America’s Innovation Ecosystem May Get Bipartisan Budget Boost
Funding for R&D and Advanced Manufacturing Institutes are Critical Investments
Many pundits give President Obama’s budget proposal little chance of passing in the Republican-controlled Congress. In fact, the House and Senate budget blueprints have set the stage for a likely veto struggle. Dysfunctional, hyper-partisanship may continue to rule Washington, but at least one very important part of the budget is cause for hope: federal investments in science and technology innovation.
There are encouraging signs that America’s innovation ecosystem will get a bipartisan boost this year.
On the cutting edge
The president’s budget calls for $2.25 billion to fund 36 advanced manufacturing institutes. These would be in addition to nine such centers already funded for this year, each of which is bringing together businesses and universities to develop cutting-edge manufacturing technologies that U.S.-based companies can adopt.
The first of these centers, in Youngstown, Ohio, focuses on the emerging field of 3D printing and in three years has trained more than 7,000 workers in the fundamentals of this game-changing technology.
These are critical investments. They are needed to accelerate and sustain America’s economic growth in research, education, training and infrastructure. They are needed to ignite innovation and strengthen the U.S. advanced manufacturing base to create good-paying jobs.
Republicans in the Senate and House are expected to finish their proposed revisions to the budget bill later this summer. Though they both are focusing on trimming the deficit, we’re confident they also will build on past bipartisanship in fostering innovation and include funding for some version of the advanced manufacturing institutes in the final budget to be agreed upon later in the year.
The Revitalize American Manufacturing and Innovation Act, which passed Congress late last year on a voice vote signifying strong bipartisan support, authorized funding for advanced manufacturing institutes to the tune of $300 million over ten years. So there’s good reason to think Congress and the president will be able to agree on this portion of the budget.
There’s more like that in the president’s plan.
As part of an overall 5.5% increase in federal R&D spending, to $146 billion, Obama calls for $30 million to speed the commercialization of university research through the “Innovation Corps.” This program improves National Science Foundation-funded and other researchers’ access to resources that can help bridge the gap to bring discoveries to market.
Closing the innovation gap
This “Innovation Gap” is a major problem for our country, and a coordinated effort between government, universities and business is needed to close it.
In recent decades, U.S. innovation capabilities have stagnated, while those of other nations have advanced.
Since 2008, the number of foreign-origin patents that the U.S. Patent and Trademark Office has granted annually has surpassed the number of domestic-origin patents. From 1999 to 2009, the US share of global research and development spending dropped, while Asia’s share as a whole rose and surpassed the U.S. share in 2009.
In effect, America’s innovation ecosystem has deteriorated during recent decades into a disorganized approach to technology commercialization.
The innovation gap emerged in the 1970s and 1980s as U.S. corporations retreated from basic research and concentrated on incremental product development. Research universities stepped in, but academic research often remains walled off within disciplines, with little concern for solving societal problems. Too often research does not make the leap from the lab to the real world.
The problem of unorganized innovation in the U.S. is made worse by extremism on both sides of the political aisle.
On the political right, laissez faire beliefs fuel a tradition of opposition to government coordination of any commercial activity, including research and development. On the political left, many oppose what they consider contamination of pure academic research by industry involvement.
Both extremes reflect an oversimplification of the complexity of moving science to societal benefit. Moreover, the extremes impede government actions that promote the government-university-industry collaboration that America needs to retain its lead in innovation.
Fortunately, this is beginning to change as new bipartisan government programs have quietly begun making their mark to organize innovation and bolster the key roles of entrepreneurs and businesses in the economy.
Linking science to the real world
During the past decade, we studied a pioneering federal initiative, the National Science Foundation’s Engineering Research Centers (ERCs). Based in universities, these centers require researchers to link basic science to social and market dilemmas. The ERC program also demands interdisciplinary and industry-academic collaboration and encourages the creation of proofs-of-concept to demonstrate that a lab-based technology has commercial potential.
From 1985 to 2009, about $1 billion in federal funding was invested in the centers. They have returned more than ten times that amount in a wide variety of technology innovations.
Our study of the NSF’s Engineering Research Centers led us to a blueprint for better coordinating the major institutions in the U.S. innovation ecosystem: universities, businesses and government.
Based on coordination among those institutions, our blueprint recommends specific managerial actions that university, business and governmental leaders can take to harvest basic science, create tangible proof-of-concepts (that is, commercial prototypes) and diffuse new products and services into the commercial marketplace to the benefit of society.
The blueprint is unique in its emphasis on how leaders can create the organizational architecture of innovation.
President Obama’s budget and The Revitalize American Manufacturing and Innovation Act can do much to help America get its act together when it comes to technology development and commercialization.
These proposals signal that Democrats and Republicans alike seem to agree we need a more organized approach to innovation. Let’s hope our political leaders will put differences aside and act to renew our prosperity.This column was co-authored by Professor Steven Currall; Ed Frauenheim, director of global research and content at the Great Place to Work Institute; and Emily Hunter, an associate professor of management, and Sara Perry, an assistant professor of management, both at Baylor University. They are co-authors of “Organized Innovation: A Blueprint for Renewing America’s Prosperity,” published by Oxford University Press.