Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future

Wiki Contributions

Having reviewed trends in the United States and abroad, the committee is deeply concerned that the scientific and technological building blocks critical to our economic leadership are eroding at a time when many other nations are gathering strength. We strongly believe that a worldwide strengthening will benefit the world’s economy—particularly in the creation of jobs in countries that are far less well-off than the United States. But we are worried about the future prosperity of the United States. Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case inasmuch as great minds and ideas exist throughout the world. We fear the abruptness with which a lead in science and technology can be lost—and the difficulty of recovering a lead once lost, if indeed it can be regained at all. The committee found that multinational companies use such criteria3 as the following in determining where to locate their facilities and the jobs that result: 
  • Cost of labor (professional and general workforce).
  • Availability and cost of capital.
  • Availability and quality of research and innovation talent.
  • Availability of qualified workforce.
  • Taxation environment.
  • Indirect costs (litigation, employee benefits such as healthcare, pensions,vacations).
  • Quality of research universities.
  • Convenience of transportation and communication (including language).
  • Fraction of national research and development supported by government.
  • Legal-judicial system (business integrity, property rights, contract sanctity, patent protection).
  • Current and potential growth of domestic market.
  • Attractiveness as place to live for employees.
  • Effectiveness of national economic system.

Although the US economy is doing well today, current trends in each of those criteria indicate that the United States may not fare as well in the future without government intervention. This nation must prepare with great urgency to preserve its strategic and economic security. Because other nations have, and probably will continue to have, the competitive advantage of a low wage structure, the United States must compete by optimizing its knowledge-based resources, particularly in science and technology, and by sustaining the most fertile environment for new and revitalized industries and the well-paying jobs they bring. We have already seen that capital, factories, and laboratories readily move wherever they are thought to have the greatest promise of return to investors.

RECOMMENDATIONS

The committee reviewed hundreds of detailed suggestions—including various calls for novel and untested mechanisms—from other committees, from its focus groups, and from its own members. The challenge is immense, and the actions needed to respond are immense as well. The committee identified two key challenges that are tightly coupled to scientific and engineering prowess: creating high-quality jobs for Americans, and responding to the nation’s need for clean, affordable, and reliable energy. To address those challenges, the committee structured its ideas according to four basic recommendations that focus on the human, financial, and knowledge capital necessary for US prosperity. The four recommendations focus on actions in K–12 education (10,000 Teachers, 10 Million Minds), research (Sowing the Seeds), higher education (Best and Brightest), and economic policy (Incentives for Innovation) that are set forth in the following sections. Also provided are a total of 20 implementation steps for reaching the goals set forth in the recommendations. Some actions involve changes in the law. Others require financial support that would come from reallocation of existing funds or, if necessary, from new funds. Overall, the committee believes that the investments are modest relative to the magnitude of the return the nation can expect in the creation of new high-quality jobs and in responding to its energy needs. The committee notes that the nation is unlikely to receive some sudden “wakeup” call; rather, the problem is one that is likely to evidence itself gradually over a surprisingly short period.

10,000 TEACHERS, 10 MILLION MINDS, AND K–12 SCIENCE AND MATHEMATICS EDUCATION

Recommendation A: Increase America’s talent pool by vastly improving K–12 science and mathematics education.

Implementation Actions

The highest priority should be assigned to the following actions and programs. All should be subjected to continuing evaluation and refinement as they are implemented.

Action A-1: Annually recruit 10,000 science and mathematics teachers by awarding 4-year scholarships and thereby educating 10 million minds.

Attract 10,000 of America’s brightest students to the teaching profession every year, each of whom can have an impact on 1,000 students over the course of their careers. The program would award competitive 4-year scholarships for students to obtain bachelor’s degrees in the physical or life sciences, engineering, or mathematics with concurrent certification as K–12 science and mathematics teachers. The merit-based scholarships would provide up to $20,000 a year for 4 years for qualified educational expenses, including tuition and fees, and require a commitment to 5 years of service in public K–12 schools. A $10,000 annual bonus would go to participating teachers in underserved schools in inner cities and rural areas. To provide the highest-quality education for undergraduates who want to become teachers, it would be important to award matching grants, on a one-to-one basis, of $1 million a year for up to 5 years, to as many as 100 universities and colleges to encourage them to establish integrated 4-year undergraduate programs leading to bachelor’s degrees in the physical and life sciences, mathematics, computer sciences, or engineering with teacher certification. The models for this action are the UTeach and California Teach program.

Action A-2: Strengthen the skills of 250,000 teachers through training and education programs at summer institutes, in master’s programs, and in Advanced Placement (AP) and International Baccalaureate (IB) training programs.

