US competitiveness expert calls for new investment in education, basic research

Guest Contributor
December 21, 2007

One of America's foremost experts on S&T's relationship to global competitiveness says his continuing clarion call for the US government to enact major educational reform and increase basic research contains important lessons for all developed nations.

Addressing a group of key Canadian policy makers and research managers in Ottawa earlier this month, Norman Augustine — chair of the committee that produced the influential Rising Above the Gathering Storm report in 2005 — outlined the key points of his latest book, Is America Falling Off the Flat Earth? He said the challenges to the US are similar to those faced by all high-cost, developed nations seeking to confront the rapidly increasing competition for jobs and prosperity from the world's emerging economic powerhouses.

"The cost of labour represents probably the greatest disadvantage the US and Canada face in this flattening and tipping earth," says Augustine. "These disparities will probably narrow over time … But that is a long time away, a lot longer than established nations like the US and Canada can probably afford to wait."

To confront the wholesale movement of higher-value products and services to Asia and elsewhere, Augustine says his nation's recipe must include an emphasis on research at one end of the spectrum and entrepreneurships at the other.

"Our competitive edge will reside in our ability to innovate, to uncover new knowledge through research, to transfer that knowledge into new products and services through good engineering and to be the very first to market with those products and services because of our entrepreneurship."

In the US, the first steps that must be taken are improvements to the education system from kindergarten to grade 12 and a doubling of federal investments in mathematics, the physical sciences and engineering. For education, he proposes a system of scholarships to generate 10,000 new math and science teachers annually, with recipients committing to remain teaching for at least five years.

Augustine says the US government heeded a previous call from the health research community to double its investment in the National Institutes of Health with impressive results. The same must be done for "the remainder of America's research budget beyond the biological and health sciences". To do any less, he asserts, increases the risk that the US will begin losing massive numbers of skilled jobs to jurisdictions where wage levels are a fraction of those paid in developing nations.

"We are slipping perilously and silently closer to the flat earth's edge. Ironically, the nations that are emerging as our most serious competitors are doing so in large part by adopting the best of our institutional practices and often executing them better than we." —

Is America Falling Off the Flat Earth?

"Between 50% and 85% of the gross domestic product of the US in the last half century can be attributed to scientific research and engineering … Two-thirds of the increase in labour productivity in the last decade is attributable to the federal government's investment in research. It was this fact that caused the committee to focus heavily on S&T and our ability to compete," he says. "US investment in physical sciences and math and engineering has been basically flat for over 40 years in real dollars … The US ranks 22nd place in the world in the fraction of GDP it devotes to non-military research."

Both the Rising Storm report and Augustine's latest book contain powerful statistics on global trends that are working against US and Canadian efforts to remain prosperous and globally competitive. The ability of Asian nations to generate technological knowledge far outstrips the capacity of the west — a dilemma that is exacerbated by often counterproductive policies.

Legislation surrounding immigration and protectionism have had a profoundly negative impact on US ability to compete for highly skilled personnel. Augustine says that since 9/11, the US has tightened is visa policies and has suffered from a declining international reputation. He notes that cutting the quota for foreign students is a form of protectionism while forcing foreign students to return to their country of origin when they finish studying in the US is "stupid. They compete against us."

Factors in selecting R&D location

1) Country's growth potential

2) Availability of highly qualified personnel

3) Existence of local customers

4) Strength of intellectual property (IP) protection

5) Ease of negotiating IP rights

6) Inherent cost of conducting R&D

7) Ease of collaborating with local universities

8) Availability of university faculty

9) Absence of regulatory and other restrictions

10) Suitability of the country as an export platform

Canada fares far better than the US when it comes to immigration policy and also out competes the US in international testing for math and science. In the OECD's latest Program for International Student Assessment (PISA) rankings for 15 year-olds, Canada ranked third for science behind Finland and Hong Kong-China, and 7th for performance in mathematics. Correspondingly, the US ranked 29th in science and 36th in math – both near the bottom of the nations that participated and deemed "statistically significantly below the OECD average".

Augustine says attitudes among parents and students, as well as improperly trained teachers bear the brunt of the blame for the poor US showing, and reinforce a pervasive cultural bias against math and science.

"In the US, a high school teacher has to work 33 hours to make $1,000. A corporate CEO can do it in two hours and fifty-five minutes. Howard Stern who is known for his obscenity on the radio takes 24 seconds. It seems to me we're trying to get what we deserve," he says.

Trends in corporate investment and capital markets also indicate that the US is on the wane as a preferred destination for new research facilities and high-tech start-ups. But Augustine — a former president and CEO of Lockheed Martin Corp — doesn't blame the corporate community. He says their investment decisions.are focused on their next quarter, leaving the public sphere to make new investments in research.

"Industry is focusing increasingly on 'D' and not on 'R'. The 'R' portion is basically drying up from industry. Witness the disappearance of the Xerox labs, Bell labs, IBM labs ," he says.


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