President Charles M. Vest has warned Congress that the unprecedented prosperity in the US cannot be maintained without major government commitment to research and education.
"Complacency is the enemy," he told the Joint Economic Committee on June 15 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 on the second day of the three-day event. Other witnesses included Federal Reserve chair Alan Greenspan, Microsoft chair and CEO William H. Gates and Secretary of Education Richard W. Riley. The summit was live-streamed over the Internet and several schools around the country were linked via videoconference, allowing students to pose question to the speakers as well as members of the committee.
President Vest, a longtime advocate of research partnerships among academia, industry and government, noted the role this alliance has played in the success of the US 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 US, 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¿½America's innovation system is 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."
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½The most vulnerable part of this system is education and long-term research.
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½The many areas of science and technology are interrelated, and evolving in unpredictable ways.
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½There 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 US gross domestic product (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 US 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 US innovation."
He said projections show that the US 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 US have earned natural science or engineering degrees, compared with 6.4 percent in Japan, 7.6 percent in Korea and 8.5 percent in the United Kingdom. A decade ago, the United States led all these countries in this area.
- While US doctoral degrees in science and engineering have been growing since 1985, about half of those degrees are now awarded to non-US 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 US 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 US biotechnology companies. Nationwide, it is estimated that about $17 billion of product sales and 137,000 jobs have been generated based on patents licensed by universities."
Dr. Vest noted that the role of universities in commercializing technologies they develop was dramatically enhanced by the Bayh-Dole Amendment that gives universities the intellectual property 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 CATscanners depend on 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."
Sen. Kay Bailey Hutchison (R-TX) com-plimented President Vest on his presentation. "Your testimony was stunning," she said. Added Rep. Anna G. Eshoo (D-CA), "This is the way hearings should be. You are wonderful teachers."
A version of this article appeared in the July 14, 1999 issue of MIT Tech Talk (Volume 44, Number 1).