Science and R&D

In an economy powered by innovation and technology, more proactive R&D policies are key to success.

'Sequester' Harm to Economy? Maybe for Longer Than You Think

The Christian Science Monitor
ITIF's report doesn't argue that federal deficits should be ignored. The sequester originated in federal law as a blunt tool, to ensure that if politicians couldn't agree on a substantial deficit-reduction plan, some spending cuts would be imposed automatically.

U.S. is Falling Further Behind in Research and Development Funding

February 28, 2013
| Blogs & Op-eds

Robust investment in R&D is critical to ensuring a nation’s leadership in science, technology, and innovation. The United States can no longer take its leadership position in any of these categories for granted. While many in Congress understandably do not want to impoverish the next generation of Americans by saddling them with unsustainable debt loads, if they try to address the debt by slashing productive investments in the future, they will end up impoverishing future generations of Americans just the same (and likely worse so). Therefore, Congress and the Administration should commit to restoring the R&D funds imperiled by the current sequestration and to more broadly maintain stable and robust funding for federal R&D, keeping the United States on a path to consistently meet the stated target of investing 3 percent of U.S. GDP in R&D annually.

The Coming R&D Crash

The Washington Post
ITIF projects that the United States will spend less on all types of R&D as a percentage of its economy in the coming decade than countries like Australia and South Korea.

Sequestration Cuts to R&D Could Reduce U.S. GDP by Over $200 Billion

WASHINGTON (February 26, 2013) - The Sequester, which is scheduled to take effect March 1st, will lead to cuts in defense, education, social services and other areas. However, the most devastating, long-term effects from sequestration will be in innovation, and these could ultimately reduce U.S. GDP by over $200 billion per year.
Read more »

Since 2004, industry R&D spending has picked up, reaching an all-time high of 2.03 percent of GDP in 2008.

Research and development yields product and process innovations, adds to the knowledge base of industry, and is a key driver of economic growth. On average, business performs 74 percent of all U.S. R&D. After steadily rising in the 1980s and falling in the early 1990s, industry R&D as a share of GDP climbed to a peak in 2000 at nearly 2.03 percent of GDP, and then declined through 2004. Since 2004, industry R&D spending has again picked up, reaching an all-time high of over 2.03 percent of GDP in 2008. Read more »

So You Want Green Energy, New Medicines and Flying Cars? You Need the Federal Government

February 9, 2013
| Blogs & Op-eds

Federal agencies and the nation's universities perform 70 percent of all basic R&D in the United States. Additionally, corporate spending on basic and applied research as a share of total corporate R&D actually fell by 3.6 percent from 1991 to 2008. What money the private sector is investing actually goes to the development of ideas they get from the knowledge mountain. Moreover, every dollar of federal investment induces the private sector to invest an additional 27 cents on R&D.

So wake up and stop complaining about innovation stagnation and focus on a real solution: dramatically increasing federal support for scientific and engineering research.

The United States ranks just 21 out of 30 nations in business-funded university research.

By 2008, funding of U.S. university research by business was just 0.02 percent of GDP, less than two-thirds of the average of 0.032 percent of GDP for 30 nations assessed in ITIF's report University Research Funding: The United States is Behind and Falling. In fact, the United States ranks just 21 out of 30 nations in business-funded university research. In countries like Canada, China, Germany, Israel, Korea and the Netherlands, business invests more than twice as much in university research than business in the United States. Read more »

Cut to Invest: Support the Designation of 20 "U.S. Manufacturing Universities"

January 14, 2013
| Reports

Congress should establish an initiative to designate 20 institutions of higher education as “U.S. Manufacturing Universities” as part of a needed push to strengthen the position of the United States in the increasingly innovation-driven global economy. In 1862, Congress passed the Morrill Act, which established land-grant colleges to promote learning in “agriculture and the mechanic arts.” These colleges played a key role in enabling the United States to later take the lead in the mechanization of agriculture and the industrialization of the economy. Today, the challenge is even greater as America competes against a wide array of nations seeking to win the race for global innovation advantage, especially in advanced manufacturing. A new cadre of federally-designated “Manufacturing Universities” that revamp their engineering programs with particular emphasis on work that is relevant to manufacturing firms while providing engineering students with real-world work experience should be part of the solution.