Federal R&D Investment as a Tool for Global Competition

Federal policy discussions about global competition increasingly include the importance of basic research. China’s continued emergence as an economic and military power in the world has generated bipartisan interest in revitalizing the United States’ federal research and development investments as a tool to ensure American global competitiveness in the years ahead. Two recent meetings brought experts together to discuss opportunities for such a policy response.

Task Force on American Innovation

On March 12th the Task Force on American Innovation (TFAI) held a talk on “Innovation in Crisis: Emerging from a Pandemic to Restore American Competitiveness”. The webinar was hosted by Dr. Sudip Parikh, CEO of the American Association for the Advancement of Science (AAAS), who was joined by a panel of experts. The talk focused on the United States’ investment in research and development and how that relates to its global competition

Matt Hourihan, Director of the R&D Budget and Policy Program for AAAS, presented on current and historical trends in US R&D investment. He noted that research and development spending dropped by 10 percent since budget caps were implemented in 2012. Before the 2008 financial crisis, spending increased on average 5.7 percent annually. Since 2008, annual increases have dropped below 4 percent. This represents a $204 billion gap between expected and actual spending in that time. Meanwhile, China is ramping up investment in research and development, with plans for 7 percent annual growth over the next 7 years.

Following Mr. Hourihan’s presentation, the panel discussed challenges facing American R&D and the need for additional funding across the board. They highlighted the US’ decline as the premier research destination in the world, as other countries have become more appealing to researchers. Speakers also commented on challenges to the STEM pipeline, citing immigration policies, the pandemic, and an insufficient incentive structure as key roadblocks to a stronger STEM workforce; three of every four workers or students in many STEM fields were once international students, and the decrease in these enrollments is holding back scientific advancement.

While panelists painted a bleak picture of the present, they expressed optimism for an even brighter future. Citing the rapid development of COVID vaccines built on years of basic research into mRNA technologies, they shared a sense that many are now opening their eyes to the critical need for more investment in research and development.

Senate Foreign Relations Committee

The Senate Committee on Foreign Relations met on March 17th for a hearing on Advancing Effective U.S. Policy for Strategic Competition with China in the Twenty-First Century. Expert testimony was provided by Dr. Elizabeth Economy, a senior fellow at the Hoover Institution, Mr. Tom Shugart, an adjunct senior fellow at the Center for New American Security, and Mr. Saif Khan, research fellow at the Center for Security and Emerging Technology.

At the forefront of discussion were concerns of China overtaking the United States as the dominant global force politically, economically, militarily, and technologically. Witnesses and Senators alike called for a strong bipartisan response. Witnesses acknowledged that the U.S. is still ahead in many areas technologically and scientifically, but emphasized that we must increase investments and continue to innovate in order to maintain our lead. Mr. Khan stressed that the U.S. must play to its strengths: attracting the best and brightest talent from around the world, and developing high-entry-cost industries like semiconductor manufacturing.

Senator Todd Young (R-IN) used the opportunity to tout the Endless Frontier Act, a bill he introduced with Majority Leader Schumer, to invest $100 billion in research and development over five years. Calling this a new “Sputnik moment”, he suggested that this can be a turning point in global competition.

China, Endless Frontier, Research and Development