Norman Augustine
The Storm Continues to Gather
June / July 2010
Volume 8 Number 3
Five years ago, responding to a bipartisan Congressional request, the National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine undertook a study of America’s competitiveness that has become known as the “Gathering Storm” study after the title of its final report. The report observed that no longer were America’s job losses to other countries confined to assembly workers but were expanding to include back-office workers and eventually engineers and researchers along with accountants, architects, radiologists and many others.
It was also noted that a number of prior economic assessments had indicated that between 50 and 85 percent of the growth of the nation’s GDP during the past 50 years was attributable to advancements in science and engineering. The Academies’ study concluded that given America’s structural disadvantages, including a high wage rate, inferior K-12 schools, burdensome tax policy and costly litigation practices, the nation’s principal opportunity to compete for jobs in the new high-tech world would be through innovation. Further, it was noted that many of the major problems facing the world today would find their solutions substantially through efforts in science and technology: these include preserving the natural environment, delivering healthcare, providing energy, protecting the nation against terrorist attack, insuring national security, and maintaining a high standard of living through economic progress. The committee placed highest priority on doubling the federal government’s annual investment in basic research performed primarily by the nation’s research universities and making major changes to the K-12 education system—in part by assuring that teachers of mathematics and science have degrees in those core subject areas.
Through a bipartisan effort on Capitol Hill and at the White House encouraged by organizations such as the National Academies, the Council on Competitiveness, the Business Roundtable, the Chamber of Commerce, the National Association of Manufacturers and others, the America Competes Act was authorized by overwhelming votes in both the House and the Senate. Unfortunately, through what might be described as a systems failure, funding was not at that time included in the appropriations act to implement the actions that had been authorized.
Ironically, in October 2007 when the economy began to collapse and the banks froze up following the sub-prime mortgage debacle, money suddenly became available to carry out many of the Gathering Storm recommendations. Most of these funds were in the stimulus package and significant progress began to be made on key competitiveness issues, such as ensuring the funding of basic research, funding ARPA-E in the Energy Department, strengthening our public schools and providing tax relief for businesses investing in R&D. But today, the nation stands on the precipice of an expiring stimulus package and an America Competes Authorization Act facing its five-year sunset provision.
Further, new developments have had an impact on America’s ability to compete for jobs—some of which have been positive and most of which have been negative. On the positive side, the above investments are beginning to produce results, but this has been eclipsed by three major adverse trends, two of which were entirely unforeseen at the time the Gathering Storm report was written only five years ago.
The first of these new trends has to do with the severe decline of the economy the nation has just experienced. One of the consequences of that decline is that the nation will have far less latitude (read: funds) to solve its problems, including its competitiveness problem. That is, further funds for research, fixing the public schools, etc., will be more difficult to find.
Second, five years ago the Academies’ report noted that one of America’s greatest advantages is the undisputed leadership of its higher education system, particularly its research universities. Probably no one could have contemplated what has since happened to severely weaken many of those institutions. The reversal of the economy produced a decline in revenues, which in turn necessitated major cutbacks in state support for universities, often resulting in severe corrective actions being enforced. In the case of the nation’s private institutions, the losses in their endowments had a similar effect.
Third, although all nations were negatively impacted by the economic downturn, some have suffered less than others. China, for example, continued to grow its real GDP and to devote a non-trivial part of the increase to enhancing its competitiveness, particularly in the science and technology arena with a focus on education. Leaders of these countries are now targeting the “all-star” researchers in America and encouraging them to move abroad where a great deal of money is being made available for new laboratories and basic research. This latter effort is facilitated by the fact that, for example, two-thirds of the engineers receiving Ph.Ds from American universities are non-U.S. citizens, as are over half of U.S. engineering faculties. Without these foreign-born individuals, the U.S. science and technology system today would barely function. The author has a friend who is in charge of research and development in another country who, engaged in the effort to attract researchers, refers to himself as a “serial kidnapper.”
Given these circumstances, what is America to do if it hopes for its citizens to be able to compete for jobs and at least maintain the standard of living Americans have come to accept? The answer still appears to be through innovation—a pursuit that will be greatly enhanced by sustaining the 20 actions proposed in the Gathering Storm report. To do this it will be necessary to reauthorize the America Competes Act and to institutionalize funding in the appropriations process to assure that actions proposed can actually be implemented. As estimated in the Academies’ report, that will require in today’s dollars about $25 billion per year. Realizing the benefits of research and improving our K-12 education is a long term challenge—it will be necessary for such efforts to be sustained for decades.
The recommendations of the Gathering Storm report have generally enjoyed strong bipartisan support—in a time when Washington is being criticized from coast to coast for its inability to act upon issues that are seriously threatening the nation. Here is an opportunity for legislators and members of the Administration to work together on behalf of all Americans, particularly our nation’s young people. Should we fail to do this, it is unlikely that anyone will ever confuse today’s adults with being part of “America’s greatest generation.”
Norman Augustine, retired chairman and chief executive officer of Lockheed Martin Corporation, was chairman of the Rising Above the Gathering Storm Committee.
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