create good jobs in every state. Here’s more by the numbers:

5.8: the number of additional jobs generated by each bioscience job in the national economy

1.3 million: total national employment in biosciences in 2006

350,000: total jobs supported by NIH grants in 2007

$50,537,000,000: total state economic output generated by $22,846,000,000 in NIH funding (a 2.2:1 ratio)

32: percentage of NIH research project grant proposals funded in 1999

24: percentage of NIH research project grant proposals funded in 2007

39: average age at which a researcher won his or her first independent grant in 1990

43: average age at which a researcher won his or her first independent grant in 2007

More on the benefits of increased NIH funding: “Where’s the Biomed Bailout?” and “Recovering Innovation, Innovating to Recover“

A white paper released last year by the American Academy of Arts and Sciences points to two priorities that need greater attention. The first is support for early-career researchers. The second is funding for high-risk, high-reward research that has the potential to be transformative. If our nation does not take these two steps, then the United States risks losing a generation of productive researchers and the benefits of their innovative ideas.

The recent report, ARISE, Advancing Research in Science and Engineering, was drafted by 22 leading scientists—including members of the Science Progress advisory board—from a variety of fields, including four Nobel Prize winners. It paints a worrisome picture of the status quo. Newly hired research faculty—those entering what should be their most productive years—have a hard time finding funds to support their work. On average, biomedical researchers don’t receive their first grant from the National Institutes of Health, their primary source of funding, until they are 42.

The percentage of grants from NIH going to new researchers has been falling, and most researchers spend too much time submitting multiple applications before they receive their first grant. The situation is equally bleak at the National Science Foundation where the approval rate for grant applications from new researchers has fallen to 15 percent. Recipients of NSF grants have, on average, already been out of school for nine years before they receive their first grant.

The United States is being deprived of the kinds of path-breaking work that could be the basis of future economic success

What’s more, the U.S. research system has become very risk-averse. Scientists tend to submit conservative research proposals for fear that more innovative ideas will be turned down. The result of these trends is that the United States is being deprived of the kinds of path-breaking work that could be the basis of future economic success—the next leapfrogging technology on the order of the Internet or entire new fields such as biotechnology. Investment in early-career faculty and high-risk research will provide immediate opportunities for future leaders and strengthen the foundations of our economy.

The government can take concrete, budget-neutral steps to improve the situation. The problem is as much inertia as it is a lack of funds. Federal agencies should set up, or in some cases expand, programs that are devoted exclusively to funding early-career investigators and the most innovative, potentially transformative research. If the research budget increases, then these programs should be the first to get new funds. If budgets do not increase, then money needs to be shifted into these programs from other programs, projects, and centers. Recent initiatives at the NIH, such as the Transformative R01 grants program, and at the Department of Defense substantially increase investment in basic research at academic institutions and begin to address these issues. But more needs to be done.

Ongoing programs also have to be administered so they do not disadvantage early-career researchers or far-reaching ideas. Case in point: Peer reviews of first-time and second-time grant applicants should have expectations appropriate for that career stage, paying more attention to an investigator’s promise. To promote potentially transformative research, applications should minimize detailed methodology and instead explain the impact the research would have if successful. And progress reports should explain the applicant’s most important accomplishments, not just list prior publications.

Beyond modest but far-reaching shifts in how the federal research pie is divided, the ARISE report targets several low-cost changes that could dramatically improve the science and technology research picture. These include strengthening review systems, enhancing support for program officers, and improving data collection and analysis across agencies.

In the months since the publication of the white paper, the chair of the Academy’s ARISE group, Thomas Cech of the Howard Hughes Medical Institute, and other committee members have met with agency officials, professional societies, university groups, and congressional policy makers to discuss the report in detail. We hope that this will stimulate a deeper discussion of our nation’s research and education enterprise and, in particular, the intertwined government and university policies and procedures that affect the success of early-career scientists and the opportunity to engage in high-risk, high-reward research.

Neal Lane is the Malcolm Gillis University Professor and senior fellow at the James A. Baker III Institute for Public Policy at Rice University.

Leslie Berlowitz is the chief executive officer of the American Academy of Arts and Sciences.

I’m totally down with that, but first, I’d like to indulge in one final Bush-era diatribe against the longest-ever serving White House science adviser: John Marburger, who has been a poor advocate indeed for the science world.

Seed magazine (my former employer) got an “exit interview” with Marburger just after President Obama’s election, but it was not published until last week. And it’s stunning stuff. Marburger doesn’t seem to think there’s anything wrong with how the Bush administration treated science, in large part because he appears fixated on what one Canadian politician amusingly called the “milk cow–milking machine relationship” between politicians and scientists: So long as scientists get their federal research money, everything’s fine. What a narrow way of conceiving of the relationship between science, politics, and society.

Perhaps Marburger has such an easy time focusing narrowly on science funding levels under Bush (which, incidentally, have failed to keep pace with inflation for four years running) because of his willingness to dismiss other charges against the president without even answering what Bush critics actually say. Let’s go through some examples from the interview:

“His position on stem cells was attacked as a scientific position, when in fact it’s an ethical position…He made federal money available for embryonic stem cell research for the first time.”

Wow. I and many, many others have pointed out that the 2001 Bush stem cell policy was based on scientifically refutable misinformation. The president was wrong about the extent to which his policy would advance (rather than strangle) biomedical research, because he was wrong about the number of embryonic stem cell lines available for federally funded research, and their biomedical potential. This is a matter of fact, not of ethics. But while we’re at it, let’s note that on the question of ethics, the Bush administration was also wrong, and the 2001 policy in fact unethical, because it designated several cell lines as eligible for research that did not meet basic ethics guidelines for informed consent, as Science Progress‘s Rick Weiss has pointed out.

“He was attacked for his position on the Kyoto protocol, despite its serious flaws, and the fact that the Senate had already refused to ratify it…The president has not said that we have to wait until the certainties are resolved before we do something about climate change. He has actually said just the opposite. It is not easy for me to understand how the public discourse can get so off track as to hold that the president says, “Oh, let’s do more research, so we don’t have to take any action.”

Allow me to quote George W. Bush on climate change, circa 2006: “There is a debate over whether it’s manmade or naturally caused.” The problem with this statement is that there isn’t such a debate; and there wasn’t then, either. Bush was wrong about a major point of science, and misleading the country about it. And that’s far from the only example of such misinformation from Bush or his administration on climate. But again, Marburger doesn’t even dignify the real criticism of the administration on this point. He completely ducks it, once again hiding behind the insulting idea that Bush critics don’t know the difference between “is” and “ought,” between what science tells us and what we should therefore do about it.

Childish things, indeed.

“We’ve seen some increased visibility of the science community during the Bush administration. I think that was part of a political strategy of the Democratic Party, which was somewhat successful, to undermine the credibility of the Bush administration by fixing on these issues.”

This, too, is false. I’m happy to say that I watched the entire politics and science issue evolve over the course of the Bush administration. It wasn’t that the Democrats stirred up the scientists; rather, the scientists stirred up the Democrats and other progressive advocates. The true coming-out moment for the scientific community with respect to Bush occurred in early 2004, when the Union of Concerned Scientists organized a group of luminaries to denounce the administration’s many distortions and abuses. Since then, I would certainly agree that progressives (including Democrats and some Republicans) more than conservatives have taken up the scientists’ cause; but scientists first laid it out there.

With this, let’s move on to the final, whopping quotation from the “exit interview”:

“I believe that history will show that under this administration, science and technology have thrived as well as they could, given the constraints that we work under. Those constraints are very great. Not least of which is having a very unpopular president, very difficult foreign policy, wars, and unpopular policies of various kinds. Those notwithstanding, I’m satisfied that I’ve done everything that I could to make science work for the nation. I think that future presidents will find it difficult to compile a record as long as this one. In retrospect, it will be seen that this was a tough act to follow.”

Marburger is certainly right about that last point—but not in the way he intends.

Chris Mooney is contributing editor to Science Progress and author of several books, including The Republican War on Science and the forthcoming Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. He and Kirshenbaum blog at “The Intersection.”

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.

Advocacy narrowly focused on a single disease is often problematic for leaders of the NIH, because such advocacy is likely to be inconsistent with the ways science works best. Furthermore, the goals of such advocacy are often spending levels that are difficult to measure accurately. For example, research on a specific neurological disease, like ALS (amyotrophic lateral sclerosis, or Lou Gehrig’s disease), should, in principle, include basic studies of nerve cells and mechanisms of cell death, in addition to clinical trials in ALS patients, which are readily classified. The basic work may be impossible to classify by disease category, since it could help to understand many neurological diseases or others. This is where the concept of scientific opportunity comes into play: Spending funds to seize a chance to understand a fundamental principle in biology is often a more effective approach to disease than mandating funds for research on a specific disease. Furthermore, efforts to understand another disease, even one that does not affect neurons, might prove to be a more valuable means to understand ALS than work on ALS itself.

He goes on to explain examples with which he is personally familiar, including studies of breast cancer leading to a breakthrough in colon cancer research, and brain tumor research improving the understanding of breast cancer.

