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Making the Case for University Research
By Norman R. Augustine
The role of research universities in underpinning our nation’s standard of living is of pivotal importance. However, too often it is taken for granted that our universities will more or less automatically continue to generate the breakthroughs that have fueled our economy for many years. Dan Goldin told me when he was administrator of NASA that he had received a complaint from a disgruntled citizen who inquired, "Why do we need meteorological satellites? We have the weather channel."
It was my privilege during the late 1990s to serve as a member of the Hart-Rudman Commission on National Security. Our final report stated, in part, that " . . . the US government seriously under-funded basic science research in recent years . . . If we do not invest heavily and wisely in rebuilding [research and education], America will be incapable of maintaining its global position long into the 20th century."
The other primary finding stated that a major direct attack against American citizens on American soil with heretofore unimagined casualties was likely, and that a National Homeland Security Agency should be established with Cabinet status to address that threat. Our prediction proved to be all too accurate. Unfortunately, the tragedy of 9/11 occurred before any of our Commission’s principal recommendations were implemented. But it is not too late to address the health of our basic scientific research enterprise, which is principally harbored in the nation’s universities.
I was responsible for a firm whose future existence was heavily dependent upon the competitive margin that could be generated by the 62,000 engineers and scientists with whom I worked. And I was well aware of studies that had shown that over 50% of the jobs created in America during the last half century could be directly attributed to investments in science and technology. Most of our own company’s sales were derived from products that did not even exist a few years earlier. In the case of another firm, Intel, nearly 90% of all the products they sell in any given year did not exist a year earlier. Even a consumer products firm such as Procter and Gamble has been described by its former CEO as fundamentally an R&D enterprise.
I was deeply troubled that many of the corporate boards on which I served were increasingly being called upon to approve proposals to relocate factories outside the US. It was almost certainly in the best interest of our shareholders, and, ultimately, of our remaining employees, to conduct more and more of our manufacturing operations in such places as Asia, India and Mexico. I recently visited a factory in Vietnam where the wrap-rate was about twenty-five cents per hour, far less than most American firms pay simply for medical insurance for their employees.
The trend to relocate abroad did not stop with factories. I soon learned that we could hire eleven engineers in India for the cost of one in the US. We could hire even more in Russia–and these too were highly-qualified engineers, many educated in the US. Soon we were being asked to approve moving our design teams and software production abroad. More recently, our research laboratories have joined the exodus.
Today, America’s companies find themselves in a marketplace without borders–or, at the very least, with borders that are extremely permeable. And it is quite clear that we are unable to compete in this global marketplace on the basis of favorable domestic labor costs. Only one acceptable choice remains: to be among the world’s foremost innovators. The underpinning of innovation is research, particularly in science and technology, which is increasingly becoming the relatively exclusive province of our nation’s universities. This is where the breakthroughs, the "Big Bangs" that have profound impacts, are produced. The consequences of neglect, although severe, are often not suffered for a number of years. Further, a trend of neglect is not easily reversed–as some great scholar once noted, you can’t produce pigs by running the sausage machine backwards.
One might reasonably ask why, if in the last dozen years, inflation-adjusted research and development conducted in America has increased by two-thirds, one should be alarmed about the health of the nation’s research enterprise. Furthermore, the industrial sector seems to have been picking up the slack in R&D growth. In fact, industry R&D spending surpassed government spending in 1980, and now comprises more than double the amount of funds that the government appropriates to this purpose.
However, almost all the increase in government research spending has been devoted to the biosciences. And while pursuing this laudable course, investment in the physical sciences, mathematics and engineering has been badly neglected. In the physical sciences, federal research spending has been roughly flat as measured in constant-purchasing power, while funding in mathematics and engineering has only slightly surpassed inflation. Correspondingly, the number of Bachelors degrees awarded by US universities in these fields since 1985 has dropped by 11%, 28% and 21%, respectively. Undergraduate students seem to be keenly aware of where the jobs are to be found.
While overall industry-funded R&D has increased markedly, these monies have largely been devoted to development activities as opposed to research. Even those funds which have been devoted to research are increasingly focused upon applied rather than basic research. Current indicators of this trend include the diminished status of such renowned institutions as Bell Labs or the closing several years ago of Martin Marietta’s corporate research laboratory.
Several years ago, when I was with Martin Marietta, we concluded that it had an unusually rich set of opportunities that could be reaped by increased investment in applied research. We called a special meeting in New York of Wall Street analysts so our president could describe our exciting plans in detail. But upon completion of his presentation, the audience literally ran from the room and sold our stock.
The price of our stock plummeted the next day and continued to decline gradually for another 18 months as we persisted in our strategy. I particularly recall the remarks of one analyst who told us, "Everyone knows it takes 10 or 15 years for investments in research to pay off–but your shareholders, on average, only own your stock for a little over a year before they sell it. The benefits of your research, if there are any, may be of interest to the great-grandchildren of your shareholders–but today’s shareholders shouldn’t be asked to foot the bill for it. Our fund doesn’t invest in companies with such short-sighted (emphasis added) management."
But if industry is to abdicate its responsibility to feed the front-end of the innovation machine, who then is to do so? A case can be made that the support of generic, broadly-applicable, high-payoff and often risky research is an appropriate province of our government. This has in fact been widely and beneficially recognized for many years and has resulted in the creation of such agencies as the NSF, NIH and DARPA and the DOE science program.
