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06.10

Science Coalition Report Stresses Importance of Federally Supported Research to U.S. Competitiveness

By Barton Reppert

Significant and consistent levels of federal funding for university-based research are necessary in order to help bolster U.S. global competitiveness and long-term economic health, according to a report released on 11 May by the Science Coalition.

The report, Sparking Economic Growth: How Federally Funded University Research Creates Innovation, New Companies and Jobs, identifies 100 companies that trace their founding to breakthrough research conducted at a university and sponsored by a federal agency. These “success stories” range from global industry leaders such as Google, Cisco Systems, SAS and iRobot to relative newcomers such as advanced battery manufacturer A123 Systems and network security company Arbor Networks.

Among the findings, the report's authors concluded that:

• Universities conduct the majority of basic research in the United States— 55 percent in 2008. Business and industry conduct less than 20 percent of basic research in the United States.

• Companies spun out of research universities have a far greater success rate than other companies, creating good jobs and spurring economic activity.

• The United States continues to lead in global research and development expenditures from all sources. However, China and other nations are investing aggressively in R&D in order to enhance their innovation capabilities.

• It is essential to America’s global competitiveness and long-term economic health that the United States invest significantly and consistently in basic research year after year.

A Science Coalition press release accompanying the report quoted Susan Desmond-Hellman, chancellor of the University of California San Francisco, as saying: “There is no question that the public benefit gained from funding basic research is exponentially greater than the initial investment. The success stories highlighted in this report demonstrate that fact and are a reminder that the continued scientific and technological leadership of the United States — and our economic well-being — depends on consistent, strong funding for research.”

The Science Coalition is a Washington-based non-profit, non-partisan organization of 45 of this country’s leading public and private research universities.

According to the Science Coalition report, when government money is invested in university research, “there is a tremendous return on investment.” Research creates jobs directly — for the principal investigator, research team, lab technicians and others who help support the work — and indirectly, through innovations that lead to new technologies, new industries and new companies.

Universities perform 55 percent of the nation’s basic research — research for the sake of knowledge that is essential to scientific discovery and understanding. The bulk of such basic research is funded by the federal government. Business and industry conduct less than 20 percent of basic research in the United States.

Gordon W. Day, 2009 IEEE-USA president and a former IEEE Congressional Fellow, commented that the report’s company success stories “make a compelling case for public investment in university research.”

However, Day said that by terming it “basic research,” the report “inadequately characterizes the nature of the research that led to the formation of the companies described. . . . Most of the example companies are, in fact, based on the work of professors of engineering and other applied sciences, including medicine. Some of the research described could more accurately be called ‘applied research’ or ‘engineering research,’ than basic research. Some of it was indeed basic research, but not research driven by curiosity. Rather, it was basic research motivated by the desire for knowledge that might solve a known problem or create a new opportunity.”

Day added: “Recognizing these distinctions is critical when allocating finite resources. Funding research in astronomy (e.g. the Hubble Telescope) is a good thing.  But over the last several decades, many more jobs and much greater economic impact have been provided by research into (for example) the fundamental electronic, magnetic and optical properties of materials, which helped enable modern communications and computing technologies.”

The Science Coalition report observed that “the founding of Google is a product of the virtuous cycle of investments in research.” Stanford University graduate students Larry Page and Sergey Brin, whose basic research was supported by a National Science Foundation grant, generated the idea at the root of Google — a better kind of search engine. “Today, Google has transformed the way we use the Internet and employs more than 19,000 people,” the report said.

As another example of a research-generated success story, the report cited SAS, which now employs more than 11,000 people. “Supported by the U.S. Department of Agriculture (USDA), SAS began as a research project at North Carolina State University to analyze agricultural data. It is today the world’s largest privately held software company and the leader in business analytics software and services.”

Most of the companies highlighted in the Science Coalition report are small businesses with fewer than 500 employees. “These are the companies that today are generating the majority of new jobs in the United States,” it said. “These companies are also unusually successful: companies spun out of research universities have far greater success rates than other startups. Indeed, of the 100 companies at the heart of this report, 43 were founded ten years or longer ago (in 2000 or earlier).”

The report quoted Kristina “Z” Holly, vice provost for innovation, University of Southern California and executive director of the USC Stevens Institute for Innovation, as noting: “University-launched startups can be powerhouses for value creation, becoming public companies at a far greater rate than the average for new businesses. Higher education can play a crucial role not just in spurring pioneering ideas, but in creating entrepreneurs who turn breakthroughs into innovation. The result benefits everyone. For example, 24 University of Southern California startups currently employ some 500 full-time employees, more than half locally in Los Angeles. And 16 of these companies have raised at least $148 million in financing over the last two years, during the height of the recession.”

Overall, the Science Coalition report described federally funded university research as “an investment that keeps on producing.”

“Innovation fueled by basic research has been a cornerstone of the U.S. economy for the last half-century, leading to the creation of countless companies, technologies and products,” the study said.

IEEE-USA's Support for R&D

Spearheaded by its Research & Development Policy Committee, IEEE-USA continues to stress the critical importance of sustained federal investment in research and development to the nation's economy and security through direct communications and interactions with Members of Congress, the Administration, and other key government agencies, as well as by participating in programs such as Congressional Visits Day, and by providing support for programs such as the Congressional R&D Caucus and the Congressional Robotics Caucus.

Most recently, in a 19 May letter to House Speaker Nancy Pelosi, IEEE-USA communicated its strong support for passage of the reauthorization of the The America COMPETES Act, which "will create a new generation of innovators, ensure sustained commitment to research and development, strengthen our energy independence, and support high-risk, high-reward pre-competitive technology development. The financial commitment authorized by this legislation is an investment in the nation’s global technological and scientific leadership that will pay dividends many times over this initial expenditure."

After some deft political wrangling, on 28 May, the House passed the COMPETES Act by a vote of 262 to 150. The bill will now go to the Senate for further action.

In February of this year, the IEEE-USA Board of Directors adopted two position statements developed by the R&D Policy Committee in support of Cyber Security Research and Development and Small Business Innovative Research. Both positions call for sustained and stable funding for two components that are critical to the health and prosperity of the U.S. enterprise.

In February 2007, the IEEE-USA Board of Directors adopted a position statement, developed by the Research and Development Policy Committee, recommending that Congress and the Executive Branch work with private industry to “maintain healthy and stable basic research investment in science, technology, engineering and mathematics and provide adequate funding in the federal research portfolio, including a doubling of the investment in basic research.”

The statement, which is currently being reviewed and updated, also said efforts should be made to “encourage mechanisms for rapid transfer from basic research to technology development to promote U.S. technological competitiveness and innovation, such as the Small Business Innovative Research and Small Business Technology Transfer programs.”

Barton Reppert is an independent science and technology writer, mainly focusing on Washington coverage of S&T policy issues. Previously he worked for 18 years as a reporter and editor with The Associated Press in Washington, New York and Moscow.

Comments may be submitted to todaysengineer@ieee.org.