In context, Varmus is talking about the budgetary difficulties of balancing requests from advocacy groups, Congress, and the White House. But this is also a useful example of why support for basic research in biological sciences is important: the eventual applications of that work is not always predictable, but it is sometimes serendipidous. And that benefits everyone.

While many nations have taken the innovation challenge to heart and put in place a host of policies to spur innovation, the United States has done little, consequently falling behind in innovation policies and risking falling behind in innovation performance as well. We see this gap in at least five main areas: programs to establish civilian technology and innovation promotion agencies;^[1] services innovation initiatives; national levels of research- and-development funding; tax incentives for research and development; and policies regarding high-skill immigration.

In the pages that follow, we will examine each of these five areas to see what our nation could learn from benchmarking new innovation policies to those of our rival industrialized competitors in Europe and Asia.

Civilian Technology and Innovation Promotion Agencies

A number of advanced countries are well ahead of the United States in creating national agencies that support innovation. In recent years, Finland, France, Iceland, Ireland, Australia, Japan, the Netherlands, New Zealand, Norway, South Korea, Canada, Germany, Taiwan, Switzerland, and Great Britain have either established or significantly expanded separate technology- and innovation-promotion agencies. Other nations, such as Denmark, Sweden, and Spain, have longstanding agencies of this type.^[2] All these countries have science- and university-support agencies similar to America’s National Science Foundation, which largely fund basic research, universities, and national laboratories. But these countries realized that if they were to prosper in the highly competitive, technology-driven global economy, they needed specifically to promote technological innovation, particularly in small and mid-sized companies and in partnership with universities.

Perhaps the most ambitious of these efforts is Tekes, Finland’s National Agency for Technology and Innovation. In the last two decades, Finland has transformed itself from a largely natural resource-dependent economy to a world leader in technology, with Tekes a key player in the country’s transformation. Affiliated with the Ministry of Employment and the Economy, Tekes funds many research projects in companies, multicompany partnerships, and business-university partnerships. With a budget of $560 million (in a country of only 5.2 million people), Tekes works in partnership with business and academia to identify key technology and application areas—including nano-sensors, broadband, and services innovation—that can drive the Finnish economy. Tekes also operates a number of overseas technology liaison offices that conduct “technology scanning,” seeking out emerging technologies bearing on the competitiveness of Finnish industries, and sponsors foreign outreach efforts to help its domestic companies partner with foreign businesses and researchers.

Similarly, Japan’s New Energy and Industrial Technology Development Organization is a quasi-public agency that receives its $2 billion budget from the Ministry of International Trade and Industry. Great Britain’s new Technology Strategy Board is a non-departmental public body (similar to an independent government agency in the United States) whose mission is to drive forward the government’s national technology strategy. South Korea’s Korea Industrial Technology Foundation, established in 2001, engages in a wide range of technology activities, including providing training to develop industry technicians and cooperating with international entities to promote industrial technology development. A host of other nations have similar bodies dedicated specifically to promoting innovation and competitiveness.^[3]

Most foreign innovation-promotion agencies provide grants to companies for research, either alone or in consortia, including in partnership with universities. All support university-industry partnership grant programs, whereby companies or business consortia can receive grants (usually requiring matching funds) to partner with universities on research projects. Vinnova, Sweden’s innovation-promotion agency, gives most of its grants to research consortia involving companies and universities.

Adequately investing in and developing innovation-enhancing policies is crucial to national innovation competitiveness, as Professors Jeffrey Furman and Richard Hayes found in a study of the national innovation capacity (an economy’s potential for producing a stream of commercially relevant innovations) of twenty-three countries from 1978 to 1999.^[4] Starting in 1979, they classify countries as either world-leading innovators (the United States, Germany, Japan), middle-tier (Great Britain, France, Australia), third-tier (Spain, Italy), or “emerging” innovators (Ireland, Taiwan) based on countries’ patenting activity per capita, a proxy for commercialized innovations.

A number of these “emerging innovators”—among them Ireland, Finland, Singapore, South Korea, Denmark, and Taiwan, in particular—achieved remarkable increases in innovative output per capita, moving to the world’s technological frontier and overtaking the innovative capacities of many mid- and third-tier countries, including Great Britain, France, and Italy, whose economic conditions started off much more favorably in the early1980s. Furman and Hayes conclude that innovation leadership among countries requires not only the development of innovation-enhancing policies and infrastructure, such as strong IP protections, openness to trade, highly competitive markets, and strong industry clusters, but also a commitment to maintaining substantial financial and human capital investments in innovation.

But compared with other industrialized democracies, the U.S. government invests relatively little in innovation-promotion efforts. In fiscal year 2006, the federal government spent a total of $2.7 billion, or 0.02 percent of gross domestic product, on its principal innovation programs and agencies: the National Institute of Standards and Technology’s Advanced Technology Program and Manufacturing Extension Partnership, the White House’s Office of Science and Technology Policy, three NSF-administered innovation programs (Small Business Innovation Research, Small Business Technology Transfer, and Industrial Technologies Program), and the Department of Labor’s Workforce Innovation Regional Economic Development, or WIRED, program.

If the United States wanted to match Finland’s outlays per dollar of GDP in innovation-promotion efforts, it would have to invest $34 billion per year. While other nations invest less in their innovation-promotion agencies than Finland, they still invest considerably more than the United States. As a percent of their countries’ GDPs, Sweden spends 0.07 percent, Japan 0.04 percent, and South Korea 0.03 percent on their innovation promotion agencies. To match these nations on a per-capita basis, the United Sates would have to invest $9 billion to match Sweden, $5.4 billion to match Japan, and $3.6 billion to match South Korea.^[5] It is astounding that economies a fraction the size of the United States spend more on innovation-promotion in actual dollars, let alone as a percentage of their economy.

This places U.S. industries and corporations operating alone at a disadvantage against foreign corporations that benefit from coordinated and enlightened national strategies among universities, governments, and industry collaborations to foster competitiveness. For example, the Japanese government has recognized advanced battery technology as a key driving force behind its competitiveness, and views battery technology as an issue of “national survival.”^[6] It is funding Lithium-ion battery research over the five-year period from October 2007 to October 2012 at $215 million (¥25 billion)—a level 10 times the amount of announced U.S. Lithium-ion battery research investment—and longer term, has committed to a 20-year Li-ion battery research program.

Germany’s government will provide a total of €1.1 billion ($1.4 billion) over 10 years to applied research on automotive electronics, lithium ion batteries, lightweight construction, and other automotive applications.^[7] U.S. automakers, receiving only a fraction of this support, are disadvantaged from the get-go. Those who believe that any kind of proactive government support or intervention for U.S. businesses is tantamount to industrial policy and that free markets alone will provide the price signals companies need to make investment decisions will indeed see the marketplace introduce hybrid and electric vehicles, but it will likely be by foreign auto companies, to the detriment of employment in, and long-term survivability of, domestic U.S. automobile manufacturers.

To be sure, a number of “third party” organizations in the United States fill in for some of the roles played by innovation promotion agencies in other countries. Case in point: The U.S. semiconductor industry and federal government partnered in the 1980s on SEMATECH, a collaborative partnership to restore U.S. innovation and competitiveness in microprocessor chips. The National Academy of Sciences’ Government-University-Industry Research Roundtable works collaboratively to identify and target promising new technologies for R&D funding and to promote a highly skilled U.S. workforce. Several states support “regional cluster” initiatives to drive competitiveness of regional industry clusters, among them The Massachusetts Life Sciences Collaborative and Southeast Michigan’s Automation Alley in industrial automation.^[8]

But many in Washington have recognized that these dispersed and unconnected initiatives will be insufficient to close the growing gap between the United States and peer countries in creating a coherent and coordinated national innovation strategy. The National Academy of Sciences will release a report (funded by the America Competes Act) by the end of 2008 documenting barriers to innovation in the United States. It will be the first NAS report addressing innovation as distinct from technology and research and development.

To address these critical innovation challenges, the Washington-based Information Technology and Innovation Foundation and The Brookings Institution have called for the creation of a National Innovation Foundation—a new, nimble, lean, and collaborative entity devoted to supporting firms and other organizations in their innovative activities. NIF’s mission will be to boost the nation’s innovation leadership for the 21st century and raise productivity and incomes.^[9] Sens. Susan Collins of Maine and Hillary Clinton of New York have authored Senate Resolution 3078 to create a National Innovation Foundation, and the Obama administration should stridently support and promote this legislation.

Services Innovation Initiatives

A dramatic macroeconomic shift from goods to services has occurred in Western economies, with services now accounting in the United States for 82 percent of output and 84 percent of employment and for 86 percent of output in Great Britain.^[10] From an employment perspective, low employment in domestic services sectors accounts for almost all of the variability in employment rates between industrialized member nations of the Organization for Economic Cooperation and Development. As services increasingly drive employment, productivity, and economic growth, a number of countries have developed explicit national services innovation policies focused on spurring innovation in the services sectors of their economies. Policymakers in these countries have recognized that knowledge of services innovation has largely been informed by studies of the manufacturing sector, and acknowledged the need to tailor unique measures to the needs of services firms and industries.^[11]

The focus on service innovation began in the mid-2000s with a coterie of small Northern European countries—Finland, Denmark, Norway, The Netherlands, and Sweden—and has since grown to include additional small countries in Europe and Asia (Taiwan, Ireland, and Singapore) and large nations (Great Britain, Canada, and Germany).

