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The "remarkably beneficial" partnership between the federal government, industry and research universities "is in danger of disintegrating," MIT President Charles M. Vest has warned, at a time when Japan, a major global competitor, is moving "very aggressively" ahead.
The situation in the United States is not surprising in a time of enormous change, Dr. Vest said in his keynote address February 26 at the Jerome B. Wiesner Symposium on the Future of the Government/University Partnership at the University of Michigan in Ann Arbor.
"It is less surprising still," he added, "in a highly politicized, economically troubled period in which distrust of institutions is widespread and short-term thinking is continually rewarded."
Dr. Vest contrasted the situation in the US with that of Japan. That country currently invests about 2.8 percent of its gross domestic product in research and development, which is almost exclusively non-defense research and development, he said.
"Japan, a much smaller nation, spends essentially as many absolute dollars on non-defense R&D as the US," he said, adding, "While we in the US move toward a distinct R&D funding decline, the Japanese are operating under a law calling for a doubling of their investment in R&D by the year 2000."
Although it now appears that this goal will not be fully met by 2000, he continued, "the Japanese science and technology budget is increasing by about 10 percent per year, despite the fact that the rest of their budget is flat.
"Furthermore, Japan is moving aggressively to build its infrastructure for scientific research. It is reforming its system of funding university research, and providing for 10,000 new doctoral and postdoctoral fellowships. It is planning to sell bonds to support a new system of centers of research excellence. Japan is moving very aggressively. We should remember this as we look to the future of our own R&D system."
Both Dr. Wiesner, who served as president of MIT from 1971 to 1980, and Dr. Vest came to MIT from the University of Michigan. Dr. Wiesner, who died last year, was educated there. Dr. Vest received his advanced degrees at Michigan, served on the faculty and was the provost and vice president for academic affairs when he became MIT president in 1990.
"As we enter this era," Dr. Vest said, "we find that our highly successful national innovation system is threatened. Indeed, it is in danger of disintegrating."
He defined the innovation system as "the government, industrial and academic institutions working in at least a loosely coupled manner to produce new scientific and technical knowledge. [They] recognize its relevance to public and commercial good, translate some of it into industrial practice, and prepare people to develop, implement and market it."
Dr. Vest said the United States traditionally has held to the belief that the federal government has a responsibility to foster and fund scientific research and that universities should conduct most of it-thereby combining the functions of education and research.
While fundamental, long-range, largely university-based research remains strong, he said, "it is increasingly under financial duress." And in the years ahead, he added, "we are very likely to see serious deterioration in federal investment in R&D."
In 1993, he said, the US invested 2.7 percent of its gross domestic product in research and development, which included investment by both government and industry. By next year, he said, it appears this national investment in R&D will drop to 2.2 percent of the GDP, although the White House Office of Science and Technology has suggested that investing 3 percent would be an appropriate national goal.
Dr. Vest said the federal government currently invests about $70 billion annually in R&D.
"Close inspection of these budgets, however, discloses that only about $35-40 billion funds anything that this audience would consider research and development," he said, amounting to only 2.3 percent of the federalbudget, and it is only a little more than 0.5 percent of the GDP. "The remainder is largely for objectives such as testing of weapons systems," and "the bottom line is that the federal government devotes only two orthree percent of its outlays to real scientific and engineering researchand development.
"The likely future of US R&D funding is not very attractive. The budgetary turmoil in Washington makes prognostication difficult," he explained, but the current congressional budget resolution, as analyzed by the American Association for the Advancement of Science, is headed toward a 30-35 percent decrease in real dollars by fiscal year 2000, almost uniformly across agencies.
Meanwhile, he added, industrial spending on R&D, currently about $102 billion annually, "also is on the decline" and "has not grown in real terms for seven years."
In addition, Dr. Vest said, industrial R&D is increasingly short term in outlook and "for the most part it improves only the situation of each company or a small cooperating group of companies."
The result, he said, is that university-based, long-range research "is chunking along, despite wear, tear and rusting bearings" while industrial research "is spinning fast on freshly-oiled bearings, but is using up all its stored energy for short-term optimization and is not investing sufficiently in the future."
Finally, Dr. Vest warned against several "policy pitfalls" that include categorizing research programs as "strategic," or "basic" or "applied"; failing to recognize research and advanced education as an investment; driving wedges between public and private research-intensive universities; and separating education and research, which he described as "shortsighted and dangerous."
In the latter case, he said, "federal sponsors, through a variety of mechanisms, originating in both Congress and the executive branch, are retreating from paying the full costs of the research they sponsor. This forces universities to shift the unreimbursed costs to their only other sources of revenue-tuition, gifts and endowment income, and state support. These resources generally should be devoted directly to our teaching programs and environments."
To secure the country's future, Dr. Vest said, "our national innovation system must be just that-a system. Government, industry and academia must be in greater discourse and partnership to attain our goals. We [universities] are great economic engines in the near term through our R&D activities. We can be even greater economic engines for the long run through improved education of our students."
A version of this article appeared in MIT Tech Talk on March 6, 1996.