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

A report by the National Academies
October, 2005

Introduction
Background
Recommendation A (K-12 Education)
Recommendation B (Research)
Recommendation C (Higher Education)
Recommendation D (Economic Policy)
Committee Members

 

Introduction

In late 2005, the National Academies' Committee on Science, Engineering, and Public Policy (COSEPUP) released Rising Above the Gathering Storm, a report concerning US competitiveness in scientific and technological innovation. The report was created in response to growing concern among leaders in industry, government, and scientific and technical fields that the US is becoming less competitive in science and technology. These leaders fear that decreased competitiveness will adversely affect social and economic conditions for US citizens.

Following a bipartisan congressional request, COSEPUP created the Committee on Prospering in the Global Economy of the 21st Century to undertake a formal study of the issue. The committee consisted of 20 members, including Nobel laureates, university presidents, and CEOs of major corporations. They were charged with answering the following questions:

1. "What are the top 10 actions, in priority order, that federal policymakers could take to enhance the science and technology enterprise so the United States can successfully compete, prosper, and be secure in the global community of the twenty-first century?"
2. "What implementation strategy, with several concrete steps, could be used to implement each of those actions?"

The committee's report was released after several meetings and focus group sessions. It details the critical role of science and technology in America's past and current economic prosperity. It then introduces four general recommendations and 20 specific actions the committee believes should be taken to implement the recommendations.

The report begins by analyzing the critical role science and technology plays in ensuring America's prosperity. Throughout the 20th century, science and engineering achievements significantly improved the American quality of life in a diverse range of fields, from electronics, telephones, and computers to safer water, more efficient agriculture, and improved health technology. Innovation in science and technology will continue to be central to America's success throughout the 21st century. Innovation contributes to economic well-being by improving technology (e.g. computers and information technology), making current industries more efficient, and creating new jobs. Scientific advances can also create entire new industries, such as the biotechnology industry that arose from fundamental research in molecular biology. Medical research and innovative medical technology promotes public health, decreasing mortality rates for diseases like cancer and heart disease. Improvements in medical technology also bring economic benefit by decreasing health care costs. Scientific research enhances public safety and environmental quality by improving air and water quality, identifying toxins, and mitigating natural hazards. Finally technological achievements have been key in protecting the security of the United States.

Despite the importance of scientific achievement to American prosperity, there has been growing concern that the US is losing its position as the worldwide leader in research and innovation. There are a number of reasons for this concern.

• Investment in research and development: Over the past decade, many Asian and European countries have dramatically increased public investment in research and development (R&D). European Union countries are increasing the percentage of gross domestic product (GDP) spent on R&D. In Japan and Korea, this percentage is already higher than in the US. In China, R&D spending rose 500% from 1991 to 2002, while in the US the increase was only 140%.
• Technology exports: US exports of high-technology products have dropped over the past 20 years, while Asian technology exports have grown dramatically, particularly in emerging countries like India. The US now has a negative trade balance in high-technology products.
• Publications: The US share of publications is also dropping. Total science and engineering publishing has remained constant in the US since 1992 but has increased steadily in Europe and Asia.
• Doctorate production: The number of doctorate degrees conferred is falling in the US but increasing rapidly in Asia.
• Foreign talent: Due to new visa and immigration policies in effect since September 11, 2001, the number of foreign students and researchers in the US is declining. Foreign visitors make up a large proportion of the graduate students and postdoctoral scholars in the US and contribute greatly to innovation.
• Industry emphasis: Many researchers are employed in the industrial sector, where R&D funding focuses on short-term and incremental projects rather than higher risk long-term or discovery-oriented research.
• Public funding: Throughout the 1990s, only biomedical research saw significant federal funding increases. Funding for the physical sciences, plant sciences, and environmental sciences remained flat, and funding for math and engineering increased only slightly more than inflation.
• K-12 education: Many primary and secondary school students lack the fundamental math skills necessary to contribute to society and the economy. In 2003, only 29% of 4th and 8th graders were "proficient" in math. A third of 4th and a fifth of 8th graders performed below the "basic" level. US 15 year olds are ranked lower than their peers in nearly every country for their ability to solve practical problems involving some level of mathematical understanding.
• Undergraduate education: Undergraduate science and engineering programs in the US have the largest attrition rate of all subjects. Less than half the students who enter these programs complete a degree in science or engineering.

The following recommendations are listed in order of priority.

