[Editors] Must-read FT Editorial TODAY by Pres. Reif, colleague

Wed Feb 27 09:34:52 EST 2013

Science must be spared Washington’s axe

By Rafael Reif and Craig Barrett

Cutting R&D capability would be irresponsible, say Rafael Reif and Craig Barrett
William Gladstone, when chancellor of the exchequer in the 1850s, is said to have asked Michael Faraday, the great scientist, whether a new discovery called electricity would ever have practical value. Faraday replied: “Why, sir, there is every possibility that you will soon be able to tax it!”

Scientific discovery improves life and creates wealth like nothing else. But that notion has essentially been on trial in the US for decades. According to the National Science Foundation, federal spending for research and development grew at just 1.3 per cent annually from 1989 to 2009, while gross domestic product rose 2.4 per cent. That is bad news – but may be about to get worse.

The US is poised to allow across-the-board cuts to federally funded research from Friday, as part of the automatic budget cutting known as sequestration. This would be a big mistake. It would further weaken the most powerful stimulant of economic growth ever devised.

Since the second world war, universities and companies have transformed discoveries into industries: fully 75 per cent of postwar growth is tied to technological innovation, according to the commerce department. Our model is well understood: countries everywhere are pursuing their own innovation-led growth.

In the US, the focus on the federal deficit threatens to blind leaders in Washington to an essential truth about our economy: we have a growth problem. The US is climbing out of a recession, but our annual growth rate is only about 2 per cent.

To slash America’s R&D capability in the name of fiscal responsibility would be akin to seeking greater efficiency for an aircraft by jettisoning the engines. While R&D accounts for a small share of federal spending, it is disproportionately important in supporting long-term economic growth.

Yes: the US needs to cut spending, but it should do so intelligently, after assessing what is critical and committing to invest in it. If Congress allows sequestration, federally funded R&D will be reduced across every R&D funding agency by 5.1 to 7.3 per cent in 2013; cuts and stagnation would continue through 2021.

A report by the non-partisan Information Technology & Innovation Foundation estimates that over those nine years, such cuts would reduce GDP by $200bn – and that estimate compares sequestration to a scenario where R&D merely remains at the 2011 rate. If in those nine years the US instead kept R&D spending constant as a proportion of output, the economy would be $565bn bigger. And if it invested in R&D at the same rate as China, that gap would grow to $860bn.

Over the next three years alone, sequestration-induced R&D cuts would result in the projected loss of 600,000 jobs. What that figure does not capture is the number of brilliant young scientists and engineers who, stymied by lack of funding, would walk away from research. We would lose a generation of transformational ideas.

Were the US to commit to investing the same share of its GDP in R&D as it did in the 1980s, we would not be talking about cuts, but instead about increasing the annual R&D budget by $110bn. The US now ranks eighth among OECD countries in R&D as a share of GDP.

The last great wave of commercialised US innovation took place in the 1990s, when discoveries in computer science reached the point where reliably increasing computing power and the development of the internet spawned huge opportunities for companies such as Cisco, Intel and Google. The US then built on this IT revolution with a biotech revolution.

Both broad sets of advances emerged from breakthroughs funded by the federal government. In the late 1990s, sharp economic growth triggered in part by IT gave the US an increase in tax revenues sufficient to create a federal budget surplus.

In the computing and biotech revolutions, as in other significant scientific advances, the most useful role that federally funded researchers could play was to think big. In the decades leading to the launch of the internet, no one investigating the possibilities of computers could have known exactly where things were headed. Enabled by federal grants, researchers set the stage for industry to create products that lifted the entire economy. The government wisely addressed a classic market failure: the private sector cannot justify the high risk associated with foundational research.

The US is still home to most of the world’s best research universities and innovative companies. If it recommits itself to investments that fuel these engines of growth, it can retain its long-held competitive advantage and generate growth that will reduce its budget deficit. This is not a leap of faith: it is an old American practice that has served the nation exceedingly well.

The writers are respectively the president of MIT and the former chief executive and chairman of Intel
On Feb 27, 2013, at 9:30 AM, Andrew Whitacre wrote:

