Funding Innovation for the Long Haul

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Funding Innovation for the Long Haul

April 28, 2015

Last month, Senator Dick Durbin and Representative Bill Foster of Illinois introduced a bill that would fund basic science research at five federal agencies to the tune of $100 billion over the next decade, including guaranteed annual increases of 5 percent over and above inflation. Senator Durbin and Congressman Foster believe that this increased long-term funding for basic R&D is essential to keeping the U.S. competitive in the global economy. I couldn’t agree more.

But, given the hefty price tag, I think it’s important to point out that sustained government support is not just necessary for economic competitiveness. It’s also the most effective mechanism for generating the kind of deep innovation that changes our lives and the world.

This message runs counter to some popular perceptions about where invention comes from. Americans love to celebrate the entrepreneurial spirit: the lone visionary with the grand idea, the start-up that becomes a multi-billion-dollar enterprise practically overnight. That’s the Silicon Valley culture so many emerging economies are trying to duplicate.

Yet the core innovations of the digital age weren’t produced by any single individual and certainly did not happen overnight. Research on semiconducting materials, chip designs, and fabrication methods required decades of effort from thousands of scientists and engineers. The U.S. government sponsored the lion’s share of this research through a microelectronics initiative at the Department of Defense. Billions of dollars in government contracts allowed companies and universities to engage in the mission-driven R&D development that led to the early start-ups of Silicon Valley.

Government funding also nurtured the precursors of the internet, GPS, and cloud-based computing, to name just a few of our device-loving society’s favorite things. The government was the first and often only customer for many other innovations that we now take for granted. Government-sponsored science laid the technical foundations for jet aviation and for the chemical and pharmaceutical industries. Government grants and contracts supported basic research on wind, solar, hydroelectric, and nuclear energy.

Such complex projects require inventions in many interdependent components, systems, and infrastructures, on a scale well beyond the reach of any lone genius or even a vast corporate entity. As I’ve explained elsewhere, only sustained, state-sponsored research initiatives can establish the incentive structure for driving broad and deep technological change. Scientists and their employers need the predictability and continuity of long (decade or more) public funding cycles to take huge risks and pursue diverse leads. They need defined goals and an overarching plan for progress so they can coordinate their efforts. Then, once the groundwork for a breakthrough has been prepared, the private sector gladly takes over, greatly multiplying the returns on the initial public investment.

This kind of narrative isn’t as simple or dramatic as the rise of a Silicon Valley mogul. Yet it’s a success story on a much larger scale—maybe so big that we may be losing sight of it. As Senator Durbin points out, accounting for inflation, federal funding for science has lost 20 percent in purchasing power in just three years. As a percentage of discretionary spending, it’s been declining for decades. And while the total (public and private) U.S. share of global R&D investment shrinks, China’s share keeps growing. China is forecast to outspend the U.S. on basic research by 2022.

Meanwhile, at the same time that we are under-investing as a nation in basic research, we are also pursuing policies that would undercut the enforceability of the intellectual property rights—the prized result of this research. That’s not a promising trend. Without strong IP protection, Americans will essentially be giving away discoveries that they paid for.

People around the world are waiting for inventions that will deliver clean water, sustainable energy, and quality healthcare. I’m hopeful that the U.S. and other countries will recognize the vital importance of sustained government funding for solving those and other complex problems. It’s a privilege to live in a nation that has both the brainpower and buying power to support the next age of invention. Now our elected officials need to join Senator Durbin and Congressman Foster in finding the willpower to do it.

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