Finland was the first to implement a national services innovation policy, with a five-year, €100 million^[12] program launched in 2006 called “SERVE—Innovative Services Technology Programme.”^[13] Finland’s neighbors soon followed suit, recognizing the increasing importance of services as their domestic manufacturing industries departed for cheaper production centers abroad, particularly in the form of “near-shoring” to Baltic and Eastern European countries. The same phenomenon affected developed Pacific Rim countries, as manufacturing moved first from Japan and Taiwan to cheaper production centers in China, and now out of China and on to the poorer nations of Southeast Asia. This process has forced almost all industrialized countries to seek to migrate their economies up the value chain towards knowledge-based, high-value-added services activities such as R&D, design, finance, consulting/training, and post-installation service and support.

Policy approaches quickly evolved into two main strands. First, these countries strove to develop framework conditions that support competitive services industries. As they began to scrutinize their services industries, these countries found they first needed considerable work in setting favorable framework conditions, such as removing barriers to labor market mobility in services industries, further opening and integrating cross-border services markets, developing better accounting practices for intangible assets, updating intellectual property and trade laws to accommodate the unique characteristics of services, developing core information technology infrastructure, and providing structures and incentives to encourage services exports.

Second, with this supportive policy framework in place, these countries implemented specific programs to support innovation in services businesses. Specific efforts (and at least one sample country implementing them) include:^[14]

• Boosting academic research in the area of services innovation and services business, especially research on creating innovative services-based business models, quantifying improvements in services productivity, and enhancing quality of services delivery (Finland, The Netherlands, Denmark)
• Funding Services Science research, that is, cross-disciplinary research that draws on fields such as computer science, management, operations, marketing, and organizational behavior (Singapore, Taiwan)
• Extending research and experimentation tax credits to services industries; especially, defining where the “innovative step” occurs for services firms (Norway)
• Developing innovation metrics that measure innovation in services, not just advanced manufacturing, and looking for “hidden innovation” in services industries (Great Britain, the United States, Ireland)
• Supporting the development of creative industries through establishing regional design centers (South Korea, the Netherlands, Great Britain)
• Providing online self-assessment tools that allow companies to benchmark their innovation infrastructures (R&D budgets, number of employees, intellectual property strategies) against in-nation and in-industry peer companies (Great Britain and European Union)
• Benchmarking services innovation policies across European countries (European Union)

Unfortunately, the United States lags behind these countries in developing policies to support innovation in its service sectors. In fact, the whole edifice of U.S. policies toward services industries is underdeveloped. For instance, U.S. trade law contemplates foreign corporations “dumping” (selling products in the United States below their cost of production or sale in the home country) only physical products, not services, in the United States. So even if a U.S. company could prove that a foreign corporation is “dumping” services onto the U.S. market—say a firm of radiologists in India sold medical imaging analysis services in the United States at a price far below the actual cost of providing the service—it would be unable to pursue any kind of injunctive relief through countervailing duties. Of more immediate concern, U.S. service industry workers who lose their jobs due to globalization are not eligible to receive Trade Adjustment Assistance, unlike their counterparts in U.S. manufacturing industries who lose their jobs due to foreign competition.

To be fair, the United States has at least begun to contemplate redressing some of these imbalances. In the 2007 America COMPETES Act, Congress authorized the funding of a research project to study service science research. And while the United States has not updated its domestic trade laws to reflect the importance of services to the economy, it has aggressively pushed liberalization in service trade in the recent Doha round on international trade liberalization and in bilateral trade negotiations with countries such as South Korea and Peru. The United States lags behind peer countries in inviting the rest of the world’s best and brightest to participate in U.S. economic opportunity, but internally it does have flexible labor markets that direct employment to the fastest-growing, highest-value-added industries.

National Levels of Research and Development Funding

While the United States does lead the world in aggregate (combined federal and corporate) R&D expenditures, it lags behind other industrialized democracies in its level of national R&D intensity (R&D as a percentage of GDP) at a time when many countries are renewing their focus on research and development activities and proactively increasing government-funded R&D investment.^[15]

In 2003, the United States invested $292.4 billion in R&D, accounting for 36.1 percent of global R&D (see Figure 1). In that year, the European Union (EU)-15^[16] and Japan came in second and third, with 25 percent and 13.9 percent, respectively, of world R&D expenditures.^[17] While the United States does lead the world in aggregate R&D investment, its global share of R&D has recently been weakening. In fact, as Figure 1 illustrates, whereas U.S. total R&D investment represented an increasing share of world R&D investment from 1993 to approximately 1998, the U.S. share of world R&D investment has been receding since then. The major reason for this slippage has been a slowdown in federal R&D investment since the mid-1990s, as total federal R&D spending grew at a sluggish 2.5 percent per year from 1994 to 2004—much lower than its long-term average of 3.5 percent growth from year from 1953 to 2004.^[18]

When comparing countries’ R&D investment levels, it is crucial to look not only at countries’ raw R&D investment levels, but also at countries’ R&D investments relative to their GDPs, a measure called R&D intensity. This is important because countries’ R&D intensity levels reveal the relative level at which countries are investing in the new technologies that will lead to innovative and commercializable products and services that keep a nation’s corporations at the forefront of market competitiveness. On this measure, the United States is one of only a few nations where total investment in R&D as a share of GDP actually fell from 1992–2005, largely because of that decline in public R&D support.^[19] Figure 2 plots the percent change in R&D/GDP ratio for the years 1991–2003 for the United States against a group of competing industrial countries, illustrating how U.S. R&D intensity has weakened against peer countries.^[20]

In fact, a recent report from the RAND corporation, “U.S. Competitiveness in Science and Technology,” examined seven countries’ levels of R&D intensity, comparing U.S. R&D intensity from 1985–2005 against that of China, Germany, Japan, Korea, the United Kingdom, and Russia/USSR (see Figure 3).^[21]

In this comparison of countries above, Japan clearly leads in R&D intensity from 1985 to 2005. While at first glance U.S. performance appears strong—the United States holding second place for most of this period—the graphic reveals several disturbing trends. One, South Korea has surpassed the United States; South Korea set a goal in 1997 to raise its R&D from 3.6 percent to 5 percent, and these results bear proof of that policy’s success, with South Korean R&D intensity reaching 4.7 percent in 2007. Second, every other country in this comparison set (except for the U.K.) exhibits increasing levels of R&D intensity, whereas U.S. levels have decreased then flattened out.

But as Will Straw documents in his companion piece, “UK Innovation Policy,” that country is making concerted efforts to energize its national innovation strategy and ramp up R&D investments. What’s more, this comparison excludes acknowledged world leaders in R&D intensity, such as Finland, Singapore, and Israel. Finland, for example, has consistently devoted about 3.5 percent of its GDP to R&D, and has recently embarked on a strategy to push that level to 4 percent.^[22]

In fact, when U.S. R&D intensity is compared to other OECD countries, we find that at 2.6 percent of GDP devoted to R&D investment, the United States ranks only seventh in R&D intensity, behind a list of countries including Japan, South Korea, Finland, and Sweden.^[23] In more recent rankings (2006) from the OECD, the United States places only 22nd in the fraction of GDP devoted to nondefense research.^[24] While R&D, as with any type of investment, confronts diminishing returns at a certain point, the United States has clearly slipped below OECD averages for national R&D intensity.

These findings are cause for concern because the payoff for government support for research and development funding is indeed considerable, as Fred Block and Matthew R. Keller argue in “Where Do Innovations Come From? Transformations in the U.S. National Innovation System, 1970–2006.” The study by The Information Technology and Innovation Foundation documented the crucial importance of federal R&D funding to innovation in the United States, finding that in 2006 only 11 of the 88 entities that produced award-winning innovations were not beneficiaries of federal funding.^[25]

Tax Incentives for Research and Development

The tax incentives the U.S. government provides corporations for R&D activities have fallen from the most generous in the world in the late 1980s to 17th among 30 OECD countries in 2004 (see Figure 4.)^[26] Many nations now provide significantly more generous tax incentives for research than does the United States. From leading the world in the late 1980s,^[27] the United States by 1996 fell to seventh most generous among OECD nations, behind Spain, Australia, Canada, Denmark, the Netherlands, and France.^[28] By 2004, we had fallen to 17th in generosity for general R&D; 16th for machinery and equipment used for research; and 22nd for buildings used for research.^[29]

Among nations with a tax incentive for R&D, the United States now provides one of the weakest incentives, below our neighbors Canada and Mexico, and behind many Asian and European nations (see Figure 5). Japan’s credit is almost three times as generous as the United States’, and for small companies it’s four times as generous. In 2004, France adopted a credit essentially equivalent to a 40 percent incremental R&D tax credit. In an explicit effort to attract U.S. corporate R&D, our neighbor to the north is even more generous. In Canada, large companies are eligible for a flat 20 percent credit while small companies can receive a 35 percent credit; in many provinces, equally generous credits can be taken on top of the federal credit. Indeed, over the past decade, all other nations with R&D tax incentives have boosted the generosity of their R&D tax incentives, particularly since 2000.^[31]

At a time of increased concern about America’s growing competitiveness challenge, our tax credit has been getting weaker, both in absolute terms and relative to other nations, in part because of changes made by Congress over the years that have diminished its generosity.^[32] In fact, until the passage in 2006 of the Alternative Simplified Credit, the credit was about half as generous as it was in the early 1980s.^[33]

Even with the recent increases in R&D tax incentives (the passage of the Alternative Simplified Credit in 2006 and its expansion in the Emergency Economic Stabilization Act of 2008), the United States moved up only to 14th place. However, this doesn’t include non-OECD nations such as India, China and Brazil, all of which have significantly more generous tax incentives to attract multi-national R&D. India’s R&D tax credit is now four times that of the United States. On top of salaries for R&D personnel that are as low as one-sixth of the costs in the United States, China provides a 150 percent deduction on R&D expenses (provided that R&D spending increased 10 percent over the prior year).

