New Threat to American Competiveness Discussed at Senate Hearing

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Publication date: 
12 October 2012

“Success  takes time,” Senate Commerce, Science, and Transportation Committee Chairman  Jay Rockefeller (D-WV) said at the outset of a September 19 hearing entitled  “Five Years of the America COMPETES Act: Progress, Challenges, and Next Steps.”  The two-hour hearing heard from five  witnesses, one of whom raised a troubling new development posing a threat to  America’s future competitiveness.

One  of these witnesses was Norman Augustine, retired chairman and CEO of Lockheed  Martin Corporation, who was instrumental in the “Rising Above the Gathering  Storm” report  released by  the National Academies in November 2005.    The report received immediate acclaim and attention and has remained a  much-cited prescription for what the United States should do to remain technologically  competitive.  The report was the  foundation on which many of the provisions of the original America COMPETES Act  were based and which was signed into law by President Bush in August 2007.    President Obama signed a new version of the  COMPETES legislation into law in January 2011.   Among the act’s 68-pages of provisions were authorization levels for the  National Institute of Standards and Technology, the National Science  Foundation, and Department of Energy basic research programs for fiscal years  2011, 2012, and 2013.

After  commenting on the progress that has, and has not, been made since the Gathering  Storm report was released, Augustine alerted the committee to a new concern:

“an  altogether new problem has arisen since the Gathering Storm report was  prepared. This new challenge deals with an issue that, to the best of my  knowledge, was unforeseen by any of our committee’s members -- most assuredly  not by myself.

“We  had noted in our report that our nation’s great research universities were  among America’s most significant assets in the crusade to create jobs -- along  with our freedom and our free enterprise system. It is noteworthy that it is  our universities that produce the talent we need to compete as well as much of  the knowledge. Even today, according to The  Times of London, the top five universities in the entire world and 18 of  the top 25 are located in the United States.

“But  these same institutions are now endangered. The share of their operating  expenses funded by state governments is rapidly declining and now represent the  lowest fraction of such resources in a quarter of a century. In three decades  state financial support of higher education as a fraction of personal income  has, on average, declined by 71 percent. One result is, for example, that at  the highly regarded public universities in California, tuition and fees have  grown by 240 percent in the past dozen years. Throughout the nation tuition and  fees at public universities have increased by an average of 85 percent over the  past decade, net of financial aid.

“Faculty  have on average seen their salaries decline by 1.2 percent during the past year  -- not including the effect of inflation; layoffs are not uncommon among junior  faculty; and teaching loads are increasing. This reduction in state support is,  in effect, privatizing our public universities - with much of the cost being  shifted to the students - thereby fundamentally threatening the continuation of  the American Dream. On the other hand, it may be appropriate       for  our universities to reconsider their own priorities and even their raison  d’être. According to USA Today, major college football coaches receive an  average compensation of $1.47 million per year, ‘a jump of nearly 55 percent in  six seasons.’”

Augustine  described how foreign universities have been successful in attracting talented  U.S. professors and how technology has changed the way in which students learn.  He concluded:

“It  seems foregone that America’s universities are going to have to remake  themselves, and how well they are able to do so will have either a profound  positive or negative impact on America’s overall competitiveness. As this  occurs, it will be of the utmost importance for government at all levels to  recognize this challenge and, among other things, provide adequate funding of  basic research; appropriately fund operating budgets; pay the true cost of  research grants; increase need-based financial aid; and enable private  universities to continue to build their endowments.”

The  shortfall in the level of federal S&T funding that the Gathering Storm  report called for, and which the  COMPETES legislation authorized was, not  surprisingly, a topic of much discussion during this hearing.  Rockefeller referred to this in his opening  comments:

“The  2007 act authorized the doubling of funding for the National Science  Foundation, major research accounts at the National Institute of Standards and  Technology, and the Department of Energy’s Office of Science within seven  years.  Unfortunately, Congress did not  follow its own direction with appropriations, slowing the doubling period to 15  years.  The 2010 reauthorization  attempted to find some middle ground with an 11-year doubling path, but, again,  appropriations and the President’s request levels have not followed, pushing  the doubling out to 18-years.  Still,  these science agencies have fared better than many and are better off on  funding than they would have been without this effort.  I will continue to push for full funding of  these vital research and education activities.”

Jeffrey  Furman of Boston University and the National Bureau of Economic Research came  to a similar conclusion:

“The  achievements of the legislation can be reasonably viewed as substantial from  the perspective of analyzing what may have happened in the absence of the  legislation. Key achievements that were enabled by the Acts include important  expansions to the power of Federal agencies to implement innovation prize  programs, the creation of Advanced Research Projects Agency – Energy (ARPA-E),  funding for the National Institutes of Standards and Technology (NIST),  substantial funding for programs at the National Science Foundation (NSF), the  harder-to-measure-enabling of agencies to implement programs consistent with  the spirit of the COMPETES Acts. . .

Of  note,

“perhaps  most importantly, the maintenance of a tenuous but consistent bipartisan  consensus to preserve the funding of physical science and engineering programs  even in the face of budgetary difficulties of historical proportions. It is  reasonable to conclude that, absent the authorization of funding for science  and engineering programs called for by the COMPETES Acts, the level of  commitment to these areas would have waned over the past half-decade that U.S.  leadership in science and innovation would have suffered as a consequence.”

Regarding  the budget doubling path that was recommended in the Gathering Storm Report and  which was a central feature of the legislation, Furman concluded:

“the  current rate of funding increase for physical sciences and engineering is not  appreciably greater than it was prior to the COMPETES legislation.

“Whether  one views this as a success or not depends substantially on the perspective  that one takes: Federal investment in physical science and engineering has not  kept pace with the specifications of either COMPETES Act; however, in contrast  to many areas of the federal budget, funding for these areas has not declined.  Thus, investment in these areas . . . relative to other budget priorities is  greater than it was prior to the COMPETES legislation and is likely  substantially greater than it would have been . . . .”

The  Gathering Storm report and the COMPETES legislation gave considerable attention  to K-12 STEM education. Carl Wieman of the University of Colorado and the  recent Associate Director for Science at the Office of Science and Technology  Policy, and John Winn of the National Math and Science Initiative testified  about the challenges and successes to improving STEM education.   In a statement provided to the committee,  Wieman wrote “there continues to be little discernible change in either student  achievement or student interest in STEM.”   Peter Lee, Corporate Vice  President at Microsoft Research described the importance of highly qualified  employees to Microsoft’s success.  There  are, he said, far fewer graduating students with degrees in computer science  than the number of job openings for computing professionals.  In August 2012, Microsoft had 3,400 research  and engineering openings in its U.S. facilities, an increase of 34 percent from  a year ago.