President Obama: Innovation and Sustainable Growth

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Publication date: 
22 September 2009

In remarks at Hudson Valley Community College in Troy, NY yesterday, President Barack Obama reaffirmed his belief in the importance of basic research.  It was the President’s second major address in which he discussed at length the value of basic research.

The President’s remarks, lasting about thirty minutes, outlined the Administration’s strategy for “sustained growth and widely shared prosperity.”  Describing the building blocks of innovation as education, infrastructure, and research, Obama reiterated an important goal that he set in an April speech  at the National Academy of Sciences.  During his April remarks, the President said:

“I am here today to set this goal: we will devote more than three percent of our GDP to research and development.  We will not just meet, but we will exceed the level achieved at the height of the Space Race, through policies that invest in basic and applied research… promote breakthroughs in energy and medicine, and improve education in math and science.  This represents the largest commitment to scientific research and innovation in American history.”

This goal in his April speech was reiterated yesterday.   It is estimated that the United States now spends approximately 2.6 percent of GDP on R&D.

The President’s remarks on research follow; the entire seven page speech can be read here.   The reference to the three percent goal is found in the fourth paragraph below:

“We also have to strengthen our commitment to research, including basic research, which has been badly neglected for decades.   That's always been one of the secrets of America's success -- putting more and more money into research to create the next great inventions, the great technologies that will then spur further economic growth.

“The fact is, though, basic research doesn't always pay off immediately.  It may not pay off for years.  When it does, the rewards are often broadly shared, enjoyed by those who bore it -- costs but also by those who didn't pay a dime for that basic research.

“That's why the private sector generally under-invests in basic science.  That's why the public sector must invest instead. While the risks may be large, so are the rewards for our economy and our society.   . . . it was basic research in the photoelectric effect that would one day lead to solar panels.  It was basic research in physics that would eventually produce the CAT scan.  The calculations of today's GPS satellites, they're based on basic research -- equations Einstein put on paper more than a century ago.  Nobody knew they'd lead to GPS, but they understood that as we advance our knowledge, that is what is going to help advance our societies.

“When we fail to invest in research, we fail to invest in the future.  Yet, since the peak of the space race in the 1960s, our national commitment to research and development has steadily fallen as a share of our national income.  That's why I set a goal of putting a full 3 percent of our Gross Domestic Product, our national income, into research and development, surpassing the commitment we made when President Kennedy challenged this nation to send a man to the moon.

“Towards this goal, the Recovery Act has helped achieve the largest increase in basic research in history.  This month the National Institutes of Health will award more than a billion dollars in research grants through the Recovery Act focused on what we can learn from the mapping of the human genome in order to treat diseases that affect millions of Americans, from cancer to heart disease.  I also want to urge Congress to fully fund the Defense Advanced Research Projects Agency, or DARPA, because since its creation it has been the source of cutting-edge breakthroughs from that early Internet to stealth technology.

“So as we invest in the building blocks of innovation, from the classroom to the laboratory, it's also essential that we have competitive and vibrant markets that promote innovation, as well. Education and research help foster new ideas, but it takes fair and free markets to turn those ideas into industries.”

At this point in his remarks the President discussed tax and other incentives to promote entrepreneurship.  Yesterday, the National Economic Council and the Office of Science and Technology Policy released a 22-page document, “A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs.”This document describes these incentives and other current and prospective policies in a wide range of areas such as education and investment in nanotechnology.  It also reiterates the President’s goal of doubling the budgets of the National Science Foundation, the DOE Office of Science, and the National Institute of Standards and Technology, and “invest three percent of GDP in R&D.”  This strategy will be reviewed in a future FYI, and is available in full here.