Given the relative generosity of our foreign competitors’ tax treatment of R&D, it’s not surprising that between 1998 and 2003, investment in R&D by U.S. majority-owned affiliates increased twice as fast overseas as it did at home (52 percent vs. 26 percent).^[35] In contrast, corporate R&D spending in the United States as a share of GDP fell every year between 2000 and 2003, to 1.67 from 1.84 percent.^[36] Moreover, as a share of GDP, corporate-funded R&D fell in the United States by 7 percent from 1999 to 2003, while in Europe it grew 3 percent and in Japan 9 percent.^[37] While a number of factors have contributed to this differential in R&D growth rates, the more generous R&D tax incentives in Europe and Japan are likely one important factor.

High Skill Immigration

Welcoming the world’s most skilled foreign-born scientists and engineers into the land of economic opportunity that America affords has long been one of the strengths of the U.S. national innovation system. The U.S. economy and the standard of living for American citizens have benefited enormously from this influx of foreign talent. AnnaLee Saxenian, a professor at the University of California-Berkeley, has shown that Indian and Chinese entrepreneurs founded or co-founded roughly 30 percent of all Silicon Valley startups in the late 1990s.^[38] Microsoft founder Bill Gates has estimated that for every foreign-born scientist or engineer Microsoft has hired, five new jobs were created for U.S. citizens.

Recognizing this, over the last decade many nations have liberalized their policies regarding high-skill immigration, while the United States, in stark contrast, has restricted its policies. In a study benchmarking high-skill immigration policies in eight nations (the United States, Canada, New Zealand, Australia, Japan, Great Britain, Germany, and France), “Global Flows of Talent: Benchmarking the United States”,^[39] The Information Technology and Innovation Foundation found that the United States trails other peer countries in developing a proactive approach to attract high-skilled foreign workers.

Using data from 2001 to 2006, the United States received an average of about 67,000 highly skilled permanent immigrants per year, with Canada receiving 56,000 per year, Australia 20,000, and New Zealand about 10,000.^[40] As a share of their populations, these rates are all several times larger than those in the United States—more than 11 times larger in the case of New Zealand (see Figure 6).

ITIF’s study of the immigration policies of those eight countries found three broad approaches. The first group—Australia, Canada, and New Zealand—conceive of immigrants as a source of economic growth and consider highly-skilled immigrants especially valuable contributors. The second group—the United States and Great Britain—were more amenable towards immigration but do not place high priority on tilting the mix of immigrants toward the talented. The third group—France, Germany, and Japan—tend to view highly skilled immigrants (and immigrants in general) more as threats to native workers than as positive additions to national well-being.

While the United States may not be as reflexively anti-immigration as some other industrialized countries, in recent years it has severely limited the flow of foreign talent entering the country at a time when the science and engineering workforce in the United States has become increasingly reliant on foreign talent. In 1995, non-U.S. citizens accounted for only 6 percent of the U.S. science and engineering workforce; by 2006, that percentage had doubled to 12 percent, and for the youngest cohort of scientists and engineers (ages 21 to 35), the percentage rose to 20 percent.

With the United States restricting the number of H-1B visas issued annually to 85,000, almost 50 percent of highly talented foreign professionals who applied for temporary work in the United States in the years 2006 to 2008 were turned away. Limiting the influx of talented foreign-born science and engineering professionals not only hurts U.S. competitiveness, it may also contribute to the decision of companies to source R&D operations abroad to be closer to local pools of S&E talent. At a time when, as The Economist put it, “Talent has become the world’s most sought-after commodity,”^[42] the United States needs an immigration strategy that once again welcomes the world’s best talent to our shores.

A first step would be collecting accurate statistics about H-1B visa applicants and grantees. The Citizenship and Immigration Service (the federal agency that oversees the guest worker program) has been unable to answer basic questions such as “How many foreign-born professionals are working in the United States on H-1B visas,” or “What percentage of H-1B visa holders seek green cards instead of returning home.”^[43] Several proposed congressional bills would raise the number of H-1B visas annually to 115,000 (with provisions to go as high as 180,000.) Andy Grove, founder of Intel Corp., and other technology leaders have called for “green cards to be stapled to the diplomas” of foreign-born individuals receiving graduate and undergraduate degrees from U.S. universities.^[44]

Conclusion

Countries are increasingly recognizing that technology and innovation drive long-term national economic growth.^[45] Most of these countries already feature robustly funded national technology and innovation agencies, and an increasing number are working to develop explicitly stated national innovation strategies and agendas that coordinate the activities of government, corporations, and universities in their countries to support innovation. Many of these countries have embraced an emerging doctrine of economics called innovation economics, which reformulates the traditional model of economic growth to place knowledge, technology, entrepreneurship, and innovation at the center of economic growth, and asserts that the central goal of economic policy should be to spur higher productivity and greater innovation.^[46]

These countries understand that markets relying on price signals alone will not always be as effective as smart public-private partnerships in spurring higher productivity and greater innovation.

The global competitive landscape continues to stiffen as a number of countries get serious about creating favorable climates that attract foreign direct investment and R&D activities and supporting the innovation efforts of their domestic corporations and workforce. It is high time the United States articulates an innovation-led economic growth strategy to respond to global economic competitiveness challenges.

Notes

[1] In this context, “civilian” means non-defense-focused technology and innovation promotion agencies focusing on private sector and non-defense public sector technology and innovation funding and support.

[2] Information about foreign technology and innovation-promotion agencies is from the following sources: Denmark—Danish Technological Institute Web site, www.danishtechnology.dk; Finland—Tekes Web site, www.tekes.fi/eng, and personal communication with Peter Westerstråhle of Tekes; France—OECD Reviews of Innovation Policy: France (Paris: Organization for Economic Cooperation and Development, 2006); Iceland—Technological Institute of Iceland Web site, www.iti.is/english; Ireland—Enterprise Ireland Web site, www.enterprise-ireland.com; Japan—NEDO Web site, www.nedo.go.jp/english, and personal communication with Hideo Shindo of NEDO; Netherlands—TNO Web site, www.tno.nl/index.cfm?Taal=2; New Zealand—New Zealand Trade and Enterprise Web site, www.nzte.govt.nz; Norway—Innovation Norway Web site, www.innovasjonnorge.no; South Korea—Korea Industrial Technology Foundation Web site, http://english.kotef.or.kr; Spain—CDTI Web site www.cdti.es/index.asp?idioma=es&r-1024*768; Sweden—Vinnova Web site, www.vinnova.se/misc/menyer-och-funktioner/Global-meny/In-English; Switzerland—CTI Web site, www.bbt.admin.ch/kti/index.html?lang=en; United Kingdom–Technology Strategy Board Web site, www.dti.gov.uk/innovation/technologystrategyboard.

[3] It is difficult to obtain information on actual results. However, discussions with government officials suggest that overall, the programs have been successful. Moreover, agencies work to improve performance. For instance, Tekes conducts regular evaluations of specific programs. An example of such an evaluation may be found at www.tekes.fi/julkaisut/FENIX_arviointi.pdf (in Finnish, with English summary).

[4] Jeffrey L. Furman and Richard Hayes, “Catching up or standing still? National innovative productivity among ‘follower’ countries, 1978–1999,” Research Policy 33 (2004): 1329–1354.

[5] Expenditures for Finland, Sweden, Japan, and South Korea are based on personal correspondence between the authors and representatives of the respective nations’ innovation-promotion agencies. Inference for the United States is from the authors’ analysis.

[6] Testimony of Don Hillebrand, Ph.D., Director, Center of National Transportation Research at Argonne National Laboratory, to House Appropriations Subcommittee on Energy and Water Development, February 14, 2008.

[7] Auto Industry UK, “Germany invests €420M in lithium-ion battery development,” May 13, 2008
< www.autoindustry.co.uk/news/13-05-08_2>.

[8] Karen G. Mills, Elisabeth B. Reynolds, and Andrew Reamer, “Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies” (Washington: The Brookings Institution, April 2008) <www.brookings.edu/~/media/Files/rc/papers/2008/04_competitiveness_reamer/Clusters Brief.pdf>.