  • Use proven models to strengthen the skills (and compensation, which is based on education and skill level) of 250,000 current K–12 teachers.
  • Summer institutes: Provide matching grants to state and regional 1- to 2-week summer institutes to upgrade the skills and state-of-the-art knowledge of as many as 50,000 practicing teachers each summer. The material covered would allow teachers to keep current with recent developments in science, mathematics, and technology and allow for the exchange of best teaching practices. The Merck Institute for Science Education is one model for this action. Science and mathematics master’s programs: Provide grants to research universities to offer, over 5 years, 50,000 current middle school and high school science, mathematics, and technology teachers (with or without undergraduate science, mathematics, or engineering degrees) 2-year, parttime master’s degree programs that focus on rigorous science and mathematics content and pedagogy. The model for this action is the University of Pennsylvania Science Teacher Institute.
  • AP, IB, and pre-AP or pre-IB training: Train an additional 70,000 AP or IB and 80,000 pre-AP or pre-IB instructors to teach advanced courses in science and mathematics. Assuming satisfactory performance, teachers may receive incentive payments of $1,800 per year, as well as $100 for each student who passes an AP or IB exam in mathematics or science. There are two models for this program: the Advanced Placement Incentive Program and Laying the Foundation, a pre-AP program.
  • K–12 curriculum materials modeled on a world-class standard: Foster high-quality teaching with world-class curricula, standards, and assessments of student learning. Convene a national panel to collect, evaluate, and develop rigorous K–12 materials that would be available free of charge as a voluntary national curriculum. The model for this action is the Project Lead the Way pre-engineering courseware.

Action A-3: Enlarge the pipeline of students who are prepared to enter college and graduate with a degree in science, engineering, or mathematics by increasing the number of students who pass AP and IB science and mathematics courses.

 

  • Create opportunities and incentives for middle school and high school students to pursue advanced work in science and mathematics. By 2010, increase the number of students who take at least one AP or IB mathematics or science exam to 1.5 million, and set a goal of tripling the number who pass those tests to 700,000.4 Student incentives for success would include 50% examination fee rebates and $100 mini-scholarships for each passing score on an AP or IB science or mathematics examination. Although it is not included among the implementation actions, the committee also finds attractive the expansion of two approaches to improving K–12 science and mathematics education that are already in use:
  • Statewide specialty high schools: Specialty secondary education can foster leaders in science, technology, and mathematics. Specialty schools immerse students in high-quality science, technology, and mathematics education; serve as a mechanism to test teaching materials; provide a training ground for K–12 teachers; and provide the resources and staff for summer programs that introduce students to science and mathematics.
  • Inquiry-based learning: Summer internships and research opportunities provide especially valuable laboratory experience for both middleschool and high-school students.

SOWING THE SEEDS THROUGH SCIENCE AND ENGINEERING RESEARCH

Recommendation B: Sustain and strengthen the nation’s traditional commitment to long-term basic research that has the potential to be transformational to maintain the flow of new ideas that fuel the economy, provide security, and enhance the quality of life.

