RISING ABOVE THE GATHERING STORM, REVISITED

Rapidly Approaching Category 5

By Members of the 2005 “Rising Above the Gathering Storm” Committee

Prepared for the Presidents of the
National Academy of Sciences
National Academy of Engineering
Institute of Medicine

NATIONAL ACADEMY OF SCIENCES,
NATIONAL ACADEMY OF ENGINEERING, AND
INSTITUTE OF MEDICINE
OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

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RISING ABOVE THE GATHERING STORM, REVISITED Rapidly Approaching Category 5 By Members of the 2005 “Rising Above the Gathering Storm” Committee Prepared for the Presidents of the National Academy of Sciences National Academy of Engineering Institute of Medicine THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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THE NATIONAL ACADEMIES PRESS • 500 Fifth Street, N.W. • Washington, DC 20001 Support for this project was provided by the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. Any opinions, findings, conclu- sions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number-13: 978-0-309-16097-1 (Book) International Standard Book Number-10: 0-309-16097-9 (Book) International Standard Book Number-13: 978-0-309-16098-8 (PDF) International Standard Book Number-10: 0-309-16098-7 (PDF) Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu Copyright 2010 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meet- ing national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examina- tion of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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2005 “RISINg AbOvE THE gATHERINg STORM” COMMITTEE MEMbERS PARTICIPATINg IN “THE gATHERINg STORM, REvISITED”1 NORMAN R. AUgUSTINE [NAE/NAS] (Chair) is the retired chairman and CEO of the Lockheed Martin Corporation and a former Undersecretary of the Army. He is a recipient of the National Medal of Technology. CRAIg bARRETT [NAE] is retired chairman and CEO of Intel Corporation. gAIL CASSELL [IOM] is vice president for scientific affairs and a Distinguished Lilly Research Scholar for Infectious Diseases at Eli Lilly and Company. She is the former president of the American Society for Microbiology and former member of the Food and Drug Administration Science Board and Advisory Committees to the Director of the National Institutes of Health and the Center for Disease Control. NANCY gRASMICK is the Maryland state superintendent of schools. CHARLES HOLLIDAY JR. [NAE] is the retired chairman of the Board and CEO of DuPont. SHIRLEY ANN JACKSON [NAE] is president of Rensselaer Polytechnic Institute. She is a past president of the American Association for the Advancement of Science and was chairman of the U.S. Nuclear Regulatory Commission. ANITA K. JONES [NAE] is University Professor Emerita at the University of Virginia. She served as director of defense research and engineering at the U.S. Department of Defense and was vice-chair of the National Science Board. RICHARD LEvIN is president of Yale University and the Frederick William Beinecke Professor of Economics. C. D. (DAN) MOTE JR. [NAE] is president emeritus of the University of Maryland and the Glenn L. Martin Institute Professor of Engineering. 1Additional members of the 2005 Committee: STEvEN CHU [NAS], a Nobel Laureate in physics, is currently serving as U.S. Secretary of Energy. RObERT gATES, former president of Texas A&M University, is currently serving as U.S. Secretary of Defense. JOSHUA LEDERbERg [NAS], recipient of the Nobel Prize in physiology/medicine, passed away on February 2, 2008. iv

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CHERRY MURRAY [NAS/NAE] is dean of the School of Engineering and Applied Science at Harvard University. She is immediate past president of the American Physical Society and a past deputy director for science and technology at Lawrence Livermore National Laboratory. She was formerly a senior vice president at Bell Labs, Lucent Technologies. PETER O’DONNELL JR. is president of the O’Donnell Foundation of Dallas, a private foundation that develops and funds model programs designed to strengthen engineering and science education and research. LEE R. RAYMOND [NAE] is the retired chairman of the Board and CEO of Exxon Mobil Corporation. RObERT C. RICHARDSON [NAS] is the F. R. Newman Professor of Physics and the vice provost for research at Cornell University. He was a co-winner of the Nobel Prize in physics in 1996. P. ROY vAgELOS [NAS/IOM] is the retired chairman and CEO of Merck & Co., Inc. CHARLES M. vEST [NAE] is president of the National Academy of Engineering and is president emeritus of MIT and a professor of mechanical engineering. He is a recipient of the National Medal of Technology. gEORgE M. WHITESIDES [NAS/NAE] is the Woodford L. & Ann A. Flowers University Professor at Harvard University. He has served as an adviser for the National Science Foundation and the Defense Advanced Research Projects Agency. RICHARD N. ZARE [NAS] is the Marguerite Blake Wilbur Professor of Natural Science at Stanford University. He was chair of the National Science Board from 1996 to 1998. v

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“Gentlemen, we have run out of money. It is time to start thinking.” Sir Ernest Rutherford, Nobel Laureate (Chemistry)

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Foreword We are pleased to present this report authored by members of the committee that pro- duced the 2005 report, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future. We requested this new report to get the perspec- tive of the original committee on progress and change since the 2005 report. bACKgROUND Rising Above the Gathering Storm was prepared in response to a request by a bipar- tisan group of Senators and Members of Congress who asked the National Academies to respond to the following questions: What are the top 0 actions, in priority order, that federal policymakers could take to enhance the science and technology enterprise so that the United States can successfully compete, prosper, and be secure in the global community of the 2st century? What strategy, with several concrete steps, could be used to imple- ment each of those actions?2 These questions were posed in the context of rapid and deep changes in the global economy, investment patterns, advancing science and technology, and the global redistri- bution of skilled workforces, education, and innovation-driven industries. Moreover, there was widespread unease about long-term trends in U.S. investments in research, develop- 1 NAS/NAE/IOM, Rising above the Gathering Storm: Energizing and Employing America for a Brighter Eco- nomic Future, National Academies Press, 2007. The initial report release was in 2005, with the final, edited book issued in 2007. 2 Letters from Senators Jeff Bingaman and Lamar Alexander, dated May 27, 2005, and Congressmen Sherwood Boehlert and Bart Gordon, to NAS President Bruce Alberts. ix

