America's global economic stature at risk

by CHARLES W. STEGER '69

• China has replaced the Unites States as the world's No. 1 high-technology exporter.
• U.S. consumers spend more on potato chips than the government spends on energy research and development.
• In the United States, twice as much money is spent on litigation as on research—far more than is spent by any nation on the planet.
• Among students in industrialized nations, U.S. students rank 20th in high school completion and 16th in college completion.
• Chinese researchers have moved from 14th to 2nd place in the number of published research articles (behind U.S. researchers).

In 2005, a distinguished panel of national leaders warned in a report prepared for the National Academies, "Rising Above the Gathering Storm," that the United States risked losing its leadership position as the world's strongest economy. In the wake of the fanfare generated by the report, Congress quickly passed legislation to address the report's recommendations. Unfortunately, little funding was provided, and not much progress was made. Now, five years later, the National Academies have issued a revised report, "Rising Above the Gathering Storm, Revisited," which concludes that our nation is facing a "Category 5 storm."

The new report reiterates its earlier recommendations—which bear repeating—but warns that the hill that must be climbed is immensely larger. Indeed, the Gathering Storm committee concludes 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 academies and the Gathering Storm's business and policy leaders have determined that the United States must improve its national economic competitiveness.

Their recommendations, then as now, call for the following actions:

I. Significantly improving K-12 science and mathematics education.
II. Doubling real federal investment in basic research in mathematics, physical sciences, and engineering.
III. Encouraging more U.S. citizens to pursue careers in mathematics, science, and engineering.
IV. Rebuilding the competitive ecosystem by introducing reforms in the nation's tax, patent, immigration, and litigation policies.

For Virginia Tech, items II and III touch especially close to home. Moreover, the updated report finds that the two highest-priority actions today are to a) ensure that teachers in every classroom are qualified to teach the subject they teach, and b) double the federal investment in research.

For years, we have known that our nation cannot compete based on low-cost labor or easy access to capital. As Professor Jeremy Siegel of the University of Pennsylvania's Wharton School asserts, "Economic growth is based on advances in productivity, and productivity is based on discovery and innovation." In turn, discovery and innovation are the very products of American research universities.

As a result, we believe that governments have important roles: the federal government in sponsoring basic research, and state governments in bolstering education in science, technology, engineering, and mathematics (STEM) disciplines. In my last column, we addressed Gov. Bob McDonnell's efforts to increase degree production for STEM disciplines, now dubbed "Top Jobs 21." In addition, we must do a better job of producing graduates of any sort. According to the Gathering Storm report, "Twenty years ago the U.S. was first among industrialized nations in [its] share of population with a high school diploma and first with a college degree. Today, we are ninth in high school diplomas and seventh in college degrees worldwide."

The federal government must be the primary and leading sponsor of the nation's basic research. With immense pressure from stakeholders and the markets, firms are unable to invest in research and development, which is inherently risky and generally offers only long-term returns. We have seen many American jobs shipped overseas. Our national competitiveness remains dependent on the innovation and creation of quality jobs—jobs whose names don't even exist today.

Some will say, "We can't spend now. Our nation is broke." But I say we cannot avoid these investments in America's future. Our nation has immense wealth. We should be willing to make the assessments and investments when they clearly will improve the nation's economic competitiveness.

	digital edition
	Spring 2011
	PRESIDENT'S MESSAGE
	www.president.vt.edu