ONE POINT OF VIEW
Charles F. Larson
NEEDED—AN R&D AND
INNOVATION STIMULUS
High unemployment and low housing prices, exploding more than half of our economic growth in recent de-
deficits and rising debt, plus gridlock in the U.S. Con- cades. Numerous studies by the National Academies, the
gress and financial instability do not bode well for Council on Competitiveness, and other groups have out-
lasting economic recovery in the near future. The ad- lined what needs to be done—improve education, pro-
ministration’s current economic stimulus plan is pouring mote basic research, and stimulate collaboration.
hundreds of billions of dollars into our economy to cre-
ate jobs. However, the best way to stimulate economic There are some indications that our political leaders per-
growth is through innovation and the best way to stimu- ceive the problem and understand its urgency. The
late innovation is to direct considerably more funding America Competes Act, passed in 2007, addressed the
into R&D, which creates new technology—the key to importance of the U.S. innovation system, calling for an
innovation and job growth. “examination” of the health and direction of U.S. sci-
ence, technology, engineering, and mathematical enter-
For many years, the United States has been the leader in prises. Last October, several business leaders endorsed
innovation and competitiveness, but our edge is slip- the Obama administration’s new national innovation
ping. As the National Science Foundation recently stated, strategy, which aims to raise the level of public and pri-
in its introduction to the 2010 Key Science and Engi- vate investments in research and development to a his-
neering Indicators Digest, “The United States holds a toric high of 3% of GDP.
preeminent position in science and engineering (S&E)
in the world, derived in large part from its long history But we’re not doing enough. Congress has done little to
of public and private investment in S&E research and follow through on the recommendations called for in the
development (R&D) and education. … Many other nations, America Competes Act. In fact, it has allowed the Re-
recognizing the economic and social benefits of such in- search and Experimentation Tax Credit to lapse once
vestment, have increased their R&D and education again, with no indication of when it might be reinstated.
spending. This trend will challenge the world leadership It should be made permanent, simplified, and doubled in
role of the United States.” value to stimulate R&D investment by a wider cross sec-
tion of business. Although it is a step in the right direc-
Indeed, the United States fell to second place, behind tion, Obama’s plan does not set the bar nearly high
Switzerland, in the 2009–2010 World Competitiveness enough; we are now just under the 3% called for, at some
Report published by the World Economic Forum. The 2.7%. If the initiative is to foster real economic growth,
report “assesses th