Action A-1: "Annually recruit 10,000 science and mathematics teachers by awarding 4-year scholarships and thereby educating 10 million minds."
Action A-1 responds to a lack of highly qualified K-12 mathematics and science teachers. The committee recommends instituting a "competitive federal scholarship program would allow bright, motivated students to earn bachelors' degrees in science, engineering, and mathematics with concurrent certification as K-12 mathematics and science teachers." The scholarship would be based purely on academic merit and would provide $20,000 per year for 4 years for tuition and other educational expenses. Students could enter the program at any point and would be required to commit to 5 years of teaching in K-12 public schools. The annual cost of the scholarship program would be between $400 million and $800 million.

The committee also recommends awarding "competitive matching grants of $1 million per year for 5 years to help 100 universities and colleges establish integrated 4-year undergraduate programs that lead to bachelors' degrees in science, technology, engineering, or mathematics (STEM) with teacher certification."

Action A-1 is based in part on the successful UTeach program at the University of Texas, Austin and on the University of California's new 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 Advanced Placement and International Baccalaureate (AP and IB) training programs and thus inspires students every day."
Action A-2 provides several ways to improve the knowledge and skills of 250,000 current teachers.

The committee recommends holding 1- to 2-week summer institutes for up to 50,000 practicing teachers each year. The institutes would focus on science and mathematics content, recent scientific and technological developments, and teaching practices. The recommendation is modeled on the successful Merck Institute for Science Education. The expected cost per participant is $1200 per week.

The committee also recommends providing funding for 50,000 teachers in 5 years to participate in part time two-year master's degree programs. They also recommend providing 500 institutional grants to develop the programs. The programs would focus on content education and pedagogy, and would include a component of in-classroom training. Graduates of the program would receive stipends of $10,000 per year for as long as they remain in the classroom. The recommendation is based on the University of Pennsylvania's Science Teacher Institute, and would cost approximately $500 million per year.

A further recommendation is to train an additional 70,000 AP or IB and 80,000 pre- AP or pre-IB teachers in math and science. This would provide 30,000 newly qualified teachers each year for 5 years. Teachers from schools with few or no AP-IB courses would have priority for the training. The new AP-IB teachers would receive incentives to attend professional development seminars and tutor students outside of class, as well as a $100 bonus for each student who passes an AP or IB exam. The recommendation is based on the Dallas AP Incentive Program and has an estimated 5-year cost of $1.3 billion.

The final recommendation of action A-2 is for the Department of Education to convene a national panel to collect and develop effective K-12 math and science teaching materials. The materials would be available free online and would serve as a voluntary national curriculum. The estimated cost is $100 million over 5 years.

Action A-3: "Enlarge the pipeline by increasing the number of students who take AP and IB science and mathematics courses."
Action A-3 provides increased opportunities and incentives for middle-school and high-school students to participate in rigorous math and science coursework. Currently, only 6.5% of juniors and seniors take at least one AP or IB mathematics or science exam, and only 230,000 students pass those exams. The recommendations of action A-3 are based on reaching two goals by 2010: increasing the number of students who take at least one of the exams to 1.5 million (23% of juniors and seniors) and increasing the number of students who pass those exams to 700,000.

The committee recommends providing students with financial incentives for passing AP or IB math or science exams, including a 50% exam fee rebate and a $100 min-scholarship for each passing score. The 5-year cost for 700,000 students would be approximately $428 million.

The committee also recommends increasing the number of statewide specialty high schools and the number of inquiry-based learning opportunities, including summer internships and research programs.

Action B-1: "Increase the federal investment in long-term basic research by 10% a year over the next 7 years."
Ideally, funds for action B-1 would be provided through reallocation for existing funds, but if necessary, the committee recommends the investment of new funds. The basic research investment "should place special emphasis on physical sciences research in the physical sciences, engineering, mathematics, and information sciences and basic research conducted by the Department of Defense (DOD)" in order to re-establish a more balanced research portfolio

Action B-2: "Provide 200 new research grants each year at $500,000 each, payable over 5 years, to support the work of outstanding early-career researchers."
The grants would be funded by existing federal agencies, including 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). The recommendation is modeled on the Presidential Early Career Award for Scientists and Engineers (PECASE).

Action B-3: "Institute a National Coordination Office for Research Infrastructure to manage a centralized research-infrastructure fund of $500 million per year over the next 5 years."
Ideally, funding would be provided through reallocation of existing funds but if necessary through new investments. Funding would allow for "construction and maintenance of research facilities including the instrumentation, supplies, and other physical resources researchers need. Universities and the government's national laboratories would compete annually for the funds."

Action B-4: "Allocate at least 8% of the budgets of federal research agencies to discretionary funding."
This discretionary funding would be controlled by technical program managers and would be targeted towards high-risk, high-payoff research. The recommendation does not require any additional funding but rather a reallocation of funds.

