A Review of Rising Above the Gathering Storm, Part 1

February 27th, 2006

Posted by: Roger Pielke, Jr.

Given the recent attention to competitiveness by the White House and Congress, I thought that it might be useful to dig into the intellectual foundation that lies underneath. This post is the first in a series and offers a perspective on the recent NRC report, Rising Above the Gathering Storm (RAGS), all 543 pages of it, chapter-by-chapter. I start the review with this post focused on Chapter 1, titled “A Disturbing Mosaic.” We provided an overview of the executive summary of RAGS here.

The summary of my critique of the RAGS report so far is that there is a disconnect between the statement of the problem and the proposed solution. It is a truism that science and technology underpin modern society. And it is also true that the world economy has been transformed by economic globalization. But it does not clearly follow from these initial conditions that a policy focused on increasing investments in basic research in the physical sciences, mathematics, and engineering, and the number of scientists and engineers, will improve U.S. “competitiveness” much less counter the negative effects of globalization. While there are a suite of other policy recommendations to be found in RAGS, the focus is mostly on government funding for science and the production of PhD scientists and engineers. My interpretation of Chapter 1 in RAGS is that its arguments are largely faith-based rather than built on a foundation of policy analysis, but perhaps that is to come in future chapters. Read on for details.

RAGS has been cited as the intellectual foundation for the focus in President Bush’s State of the Union address on “keeping America competitive.” It also has been cited as the basis for a suite of proposed legislative actions now in various stages of development in Congress, most notable the so-called trifecta of PACE bills – Protecting America’s Competitive Edge.

RAGS defines the policy problem to be addressed consistent with the thesis of Thomas Friedman’s book, The World is Flat, which argues that the world in more economically competitive that ever before. RAGS summarizes Friedman’s concerns as follows:

Friedman asks rhetorically whether his own country is proving its readiness by “investing in our future and preparing our children the way we need to for the race ahead”. Friedman’s answer, not surprisingly, is no.

RAGS takes Friedman’s concern as its central focus:

This report addresses the possibility that our lack of preparation will reduce the ability of the United States to compete in such a world. Many underlying issues are technical; some are not. Some are “political”—not in the sense of partisan politics, but in the sense of “bringing the rest of the body politic along”. Scientists and engineers often avoid such discussions, but the stakes are too high to keep silent any longer. Friedman’s term quiet crisis, which others have called a “creeping crisis”, is reminiscent of the folk tale about boiling a frog. If a frog is dropped into boiling water, it will immediately jump out and survive. But a frog placed in cool water that is heated slowly until it boils won’t respond until it is too late. Our crisis is not the result of a one-dimensional change; it is more than a simple increase in water temperature. And we have no single awakening event, such as Sputnik. The United States is instead facing problems that are developing slowly but surely, each like a tile in a mosaic. None by itself seems sufficient to provoke action. But the collection of problems reveals a disturbing picture a recurring pattern of abundant short-term thinking and insufficient longterm investment.

The RAGS focus on “competitiveness” reminds me of a statement by Charles L. Schultze, writing in a book edited by B. L R. Smith and C. Barfield (Technology, R&D, and the Economy, Brookings, 1996), who suggested some principles for thinking about R&D in the economy

First, do not specify the target as increasing competitiveness. Competitiveness is a virtually meaningless, if widely used, word. It can – and has been – used to justify virtually anything.

RAGS then identifies three “clusters” of problems:

*Tilted jobs in the global economy
*Disinvestment in the future
*Reactions to 9/11

Let’s consider each in turn.

“Tilted jobs in the global economy” refers to the reality that companies have access to an employment market that goes well beyond national borders. Far from being a problem, RAGS seems to make the case that the flattening of the global economy is a good thing, both for the U.S. and other countries:

Most economists believe that [David] Ricardo is still correct—that there will be gains for all such nations. They acknowledge that there might be a transition phase in which wages for lower skilled workers in a rich country like the United States will fall. Some say that there is, however, no reason to believe that wages for highly skilled workers will fall in either the short run or the long run. Economist Paul Romer argues that technological change continues to increase the demand for workers with high levels of education. As a result, wages for US workers with at least a college education continue to rise faster than wages for other workers. The low wages for highly skilled workers seen in such countries as China and India are not a sign that the worldwide supply of highly skilled workers is so large that worldwide wages are now falling or are about to fall, says Romer. In those economies, wages for skilled workers are low because these workers were previously cut off from the deep and rapidly growing pool of technological knowledge that existed outside their borders. As they have opened up their economies so that this knowledge can now flow in, wages for highly skilled workers have grown rapidly.”