[9] Robert D. Atkinson and Howard Wial, “Boosting Productivity, Innovation, and Growth Through a National Innovation Foundation” (Washington: Information Technology and Innovation Foundation, April 2008) < www.itif.org/files/NIF.pdf>.

[10] Tekes, the Finnish Funding Agency for Technology and Innovation, Seizing the White Space: Innovative Service Concepts in the United States (Helsinki, Finland: Tekes, March 2007) <www.tekes.fi/eng/publications/innovative_service.pdf> and United Kingdom National Endowment for Science, Technology, and the Arts, Innovation in Services Policy Briefing (London, England: NESTA, May 2008) <www.nesta.org.uk/assets/Uploads/pdf/Policy-Briefing/innovation_in_services_policy_briefing_NESTA.pdf>.

[11] Forfas, Service Innovation in Ireland – Options for Innovation Policy, (Dublin, Ireland: Forfas, September 2006): 10 < www.forfas.ie/media/forfas060928_services_innovation_full_report.pdf>.

[12] €100M converted into $120M according to exchange rates at the time. (€100M converts to $130M in today’s dollars.)

[13] Tekes, the Finnish Funding Agency for Technology and Innovation, Service innovations – innovative business (Helsinki, Finland: Tekes, 2006).

[14] While this is a small sampling, a comprehensive inventory of European services innovation policies is available via the European Innovation Policy Project in Services available at www.europe-innova.org/servlet/Doc?cid=9268&lg=EN.

[15] Stephen J. Ezell and Robert D. Atkinson, RAND’s Rose-Colored Glasses: How RAND’s Report on U.S. Competitiveness in Science and Technology Gets it Wrong (Washington: Information Technology and Innovation Foundation, September 2008): 11–13 < www.itif.org/index.php?id=174>.

[16] Fifteen was the number of member countries in the European Union prior to the accession of 10 candidate countries on May 1, 2004. The EU15 comprised the following 15 countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, United Kingdom.

[17] Titus Galama and James Hosek, U.S. Competitiveness in Science and Technology (Santa Monica, California: RAND Corporation, 2008): 22.

[18] Galama and Hosek, 2008, 67.

[19] Organization for Economic Co-operation and Development, OECD Science Technology and Industry Scoreboard 2005 (Paris: OECD 2005).

[20] Robert Atkinson, “The Globalization of R&D and Innovation: How Do Companies Choose Where to Build R&D Facilities?” presented before the Committee on Science and Technology Subcommittee on Technology and Innovation, U.S. House of Representatives, October 4, 2007.

[21] Galama and Hosek, 2008, 23. Figure 2.3 reproduced from Eaton and Kortum (2007); OECD (2006, 2006c.) Used with original author’s permission.

[22] Paul Heller, “Finland unveils new innovatio0n strategy,” Science|Business, June 30, 2008 <www.bulletin.sciencebusiness.net/ebulletins/showissue.php3?page=/548/art/11069>.

[23] Organization for Economic Co-operation and Development, OECD Science, Technology, and Industry Scoreboard 2007 (Paris: OECD, 2007) <http://oecd.p4.siteinternet.com/publications/doifiles/922007081PIG2.xls>.

[24] Norman Augustine, Is America Falling Off the Flat Earth? (Washington: National Academies Press, 2006), 53.

[25] Fred Block and Matthew R. Keller, “Where Do Innovations Come From? Transformations in the U.S. National Innovation System, 1970–2006” (Washington: Information Technology and Innovation Foundation, July 2008) <www.itif.org/files/Where_do_innovations_come_from.pdf>.

[26] Robert D. Atkinson, Expanding the R&D Tax Credit to Drive Innovation, Competitiveness and Prosperity (Washington: Information Technology and Innovation Foundation, April 2007).

[27] Bronwyn Hall and John van Reenen, “How Effective Are Fiscal Incentives for R&D? A Review of the Evidence,” Research Policy 29 (2000): 449–469.

[28] Dominique Guellec and Bruno van Pottelsberghe de la Potterie, “Does Government Support StimulatePrivate R&D?” OECD Economic Studies 29 (1997).

[29] In fact, government support declined significantly over this period and as a result, the United States was one of the few nations where the share of R&D-to-GDP ratio fell between 1991 and 2002.

[30] OECD data including Jacek Warda (op. cit.).

[31] Martin Falk, “What Drives Business R&D Intensity Across OECD Countries?” Paper Presented at the DRUID 10^th Anniversary Summer Conference, Copenhagen, Denmark (June 27–29, 2005).

[32] In 1985 the rate was reduced from 25 to 20 percent, and other restrictions (such as the 50 percent rule and the recapture of benefits through reductions in expensing) were put in place in the late 1980s.

[33] K.C. Whang, A Guide to the Research Tax Credit: Why We Have It, How It Works, and How It Can Be Improved (Washington: U.S. Congress, Working Paper Series, Offered to the Joint Economic Committee Minority, Dec. 1998).

[34] Warda, op. cit.

[35] Majority-owned foreign affiliates (MOFA), which are foreign business enterprises that are owned at least 50 percent by U.S. parent(s).

[36] However, this is not unprecedented. Corporate R&D fell in the recession of the early 1990s and took five years to regain its peak. National Science Foundation, Science and Engineering and Indicators, 2006.

[37] Organization for Economic Co-operation and Development (OECD), OECD STI Scoreboard 2005 (Paris: OECD 2005).

[38] Richard Florida, “The World is Spiky,” Atlantic Monthly, October 2005: 48-51 <isites.harvard.edu/fs/docs/icb.topic30774.files/2-2_Florida.pdf>.

[39] David M. Hart, Global Flows of Talent: Benchmarking the United States (Washington: Information Technology and Innovation Foundation, November 2006), 12 < www.itif.org/files/Hart-GlobalFlowsofTalent.pdf>.

[40] Australian data are drawn from the Australian Department of Immigration and Multicultural Affairs (DIMA) annual Immigration Update, <www.immi.gov.au/media/publications/statistics/>, accessed August 31, 2006. New Zealand data are drawn from OECD, SOPEMI 2006, pp. 303-304. Canadian data are drawn from Citizenship and Immigration Canada annual Facts and Figures, accessible at <www.cic.gc.ca/english/research/menu-fact.html>, accessed August 31, 2006. All figures are for principal applicants only.

[41] Ibid., and 2000 U.S. Census; OECD 2005.

[42] Adrian Woodbridge, “The Battle for Brainpower, “ The Economist, October 7, 2006, survey section, p. 3.

[43] Tom Abate, “H1-B Federal Immigration Bill: Reforms to the work visa program are a small part of the overall debate–except in Silicon Valley,” San Francisco Chronicle, May 27, 2007.

[44] Ibid.

[45] Paul Romer, “Increasing Returns and Long-Run Growth,” 94 Journal of Political Economy (1986): 1002; Paul Romer, “Endogenous Technological Change,” 98 Journal of Political Economy (1990): 71.

[46] Robert D. Atkinson and David B. Audretsch, Economic Doctrines and Policy Differences: Has the Washington Policy Debate Been Asking the Wrong Questions? (Washington: Information Technology and Innovation Foundation, September 2008) <www.itif.org/index.php?id=177/>

Friday, Nature published an interview with former NIH Director Elias Zerhouni in which he talks about balancing the playing field between young and established investigators and providing for research in the midst of an economic downturn (HT: David Bruggeman at Prometheus):

What solution do you see to the NIH financial crisis?

The solution is that the economic situation has to turn around. I studied the NIH budget over time. And it’s directly correlated with the federal surplus and gross domestic product growth.

But look at the situation today. The economic stimulus package is $500 billion, with $1 billion for science. It’s outrageous. This is the future of our country. So now we’re subsidizing the industries of the past at the expense of investments in the industries of the future. It’s almost an insult, frankly.

The Washington Post followed up Saturday with a profile on Zerhouni that examined, among other things, the possibilities for redoubling the agency’s budget when President-elect Barack Obama takes office. Donald Light explored one point upon which that argument might turn last week–comparative effectiveness research as a way to reduce health costs. Wrote David Brown at the Post:

A major question facing the new administration is what role, if any, the NIH will play in the huge number of cost-effectiveness, comparative-effectiveness, quality-improvement and patient-safety studies that many health-care policy experts say must be done to get the full value of the products of medical research.

In an effort to make up for the impact of budget deficits on R&D spending, the American Association of Research Universities sent a letter to the incoming administration with six recommendations for how to help schools that support the economy in midst of the crisis using some of the $700 billion set aside for the financial services industry. The first proposal deals with ensuing access by helping students secure the grants and loans to, and the remaining five deal with improving academic infrastructure–both physical buildings and research grants. The Chronicle news blog has a summary, and Science Insider has the full letter, which is short.

Rick Weiss confronted the issue of NIH funding earlier this year and wondered if there wasn’t a spare $2 billion sitting around that Congress could invest in biomedical research for the health of the American public.