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preface ment and higher education, and special and deepening concern about the competitive- ness of U.S. businesses and the state of the primary and secondary education attained by vast numbers of our children. Rising Above the Gathering Storm was drafted by a group of 20 distinguished Americans including then current or former corporate CEOs; university presidents; scientists, including three Nobel Laureates; philanthropists, former govern- ment officials; and education leaders.3 Norman R. Augustine, retired CEO of Lockheed Martin and former Under Secretary of the Army, chaired the committee. A vast relevant literature was reviewed, updated, and summarized; a diverse group of 66 stakeholders was convened to help frame and contextualize the issues; and the committee formed consensus on its recommendations. Peers drawn from many relevant backgrounds and experiences reviewed the report prior to its release. The original report informed the debate in Congress and within two presidential administrations, and, together with other reviews of America’s competitive position and innovation environment, led to the passage with strong bipartisan support of the America COMPETES Act of 20074 that has formed the basis for debating and structuring federal policy and budgets, and prompted a great deal of activity at local, state, and regional levels as well. THE CURRENT REvIEW In the five years that have passed since Rising Above the Gathering Storm was issued, much has changed in our nation and world. Despite the many positive responses to the initial report, including congressional hearings and legislative proposals, America’s competitive position in the world now faces even greater challenges, exacerbated by the economic turmoil of the last few years and by the rapid and persistent worldwide advance of education, knowledge, innovation, investment, and industrial infrastructure. Indeed the governments of many other countries in Europe and Asia have themselves acknowl- edged and aggressively pursued many of the key recommendations of Rising Above the Gathering Storm, often more vigorously than has the U.S. We also sense that in the face of so many other daunting near-term challenges, U.S. government and industry are letting the crucial strategic issues of U.S. competitiveness slip below the surface. 3 The Committee on Prospering in the Global Economy of the 21st Century: An Agenda for American Science and Technology was authorized under the auspices of the NAS/NAE/IOM Committee on Science, Engineering, and Public Policy (COSEPUP). Its overall charge was to address cross-cutting issues in science and technology policy that affect the health of the national research enterprise. 4 America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act, Public Law 110-69, August 9, 2007. x

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preface For these reasons, we believed that the nation would be well served by an update of the global context and events since the original report. We therefore asked Mr. Augustine, assisted by National Academies staff, to prepare a first draft of this update document and then work with the available members of the original committee to refine it. Each of the available members of the committee generously agreed to do so as a matter of national service. The resulting report was then anonymously peer reviewed by ten individuals with a wide range relevant expertise and experience. The results of this process are reported herein and have the unanimous support of the available members of the 2005 committee.5 As presidents of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, we are pleased to convey this report to interested readers. We believe that it will serve to inform the public and policy makers, rekindle and advance an urgent national dialogue, and stimulate further strong and sustained bipartisan effort to ensure the future competitiveness, innovation capacity, economic vitality, and job cre- ation in the opening decades of this century. Ralph J. Cicerone Charles M. Vest Harvey V. Fineberg President, National President, National President, Institute Academy of Sciences Academy of Engineering of Medicine 5 One member, Joshua Lederberg, is now deceased. Steven Chu is currently serving as U.S. Secretary of Energy and Robert Gates is currently serving as U.S. Secretary of Defense and therefore they could not participate. xi

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PREFACE During the summer of 2005, the National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine undertook a study of America’s evolving com- petitiveness in the global economy. The study resulted in a 500-page volume that became known as the “Gathering Storm” report. It focused upon the ability of Americans to com- pete for employment in a job market that increasingly knows no geographic boundaries. The Executive Summary of the original report began, “The United States takes deserved pride in the vitality of its economy, which forms the foundation of our high quality of life, our national security, and our hope that our children and grandchildren will inherit ever- greater opportunities.” But the report concluded that, “Without a renewed effort to bolster the foundations of our competitiveness, we can expect to lose our privileged position.” Contained in the initial report were twenty specific actions that were intended to help assure that America could in fact remain competitive. Five years have passed since the initial report was prepared, a period in which a great deal has changed…and a great deal has not changed. The recommendations included several actions that relate specifically to the physical sciences and engineering. Reflecting evolving federal budget priorities, the present report also briefly considers the biological sciences, which after a period of growth have begun to see their funding erode. This docu- ment, unanimously approved by participating members of the original Gathering Storm committee, revisits and updates the earlier findings. xiii

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CONTENTS Executive Summary 1 1.0 The Gathering Storm, Revisited 16 2.0 Efforts to Avert the Storm 24 3.0 Changing Circumstances 33 4.0 The Ingredients of Innovation 43 4.1 Knowledge Capital, 44 4.2 Human Capital, 47 4.3 Environment, 54 5.0 A Category 5 Storm 63 Appendixes A Some Perspectives 69 B Report Reviewers 81 C Project Staff 82 D Bibliography 83 xv

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