Can U.S. Still Compete?

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TR: Is the president's budget and his American Competitive Initiative enough?

DWS: It was fantastic when the president talked about nanotechnology and supercomputing. These are capabilities that will have a transformational effect, cutting across so many sectors. And if this budget goes through, there will be a doubling of the National Science Foundation budget, and a significant increase for the Department of Energy's Office of Science and the National Institutes of Standards and Technology. This doubling of the DOE's science budget is long overdue. They maintain the most advanced computing research facilities in the world and provide critical infrastructure for many of our university researchers.

TR: But aren't the actual dollar amounts still pretty low? For example, the proposed increase for NIST amounts to about $75 million and the National Nanotech Initiative would get an extra $30 million or so. Are numbers like these really meaningful and commensurate with the problem?

DWS: The specific numbers are less important at this stage than the critical message the president is sending that innovation is a national priority. Even as we focus on cutting our budget deficits we need to ensure that we continue to invest in areas like education and R&D that over the long term will provide benefits to the nation far in excess of their costs. With the Senate legislation and the president's State of the Union address, we see a convergence on this as a first-tier economic imperative for our country.

TR: Meanwhile, the National Institutes of Health was flat-lined in the president's proposed budget, with cuts in cancer research.

DWS: While the physical sciences and engineering have been underfunded relative to the health sciences, we do not think that increases in one area should come at the expense of another. Given the multidisciplinary nature of modern science and technology, innovation depends critically on advances across fields. For that reason, we need to maintain a balanced approach to R&D funding.

TR: Presumably, government can only do so much. What must corporations do to solve the problem, and what must academic institutions do?

DWS: All governments invest in R&D to some extent. Some even invest more than we do as a percentage of GDP. What really distinguishes the U.S. from other countries is the strength of the private sector contribution to our innovation system. American companies are among the most innovative in the world and our universities are consistently ranked the highest. The strong linkages we have between companies, universities, and national laboratories put us in a very good position to capitalize on federal R&D spending.

TR: You note that the United States finds itself at a "tipping point." In what way is the Council on Competitiveness responding?

DWS: Coming out of the findings in our National Innovation Initiative report [called "Innovate America: Thriving in a World of Challenge and Change"], we've identified several critical issues on the horizon that, if addressed strategically, could position the United States and all Americans for a bright future. Let me highlight two: First, we will focus on understanding the role of manufacturing in the 21^st century -- we contend that we are too quickly writing off manufacturing as dirty, dumb, dangerous, and disappearing. Innovation tools -- like high performance computing, where we are a world leader -- can help transform our entire manufacturing and services economy.

Second, the council will also continue to catalyze regional innovation strategies -- as we build out our concept of regional innovation hotspots. While there are many innovation hubs across the country, our contention is that many regions and regional leaders have a lot to learn about how to simultaneously leverage workforce training and economic development investments, education strategies, and entrepreneurship to bolster their own productivity growth and prosperity.