If we’ve learned anything from the financial crisis (and I certainly hope we have), it is that the priorities of Wall Street still largely dictate the priorities of our governments. Who would have ever thought that one of the most gung-ho, pro-market administrations in recent history would bail out several investment firms and—gasp—nationalize (at least partly) others? Yet, at the same time that some governments are frantically shoring up their faltering financial markets by shoveling in billions of dollars, they also are preparing deep cuts in spending for less “essential” sectors. One of those likely to be affected in the short-term is government science. That’s why now is the time for scientists to stand up, speak up, and practice communicating to policymakers the reasons why science helps Americans live safer, healthier, and more productive lives.

One reason why scientists rarely, if ever, get a seat at the table in Washington D.C. is that the profession lacks charismatic, influential leaders (and, no, Al Gore does not count).

Although President-elect Barack Obama promises to boost research funding during his first term in office, and pledged to double the budget of the National Institute of Health over the next decade, one can expect to see some degree of retrenchment. Unfortunately, this could mean science budgets will stagnate further or remain at the lows imposed by the previous administration. According to the National Science Foundation, federal research funding fell for 2 years running in real terms between 2006 and 2007 for the first time in its 35-year record-keeping history.

To say that further cuts would come at the worst possible time is no small exaggeration. The Obama administration will need to deal with a number of pressing science-related issues, such as managing the threat of bioterrorism and the budding nanotechnology market—and that’s not even including tackling the looming climate crisis. Science may have been persona non grata on the campaign trail (despite the best efforts of the Science Debate 2008 team), with climate change only making token appearances in several debates, but it can longer fly under the radar. Indeed, as Science Progress contributing editor Chris Mooney pointed out earlier this week, Obama made it clear in his Tuesday night speech that science is as pivotal to our future as it has been to our past, saying of the 20^th century: “A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination.”

But already we have seen several prominent research labs close up shop under the strain of funding difficulties, and we will likely see many more in the coming months as the credit crunch’s tentacles continue to spread. With many universities set to pare back their hires over the coming years, an already poor job market for new science graduates in academia could become bleak.

So what should be done? For one thing, those who value science and the innumerable contributions it has made to society should continue make the case to their elected representatives that we need policies that maintain and expand research funding. In an ideal world, your average news consumer would be familiar enough with the latest science so as to appreciate the challenges we face and the need for more federal support. (A man can dream, can’t he?)

On a more fundamental level, what we need right now is not necessarily more scientists (though that certainly wouldn’t hurt), but more effective science communicators. One reason why scientists rarely, if ever, get a seat at the table in Washington D.C. is that the profession lacks charismatic, influential leaders (and, no, Al Gore does not count). In an arena dominated by lawyers, former bankers, and military officers, rare is the legislator who hails from a background in research or academia—with a few notable exceptions.

As much as scientists like to disavow it, there is much truth to the well-worn stereotype of the scientist as a reclusive nerd. When scientists do congregate en masse, they tend to split off by discipline—the chemists stay with the chemists and the biologists stay with the biologists. Moreover, the scientific community, though close-knit, is very insular: researchers often have little patience for journalists or the average layman when it comes to communicating their work. “If only they knew what I knew,” they say, “then they would understand why my research is so important.”

Unfortunately that is not necessarily the best way to get your point across to an uninformed public—or to ingratiate yourself to a skeptical but powerful politician, for that matter. In their landmark article on the subject, called “Framing Science,” Matthew C. Nisbet, a professor of communication at American University, and Chris Mooney argue that scientists must learn to actively “frame” their research to make it relevant to a variety of audiences. Because regular citizens are often unable to weigh competing theories and arguments, they say, scientists need to pare down complex issues, or “frame” them, in order to help the average news reader understand why it matters and, if action is necessary, what should be done.

While many scientists remain resistant to the idea, suggesting that science should always be kept separate from the political process, several organizations have stepped into the void to provide media training and policy fellowships to the younger generation of scientists.

Communication Partnership for Science and the Sea, or COMPASS, organizes training sessions on campuses around the country to help faculty and graduate students in the marine sciences communicate information to the public, the media and policymakers. National fellowship programs such as the American Association for the Advancement of Science’s prestigious Science & Technology Policy Fellowship place freshly-minted Ph.D.s in government agencies—everything from the FBI to the USDA—to help them learn the ropes of the legislative process. Organizations like the Union of Concerned Scientists and Research!America are vocal advocates for research and help to bring important science issues to the fore of policy conversations.

We will need as many effective communicators as we can muster if we hope to successfully confront the scientific challenges of the 21^st century, and now is the moment to speak up and be heard.

Jeremy Jacquot is a graduate student in marine environmental biology at the University of Southern California and is a contributing writer for VentureBeat, DeSmogBlog, The Huffington Post, and TreeHugger.

Science, Cultured

Science Progress contributing editor Chris Mooney surveys the interactions between science, politics, and culture from Los Angeles, California. He is author author of several books, including The Republican War on Science and the forthcoming Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. He and Kirshenbaum blog at “The Intersection.” (Photo: flickr.com/sarahfelicity)

It wasn’t noticed by everyone, or loudly trumpeted by his campaign. But as the presidential election heated up, now-president-elect Barack Obama also began ramping up his science policy capacity. After answering fourteen questions posed by ScienceDebate2008 in a manner that received applause from the scientific community, Obama went further by releasing, to Wired Science, his list of advisors who had drafted the responses. It was an impressive group whose membership—including former Clinton administration National Institutes of Health director and Nobel laureate Harold Varmus; former American Association for the Advancement of Science president Gilbert Ommen; and recent Nobel Laureate Peter Agre—strongly suggests that Obama’s administration will take scientific advice very seriously. In an early October letter to the National Academy of Sciences, Obama further assured the scientific community that he will quickly appoint a presidential science adviser to take with him to Washington.

But let’s look in a little more detail about what American science can expect from president Obama. First, Obama’s answers to ScienceDebate2008 show that he will not allow the “war on science” perpetrated under George W. Bush to continue. Scientists—especially those in the government’s employ—can look forward to an administration that will not be beset by recurrent scandals over political meddling with research. In fact, Obama has specifically pledged to protect scientist whistleblowers and make sure his administration avoids political interference with scientific reports released to the public. These are the right sounds to be making, although thus far, they haven’t been made very loudly. With all of the crises president Obama will inherit, the real question will be whether such matters remain on the radar or receive much priority.

On the two highest-profile science policy issues during the Bush administration, embryonic stem cell research and global warming, president Obama will chart a very different course. The two issues are perhaps most dramatically differentiated by how simple it will be to resolve the one, and how staggeringly difficult it will be to even begin to address the other. On stem cells, Obama can simply reverse President Bush’s August 2001 executive order limiting research to pre-existing cell lines; Congress already wanted this before Democrats controlled both houses, as they do now. In a short time, then, we can assume that the most politicized phase of the embryonic stem cell debate will be over.

Despite many challenges ahead, it’s clearly a new day for science in Washington

On climate change, in contrast, this administration needs a massive and sustained effort to: 1) pass a cap-and-trade bill to cut emissions; 2) invest dramatically in renewable energy research and development; 3) prepare to negotiate an international greenhouse gas treaty, the successor to the Kyoto Protocol; and 4) begin a climate change adaptation and readiness agenda for the nation. On the first two points, Obama has outlined ambitious plans—most notably, to set the U.S. on course to reduce greenhouse gas emissions by 80 percent by 2050, and to invest $150 billion in renewable energy over the next decade. The real question, however, will be whether Obama and progressive members of Congress stick to their guns on a strong cap-and-trade bill despite the dismal economic situation—one in which any legislation will be mercilessly attacked for an alleged capacity to damage the economy and raise energy prices. Stand by.

For the same reason that a greenhouse gas bill will be a tough slog—the terrible economy—securing adequate funding for scientific research, including fulfilling funding obligations for the languishing America COMPETES Act, will also pose major challenges to the Obama administration. Here again, Obama says all the right things—perhaps most notably, he wants to see basic research budgets double over the next decade. But staring down a federal budget deficit that could hit one trillion dollars, Obama will be very hard pressed to start out ambitiously toward this end. Let us hope that the people surrounding him make the strong argument that even though research funding will not provide an immediate solution to the economic problems that George W. Bush has left behind, in the long term it’s the single best way to fire the economy—in the energy sphere above all, but across the board.

Despite many challenges ahead, it’s clearly a new day for science in Washington, and there are strong grounds for feeling optimistic. For scientists who so struggled under George W. Bush, there’s a very real sense that the clouds are parting. Now, we await a still-clearer signal of how president Obama will govern science—his pick of a presidential science adviser, which should come soon, and will tell us a great deal. In the meantime, however, we can note that in his victory speech last night, Obama did not leave out science; rather, he gave it a central role in defining the course the nation has taken over the past half century: “A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination.”

Let the tradition finally resume.

Chris Mooney is contributing editor to Science Progress and author of several books, including The Republican War on Science and the forthcoming Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. He and Kirshenbaum blog at “The Intersection.”

The program, which has been planned for a year and is called Grand Challenges Explorations, aims to operate more along the lines of Silicon Valley’s investment approach, in which venture capitalists provide relatively small amounts of capital to a large number of ideas in the hope that just a few will succeed and become the next Microsoft or Google.

