Study: U.S. job market is putting more workers in positions with limited upside and leverage.
WASHINGTON -- MIT President Charles M. Vest warned Congress Tuesday that the unprecedented prosperity in the U.S. could not be maintained without major government commitment to research and education.
"Complacency is the enemy," President Vest told the Joint Economic Committee at its first National Summit on High Technology.
President Vest, the only university representative to testify, appeared with the CEOs of four prominent information technology companies in Room 216 of the Hart Senate Office Building. The committee is chaired by Sen. Connie Mack (R-Fla.). Rep. John Saxton (R-NJ) is the vice chair.
A longtime advocate of research partnerships among academia, industry and government, President Vest noted the role this alliance has played in the success of the U.S. economy and urged Congress to maintain the momentum by continuing to fund projects at research universities.
"Universities are the largest performer of the basic research in the U.S., conducting over 50 percent of all basic research," he said. "Universities increasingly are the only game in town when it comes to long-term research that ultimately generates the new ideas that define the future."
Dr. Vest emphasized several points in his testimony, including:
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½"The U.S. has an innovation system, based on the synergistic roles of universities, government, and industry. This system generates new knowledge and new technologies through research, and it educates men and women to use this new knowledge to create new products, processes and services and move them into the commercial sector.
- "The most vulnerable part of this system is education and long-term research.
- "The many areas of science and technology are interrelated and evolving in unpredictable ways. Advances in one area are necessary for progress in another. The human genome project, for example, depends on robotics, computer science, and combinatorial mathematics, as well as biology.
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½"There is an essential role for the federal government in supporting research and education."
The booming economy has given birth to "the age of knowledge and innovation," in which "companies are fast-paced, knowledge-based, global, electronically-interconnected, and spawned by entrepreneurs," he said. Future success will be "largely dependent on new knowledge and appropriately educated and trained people."
"Yet the knowledge driving the advances of industry has been accumulated during the past 40 years of federal and industrial support of long-term research," President Vest said. "Are we doing the right things to generate the knowledge that will drive future economic success? No. We are reducing our investments. We are going in the wrong direction."
He noted that federal R&D expenditures have been steadily decreasing by about 2.6 percent per year. In 1985 federal R&D was about 1.2 percent of the U.S. GDP. In 1997 it was about 0.8 percent. Federal spending on basic and applied research fell by 12 percent as a share of GDP between 1993 and 1997.
President Vest said: "Are we attracting an increasing proportion of our bright young men and women into science, mathematics and engineering? No. And we especially are not attracting strong numbers of women and minorities. We cannot be complacent, we must turn both of these situations around."
The Japanese challenge in the late 1970s and early 1980s stimulated U.S. manufacturing industries to dramatically improve manufacturing and reduce product cycle times, President Vest said.
"In large companies, accomplishing this also involved dramatically changing the R&D function in very clever and productive ways," he said. "R&D efficiencies were gained, some discovery processes were accelerated, and the research and engineering functions were better integrated. This was very important and effective. But it came at a price:
"Most corporations cut back very substantially on fundamental, long-term research. Why? It is not clear that the benefits of such research will likely accrue directly to the performing company. Coupled with declining federal support, this does not bode well for future U.S. innovation."
He said projections show that the U.S. innovation index is likely to drop below several countries by 2005 -- largely because of cutbacks in R&D spending, a reduced talent pool, and slowing of policy innovation. "Our most vulnerable area is education and long-term research," he said, noting some warning signs:
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½Five percent of the 24-year-olds in the U.S. have earned natural science or engineering degrees, compared with 6.4% in Japan, 7.6 % in Korea and 8.5% in the United Kingdom. A decade ago, the United States led all of these countries in this metric.
- While U.S. Doctoral degrees in science and engineering have been growing since 1985, about half of those degrees are now awarded to non-U.S. citizens, compared with about 30 percent in 1986.
"The stake in research universities is high," said President Vest. "For example, a 1997 study by BankBoston showed that MIT graduates founded or co-founded over 4,000 companies that in 1994 employed 1.1 million people with revenues of $232 billion. A similar success story could be told by other major universities such as Stanford.
"In the field of biotechnology alone, there are at least 45 U.S. companies founded or co-founded by MIT graduates, or else founded on MIT patents. They employ nearly 10,000 people and produce annual revenues of $3 billion, roughly one quarter of the revenue of all U.S. biotechnology companies.
"Nation-wide, it is estimated that about $17 billion of product sales and 137,000 jobs have been generated based on patents licensed by universities."
He noted that the role of universities in commercializing technologies they develop was dramatically enhanced by the Bayh-Dole Amendment that gives universities the IP rights developed under federal grants and contracts, with the federal government retaining free usage. "This highly-effective legislation must be maintained," he said.
Biology will soon become the fourth science underlying engineering, joining physics, chemistry and mathematics, President Vest said.
"The seamlessness of science and technology, and the interrelation of their subfields, is demonstrated every day," he said. "Medical CAT scanners depend upon fast computation and efficient sensors. The advances in mapping and sequencing of genomes depend on robotics, computer science and combinatorial mathematics. Advances in one area are necessary for progress in another, and synergies at their interfaces are increasingly important.
"The federal government has an essential role."