Eating Our Seed Corn: R&D Funding Cuts Are Killing Our Economic Engine
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.
The same article stressed that “governments must provide adequate support -- especially for basic science, which promises big payoffs but requires the longer-term, sustainable funding that can be impractical for the private sector."
A Battelle report on Global R&D Forecasting stressed that “It’s important to note the long-term effects of R&D investments and their close relationship to economic growth…. R&D is not an instrument that can be quickly turned on and off to trigger economic growth. In our increasingly technology-dependent world, strong continued support of R&D investments is essential to maintain and grow a nation’s economic strength.”
A recent blog by technology writer Ken Daley, who also is vice chairman of the California Democratic Party's Computer & Internet Caucus, noted that “while U.S. spending remains stagnant and—under sequestration—[is] soon to be nonexistent, China's spending has continued to rise … while the U.S. and Europe will both fail to even match their projected inflation rates of 1.9% and 1.5%, respectively, in 2013.”
The Battelle report also noted that “it is well-established that technological change is accelerating and without the tools, knowledge, and expertise to build upon those changes, a nation will quickly fall behind those that do invest in innovation.”
The report goes on to state that “for more than 65 years, the bastion of basic research has been the 127 U.S. research universities that account for more than 80% of the federally funded research. But even this cornerstone of R&D is under attack by the economic uncertainties of federal and industrial funding, the rapid growth and funding of foreign universities, and staffing challenges.”
The sensitivity of the academic R&D pipeline to funding uncertainties is significant, because it does not take much of a cut in grant funding to divert the life-courses of hundreds of young individuals with proven and unusually high potential to contribute to solving fundamental problems.
In fact, what leaders may think of as a relatively tolerable reduction in budget from a percentage perspective can be quite impactfull to future research in the real world. When Battelle forecast 9% cuts at NIH in grant funding for 2013, that equated to 2,300 research projects going unfunded and 255 graduate students losing support for every 1% loss in funding at just that one agency.
Battelle's 2014 forecast for academic funding is faintly hopeful that the academic research funding dive may level out this year and even creep up slightly, but it is so laced with doubts about the prospects and uncertainties that it will not give much of a morale boost to young researchers who have been watching year after year as their cohort's prospects fell apart.
It is early career academic professionals that are often the source of new ideas, and serve as the mentors and the motivators for graduate students and Ph.D. candidates climbing the academic ladder.
Young faculty members are winning smaller and smaller grants, which translates into fewer and fewer assistanceships.
What are we to do?
I polled the civil engineering department chairs from three major East Coast universities over the last few days to discuss this issue.
All were adamant that their young faculty members are struggling to bring in enough research funding to provide assistance to graduate students. While grants are available, the competition for them has become much more intense and their size significantly smaller than in the past.
Couple that with the increased costs of doing research and the rising costs of equipment and laboratories, etc., and fewer and fewer students are receiving support. This is reflected in a decline in the number of graduate students as well as a reduction in faculty positions.
All three department chairs expressed concern over their reduced ability to attract U.S. students into graduate programs, especially for Ph.D.-level study.
The proportion of foreign students enrolled in U.S. engineering programs in 2012 was approximately 9% for undergraduates, 43% for Masters' programs and 54% for Ph.D. programs, according to the American Association of Engineering Education.
In addition, while faculty positions have decreased, the undergraduate enrollment has essentially doubled at some institutions—creating a situation of larger class sizes and more teaching being accomplished with adjunct faculty and graduate teaching assistants.
There has been one bright spot on the R&D horizon.
Within the U.S. Dept. of Defense, R&D accounts are being protected from the major reductions threatening the acquisition and operational accounts, perhaps as a hedge to stimulate technological capabilities that can substitute for capabilities provided in the past by soldiers and equipment.
When you add up the funding associated with infrastructure, it is significant, however, that aside from the relatively small accounts associated with military installation management and energy efficiency, most of the infrastructure funding is focused on security.
In the post 9-11 environment we have invested significant resources to characterize the vulnerability of critical infrastructure and appropriately develop means to reduce that vulnerability. That investment continues as a key element of the DOD and Dept. of Homeland Security budgets.
If you search for funding that is focused on the rehabilitation and renewal of our aging public infrastructure (see the American Society of Civil Engineers’ Infrastructure Report Card), the investments are not nearly so significant.
Beyond the National Science Foundation grants program, there is little if any basic research being funded. The majority of the R&D funded by agencies such as the U.S. Army Corps of Engineers, the National Institute of Science and Technology, and the Bureau of Reclamation, is very applied and aligned with specific near-term needs and persistent problems.
In many cases there is little discretionary funding available to exploit the substantial military research being done into new materials and technologies that could be applied to civil infrastructure.
One can imagine a future where our critical civil infrastructure crumbles under its own degradation, while perfectly guarded from external threats by sophisticated sensors and protected by exotic new materials.
There are an immense number of options for spending our hard earned tax dollars. Currently, the majority of those options are being expended solving near term goals, and they make sense in that regard. However, the proportion dedicated to the long term is much smaller, and that does not make sense.
We are sacrificing not only the livelihood and potential of the students who are the lifeblood of the academic system, but the livelihood and economic prospects of our nation.
In my 45 years of being involved with R&D in one form or another, perhaps the most frustrating thing has been watching the repeated cycles of sacrifice of R&D investments whenever the going gets tough.
Each time we have sought to protect the present on the back of the future.
Yet, as we move to the future, the same issues that caused the trauma in the present persist into the future and converge with additional factors to increase the challenges.
Dealing with the confluence of our aging infrastructure, the changing climate and changing population and associated demands will need all of our intellectual resources, trained to the maximum, to cope. The investments to do so are in fact quite affordable—yielding a 9 to 1 return on investment, based on the earlier example from the ITIF.
Unless we change course and stop draining academic funding for basic research, when next we open our seed bag for the future, it will be empty.
It is untenable to think that all short term investments should suffer for the sake of the long term; however, it is prudent when making these critical investment decisions that a balance be achieved that assists in preparing us to meet the future.
We cannot afford to continue to eat our seed corn!
