Declining innovation funding threatens future economy

Two recent reports highlight the importance of funding innovation in the U.S., and give a glimpse into the perils of ignoring it. The reports, from The Aspen Institute and Information Technology & Innovation Foundation (ITIF), independently corroborate the role of the public sector in ensuring a more prosperous future through innovation. The Aspen report, An Innovation Challenge for the United States, warns that the innovation culture forged in this country following World War II is now at risk, while the ITIF report focuses on the dwindling support for higher education from both the state and federal levels and details how such changes could negatively impact the research and development efforts that help build the innovation economy.

The Aspen report notes that many of the conditions that propelled the United States into a global leadership position in innovation following WW II no longer exist (infrastructure is aging, competition for talent is global, nature of innovation has changed, erosion of public trust in government, and reduced spending on foundational research) and that to maintain our global position a “purposeful course” must be charted by government, the private sector and academia.

The authors maintain that the current climate of declining federal funding for R&D and increased private sector focus on late-state research, “is a recipe for an innovation wasteland in the United States.” While the report acknowledges that the Trump administration recognizes the importance of R&D spending to support innovation, it finds the fact that U.S. government investment continues to decline while other nations are increasing federal investment and strengthening foundational research troubling. “The solution to this problem begins with a national research and development agenda,” it states.

The report goes on to encourage the policies that would enable innovation, including those that encourage competition and drive improvement, strong trade, encourage immigration, provide affordable education, value a diverse workforce, improve access to education and expand opportunities for STEM and STEAM education, protect American intellectual property, and be willing to take risks and fail.

In a separate report from ITIF, U.S. Funding for University Research Continues to Slide, authors Robert D. Atkinson and Caleb Foote outline how the U.S. continues to fall further behind other world players in funding for university research, noting that the U.S. has slid to 28^th of 39 nations in such funding as a share of GDP, with the 12 leading governments investing more than double the U.S.

To combat this trend, the authors advocate for Congress to commit to increasing university support by $45 billion per year, which would place the U.S. in the top seven countries. The authors point out that innovation powers long-run economic growth and that universities have played an increasing role in that system as corporations have pulled back from R&D.