Action B-5: "Use the Defense Advanced Research Projects Agency (DARPA) as an Energy Research Model."
The committee recommends the creation of an Advanced Research Projects Agency-Energy (ARPA-E) within the Department of Energy (DOE) to sponsor specific R&D programs focused on America's long-term energy needs. In particular, ARPA-E would sponsor high-risk, high-payoff energy research not supported by industry. Funding requirements would be approximately $300 million in the first year and would increase to $1 billion per year over 5-6 years. At that point the program's effectiveness would be evaluated.

Action B-6: "Institute a Presidential Innovation Award to stimulate scientific and engineering advances in the national interest."
These awards would be presented in addition to existing awards and would "identify and recognize individuals who develop unique scientific and engineering innovations in the national interest at the time they occur." The new awards would "encourage risk-taking… and educate the public about current issues of national interest."

Action C-1: "Increase the number and proportion of US citizens who earn physical-sciences, life-sciences, engineering, and mathematics bachelor's degrees by providing 25,000 new 4-year competitive undergraduate scholarships each year to US citizens attending US institutions."
The goal of action C-1 is to "increase the percentage of 24-year-olds with first degrees in the natural sciences or engineering in from the current 6% to the 10% benchmark already met by Finland, France, Taiwan, South Korea, and the United Kingdom."

The new Undergraduate Scholar Awards in Science, Technology, Engineering, and Mathematics (USA-STEM) awards would be allocated based on the results of a competitive national exam and would provide up to $20,000 per year for tuition and fees. The scholarships would be awarded by states and the number of scholarships per state would be determined based on the size of each state's congressional delegation. Recipients could use the awards at any accredited US university, and the recipient's university would receive a grant of $1000 per year.

The total cost of the program would be $1.1 billion over 4 years.

Action C-2: "Fund Graduate Scholar Awards in Science Technology, Engineering or Mathematics (GSA-STEM), a new scholarship program that would provide 5000 new portable 3-year competitively awarded graduate fellowships each year for outstanding US citizens pursuing science, mathematics, and engineering programs."
The program would be administered by NSF and would focus funding in "areas of national need," which would be identified by representatives of other federal agencies. The grants could be used at any institution and would provide up to $10,500 per year for tuition as well as an annual stipend of $30,000 (to be adjusted for inflation).

Costs for the program would be $202 million in the first year and would cost $608 million per year by the third year.

Action C-3: "Provide tax credits up to $500 million each year to employers who help their eligible employees pursue continuing education."
The goal of action C-3 is "to keep practicing scientists and engineers current with rapidly changing science and technology." To qualify, the courses would be required to meet certain standards. They could be offered either internally by employers or by external colleges and universities.

Action C-4: "Continue to expedite visa processing for international students and scholars."
Action C-4 would "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: Permit "international students who receive advanced degrees (doctoral or equivalent) in science, technology, engineering, mathematics, or other fields of national need… to remain in the United States for 1 year after graduation to seek employment. If these students are offered jobs by United States-based employers and pass a security screening test, they should receive automatic work permits and expedited residency status."
Action C-5 will "allow the United States to more easily recruit and retain students and scholars who have opportunities elsewhere in the world." If students remaining in the US after graduation are unable to obtain employment within 1 year, their visas would expire.

Action C-6: "Institute a skill-based, preferential new immigration option."
"Doctoral-level education and science and engineering skills would significantly raise an applicant's chances of obtaining US citizenship," increasing the ability of the US to attract foreign scholars. The committee also recommends that "in the interim, the government should increase the number of H-1B visas15 by 10,000 and make the additional visas available for companies to hire scientists and engineers with doctorates from US universities."

Action C-7: "Reform the current system of 'deemed exports'."
Currently, the transfer of technology is covered by the Export Administration Act. Providing "specific information necessary for the 'development,' 'production,' or 'use' of a product" to a foreign national can be considered a "deemed export" and requires an export license.

The committee recommends a new system allowing foreign scholars participating in research within the US to have access to information and research equipment in US laboratories. Any information restricted by national-security regulations would be excluded.

The new system would also remove from the deemed-exports list all information and research equipment that is available for purchase on the overseas open market as well as any items that have manuals available in the public domain.

Action D-1: "Enhance intellectual-property protection for the 21st century global economy."
The committee strongly recommends increasing the resources of the US Patent and Trademark Office (USPTO) with the goal of making "intellectual-property protection more timely, predictable, and effective." Specifically, increased resources would be used to hire and train more patent examiners, implement more effective electronic processing, provide an "early warning" of new technologies to be patented, and conduct systematic reviews of the performance of USPTO and its individual examiners.