The problem resides in the inadequacy of resources being made available for research in the so-called "hard sciences". Flat federal funding of the physical sciences, in constant dollars, has taken place as we have become increasingly dependent on science and technology for jobs, healthcare, energy and national security. In effect, we have created a huge "inverted pyramid" of jobs, corporations and technology which to a large extent is supported, rather precariously, at its fulcrum by a program of university research.
The bottom line is that in the last two decades, the US share of global exports has fallen from 30% to 17%, while those of Asia, excluding Japan, grew from 7% to 27%. For the first time in memory, the US now has a negative trade balance for high-technology products–and the jobs associated therewith are fast becoming one of our major exports.
These were some of the considerations that prompted me to begin attempts to call increased attention to our nation’s under-investment in university research. It became abundantly evident in my role as a relatively neutral party that, although I found America’s academe broadly and highly respected for its scholarly excellence, its researchers were often resented by the very officials who have a say in the allocation of federal research funds. I also found a certain unspoken reluctance by some legislators to support institutions which they view as elitist; institutions whose tuition, even after scholarships, grows at a rate considerably exceeding the growth in income of the general populace–and which rejects the sons and daughters of the Washington cognoscenti at a rate which does not go unobserved. And, finally, I would gratuitously note that when scientists, as a group, take public positions on contentious subjects having at best marginal relationships to science, it rarely endears them to all members of the political establishment.
I further discovered that relationships within the nation’s research community itself in many instances make last year’s Los Angeles Lakers appear to be Miss Congeniality. On several occasions, after having made an impassioned plea for university research funding, I would learn that my footsteps had been followed by groups of scientists wherein the physicists argued that any new money should be spent on physics and certainly not on chemistry; but the physicists then argued among themselves whether new money should be spent on particle physics or astrophysics; and the experimentalists asserted that new funds should certainly not be wasted on theoreticians.
The result of this cacophony was that many members of Congress, perhaps understandably, tended to throw up their hands: If the experts can’t agree on how money should be spent, and the members don’t have the time, or perhaps even inclination, to learn the difference between a boson and a lepton, it is best that the money simply be spent on highways.
It is my belief that were industry and our universities to work more closely together in explaining the importance of fundamental research, a much broader acceptance of the notion might be realized. Similarly, an increase in industry funding of research performed at our universities would benefit both parties. A program of tax credits for companies that do so would provide additional incentives.
I recognize that it is difficult to obtain government support in today’s challenging funding climate for pursuits that do not produce a rather clear, direct impact on the quality of life of the average citizen. My first suggestion is to adopt, wherever possible, pragmatic arguments when making the case for increasing the nation’s spending on academic research. Relate such spending to the creation of jobs, the enhancement of health, the assurance of physical security, and so forth. I conclude this with a sense of sadness, because I believe that the search for knowledge has merit in its own right. If we cannot afford to study the origin of the dinosaur because it may not create jobs, not even for dinosaurs, does that also suggest that we should not take time to watch Shakespeare performed, listen to Beethoven’s works, or cheer Roger Clemens’ fastball? On the other hand, when this connectivity is convincingly demonstrated, the nation’s policy makers appear to be willing, even eager, to invest.
My second suggestion is that some degree of internal consensus be established within the academic community as to priorities for allocating resources. At a minimum a "truce" is needed whereby the various interested partisans make their cases without attacking those of others.
Third, spokespersons need to be enlisted in the cause who are independent of our research universities and do not suffer the appearance of being self-serving. This accounts for the remarkable success groups of citizens concerned with various diseases have had in doubling the NIH budget in recent years.
Fourth, successes achieved from our government’s investment in research need to be broadly publicized and publicly attributed to government support. Few people seem to recognize the important role physics, chemistry, engineering and mathematics play in underpinning health research; for example, the contribution of robotics, computers and mathematics in deciphering the human genome, or the role of mathematics and engineering in modern non-intrusive imaging techniques. Even fewer seem to be aware of studies such as the one that concluded that research conducted at MIT alone had in recent years generated over 4,000 companies and created over a million jobs.
Finally, I recommend communicating the old fashioned way: face-to-face contacts with individual members of Congress, the administration and the media. It is also important to visit the members in their home district, where they have more time to devote to longer-term issues. Including respected local citizens in these visits amplifies the impact of the message being conveyed.
The bad news is that our nation’s investment in research in the physical sciences and engineering is only about one-tenth of one percent of the nation’s GDP. But the good news is that major proportionate increases can therefore be achieved with relatively modest overall impact on the federal budget. For example, the federal research effort in engineering, math and the physical sciences could be doubled by increasing the gasoline tax by a dime per gallon. For perspective, the entire research budget in all these fields is less than the amount by which healthcare costs in America increase every two months. There is enormous leverage available for research to recover increased investment.
I would like to close with a poem attributed to Richard Hodgetts that, to my mind, captures the intense competitiveness of the global marketplace.
Every morning in Africa a gazelle wakes up.
It knows it must outrun the fastest lion or it will be killed.
Every morning in Africa a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve.
It doesn’t matter whether you’re a lion or a gazelle–when the sun comes up, you’d better be running.
Norman R. Augustine is the retired Chairman and CEO of the Lockheed Martin Corporation and former Under Secretary of the Army. This article is adapted from his April 19, 2005 lecture before the Association of American Universities.
The full text of the lecture can be found at http://www.aau.edu/resuniv/Augustine--04-19-05.pdf.
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