Future innovation and research require funding, says PCAST

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If the U.S. wants to maintain its lead in technology and innovation, then the federal government must be willing to spend more on basic research and encourage industry investments, says the  President's Council of Advisors on Science and Technology.

In a Nov. 30 report (.pdf), PCAST says U.S. investment in research and development as a fraction of gross domestic product has dropped from first in the world to eighth, and is fourth in the world among large economies. It warns this is a significant threat to long-term research if qualified researchers left for other countries couple with a private sector that is focused primarily on near-term results.

At the report's announcement, John Holdren, director of the White House Office of Science and Technology Policy and PCAST co-chair, said that the United States, for now, has no equal in terms of capabilities. "Note that I said unmatched and not unrivalled," said Holdren, "we do have rivals. More  and more of them all the time."

The report argues that losing a high ranking in science and innovation would cost the US jobs in science and supporting industries as well as benefits to safety, medicine and national security.

"More than half, and perhaps as much as 85 percent of productivity growth in the United States in the first half of the 20th century" can be attributed to technical advances, says the report. It also describes the National Science Foundation, National Institutes of Health and the Energy Department as the "primary stewards of basic research in the United States."

To promote domestic research, PCAST urges the government to increase research and development expenditures from the current level of 2.9 percent of GDP to 3 percent as well as create policy incentives that will increase the private sector's investment in long-term research. Private industry currently accounts for some two-thirds of the total R&D expenses in the U.S.

The report also warns against instabilities in funding, such as the looming sequestration, and says the government should develop a multiyear funding approach to prevent research gaps. It recommends using the multiyear financial plan similar to the Defense Department's future years defense program as a possible blueprint.

Taxes also come into play, with PCAST suggesting that the research and experimentation tax credit be made permanent and rise from a rate of 14 percent to 20 percent. It says this will make it more useful to small and medium-sized enterprises that are R&D intensive.

For more:
- read the report (.pdf)
- watch the PCAST report announcement

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