Implementation Actions

  • Action B-1: Increase the federal investment in long-term basic research by 10% each year over the next 7 years through reallocation of existing funds5 or, if necessary, through the investment of new funds. Special attention should go to the physical sciences, engineering, mathematics, and information sciences and to Department of Defense (DOD) basic-research funding. This special attention does not mean that there should be a disinvestment in such important fields as the life sciences or the social sciences. A balanced research portfolio in all fields of science and engineering research is critical to US prosperity. Increasingly, the most significant new scientific and engineering advances are formed to cut across several disciplines. This investment should be evaluated regularly to realign the research portfolio to satisfy emerging needs and promises—unsuccessful projects and venues of research should be replaced with research projects and venues that have greater potential.
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  • Action B-2: Provide new research grants of $500,000 each annually, payable over 5 years, to 200 of the nation’s most outstanding early-career researchers. The grants would be made through existing federal research agencies—the National Institutes of Health (NIH), the National Science Foundation (NSF), the Department of Energy (DOE), DOD, and the National Aeronautics and Space Administration (NASA)—to underwrite new research opportunities at universities and government laboratories.
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  • Action B-3: Institute a National Coordination Office for Advanced Research Instrumentation and Facilities to manage a fund of $500 million in incremental funds per year over the next 5 years—through reallocation of existing funds or, if necessary, through the investment of new funds—to ensure that universities and government laboratories create and maintain the facilities, instrumentation, and equipment needed for leading-edge scientific discovery and technological development. Universities and national laboratories would compete annually for these funds.
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  • Action B-4: Allocate at least 8% of the budgets of federal research agencies to discretionary funding that would be managed by technical program managers in the agencies and be focused on catalyzing high-risk, highpayoff research of the type that often suffers in today’s increasingly riskaverse environment.
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  • Action B-5: Create in the Department of Energy an organization like the Defense Advanced Research Projects Agency (DARPA) called the Advanced Research Projects Agency-Energy (ARPA-E).6 The director of ARPA-E would report to the under secretary for science and would be charged with sponsoring specific research and development programs to meet the nation’s long-term energy challenges. The new agency would support creative “outof- the-box” transformational generic energy research that industry by itself cannot or will not support and in which risk may be high but success would provide dramatic benefits for the nation. This would accelerate the process by which knowledge obtained through research is transformed to create jobs and address environmental, energy, and security issues. ARPA-E would be based on the historically successful DARPA model and would be designed as a lean and agile organization with a great deal of independence that can start and stop targeted programs on the basis of performance and do so in a timely manner. The agency would itself perform no research or transitional effort but would fund such work conducted by universities, startups, established firms, and others. Its staff would turn over approximately every 4 years. Although the agency would be focused on specific energy issues, it is expected that its work (like that of DARPA or NIH) will have important spinoff benefits, including aiding in the education of the next generation of researchers. Funding for ARPA-E would start at $300 million the first year and increase to $1 billion per year over 5-6 years, at which point the program’s effectiveness would be evaluated and any appropriate actions taken.
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  • Action B-6: Institute a Presidential Innovation Award to stimulate scientific and engineering advances in the national interest. Existing presidential awards recognize lifetime achievements or promising young scholars, but the proposed new awards would identify and recognize persons who develop unique scientific and engineering innovations in the national interest at the time they occur.

BEST AND BRIGHTESTIN SCIENCE AND ENGINEERING HIGHER EDUCATION

Recommendation C: Make the United States the most attractive setting in which to study and perform research so that we can develop, recruit, and retain the best and brightest students, scientists, and engineers from within the United States and throughout the world.

Implementation Actions Action C-1: Increase the number and proportion of US citizens who earn bachelor’s degrees in the physical sciences, the life sciences, engineering, and mathematics by providing 25,000 new 4-year competitive undergraduate scholarships each year to US citizens attending US institutions. The Undergraduate Scholar Awards in Science, Technology, Engineering, and Mathematics (USA-STEM) would be distributed to states on the basis of the size of their congressional delegations and awarded on the basis of national examinations. An award would provide up to $20,000 annually for tuition and fees.

Action C-2: Increase the number of US citizens pursuing graduate study in “areas of national need” by funding 5,000 new graduate fellowships each year. NSF should administer the program and draw on the advice of other federal research agencies to define national needs. The focus on national needs is important both to ensure an adequate supply of doctoral scientists and engineers and to ensure that there are appropriate employment opportunities for students once they receive their degrees. Portable fellowships would provide a stipend of $30,0007 annually directly to students, who would choose where to pursue graduate studies instead of being required to follow faculty research grants, and up to $20,000 annually for tuition and fees.

Action C-3: Provide a federal tax credit to encourage employers to make continuing education available (either internally or through colleges and universities) to practicing scientists and engineers. These incentives would promote career-long learning to keep the workforce productive in an environment of rapidly evolving scientific and engineering discoveries and technological advances and would allow for retraining to meet new demands of the job market.

Action C-4: Continue to improve visa processing for international students and scholars to provide less complex procedures and continue to make improvements on such issues as visa categories and duration, travel for scientific meetings, the technology alert list, reciprocity agreements, and changes in status.

Action C-5: Provide a 1-year automatic visa extension to international students who receive doctorates or the equivalent in science, technology, engineering, mathematics, or other fields of national need at qualified US institutions to remain in the United States to seek employment. If these students are offered jobs by US-based employers and pass a security screening test, they should be provided automatic work permits and expedited residence status. If students are unable to obtain employment within 1 year, their visas would expire.

Action C-6: Institute a new skills-based, preferential immigration option. Doctoral-level education and science and engineering skills would substantially raise an applicant’s chances and priority in obtaining US citizenship. In the interim, the number of H-1B visas should be increased by 10,000, and the additional visas should be available for industry to hire science and engineering applicants with doctorates from US universities.8 Action C-7: Reform the current system of “deemed exports.” The new system should provide international students and researchers engaged in fundamental research in the United States with access to information and research equipment in US industrial, academic, and national laboratories comparable with the access provided to US citizens and permanent residents in a similar status. It would, of course, exclude information and facilities restricted under national-security regulations. In addition, the effect of deemed-exports9 regulations on the education and fundamental research work of international students and scholars should be limited by removing from the deemed-exports technology list all technology items (information and equipment) that are available for purchase on the overseas open market from foreign or US companies or that have manuals that are available in the public domain, in libraries, over the Internet, or from manufacturers.