This is also an instance of a major foundation endorsing the “high-risk, high-return” approach which understands both that the road to scientific breakthroughs winds past some unmitigated failures, and that pursuing ultimately unsuccessful projects is perfectly healthy when there are multiple paths to a solution. The Howard Hughes Medical Institute sent 56 researchers down this track earlier this year.

The Explorations proposals funded in this first round include researching “living antibiotics” that will send predator microbes to destroy harmful infections, employing mosquitoes as “flying syringes” to distribute vaccines, and investigating genetic resistance to HIV and tuberculosis.

The Gates Foundation press release describing the project is here.

Science, Cultured

Science Progress contributing editor Chris Mooney surveys the interactions between science, politics, and culture from Los Angeles, California. He is author of two previous books, The Republican War on Science and Storm World: Hurricanes, Politics, and the Battle Over Global Warming. He blogs at The Intersection with Sheril Kirshenbaum. (Photo: flickr.com/sarahfelicity)

Scientists—especially those reliant upon federal research dollars—are pretty worried right now. They’ve watched the government prepare an unprecedented and vastly expensive bailout of the financial industry, and the presidential candidates are currently debating who will do more to cut back spending upon taking office. We need scientific innovation now more than ever to fuel the nation’s economic future—to discover the new products, new energy sources, and new communication technologies that will help us retain our status as world leader and prepare us for the remainder of the century. And yet our economic present is so bad that it’s doubtful we can make much of an investment in that future any time soon.

The funding situation for science was, in fact, already troubling long before the recent financial crackup, as several speakers related in Minneapolis earlier this week at the Innovation2008 conference (hosted by ScienceDebate2008 and the Center for Science, Technology, and Public Policy at the University of Minnesota’s Hubert H. Humphrey Institute for Public Affairs, and others). After heeding the concerns of the science community about risks to our competitiveness posed by surging nations like India and China—and passing, in August of 2007, the America COMPETES Act by a strong bipartisan majority—Congress failed to fund the bill’s new programs at the authorized level. Over time, the act would have doubled federal funding of basic scientific research at several agencies, among other initiatives—but instead, the situation has become a “train wreck,” in the words of Russell Lefevre, president of the Institute of Electrical and Electronics Engineers-USA and a speaker at the Minneapolis conference. Right now there’s little hope of getting America COMPETES properly funded at least until the next administration, Lefevre added—and can it really be a priority even then, in such a nasty budget situation?

According to Koizumi, 2009 could be the fifth year in a row that overall federal support for research declines in real terms.

The 2008 deficit has risen to $454 billion, a new record, and for fiscal year 2009, which began on October 1, it could conceivably rise as high as a trillion dollars, noted Kei Koizumi, director of the R&D Budget and Policy Program of the American Association for the Advancement of Science and another speaker at the Minneapolis event. As Koizumi added, science budget trends generally track overall trends in federal domestic spending, precisely what is under such incredible strain as a consequence of the follies of Wall Street.

Because of this, according to Koizumi, 2009 could be the fifth year in a row that overall federal support for research declines in real terms. And in fact, if you look at the data on funding trends broken down by area, the situation is even more troubling. While the National Institutes of Health saw a dramatic budget doubling between 1998 and 2003, other agencies have in fact not seen significant research budget increases in decades. The final science budget won’t be determined until after March 6 of 2009, thanks to a continuing resolution passed by Congress when it couldn’t agree with president Bush on spending priorities. At that point, under the new administration, things may or may not look as dismal as they do at present. But there’s every reason to fear they may appear considerably worse.

Granted, we’re not exactly doomed yet: It’s important to remember that the United States still dominates the world in total scientific research and development funding, two thirds of which comes from the private sector and not the government. But it’s also important to place these numbers in context: While the U.S. spends nearly three times as much annually on R&D as its closest competitor in terms of dollars, Japan, three Asian nations (Japan, South Korea, and China) now collectively make up almost one third of the world R&D total. And what people worry about far more than these absolute numbers are the trends, notes Koizumi. If you examine the percentage of GDP that different nations are spending on research, the United States is flat or in decline, but those same three nations are rising.

The big picture: Whether the issue is global warming or the financial crisis, it is increasingly obvious to Americans that we’ve mismanaged our present badly enough to severely jeopardize our future. Science is just a part of this mortgaging of the American destiny, but we ought to be paying it considerable attention. Science’s woes do not generally draw big headlines, in part because the research that isn’t funded today may not be missed for decades—but at that point we may miss it terribly. That’s precisely what happened with energy: Staggeringly, from the 1980s to the early 2000s, the share of total federal research and development dollars devoted to energy research declined dramatically, and now we find ourselves surrounded by energy woes. No one with any influence had any vision; and now, unless something changes, we run the risk of seeing it happen all over again.

Chris Mooney is a contributing editor to Science Progress and the author of two books, The Republican War on Science and Storm World: Hurricanes, Politics, and the Battle Over Global Warming. He blogs on The Intersection with Sheril Kirshenbaum.

Building on his previous analysis, Weiss filmed an Ask the Expert video with our colleagues at the Center for American Progress. Congress needs to step up next year, says Weiss, with a minimum of $2 billion in additional funding for the NIH so that we can reap the benefits of prior investments.

Watch Weiss:

Transcript available here.

Weiss’s Notebook

CAP Senior Fellow Rick Weiss covered science and medicine for The Washington Post for 15 years, and now he brings his investigative eye to science policy. From cloning and stem cells to agricultural biotechnology and nanotechnology, Weiss examines the issues at the intersection of cutting edge research and public policy.

Looking for a scientific good time this weekend? Consider joining the festivities at Fusionopolis, the futuristic research complex that’s having a week-long grand opening celebration on the tropical island of Singapore.

Fusionopolis is more than a place to work. It is a planned community for scientists, complete with high-tech research labs, high-rise apartments, and high-end entertainment venues, including a rooftop swimming pool and fitness center, restaurants, experimental theater, and 13 elevated “sky gardens.” Visitors to the spanking new complex this weekend will find themselves entertained by dancing robots, wind-turbine displays and cool chemistry demonstrations—all honoring Singapore’s latest step toward fulfilling its ambition of becoming an economic powerhouse through science, technology and innovation.

Singapore, of course, is a very different place than the United States, with a much higher degree of central control over science priorities and economic strategy. Fusionopoli are not likely to sprout like ethanol refineries in the U.S. Midwest, even though they would look pretty cool there.

But the island nation’s development goals are actually very similar to those that scholars and domestic policy advisors around the United States are espousing here at home: to support the development of novel technologies that can solve our energy, environment, telecom, and infrastructure problems while simultaneously jumpstarting the economy with a new wave of “green collar” jobs.

So as different as the place may be from America politically and culturally, there is something about the way Singapore is tackling its economic challenges through big investments in science and technology that deserves attention from Washington insiders and the American public.

Crumbling are the walls between basic and applied research, public and private research, and even (for better or worse) recreation and work.

The science buildings at Fusionopolis house government-funded as well as corporate labs that focus on materials science, communications technologies, microelectronics, and high-performance computing and manufacturing. Architects designed the structures explicitly to facilitate interactions among the 800 researchers who will initially be working in them (a number that’s expected to grow to 2,400 by 2012, when additional construction is complete). Among the initial corporate tenants are Vestas, a leading wind turbine company; Ubisoft, one of Europe’s largest electronic game publishers; Linden Lab, the creator of the popular virtual universe Second Life; and Nitto Denko, the Japanese electronics and advanced materials company. Also among the tenants are two government-sponsored engineering research institutes and the “Advanced Digital Sciences Center,” the first overseas research center to be launched by the University of Illinois at Urbana-Champaign.

But the theme of advancement through collaboration goes well beyond the corridors and catwalks connecting those public, private and university labs. The community itself, including the living quarters and public spaces, were designed to be “test beds” for some of the new technologies being developed in those labs—all part of the “work-play-live-learn” environment that Fusionopolis strives to be.

The supermarket chain Cold Storage, for example, plans to test its “intelligent shopping cart” at its Fusionopolis outlet. Chips embedded in the carts can identify the shopper and his or her programmed preferences and, based on that shopper’s location in the store, will project targeted ads on a cart-mounted monitor and guide the shopper to desired products.

Even the homes are set to become research labs of sorts, where novel wireless security and entertainment systems will be installed for real-life beta testing.

Moreover, the complex is just half a mile from Singapore’s Biopolis, a similarly Flash Gordon-like complex of labs and living spaces focused on biomedical, rather than engineering, research. I had the opportunity to visit the Biopolis a few years ago, where hundreds of scientists in more than a dozen publicly and privately funded laboratories work and live an intellectually and entrepreneurially intense—if somewhat nerdy—existence. The idea, in part, is that if you concentrate enough of a nation’s greatest minds in a few rather sterile but well-funded acres, some of the best solutions to the next century’s problems may emerge from chance encounters at the local Starbucks or sandwich stand.