In spite of this seeming optimism based on the consensus view of economists RAGS then presents a conclusion that I can only conclude must be based entirely on assumptions:

It has also been argued that in a period of tectonic change such as the one that the global community is now undergoing, there will inevitably be nations and individuals that are winners or losers. It is the view of this committee that the determining factors in such outcomes are the extent of a nation’s commitment to get out and compete in the global marketplace. New generations of US scientists and engineers, assisted by progressive government policies, could lead the way to US leadership in the new, flatter world—as long as US workers remain among the best educated, hardest-working, best trained, and most productive in the world.

A few things should be pointed out. First, the United States is by any measure a global economic winner and has been for decades and longer. Second, this part of the report provides no data and no argument to make the case that the “tilting” of the global is in anyway problematic from a national perspective, and the evidence that it does provide suggests that this tilting is instead beneficial. The transition from a description of the realities of globalization to the call for progressive government policies and education of scientists and engineers is abrupt. It may very well be that such actions are needed, but the case has not yet been made thus far in RAGS. Let’s move on.

The second cluster of problems is “disinvestment in the future.” This section starts by citing a public opinion poll to make the case that education is suffering in the United States. It then presents familiar statistics on the average performance of U.S. K-12 students when compared to their OECD counterparts. The chapter then argues that more of the costs of education are being placed upon individuals, rather than the public. RAGS asserts that this has the effect of limiting the access to higher education among low-income students. I would agree that this is indeed a problem. But lets be clear, it is a problem of equity and access, and no connection is made here to the larger thesis of the chapter focused on economic competitiveness.

The section next claims that “the increasing pressure on corporations for short-term results has made investments in research highly problematic.” This section could have been a bit more substantive, and perhaps later in the report we will see such substance. But according to data gathered by the NSF SRS, industry has a long-term trend of increasing investments in research and development, with the NSF’s most recent issue brief noting, “Companies spent $204 billion in current-year dollars on research and development (R&D) performed in the United States during 2003 compared with $193.9 billion in 2002.” Industry outspends the federal government on R&D by about 50%. It is not at all clear that there is a problem in industry related to R&D investments. There is certainly no evidence of “disinvestment.”

The next section asserts that “funding for research in most physical sciences, mathematics, and engineering has declined or remained relatively flat—in real purchasing power—for several decades.” Why does this matter? According to RAGS, there are two reasons. The first is that health care advances depend on such research, “Many medical devices and procedures—such as endoscopic surgery, “smart” pacemakers, kidney dialysis, and magnetic resonance imaging—are the result of R&D in the physical sciences, engineering, and mathematics.” RAGS does acknowledge the meteoric rise in funding for health research over he past decade, but that apparently is insufficient. The second reason why RAGS argues that flat funding for the physical sciences, mathematics, and engineering matters is that it creates incentives for less-risky research, “Many believe that federal funding agencies—perhaps influenced by the stagnation of funding levels in the physical sciences, mathematics and engineering—have become increasingly risk-averse and focused on short-term results.” It is not clear either what this means or why it matters. A focus on high-risk research is a function of research policies and not necessarily the consequence of overall funding levels. For example, one way to encourage “riskier” research in NSF would be to do away with the second review criterion focused on broader societal impacts and focus narrowly on scientific merit. Funding is neither here nor there. Again, there is no evidence of a “disinvestments.”

Let’s now turn to the third problem cluster, “Reactions to 9/11.” RAGS takes issue with three specific areas of U.S. science policy put into place follow 9/11, “visa policies, export controls, and the treatment of “sensitive but unclassified” information.” These are of concern to scientists because of the limitations that each policy places upon the ability to recruit and train foreign students and conduct research alongside foreign colleagues.
Because I work in a university and see the effects of these policies, I am in general agreement with RAGS that they are problematic from the standpoint of fettering research. But at the same time these policies have been put in place as a reaction to the threat of terrorism. Have such policies gone too far? Perhaps. But of course scientists want research to be unfettered by restrictions. So far however RAGS has not provided evidence for understanding the effects of national security policies in a way that would allow for a sense of the tradeoffs involved. Perhaps this is to come in a subsequent chapter.

