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http://www.newsweek.com/id/222836?from=rss
Some excerpts
Some excerpts
By most measures, America remains the world leader in technological achievement. Consider the 2009 Nobel Prizes: of the 13 people honored, nine were American. Once you take out the economics, literature, and peace prizes, the United States, with 5 percent of the world's population, still won close to 70 percent of the awards. Even amid a terrible recession, the country still dominates the fields of information technology, life sciences, and nanotechnology, all key industries of the future. The World Economic Forum routinely cites America as having the most competitive economy on the planet (though this year it was narrowly overtaken by Switzerland). When decision makers are asked to rank countries on innovation, the United States always comes first by a large margin.
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Like a star that still looks bright in the farthest reaches of the universe but has burned out at the core, America's reputation is stronger than the hard data warrant. For example, the World Economic Forum surveys say America is the globe's top recipient of venture capital and third-biggest spender on corporate research, but the actual data put it fifth in both categories. Most striking, the ITIF rankings show that, in recent years, the United States has made the least progress of the 39 countries analyzed in improving its innovation capacity and internal competitiveness. The measures are standard, ranging from government research spending, where the United States does well, to the corporate tax rate, where it does extremely poorly.
...
In some ways America's once dominant position was an aberration. The country's technological triumphs rested on three tidal waves that all began in the late 1930s. The first was the wave of destruction that wrecked virtually every other country, and certainly every other economic competitor, during World War II. Germany, France, and Britain were devastated, their cities laid to waste, their industries in ruins, their universities boarded up. Coupled with World War I and the Great Depression, the effects of this "30-year war" went well beyond physical destruction. Political, economic, and social systems were overwhelmed by angry workers, populists, fascists, and communists. The result: by the late 1940s, most of Europe was still rationing food, rebuilding its cities, bridges, and roads, and coming to terms with new political systems. The United States was in a very different position, and in the realms of technology and economics did not really have a serious rival for a generation.
The second tidal wave, related to the first, was the generation of immigrants who left Europe and populated American universities, research centers, and think tanks. You cannot exaggerate the dividends this paid to the United States. In the 1930s Germany was the world's leading nation in scientific research, much of it done by German Jews. Despite immigration restrictions, 100,000 Jews entered the United States in the 1930s. By the 1950s, the American research and technology system—universities, centers, companies—had become a magnet for enterprising, scientifically minded people around the world. When immigration restrictions were relaxed in 1965, there began another great wave of immigration, and this time bright Indians and Chinese, often scientifically trained, made their way to America.
The third tidal wave was massive government funding. Beginning in the Great Depression but accelerating dramatically during World War II, the federal government began showering money on research and development, and channeled most of it through universities—a brilliant innovation that has endured as an American model. After World War II, the Cold War drove this funding to new highs, so that by the 1950s, the United States was spending 3 percent of GDP on R&D, which amounted to a majority of the total spending on science on the planet.
Government funding of basic research has been astonishingly productive. Over the past five decades it has led to the development of the Internet, lasers, global positioning satellites, magnetic resonance imaging, DNA sequencing, and hundreds of other technologies. Even when government was not the inventor, it was often the facilitator. One example: semiconductors. As a study by the Breakthrough Institute notes, after the microchip was invented in 1958 by an engineer at Texas Instruments, "the federal government bought virtually every microchip firms could produce." This was particularly true of the Air Force, which needed chips to guide the new Minuteman II missiles, and NASA, which required advanced chips for the on-board guidance computers on its Saturn rockets. "NASA bought so many [microchips] that manufacturers were able to achieve huge improvements in the production process—so much so, in fact, that the price of the Apollo microchip fell from $1,000 per unit to between $20 and $30 per unit in the span of a couple years."
...
With the end of the Cold War, Americans stopped worrying about the Soviet threat and, as a result, R&D funding for applied science plummeted, dropping 40 percent in the 1990s. It has picked up since then, but the government's share of overall R&D spending remains near its all-time low. And while corporations still spend on R&D, they do not fund the kind of basic research that leads to breakthroughs.
America's decline is most evident in the one realm of high technology where the U.S. government has, until recently, seemed most uninterested: energy. The three most important areas where current technology could yield big results are solar, wind, and battery production (the latter because the energy has to be stored somewhere). According to the investment bank Lazard Frères, the world's largest wind-turbine manufacturer (by revenue) is a U.S. company: General Electric. But the other nine companies among the top 10 are scattered around the world, including Germany (Nordex), Denmark (Vestas), India (Suzlon), and Spain (Acciona).
...
The rise of the rest also undercuts the other great advantage that the United States has had: being a magnet for the best and the brightest from around the world. While there is no good way to measure this yet, it would seem obvious that as opportunities increase in China, India, and other developing countries, fewer scientists will want to or need to uproot themselves from their country and culture in order to make a better living. In the early 1980s about 75 percent of all the graduates of the Indian Institutes of Technology ended up in the United States. In recent years fewer than 10 percent have been America-bound.
American culture is open and innovative. But it was powerfully shaped and enhanced by a series of government policies. Silicon Valley did not arise in a vacuum. It grew in the 1950s in a state that had created the world's best public-education system (from kindergarten through Ph.D. programs), a superb infrastructure, and a business-friendly environment that attracted defense and engineering industries. Today California builds prisons, but not college campuses. In 1976 it spent 18 percent of its budget on education; that figure now is about 10 percent. The state is permanently bankrupt, saved only by massive, continual borrowing. Are these the foundations for future scientific achievement?