Late last week I got in touch with Charles Zukoski, a professor in the department of chemical and biomolecular engineering at the University of Illinois, who also chairs the Science and Engineering Research Council of Singapore’s Agency for Science, Technology and Research. I reached Zukoski in Singapore, where he was attending some of the celebratory events (which included, to the organizers’ great credit, fun science events for families and kids), and I asked him to describe the scene at Fusionopolis.

“There are a lot of people in the elevators and in the research facilities,” he said. “The computer facility is up and fully operational as are the visualization facilities of the institute of High Performance Computing.” All of the corporate spaces have been rented out, he said, and “you can hear the clank of construction” nearby, where the second phase of the complex is under construction.

“There is a lot of science going on,” Zukoski said. “My sense is one of great excitement and expectation.”

The Science and Engineering Research Council that Zukoski chairs oversees a number of government research institutes focusing on various areas of engineering and technology. Unlike the system in this country, in which most of the government’s research expenditures are funneled through academic centers, these major research initiatives are not related to that nation’s Ministry of Education. Rather they are explicitly geared toward growing the Singapore economy.

“We look at ourselves as being placed between universities and the private sector,” Zukoski said. “We harvest and develop ideas that will lead to commercial products and develop these ideas into commercializable units on our own, or in collaboration with the private sector.”

The approach goes far beyond the trend toward “multidisciplinary research” that has started to become popular in the United States. Not only are the old “silos” that once separated various research specialties being broken down. Also crumbling are the walls between basic and applied research, public and private research, and even (for better or worse) recreation and work.

“The opening of the Fusionopolis represents the physical embodiment of a new approach to doing research,” Zukoski said.

Again, it is not an approach appropriate for direct transplant to the United States. Compared to New York and Los Angeles, Washington’s suburbs are already a little short on culture and rife with people out of step with fashion. All Bethesda needs is to have its restaurants and concerts attended by people in lab coats and pocket protectors.

But how refreshing it would be if, in our own American way, we as a nation also focused on investment in technological innovation as a central strategy for reversing our economic decline. Consider this: Singapore’s $4.2 billion investment in research and development in 2007 was 26 percent higher than it was in 2006, and twice the amount invested in 2000. The nation is quickly approaching its goal of having R&D expenditures amount to fully 3 percent of it gross domestic product by 2011.

By contrast, R&D spending in the United States has been flat for years, at just 2.6 percent of GDP. That’s higher than the European Union (1.8 percent) and China (1.4 percent), but embarrassingly less than Japan (3.4 percent) and South Korea (3.3 percent) according to figures compiled by the American Association for the Advancement of Science.

In fact, as of this year, it appears that Singapore has surpassed the U.S. in R&D spending as a percentage of GDP. Singapore has said very plainly that it is betting its future on growing “a knowledge-based, innovation-driven economy.”

We in the United States could do worse.

Rick Weiss is a Senior Fellow at the Center for American Progress and Science Progress.

More on Michigan Stem Cell Policy from Science Progress

Michigan’s Modest Ballot Proposal Gains Media Support

Michigan’s Costly Biotech Policy

This year, Time magazine named University of Wisconsin professor James Thomson one of the 100 most influential people in the world for his work reprogramming adult human cells to take on many of the most promising attributes of human embryonic stem cells. Remarkably, if Professor Thomson had done his work in Michigan rather than Wisconsin he could have been fined up to $10 million and imprisoned for up to 10 years for his discovery, since the early stages of this work involved the derivation of embryonic stem cell lines and the destruction of human embryos.

Michigan has one of the most restrictive laws in the country with respect to embryonic stem cell research: it is legal for patients to discard human embryos but not legal for scientists to perform research on these discarded embryos even if that is what the patients want. This law delays medical research without saving a single embryo from destruction.

Advocates and opponents of human embryonic stem cell research have heralded Thomson and Shinya Yamanaka’s development of the techniques for obtaining induced pluripotent, or iPS, cells. It seems that once the issue of how the cells are derived is off the table, there is widespread agreement that embryonic stem cell research holds great promise for understanding and treating some of our most devastating diseases.

This November, a bipartisan, broad-based coalition in Michigan is trying to change that law with a ballot initiative, known as Proposition 2, that would allow narrowly defined research on human embryos that are leftover after fertility treatment and that would otherwise be discarded if not donated by patients for stem cell research. Although polling suggests that the initiative has strong public support in Michigan, well-financed opponents are pouring millions of dollars into defeating the initiative and keeping the ban in place.

Only a few states have laws as restrictive as Michigan. Both presidential candidates and a majority of members of Congress have affirmed their support for loosened restrictions on embryonic stem cell research, but the Michigan legislature has refused to support the research. Both presidential candidates have recently affirmed their support for embryonic stem cell research, further marginalizing Michigan’s policies. The loosening of federal funding restrictions will provide a boost to stem cell research nationwide, but will increase the gulf between scientists in Michigan as compared to those in other states. Unlike scientists at other major research universities, scientists in Michigan universities will remain unable to derive new embryonic stem cell lines for use in expanded federal funding. So is the Michigan vote consequential for national public policy on stem cell research?

Yes.

Forty-five minutes south of Ann Arbor, Michigan, scientists in Toledo, Ohio, are free to use human embryos in research and to derive new stem cell lines.

A peer-governed competitive national system for funding biomedical research has been a fundamental policy and programmatic triumph for the United States. The National Institutes of Health invest over $28 billion each year, 80 percent of which is awarded in peer-reviewed competitive grants to researchers across the nation. This system has advanced our knowledge of disease, led to more effective diagnosis and treatment, and spawned philanthropic and corporate investment, which has fueled our economy. Under this system, the United States has become the global leader in biomedical research. Key to our success has been choosing the best research to fund based a nationwide competition, judged by scientists themselves rather than politicians or lobbyists. American science succeeds because it is a meritocracy, rewarding achievement and ability over more provincial concerns.

This winning approach is thwarted by the patchwork of conflicting state laws and policies regarding human embryonic stem cell research. Forty-five minutes south of Ann Arbor, Michigan, scientists in Toledo, Ohio, are free to use human embryos in research and to derive new stem cell lines. Are the values of Ohio residents so different from the values of Michigan residents (other than in football)? Across the country in California, the state just awarded over $59 million to support the stem cell research of California scientists and has committed a total of $3 billion overall. Massachusetts is investing $1 billion in a similar program, and New Jersey, New York, Wisconsin, Connecticut, and Illinois have also pledged millions of dollars in funding. Yet scientists in Michigan would go to jail for doing the work for which scientists in these states are receiving millions of dollars in state funding.

Diverse and separate state funding undercuts the successful system of choosing which research to fund based on nationwide competition and peer review. California scientists are only competing with other California scientists for the funds available there and Illinois scientists will only compete with other Illinois scientists. Scientists in other states, who may sometimes have greater expertise, will not have the opportunity to help solve the important problems targeted by these states for funding. This fractured system is antithetical to the goal of funding the most meritorious research and to engaging all of our resources in the war against disease. Families affected by disease don’t care where the cure comes from. Yet under the current system, geography drives research investment and determines the problems and approaches that our scientists focus on.

A comprehensive national system is needed to make the quickest progress in harnessing the potential of human embryonic stem cells to improve the treatment of disease. The state-by-state patchwork of funding and regulations is a necessary stop-gap measure to manage the recent lack of federal leadership in this promising area, but ultimately will be self-limiting if not replaced with a more integrated federal approach.

A state-by-state approach to stem cell policy also narrows the opportunities for conducting research that will benefit all segments of our society. One of the more subtle and profound effects of the last seven years of limited federal funding of human embryonic stem cell research is that the stem cell lines currently available for federally funded research are largely derived from embryos obtained from Haifa, Israel. So on one hand, the federal government insists that NIH-funded clinical trials enroll diverse patients that mirror American society, while on the other hand the it restricts federally funded scientists to working with embryonic stem cell lines that do not come anywhere close to reflecting the diversity in our society. If embryonic stem cells actually change the future of medicine, we are at risk of leaving some segments of our society out of this future. Who will fix this social justice problem? Scientists in Michigan could, but are prohibited from doing so by state laws. By prohibiting some in our country from working on the important problems we delay progress for all.

While we are waiting for federal leadership to prevail, the best we can do is to encourage states like Michigan to bring their policies in line with federal law. If states like Michigan move further away from federal and other state science policies it will be that much more difficult to integrate and engage our scientific community when federal leadership reemerges. Time and talent will be irretrievably lost in the search for new cures.

Michigan is home to the University of Michigan, one of the world’s leading research universities. According to various measures of scientific impact, UM is one of the top universities in the world in the field of stem cell research. Yet that impact comes almost entirely from research in the area of adult stem cells. If the upcoming ballot initiative in Michigan fails, it will delay Michigan’s ability to develop in the area of pluripotent stem cell research and reinforce the idea that geography should trump merit or promise when the nation determines scientific priorities.

Liz Barry, J.D. is the Managing Director of the Life Sciences Institute at the University of Michigan and Sean J. Morrison is the director of the University of Michigan Center for Stem Cell Biology. This article represents solely the views of Ms. Barry and Dr. Sean Morrison and not of the University of Michigan itself.