INCENTIVES FOR INNOVATION

Recommendation D: Ensure that the United States is the premier place in the world to innovate; invest in downstream activities such as manufacturing and marketing; and create high-paying jobs based on innovation by such actions as modernizing the patent system, realigning tax policies to encourage innovation, and ensuring affordable broadband access.

Implementation Actions Action D-1: Enhance intellectual-property protection for the 21stcentury global economy to ensure that systems for protecting patents and other forms of intellectual property underlie the emerging knowledge economy but allow research to enhance innovation. The patent system requires reform of four specific kinds: • Provide the US Patent and Trademark Office with sufficient resources to make intellectual-property protection more timely, predictable, and effective. • Reconfigure the US patent system by switching to a “first-inventorto- file” system and by instituting administrative review after a patent is granted. Those reforms would bring the US system into alignment with patent systems in Europe and Japan. • Shield research uses of patented inventions from infringement liability. One recent court decision could jeopardize the long-assumed ability of academic researchers to use patented inventions for research. • Change intellectual-property laws that act as barriers to innovation in specific industries, such as those related to data exclusivity (in pharmaceuticals) and those that increase the volume and unpredictability of litigation (especially in information-technology industries).

Action D-2: Enact a stronger research and development tax credit to encourage private investment in innovation. The current Research and Experimentation Tax Credit goes to companies that increase their research and development spending above a base amount calculated from their spending in prior years. Congress and the Administration should make the credit permanent,10 and it should be increased from 20 to 40% of the qualifying increase so that the US tax credit is competitive with those of other countries. The credit should be extended to companies that have consistently spent large amounts on research and development so that they will not be subject to the current de facto penalties for having previously invested in research and development.

Action D-3: Provide tax incentives for US-based innovation. Many policies and programs affect innovation and the nation’s ability to profit from it. It was not possible for the committee to conduct an exhaustive examination, but alternatives to current economic policies should be examined and, if deemed beneficial to the United States, pursued. These alternatives could include changes in overall corporate tax rates and special tax provisions providing incentives for the purchase of high-technology research and manufacturing equipment, treatment of capital gains, and incentives for long-term investments in innovation. The Council of Economic Advisers and the Congressional Budget Office should conduct a comprehensive analysis to examine how the United States compares with other nations as a location for innovation and related activities with a view to ensuring that the United States is one of the most attractive places in the world for long-term innovation-related investment and the jobs resulting from that investment. From a tax standpoint, that is not now the case

Action D-4: Ensure ubiquitous broadband Internet access. Several nations are well ahead of the United States in providing broadband access for home, school, and business. That capability can be expected to do as much to drive innovation, the economy, and job creation in the 21st century as did access to the telephone, interstate highways, and air travel in the 20th century. Congress and the administration should take action—mainly in the regulatory arena and in spectrum management—to ensure widespread affordable broadband access in the very near future.

CONCLUSION

The committee believes that its recommendations and the actions proposed to implement them merit serious consideration if we are to ensure that our nation continues to enjoy the jobs, security, and high standard of living that this and previous generations worked so hard to create. Although the committee was asked only to recommend actions that can be taken by the federal government, it is clear that related actions at the state and local levels are equally important for US prosperity, as are actions taken by each American family. The United States faces an enormous challenge because of the disparity it faces in labor costs. Science and technology provide the opportunity to overcome that disparity by creating scientists and engineers with the ability to create entire new industries—much as has been done in the past. It is easy to be complacent about US competitiveness and preeminence in science and technology. We have led the world for decades, and we continue to do so in many research fields today. But the world is changing rapidly, and our advantages are no longer unique. Some will argue that this is a problem for market forces to resolve—but that is exactly the concern. Market forces are already at work moving jobs to countries with less costly, often better educated, highly motivated workforces and friendlier tax policies. Without a renewed effort to bolster the foundations of our competitiveness, we can expect to lose our privileged position. For the first time in generations, the nation’s children could face poorer prospects than their parents and grandparents did. We owe our current prosperity, security, and good health to the investments of past generations, and we are obliged to renew those commitments in education, research, and innovation policies to ensure that the American people continue to benefit from the remarkable opportunities provided by the rapid development of the global economy and its not inconsiderable underpinning in science and technology.