We cannot stop the world from rising and doing better at innovation, nor should we want to do so: the rise of the rest is a powerful, positive phenomenon for everyone. But America must adapt to it, not watch quietly as a spectator.
For the past three decades, funding for science research has slipped, the education system has continued to decline, and immigration policy has become less and less rational. Tax and regulatory policies have been made with more thought to domestic special interests than America's long-term competition.
...
Like a star that still looks bright in the farthest reaches of the universe but has burned out at the core, America's reputation is stronger than the hard data warrant. For example, the World Economic Forum surveys say America is the globe's top recipient of venture capital and third-biggest spender on corporate research, but the actual data put it fifth in both categories. Most striking, the ITIF rankings show that, in recent years, the United States has made the least progress of the 39 countries analyzed in improving its innovation capacity and internal competitiveness. The measures are standard, ranging from government research spending, where the United States does well, to the corporate tax rate, where it does extremely poorly.
...
In some ways America's once dominant position was an aberration. The country's technological triumphs rested on three tidal waves that all began in the late 1930s. The first was the wave of destruction that wrecked virtually every other country, and certainly every other economic competitor, during World War II. Germany, France, and Britain were devastated, their cities laid to waste, their industries in ruins, their universities boarded up. Coupled with World War I and the Great Depression, the effects of this "30-year war" went well beyond physical destruction. Political, economic, and social systems were overwhelmed by angry workers, populists, fascists, and communists. The result: by the late 1940s, most of Europe was still rationing food, rebuilding its cities, bridges, and roads, and coming to terms with new political systems. The United States was in a very different position, and in the realms of technology and economics did not really have a serious rival for a generation.
The second tidal wave, related to the first, was the generation of immigrants who left Europe and populated American universities, research centers, and think tanks. You cannot exaggerate the dividends this paid to the United States. In the 1930s Germany was the world's leading nation in scientific research, much of it done by German Jews. Despite immigration restrictions, 100,000 Jews entered the United States in the 1930s. By the 1950s, the American research and technology system—universities, centers, companies—had become a magnet for enterprising, scientifically minded people around the world. When immigration restrictions were relaxed in 1965, there began another great wave of immigration, and this time bright Indians and Chinese, often scientifically trained, made their way to America.
The third tidal wave was massive government funding. Beginning in the Great Depression but accelerating dramatically during World War II, the federal government began showering money on research and development, and channeled most of it through universities—a brilliant innovation that has endured as an American model. After World War II, the Cold War drove this funding to new highs, so that by the 1950s, the United States was spending 3 percent of GDP on R&D, which amounted to a majority of the total spending on science on the planet.
Government funding of basic research has been astonishingly productive. Over the past five decades it has led to the development of the Internet, lasers, global positioning satellites, magnetic resonance imaging, DNA sequencing, and hundreds of other technologies. Even when government was not the inventor, it was often the facilitator. One example: semiconductors. As a study by the Breakthrough Institute notes, after the microchip was invented in 1958 by an engineer at Texas Instruments, "the federal government bought virtually every microchip firms could produce." This was particularly true of the Air Force, which needed chips to guide the new Minuteman II missiles, and NASA, which required advanced chips for the on-board guidance computers on its Saturn rockets. "NASA bought so many [microchips] that manufacturers were able to achieve huge improvements in the production process—so much so, in fact, that the price of the Apollo microchip fell from $1,000 per unit to between $20 and $30 per unit in the span of a couple years."
...
With the end of the Cold War, Americans stopped worrying about the Soviet threat and, as a result, R&D funding for applied science plummeted, dropping 40 percent in the 1990s. It has picked up since then, but the government's share of overall R&D spending remains near its all-time low. And while corporations still spend on R&D, they do not fund the kind of basic research that leads to breakthroughs.
America's decline is most evident in the one realm of high technology where the U.S. government has, until recently, seemed most uninterested: energy. The three most important areas where current technology could yield big results are solar, wind, and battery production (the latter because the energy has to be stored somewhere). According to the investment bank Lazard Frères, the world's largest wind-turbine manufacturer (by revenue) is a U.S. company: General Electric. But the other nine companies among the top 10 are scattered around the world, including Germany (Nordex), Denmark (Vestas), India (Suzlon), and Spain (Acciona).
...
The rise of the rest also undercuts the other great advantage that the United States has had: being a magnet for the best and the brightest from around the world. While there is no good way to measure this yet, it would seem obvious that as opportunities increase in China, India, and other developing countries, fewer scientists will want to or need to uproot themselves from their country and culture in order to make a better living. In the early 1980s about 75 percent of all the graduates of the Indian Institutes of Technology ended up in the United States. In recent years fewer than 10 percent have been America-bound.
American culture is open and innovative. But it was powerfully shaped and enhanced by a series of government policies. Silicon Valley did not arise in a vacuum. It grew in the 1950s in a state that had created the world's best public-education system (from kindergarten through Ph.D. programs), a superb infrastructure, and a business-friendly environment that attracted defense and engineering industries. Today California builds prisons, but not college campuses. In 1976 it spent 18 percent of its budget on education; that figure now is about 10 percent. The state is permanently bankrupt, saved only by massive, continual borrowing. Are these the foundations for future scientific achievement?
We cannot stop the world from rising and doing better at innovation, nor should we want to do so: the rise of the rest is a powerful, positive phenomenon for everyone. But America must adapt to it, not watch quietly as a spectator.
For the past three decades, funding for science research has slipped, the education system has continued to decline, and immigration policy has become less and less rational. Tax and regulatory policies have been made with more thought to domestic special interests than America's long-term competition.