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Eating Our Seed Corn: R&D Funding Cuts Are Killing Our Economic Engine

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Lewis E. Link
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We are experiencing a quiet, insidious crisis—one that will not receive much attention until it is too late to mitigate the impacts.

It is a quiet crisis because our political system embraces the near term and reacts to metrics that serve the election cycle rather than the future.

And it is quiet because the immediate pain is being felt by individuals and organizations that are not in the mainstream of today’s economy, but instead are the foundation for tomorrow’s.

And it is an insidious crisis because the impacts are incremental, continuously increasing at a subtle rate until the composite eventually will be exposed as the root cause of a significantly declining national economy.

We are at the confluence of too little long-term investment, too much aging infrastructure, and woefully inadequate investment in research and development at the federal level that should provide the means to rectify the situation.

Farmers would liken this situation to the age old adage of saving a portion of a crop to be used as seed for the next year, then becoming so desperate that you eat the seed to make it through tough times.

When we open our bag of seed corn it is important to realize what is inside.

First, it is graduate students, dedicated to developing new knowledge—not only for their individual research topics, but also for their aspiring careers as future researchers and developers.

However, many of these intelligent, hard-working and risk-taking individuals are in a quandary because of uncertainty over the future availability of resources to continue their work. In fact, many U.S.-born students are abandoning academia to take advantage of the surge in activity in industry and are foregoing graduate degrees, particularly Ph.D.-level programs.

Now, instead, a majority of research and teaching assistant positions are being taken by foreign students, a lower percentage of whom stay in the U.S. after graduating. The decline in funding and the increasing uncertainty of sustained resources to support longer-term research and graduate studies is taking its toll.

Digging deeper into the seed bag shows that our research investments are not addressing some of the most critical challenges we face, namely, the renewal and rehabilitation of our ever-aging infrastructure.

While significant attention is being paid to the security of critical infrastructure, we are not developing the fundamental technologies that will allow us to affordably re-invigorate these assets that are so critical to our economic competitiveness and well being.

Research is the seed corn of our economic future, now more than ever with the advent of globalization and economies stimulated by continuous advances in technologies.

The Information Technology & Innovation Foundation (ITIF) anticipates that ongoing U.S. budget cuts will cause a shortfall in federal R&D spending of about $95 billion by 2021, resulting in a reduction in GDP by up to $860 billion over the same period. That is a decline in GDP of $9 for every dollar reduction in R&D!

That translates into fewer jobs, opportunities lost, and a decline in competitiveness—a negative spiral not easily reversed.

While universities primarily depend on federal sources of R&D funding, federal R&D expenditures are less than 30% of the total for the country. Since the 1980s industry has been the dominant source of R&D funding, now providing up to 70% of all resources. '

But industry’s investments tend to focus on development of near term opportunities that will provide market advantage and return on investment. Industry invests very little in long-term basic research, which is the root of major new opportunities.

A recent National Science Foundation report indicated that although industrial R&D investments experienced a decline during the 2008 recession, high tech companies have rebounded and are steaming ahead with annual increases in R&D investment well ahead of the growth in GDP.

The same is not the case for federal R&D, where the end of the massive stimulus spending begun in 2009 has left academic researchers struggling because more than 60% of all academic research is funded by the federal government. Of that, more than 60% is oriented to basic research.

A 2013 Politico Op Ed article stated that U.S. federal R&D expenditures declined by 16.3%, in constant dollars, between fiscal years 2010 and 2013.  The fiscal 2013 decline stems from spending cuts and sequestration mandated by the Budget Control Act of 2011.

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