Alan I. Leshner: Science Budgets Fuel Economic Growth in Europe, U.S.

Governments must continue robust funding for basic research if they are to reap the economic benefits of science and technology innovation, AAAS CEO Alan I. Leshner writes in a 27 September op-ed in the German newspaper Die Zeit.

In recognition of this reality, European Union nations from Germany to Denmark are “increasing their science investments even as they control their budgets,” said Leshner, who is also the executive publisher of the journal Science.

Leshner noted that the European Union has recommended that its member states invest 3% of their gross domestic product on research and development by 2020. Government investment in basic research is essential, he said, because industry funding in the European Union and the United States mostly goes to support development.

He warned, however, that these investments could be affected by budget cuts in the United States, particularly a “sequestration” measure that would reduce non-defense discretionary spending by approximately 8% across most federal programs starting in January 2013.

“This would deal U.S. science and technology a very hard blow,” Leshner said, “that would inevitably be felt by American industry and the broader global scientific community as innovations, patents, and publications begin to dwindle.”

The op-ed is part of a larger special supplement by Die Zeit in advance of the annual Falling Walls conference. Leshner is a featured speaker at the 9 November meeting in Berlin, which presents global research on the future of science and society.

Science is the Fuel for Industry and Economic Growth

By Alan I. Leshner, Die Zeit, 27 September 2012

Science and technology are closely related—as either cause or cure—to virtually every issue of modern life. Of particular importance is the role that science and technology play in economic growth, as they are the seed corn of innovation. This is why the European Union has recommended, within its Europe 2020 Strategy, that member states should maintain an investment equivalent to 3% of their collective economy, or gross domestic product (GDP), on research and development by the year 2020. A commitment to advancing science translates directly into industry advances such as patent applications, which increased across the EU region from about 45,000 in 1998 to nearly 60,000 by 2008.

The long-term payoffs from science investments are significant: Economists estimate that science and technology have been responsible for more than half of America’s economic progress since World War II. Specific examples of basic science that bore fruit and helped to drive the economy include the Google search engine, created somewhat through serendipity when Larry Page and Sergey Brin, then a National Science Foundation fellow, created an algorithm to rank Web pages. Fiber optics, magnetic storage devices, global positioning systems, lithium-ion batteries, robotic arms that help surgeons perform less-invasive surgeries, and many other life-changing technologies have made their way from basic-research laboratories to the marketplace. The Human Genome Project, estimated to cost $5.6 billion over a 13-year time period, was found in a study to have produced an economic payoff of $67 billion in 2010 alone, including advances in agriculture, forensics, veterinary medicine, and human health.

As more and more nations recognize the importance of innovation to their futures—especially healthcare advances, quality of life, and economic growth—they are increasing their science investments even as they control their budgets. For example, Germany’s total investment in research and development as a share of its economy rose from about 2.41% in 1999 to 2.82% ten years later, according to the Organisation for Economic Cooperation and Development (OECD). Germany also tallied the highest number of patent applications submitted to the European Patent Office in 2008.

Many other EU countries are wisely spending more on science: Switzerland’s science investment rose from a 2.53% share of its economy in 2000 to 2.99% in 2008. France has boosted its science spending from 2.15% of its economy in 2000 to 2.25% in 2010. Denmark’s science investment increased from 2.18% in 1999 to 3.06% of its GDP in 2010, the OECD has reported. These are only a few European examples. In comparison, Japan’s total R&D spending jumped from 2.98% in 1999 to 3.26% in 2010. The United States’ R&D investment was 2.9% of its economy in 2009, compared with 2.64% in 1999.

Science and technology are the wellspring of novel inventions, which are, of course, a basis of innovation. This is why Israel spends 4.4% of its economy on science, and Finland is not far behind, with a 3.88% investment. Leaders in these and other economies where federal science spending is on the rise, including Taiwan, South Korea, and China, recognize the need to cultivate a 21st century labor force as well as new ideas that fuel innovation and economic growth.

Who covers the cost of innovation? In the United States, industry sponsors the majority of all R&D, while government, industry, and private foundations have historically shared the responsibility for supporting basic research, in particular. However, more than half of the nation’s total basic research (53%) is conducted at academic institutions, and since 2000, industry’s support for that type of work has dropped to below 6%, according to the U.S. National Science Board’s Science and Engineering Indicators 2012. U.S. industry understandably seems to be more focused on near-term development work, rather than longer-term, higher-risk basic research. For every dollar that U.S. industry spends on research and development, 80 cents goes to support development, not basic research.

Clearly, robust government funding of basic research will remain essential to fostering economic growth and innovation. Nations cannot depend upon industry alone to develop radically new ideas. Yet, basic science requires a sustained investment over time, and in the current global economy, many nations may not be able to spend what it takes to generate significant discoveries. Consider the case of the United States, where federal R&D funding has declined in real dollars (adjusted for inflation) by 10% since 2010. Moreover, a deadline for serious budget reductions, including what is known as the “sequestration,” is looming in the United States. As laid out in the Budget Control Act of 2011, across-the-board cuts will become mandatory under the sequestration plan beginning in January 2013 unless policymakers can develop a different strategy to trim the nation’s $1.1 trillion annual deficit during the current post-election Congressional session.

Mandating $1.2 trillion in spending cuts over the next decade, the sequestration would cut defense R&D by 9.7% and nondefense R&D by 7% over the first five years of the budget cuts, assuming they are distributed equally, according to an analysis by the American Association for the Advancement of Science. This would deal U.S. science and technology a very hard blow that would inevitably be felt by American industry and the broader global scientific community as innovations, patents, and publications begin to dwindle.

Federal science funding should not be considered a multi-national race, with a single first-place winner and many losers. Rather, the United States and other countries should strive to contribute meaningful innovations that help advance industry, economic progress, and human welfare worldwide. Sustained support from both government and industry in the United States, Europe, Asia, and elsewhere will be ever-more essential to that goal in the coming decade.

Alan I. Leshner is chief executive officer of the American Association for the Advancement of Science and executive publisher of the journal Science.