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The Gathering Storm, Revisited

“It is amazing the insights one can get sitting in an airport waiting for a flight. Last week I found myself at Heathrow airport in London sitting with two businessmen. The stories they told were remarkable.


One businessman was on his way home from China. He had just spent a week working out the details to build a major manufacturing facility at a booming Chinese industrial park. The development authority promised expedited zoning procedures to facilitate rapid construction. Another government entity offered to line up job fairs to recruit workers. The mayor said they will provide free transportation services from downtown to the factory for employees for two years. The local university promised an intern program for engineering students. And on it went.


The other businessman relayed the challenges he faced with his factory in America. He wanted to double the size of the factory, but was informed he needed a new environmental impact study before he could approach zoning authorities. He sought a meeting with federal officials who were managing “stimulus” funds that he hoped would help finance the expansion. But he was informed he could not meet with the assistant secretary because it would possibly suggest a ‘conflict of interest’.”a


John Hamre,

Former Deputy Secretary of Defense

a

Communication from John Hamre, July 27, 2010.



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1.0 The Gathering Storm, Revisited “It is amazing the insights one can get sitting in an airport waiting for a flight. Last week I found myself at Heathrow airport in London sitting with two businessmen. The stories they told were remarkable. One businessman was on his way home from China. He had just spent a week working out the details to build a major manufacturing facility at a booming Chinese industrial park. The development authority promised expedited zoning procedures to facilitate rapid construction. Another government entity offered to line up job fairs to recruit workers. The mayor said they will provide free transportation services from downtown to the factory for employees for two years. The local university promised an intern program for engineering students. And on it went. The other businessman relayed the challenges he faced with his factory in America. He wanted to double the size of the factory, but was informed he needed a new environmental impact study before he could approach zoning authorities. He sought a meeting with fed- eral officials who were managing “stimulus” funds that he hoped would help finance the expansion. But he was informed he could not meet with the assistant secretary because it would possibly suggest a ‘conflict of interest’.”a John Hamre, Former Deputy Secretary of Defense aCommunication from John Hamre, July 27, 2010. 1

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THe GaTHerING STOrM reVISITeD THE ASSIgNMENT In 2005 the National Academies was requested, on a bipartisan basis, to conduct a review of America’s competitiveness in the rapidly evolving global marketplace and, as appropriate, to offer specific actions that could be taken by federal policymakers to ensure the nation’s position as a prosperous member of the global economy of the twenty-first century. Ten weeks were allotted for the conduct of the study, after which a 500-page vol- ume was produced bearing the title, “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.” The initial request for the study was made jointly by Senator Lamar Alexander and Senator Jeff Bingaman, both of the Senate Committee on Energy and Natural Resources, and was endorsed by Representative Sherwood Boehlert and Representative Bart Gordon of the House Committee on Science and Technology. The study’s conduct was supported by numerous members of the House of Representatives and Senate from both parties as well as members of the Administration, including the President. In responding to the above request, the National Academies convened a twenty-per- son committee composed of individuals having highly diverse professional backgrounds. These included chief executive officers of major corporations, presidents of public and private universities, scientists and engineers (including three Nobel Laureates), former presidential appointees, and the superintendent of a state school system. The committee benefited greatly from the inputs of well over one hundred experts in specific fields and the support of a remarkable staff directed by Dr. Deborah Stine. Before being approved the report was subjected to an anonymous critique by 37 members of the National Academies. REvISITINg THE gATHERINg STORM The present document was reviewed and endorsed by members of the same commit- tee that had prepared the initial Gathering Storm report, with the exceptions of Dr. Robert Gates and Dr. Steven Chu, who are now serving as Secretary of Defense and Secretary of Energy, respectively. Further, the members of the committee observe with deep regret the death in 2008 of our much respected colleague and friend, Nobel Laureate Joshua Lederberg. The original Gathering Storm report concluded that the fundamental measure of com- petitiveness is quality jobs. It is jobs that to a considerable degree define the quality of life 1