> Bah, the article is behind a paywall. Anybody have access and can cut-and-paste to the list?
> 
> (Or is there a way to get to it via the MIT Libraries?)
> 
> Andrew Whitacre
> Communications Director
> cms.mit.edu | civic.mit.edu | gamelab.mit.edu
> Massachusetts Institute of Technology
> (617) 324-0490
> awhit at mit.edu
> 
> On Feb 27, 2013, at 9:26 AM, Elizabeth A Thomson wrote:
> 
>> FYI…worth posting FT piece on your social media feeds? Also, see Alumni Association note, below.
>> 
>> 
>> FT editorial: Cutting govt funds for R&D like seeking greater efficiency for a plane by jettisoning engines." ow.ly/i5VS2
>> 
>> Elizabeth
>> =========================
>> Elizabeth A. Thomson
>> Associate Director of Communications
>> MIT Resource Development
>> Office of Communications
>> 600 Memorial Dr., W98-300
>> 617-258-5563, 857-756-9457
>> <thomson at mit.edu>, giving.mit.edu
>> =========================
>> 
>> Begin forwarded message:
>> 
>>> From: John Gavenonis '98 <alumadvocacy at MIT.EDU>
>>> Subject: MIT Legislative Advocacy Network Call to Action
>>> Date: February 26, 2013 5:00:35 PM EST
>>> To: "thomson at mit.edu" <thomson at mit.edu>
>>> Reply-To: <alumadvocacy at MIT.EDU>
>>> 
>>> 
>>> Call to Action
>>> Dear MIT Legislative Advocacy Network Members:
>>> 
>>> In today’s Financial Times, MIT President Rafael Reif co-authored an op/ed with former Intel chief executive and chairman Craig Barrett. Calling for a recommitment to research universities and US innovation, the authors suggest "To slash America’s R&D capability in the name of fiscal responsibility would be akin to seeking greater efficiency for an aircraft by jettisoning the engines."
>>> 
>>> As President Reif and Craig Barrett argue, the sequester, on track to take place in under 100 hours, will have a significant negative impact on America’s innovation. Once again we ask you to take time to remind the members of congress and your community of the importance of investments in scientific research and education, and the competitive advantage they provide to the American economy.
>>> 
>>> To find the contact details for your representative and senators, visit this web page: http://www.contactingthecongress.org/ In general, you will find that congressional leaders utilize web forms for receiving email from constituents.
>>> 
>>> Below you will find suggested text for communication to your congressional representative regarding sequestration. In addition, we’ve posted this sample letter to your congressional member and a sample letter to the editor on our volunteer toolkit.
>>> 
>>> We would be pleased to receive copies of any follow up messages you receive in reply from your congressional leaders or their staffs. Please forward them to alumadvocacy at mit.edu.
>>> 
>>> I look forward to hearing about your experiences in this ongoing effort to contact congress and influence their efforts to avoid the sequester.
>>> 
>>> Sincerely,
>>> 
>>> John Gavenonis '98
>>> Chair, Legislative Advocacy Network
>>> 
>>> 
>>> Sample letter Text: 
>>> I am writing as a constituent in your district to highlight MIT President Reif’s and former Intel CEO Craig Barrett's recent op/ed in the Financial Times arguing against sequestration.
>>> 
>>> Sequester cuts on track to be initiated this Friday, March 1, will cause irreparable damage to the future of our country. The first impact will be in the area of federal funding for research and, as this funding continues to falter over the 9-year timeline of sequester, these cuts will reverberate through the economy in the form of lowered competitiveness, loss of hundreds of thousands of jobs, and curtailed innovation across economic sectors.
>>> 
>>> There is no doubt that while the federal budget is a significant concern, the sequester ignores the more complex needs of a dynamic economy, including the necessity to ensure a strong growth rate. In 2010, the U.S. Commerce Department reported over 60% of U.S. economic growth since World War II has been tied to technological and related innovation. Without investment in R&D, our economy doesn’t have the engines for innovation that drive growth.
>>> 
>>> In addition to stalling the country's economic growth engine, these additional cuts to R&D come on the heels of 30 years of underinvestment in R&D. According to the Information Technology and Innovation Foundation, from 1987 to 2007 investment in federally funded research as a portion of GDP grew just 0.3 percent annually. This figure significantly trails the investment of other countries in R&D, including China.
>>> 
>>> As an alumnus of MIT, I want to emphasize to you the mistake it is not only to continue the trajectory of underinvestment in R&D but to cut it even further. As you have already seen from the new numbers out this week, and as compiled by The Science Coalition, sequestration will reduce federal funding for scientific research by nearly $85 billion over the next nine years. This will reduce GDP by at least $203 billion. Between 2013 and 2016 alone, the economy will forfeit 200,000 jobs.
>>> 
>>> We know that sequestration will have a disastrous effect on the economy. The time is now: bet on America and American competitiveness, end the sequester threat, and recommit to funding American innovation for economic growth.
>>> 
>>> 	600 Memorial Drive, W98, Cambridge, MA 02139-4822
>>> aacomments at mit.edu | 800-MIT-1865	
>>> 			
>>> If you wish to be removed from this mailing list, click here.
>>> 
>>> 
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