The Innovation-quester

27 Mar

When Congress and the President failed to agree on a plan to avert $85.4 billion in automatic spending cuts, more affectionately known as the sequester, everyone pretty much agreed that this was a terrible idea. In total, The Budget Control Act, its official name, cuts defense and non-defense discretionary spending by $1.2 trillion from 2013-2021.

All told, the 2013 edition of the sequester included:

  • $42.7 billion in defense cuts (a 7.9 percent cut).
  • $28.7 billion in domestic discretionary cuts (a 5.3 percent cut).
  • $9.9 billion in Medicare cuts (a 2 percent cut)
  • $4 billion in other mandatory cuts (a 5.8 percent cut to nondefense programs, and a 7.8 percent cut to mandatory defense programs).

It’s questionable whether the country actually has long-term debt problems after efforts in deficit reduction over the past two-years have sliced more than $3 trillion off our long-term debt. The quixotic crusade of deficit reduction at all costs is frightening to our long-term competitiveness, especially on the innovation front. For example, last week the American Association for the Advancement of Science released the appropriation figures for FY2013 for federal R&D investment. The sequester’s immediate impact on innovation efforts is startling:

According to initial AAAS estimates, federal R&D investment will amount to approximately $130.9 billion in FY 2013, a drop of $9.6 billion or 6.9 percent from FY 2012. Nearly all of this decline is due to sequestration, as Congress appeared to hold several R&D accounts nearly flat and trimming only $506.6 million from R&D expenditures in the final bill.

Since World War II, the U.S. government has funded basic research since firms simply won’t invest in this risky endeavor. The fact remains that investing in basic research and our relatively healthy market economy have been essential for our rise to global innovation and technological leadership. Federal funding brought GPS to the market, spurred breakthroughts in medical research, and introduced the Internet to modern life. It’s fair to say that the overall innovative system and institutions in the U.S. has been the reason for our economic prosperity relative to our neighbors in advanced economies. These countries are continually investing more and more in basic research and science.

Innovation only works through long-term investment and trial and error. Radically altering our commitment to basic research funding for science and innovative efforts is a serious threat to our long-term prosperity. The piece meal approach to innovation complimented by bad public policies that fail to support basic research is sure way to lose in the long-run.


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