Panel Highlights Role of Basic Research in Economy

“It is very clear to me that we are severely and critically underinvesting in basic research.” - NSF Director Rita Colwell

Recognition that the federal government’s current investment in basic research affects the nation’s economic future prompted a September 28 hearing by the House Science Subcommittee on Basic Research. Although he believes research funding should be increased, Chairman Nick Smith (R-MI) said that with tight budgets a reality, the question is whether the government is “spending its limited dollars on basic research that will yield significant technological innovations in the future.” Ranking Minority Member Eddie Bernice Johnson (D-TX) asked what federal policies will ensure continued economic success, and what would be the long-term effects of “inadequate investment today.”

A panel of witnesses led by NSF Director Rita Colwell warned that the federal government was not investing enough in basic research. Colwell cited recent reports showing that “private industry is increasingly dependent on federally-supported research” for technological innovation. She described NSF’s historical role in the development of the Internet and genetics, for example, and discussed how NSF-sponsored Centers help move discoveries from university research to commercial application. She noted that another crucial federal role is the training of graduate students in science and engineering.

The government’s support of graduate students was reiterated again and again by witnesses as one of the most effective means of transferring ideas from academia to the private sector. Fawwaz Ulaby, Vice President for Research at the University of Michigan, called it “the single most important feature of technology transfer.” He highlighted his university’s role in successful transfer of technologies such as medical lasers, reconfigurable manufacturing, and a DNA analyzer, but added that tech transfer often costs universities more than they get from it. Ulaby said federal support of basic research at universities is essential because it is the only place that allows researchers to pursue risky, “improbable ideas,” and “work on a problem for 20 to 30 years.” He quoted an IBM vice president as saying that the most critical factor in industry’s ability to respond quickly to the marketplace is having long-term, federally-sponsored basic research already available so industry can capitalize on it. Noting that “some of our greatest economic payoffs are the result of technological developments founded on a long history of basic research,” he and other witnesses cautioned against letting university research shift too far toward the short-term.

Scott Stern of MIT’s Sloan School discussed a study in which he and other researchers developed an Innovation Index to measure a nation’s innovative capacity. He warned that the U.S. “may be living off historical assets that are not being renewed,” and its continued status as the world’s preeminent innovator nation is not assured “if current policies continue unchanged.” Stern recommended policy changes including reversing “the downward slide of federal support for R&D beyond the health sciences,” rebuilding the pool of scientists and engineers, and renewing the broad national consensus on the importance of these assets.

Smith asked what policies could encourage the private sector to perform more long-term basic research. Merck Vice President Laurence Hirsch suggested extending the duration of intellectual property rights, and Stern mentioned tax credits for more fundamental research. Rep. Sherwood Boehlert (R-NY) added that it was “not a very smart policy” to consider graduate fellowships taxable income. Boehlert asserted that the science community “in essence doesn’t know diddly about shaping public policy.” He strongly advocated efforts like the Congressional Science Fellowship programs run by many professional societies (including AIP, APS, AGU and OSA), that enable scientists to learn how Capitol Hill works so they can “help shape policy in the right way.”

In response to other questions, the witnesses cautioned against increasing life sciences funding at the expense of other fields of science. Colwell said “the shift in federal emphasis away from physics and chemistry” is going to have a significant impact because many advances in the health sciences have initially come from physics and chemistry. Reiterating her warning about underinvestment in basic science, Colwell said she has asked her division heads for their assessments of “unmet opportunities” in all fields, and expressed her wish for an NSF budget of about $8 billion to meet them. She noted that, in constant dollars, the current average NSF grant is less than it was in 1970, and NSF’s average grant length is less than that of NIH. Giving larger grants for longer periods makes for more efficient researchers, she said. Ulaby added that the percent of time young faculty members spend on grant proposals has jumped in 20 years from about five percent to nearly 30 percent.

Rep. Vern Ehlers (R-MI), commenting that many ideas expressed by the witnesses had been emphasized in his national science policy study released last year, concurred that NIH has “done too well” at the expense of the physical sciences. He asked how to ensure federally-sponsored research remains creative and does not discourage risk-taking. By keeping government monitoring at a minimum and letting scientists decide what research to support via the peer-review process, answered Stern. “I can’t say it any better,” agreed Hirsch: “Let the scientists decide.”

Ehlers also said he has tried hard to get the FY 2000 appropriations increased for some of the science agencies. Coming at this time, this hearing is too late to affect the current fiscal year’s appropriations process, but may set the stage for efforts to increase basic research spending for FY 2001. Colwell and the heads of other federal agencies are currently working with OMB to prepare President Clinton’s FY 2001 budget submission to Congress. For the upcoming fiscal year, the first step is up to the Administration.