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rISING aBOVe THe GaTHerING STOrM, reVISITeD of a nation’s individual citizens. Further, it is the tax revenues derived from the earnings of those individual citizens and the firms that employ them that make possible the benefits widely expected from government—including, but by no means limited to, healthcare, national security, physical infrastructure, education and unemployment assistance. Substantial evidence continues to indicate that over the long term the great majority of newly created jobs are the indirect or direct result of advancements in science and technology, thus making these and related disciplines assume what might be described as disproportionate importance. A variety of economic studies over the years reveals that half or more of the growth in the nation’s Gross Domestic Product (GDP) in recent decades has been attributable to progress in technological innovation.1 Advancements in these fields have led not only to the creation of large numbers of quality jobs, they have also made it possible for hundreds of millions of people around the globe to compete with Americans for these same jobs. In particular, the advent of modern aircraft and modern information systems has made it feasible to move objects, including humans, around the world at nearly the speed of sound—and ideas at the speed of light, the latter with little regard for geopolitical borders. In describing the consequences of this development, writer Tom Friedman notes that “Globalization has accidentally made Beijing, Bangalore and Bethesda next-door neighbors.” Whereas in the past, citizens of any one nation generally had to compete for jobs with their neighbors living in the same community, in the future they will increasingly be required to compete with individuals who live half-way around the world. Software written in India is now shipped to the United States in milliseconds to be integrated into systems that same day. Flowers grown in Holland are flown overnight for sale in New York the next morning. Magnetic Resonance Images (MRI’s) of patients in United States hospitals are read moments later by radiologists in Australia. Pilots stationed in the United States guide unmanned aircraft to attack targets in Afghanistan. United States accounting firms prepare United States citizens income taxes using accountants located in Costa Rica and Switzerland. Water collected in France is sold in grocery stores in California. The receptionist in an office in Washington, DC lives in Pakistan. A physician in New York removes the gall bladder of a patient in France with the help of a remotely controlled robot. And so it goes in a world where, as described by Frances Cairncross writing in The Economist, “Distance is Dead.” 1 M. J. Boskin and L. J. Lau. Capital, Technology, and Economic Growth. In N. Rosenberg, R. Landau, and D. C. Mowery, eds. Technology and the Wealth of Nations. Stanford, CA: Stanford University Press, 1992. 1

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THe GaTHerING STOrM reVISITeD If Americans are to compete for quality jobs in such a world—one where three billion new would-be capitalists entered the job market upon the restructuring of many of the world’s political systems late in the last century—they will need help from their govern- ment . . . at all levels . . . as well as from themselves. The latter includes preparing for the growing educational demands of quality jobs and continuing to maintain their skills in a circumstance where the half-life of new technical knowledge may be measured in terms of a few years or, in some cases, even a few months. The Gathering Storm committee contends that it is strongly in America’s interest for all nations to prosper. Aside from its humanistic merit this outcome should produce a safer world for everyone, one with more products for United States consumers and more consumers for United States products. But the committee also expressed its commitment to helping America to be among those nations enjoying the fruits of what it hopes will be truly global prosperity. In the latter regard, the committee concluded that the United States appears to be on a course that will lead to a declining, not growing, standard of living for our children and grandchildren. The likelihood of a more promising outcome can be enhanced by implementing the four overarching recommendations (via twenty specific actions) offered in the original Gathering Storm report . . . and to sustain the effort needed to reach fruition. It is note- worthy that America’s current predicament was not generated in a decade, nor will it be resolved in a decade. Staying-power is essential. Recommendations The Gathering Storm committee offered four overarching recommendations. These are highly interdependent. For example, to produce more researchers but not increase research spending would be highly counterproductive. In order of assigned importance, the four recommendations can be summarized as follows: I. Move the United States K-12 education system in science and mathematics to a leading position by global standards. II. Double the real federal investment in basic research in mathematics, the physi- cal sciences, and engineering over the next seven years (while, at a minimum, maintaining the recently doubled real spending levels in the biosciences). 1

