Research and Development Key to America’s Future Progress

WASHINGTON — Government investment in research and development has led to triumphs in war and economic prosperity, but as lawmakers work on the Bipartisan Innovation Act, the question is: Will that continue?

“If the United States wants to maintain its global leadership position — national security, economic competitiveness, climate, you name it — if we want to maintain that global leadership position, this is the future we need to embrace,” said retired Air Force Lt. Gen. John Shanahan.

Shanahan was part of a group urging lawmakers to pass the legislation this summer during a virtual event held by the Information Technology & Innovation Foundation Tuesday. Their central thesis: It’s not only economic but crucial to national security and democracy.

The law is intended to infuse billions of dollars into research and development and reinvigorate the semiconductor manufacturing industry. Manufacturing and national security policy experts are saying now is the time for this investment. 

Currently, 107 members of the House and Senate are working in a conference committee that is looking to reconcile the differences between the Senate-passed Innovation and Competition Act and the House-passed America COMPETES Act; each chamber’s versions of the Bipartisan Innovation Act.

“This is what the government does best is … support basic research and development. And the National Science Foundation makes an excellent channel in which to see that funding flow out and to also see that kind of research in ways that are often very very difficult to foresee,” said Arthur Herman, a senior fellow at the Hudson Institute.

For example, in 1994 the government gave a research and development grant to Stanford students to look into monitoring and tracking internet activity, which led to Google, he said.

Over the years the U.S. has significantly decreased its investment in research and development. In the 1960s, at the height of the Cold War, the government was investing the equivalent of $200 billion into researching new technologies, said Michael Brown, the director of the Defense Innovation Unit at the Department of Defense.

That investment paid off for the U.S., reinforcing national security and economic success, he explained. 

“The private sector takes care of what is in its own interest to make profit, which has increasingly moved the U.S. economy to software and services. Fantastic that we have a comparative advantage and we should reinforce that comparative advantage,” Brown said Tuesday. “But what we see that we miss if we leave this all to the market is we don’t make the long-term investments, we don’t make the riskier investments and increasingly we don’t make the hardware investments. All of those are critical for economic and national security.”

That’s why many manufacturing industries have moved out of the country, creating supply chain issues, said Edlyn Levine, the co-founder and chief science officer at America’s Frontier Fund.

“A lot of the optimization that industry makes by itself is for near-term profits and companies around the world are global entities that will optimize for location of manufacturing and advanced research for where it is economically favorable [to them] not where it is favorable from an economic and national security perspective for a specific country to begin with,” Levine said.

Right now is a pivotal time to invest in semiconductor manufacturing because the U.S. is still a leader in production, but companies are moving out, she said. The U.S. needs to realize it should “actively compete” on the global stage, which these investments would help spur, she said.

The U.S.’s biggest competitor is China, the experts agreed, as the country pours money into its own research and development and also lures American companies to its shores with lower production costs. 

China is not only economically competing with the U.S. Brown explained,but our democratic form of government is competing with China’s authoritarian regime.

It’s about setting “norms and standards that reinforce democratic values — democratic small ‘d.’ If we are not on the forefront with many of these technologies we are not going to be setting these standards,” he said.

“Imagine in the 1960s if we were having a discussion about companies in the Soviet Union. Would we have said ‘Okay, it’s okay for U.S. companies to make investments in the Soviet Union given what they stand for?” he asked.

“We live in a world where China has integrated itself with the global economy in a way that causes us to have a question here. But if you look at what the country stands for — the human rights record, the wanting to undermine us geopolitically — it really makes no sense for us to be supporting them investing in the U.S. or allowing the U.S. to invest in China,” Brown said.

Madeline can be reached by email at [email protected] or on Twitter @ByMaddieHughes