The committee also recommends switching the US patent system from a "first-to-invent" to a "first-inventor-to-file" system and instituting a post-grant system of administrative "peer review." These changes would align US policies with those of Europe and Japan, save time and money, and aid US inventors in obtaining global protection.

A third recommendation of action D-1 is to pass legislation exempting some research uses of patented inventions from infringement liability. Should enactment of the legislation be delayed, the committee recommends providing grantees with the same "authorization and consent" protection that the Office of Management and Budget provides to contractors.

The committee's final recommendation for action D-1 is to "change intellectual-property laws that act as barriers to innovation in specific industries." In particular, this action targets data exclusivity laws in the pharmaceutical industry and laws leading to frequent and unpredictable litigation in the information-technology industry.

Action D-2: "Strengthen the R&D tax credit."
The goal of action D-2 is to encourage private investment in innovation. Although the tax credit has been in existence since 1980, it has never been permanent, and instead has been repeatedly extended and occasionally modified. The committee recommends making the tax credit permanent. This would cost approximately $5 billion per year, equivalent to the current costs of the tax credit.

The committee also recommends doubling the current rate of the tax credit, increasing it to 40%. Currently, the effective credit is only 13% (rather than 20%), and the increased rate would greatly increase the incentive for companies. It would also make the US a more attractive location for multinational corporations to invest in R&D.

A third recommendation of action D-2 is to change the definition of "applicable expenses" used to calculate the tax credit. The current system rewards companies that have significantly increased their investment of R&D over recent years; however, companies that consistently invest large amounts in R&D can receive little or no tax credit. The committee recommends extending the credit to companies with consistently high levels of R&D investment.

Action D-3: "Provide incentives for US-based innovation."
The committee recommends altering current tax policy to encourage long-term innovation investment within the US. The committee did not have time to examine all possible options and their consequences; however, they suggested a number of possibilities for further analysis. These include "changes in overall corporate tax rates, provision of incentives for the purchase of high-technology research and manufacturing equipment, treatment of capital gains, and incentives for long-term investments in innovation."

Action D-4: "Ensure ubiquitous broadband internet access."
The committee recommends that Congress do whatever necessary to meet President Bush's goal of ubiquitous broadband access by 2007. The committee believes several important changes (some of which are already underway) are needed in telecommunications regulatory and spectrum policy. These changes require no federal financial investments.

Norman R. Augustine (Chair), Retired Chairman and CEO, Lockheed Martin
Corporation, Bethesda, MD
Craig Barrett, Chairman of the Board, Intel Corporation, Chandler, AZ
Gail Cassell, Vice President, Scientific Affairs, and Distinguished Lilly Research Scholar for Infectious Diseases, Eli Lilly and Company, Indianapolis, IN
Steven Chu, Director, E.O. Lawrence Berkeley National Laboratory, Berkeley, CA
Robert Gates, President, Texas A&M University, College Station, TX
Nancy Grasmick, Maryland State Superintendent of Schools, Baltimore, MD
Charles Holliday Jr., Chairman of the Board and CEO, DuPont Company, Wilmington, DE
Shirley Ann Jackson, President, Rensselaer Polytechnic Institute, Troy, NY
Anita K. Jones, Lawrence R. Quarles Professor of Engineering and Applied Science,
University of Virginia, Charlottesville, VA
Joshua Lederberg, Sackler Foundation Scholar, Rockefeller University,
New York, NY
Richard Levin, President, Yale University, New Haven, CT
C. D. (Dan) Mote Jr., President, University of Maryland, College Park, MD
Cherry Murray, Deputy Director for Science and Technology, Lawrence Livermore National Laboratory, Livermore, CA
Peter O'Donnell Jr., President, O'Donnell Foundation, Dallas, TX
Lee R. Raymond, Chairman and CEO, Exxon Mobil Corporation, Irving, TX
Robert C. Richardson, F. R. Newman Professor of Physics and Vice Provost for
Research, Cornell University, Ithaca, NY
P. Roy Vagelos, Retired Chairman and CEO, Merck, Whitehouse Station, NJ
Charles M. Vest, President Emeritus, Massachusetts Institute of Technology, Cambridge, MA
George M. Whitesides, Woodford L. & Ann A. Flowers University Professor, Harvard University, Cambridge, MA
Richard N. Zare, Marguerite Blake Wilbur Professor in Natural Science, Stanford
University, Stanford, CA

Source: Rising Above The Gathering Storm

Contributed by Jenny Fisher, AGI/AAPG 2006 Spring Semester Intern

Please send any comments or requests for information to AGI Government Affairs Program.

Posted January 27, 2006