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rISING aBOVe THe GaTHerING STOrM, reVISITeD III. Encourage more United States citizens to pursue careers in mathematics, science, and engineering. IV. Rebuild the competitive ecosystem by introducing reforms in the nation’s tax, patent, immigration and litigation policies. Implementing Actions In support of the above general recommendations, the National Academies offered 20 specific implementing actions2: ❖ “10,000 Teachers Educating 10 Million Minds” (focuses on K-12 education, the committee’s unanimous highest priority). • Provide 10,000 new mathematics and science teachers each year by funding competitively awarded -year scholarships for U.S. citizens at U.S. institu- tions that offer special programs leading to core degrees in mathematics, sci- ence, or engineering accompanied by a teaching certificate. On graduation, participants would be required to teach in a public school for five years and, one hopes, beyond that time by choice. • Strengthen the skills of 250,000 current teachers by such actions as subsidiz- ing the achievement of master’s degrees (in science, mathematics, or engi- neering) and participation in workshops, and create a world-class mathemat- ics and science curriculum available for voluntary adoption by local school districts throughout the nation. • Increase the number of teachers qualified to teach Advanced Placement courses and the number of students enrolled in those courses by offering financial bonuses both to high-performing teachers and to students who excel. 2 See National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, Washington, DC: National Academies Press, 2007, for a discussion of the recommendations. 20

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THe GaTHerING STOrM reVISITeD ❖ “Sowing the Seeds” (focuses on funding for research). • Increase federal basic-research funding in the physical sciences, mathemat- ics, and engineering by a real ten percent each year over the next seven years. • Provide research grants each year to 200 early-career researchers, payable over five years. • Provide an incremental $500 million per year for at least five years to mod- ernize the nation’s aging research facilities, with the expenditures overseen by a National Coordination Office for Research Infrastructure to be in the White House Office of Science and Technology Policy. • Allocate eight percent of government research funds to pursuits specifically chosen at the discretion of local researchers and their managers, with empha- sis on projects potentially offering a high payoff even though accompanied by substantial risk. • Establish an ARPA-E in the Department of Energy patterned after the highly successful DARPA in the Department of Defense but focused on major break- throughs in energy security. • Institute a Presidential Innovation Award to stimulate advances serving the national interest. ❖ “best and brightest” (focuses on higher education). • Provide 25,000 competitively awarded undergraduate scholarships each year of up to $20,000 per year for  years in the physical and life sciences, math- ematics, and engineering for U.S. citizens attending U.S. institutions. • Provide 5,000 competitively awarded portable graduate fellowships each year of up to $20,000 per year in fields of national need. • grant tax credits to employers that support continuing education for practic- ing scientists and engineers. • Continue to improve visa processing for international students. 21

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rISING aBOVe THe GaTHerING STOrM, reVISITeD • Offer a one-year visa extension to PhD recipients in science, technology, engineering, mathematics or other fields of national need; grant automatic work permits to those meeting security requirements and obtaining employ- ment; provide a preferential system for acquiring citizenship for those who complete their degrees; and repeal the mandatory “go-away” provision now in U.S. immigration law. • Offer preferential visas to applicants who have special skills in mathematics, science, engineering, and selected languages. • Modify the “deemed export” law whereby faculty currently may be required to obtain export licenses to teach a technology class that includes a foreign student even if the material covered is unclassified. ❖ “Incentives for Innovation” (focuses on the innovation environment). • Adopt a “first-to-file” patent system and increase employment of the U.S. Patent and Trademark Office to permit accelerated handling of patent matters. • Expand and make permanent the R&D tax credit that has been extended eleven times since it was first enacted in 11 but never made permanent. • Restructure the corporate income-tax laws to help make firms that create jobs in the United States more competitive. • Increase broadband Internet access throughout the nation. Additional Observation The Gathering Storm report was prepared shortly after the nation’s research budget in the health sciences had, over a five-year period, doubled. The Gathering Storm review thus focused on the physical sciences, mathematics and engineering, fields for which real funding had been stagnant for decades. However, shortly after the “doubling” in the health sciences was achieved, the funding for that activity was permitted to erode once again—the exception being a major one-time, two-year funding infusion as part of the American Recovery and Reinvestment Act. 22

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THe GaTHerING STOrM reVISITeD Many of the findings of the Academies’ study regarding the physical sciences, math- ematics and engineering now pertain to the biological sciences as well. This is a particu- larly significant development given the evolving interdependency among disciplines— wherein, for example, automotive fuels and plastics are now being made using biological processes, and biocomputing (the use of biological molecules to perform computational calculations) is in the early research stage. Also, there is a critical need for physicists and mathematicians to help mine the vast seas of data coming from genome studies being done to understand the development and treatment of cancers and other diseases. During the past century life expectancy in America has increased by over 50 percent due in sub- stantial part to advances in the health sciences—indicating the impact of various types of innovation.3 3 NAS-NAE-IOM, 2007, p. 51. 2