The chapter ends by asserting – not arguing – its conclusion: “Well-paying jobs, accessible health care, and high-quality education require the discovery, application, and dissemination of information and techniques … This report emphasizes the need for world-class science and engineering—not simply as an end in itself but as the principal means of creating new jobs for our citizenry as a whole as it seeks to prosper in the global marketplace of the 21st century.” That modern society is built upon science and technology is obvious. But the important questions about science and technology are not yet raised by RAGS, much less answered – What information is it that we need? What techniques? How should we think about priorities among different areas of knowledge? How does world-class science and engineering relate to jobs? Perhaps the answers to these questions will be revealed in subsequent chapters.

Thus far, the story is about an ill-defined problem with a crystal-clear solution: more investment in research and development.

4 Responses to “A Review of Rising Above the Gathering Storm, Part 1”

  1. David Bruggeman Says:

    So, it appears this document will join a long list of reports agitating for more funding and doing a lousy job of explaining why.

    An aside. Roger suggests:

    “For example, one way to encourage “riskier” research in NSF would be to do away with the second review criterion focused on broader societal impacts and focus narrowly on scientific merit.”

    Let me also suggest that another way to encourage “riskier” research in NSF would be to truly address requirement two, or even shift emphasis toward greater societal impacts. It all depends on how you define your risk. Seems that RAGS did a lousy job of defining its terms and assumptions. Bad policy work.

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  3. Markk Says:

    I will be interested in seeing the review of the rest of the report.
    Speaking as a US engineer who worked for one of the largest US global corporations, this report seems somewhat oddly focused. On the corporate level of the large (> $5B revenue) firms (that I was aware of) doing business in the US, you will hear talk about US competitiveness, but you will see that virtually all new resources are going overseas. Where are the new reasearch hubs in the US from the large companies? You might say they were already there, but if you look at budgets I would bet that virtually 100% of new allocations are going to India, China, Eastern Europe, etc. The US establishments are looking for more “efficiency” a euphemism which means the employees better start looking internally at least for different positions if they want to progress. This is just an anecdote from one person, but I do not see a career path in large companies in the US for technical people.

    Now this may just mean that the opportunities are in smaller companies, but I do think that what will happen is that in many large established companies in 15 years the majority of R&D will not be done in the US, in fact since the factories are also moving or already gone, I see the US portions of the companies becoming shells. The reason is emerging markets and simple costs, so I really do not see a good solution. I think the US technical community has been squeezed, and will continue to be in the future even more so regardless of government promotion. The size of the community will be smaller per capita I think, even if it grows in total and the salaries will not increase.

    Personally I think the government research push might be better spent on some large scale ecological surveys and ecosystem design and understanding a la The Nature Conservancy. This is basic research in a sense, but perhaps the real work here would be developing tools to allow easy surveys. I do actually like at least the start of new energy policy as well, at least the fact that all parties are realizing the future won’t be the same as today.

    In the longer run (30 years) the overseas economies and technical prowess will be equal or better than the US, and planning now for that future might indicate risking money in ways that don’t seem obvious now, and leveraging the global knowledge base more.

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  5. James Wilsdon Says:

    Roger, Thanks for your thoughtful analysis – I look forward to the next installment.

    For me, the focus in the RAGS report on competitiveness rather than collaboration is both depressing and shortsighted, especially in relation to the growing scientific capabilities of China and India.

    Such constant banging of the competitiveness drum thrteatens to drown out the opportunities that are being created by the emergence of new centres of excellence. Science is not a zero sum game: more in Asia doesn’t mean less in Europe or the US. To pretend otherwise is to misunderstand the nature of innovation.

    In ‘the new geography of science’, it is those who are good at sharing knowledge who will increasingly flourish. So rather than shoring up our scientific defences – whether in the US or Europe – our priority should be developing better mechanisms for orchestrating research across international networks, and supporting our scientists to undertake joint research with their counterparts in Asia.

    It seems to me that this crucial dimension of the debate is largely ignored in the RAGS report. It is as if they are only interested in the ‘threat’ from Asia insofar as it bolsters the case for more US science spending, rather than as the basis for a serious, textured analysis of what is happening in Asian science, and what the implications (no doubt, some negative but also many positive) might be for the US.

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  7. kevin Says:

    Prometheus still isn’t accepting trackbacks properly, so here ya go: