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24–132PS 2006

SCIENCE, TECHNOLOGY, AND GLOBAL

ECONOMIC COMPETITIVENESS

HEARING

BEFORE THE

COMMITTEE ON SCIENCE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

OCTOBER 20, 2005

Serial No. 109–27

Printed for the use of the Committee on Science

(

Available via the World Wide Web: http://www.house.gov/science

(II)

COMMITTEE ON SCIENCE

HON. SHERWOOD L. BOEHLERT, New York, Chairman

RALPH M. HALL, Texas

LAMAR S. SMITH, Texas

CURT WELDON, Pennsylvania

DANA ROHRABACHER, California

KEN CALVERT, California

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

GIL GUTKNECHT, Minnesota

FRANK D. LUCAS, Oklahoma

JUDY BIGGERT, Illinois

WAYNE T. GILCHREST, Maryland

W. TODD AKIN, Missouri

TIMOTHY V. JOHNSON, Illinois

J. RANDY FORBES, Virginia

JO BONNER, Alabama

TOM FEENEY, Florida

BOB INGLIS, South Carolina

DAVE G. REICHERT, Washington

MICHAEL E. SODREL, Indiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

MICHAEL T. MCCAUL, Texas

VACANCY

VACANCY

BART GORDON, Tennessee

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

LYNN C. WOOLSEY, California

DARLENE HOOLEY, Oregon

MARK UDALL, Colorado

DAVID WU, Oregon

MICHAEL M. HONDA, California

BRAD MILLER, North Carolina

LINCOLN DAVIS, Tennessee

RUSS CARNAHAN, Missouri

DANIEL LIPINSKI, Illinois

SHEILA JACKSON LEE, Texas

BRAD SHERMAN, California

BRIAN BAIRD, Washington

JIM MATHESON, Utah

JIM COSTA, California

AL GREEN, Texas

CHARLIE MELANCON, Louisiana

DENNIS MOORE, Kansas

(III)

C O N T E N T S

October 20, 2005

Page

Witness List ............................................................................................................. 2

Hearing Charter ...................................................................................................... 3

Opening Statements

Statement by Representative Sherwood L. Boehlert, Chairman, Committee

on Science, U.S. House of Representatives ........................................................ 24

Written Statement ............................................................................................ 25

Statement by Representative Bart Gordon, Minority Ranking Member, Committee on Science, U.S. House of Representatives ............................................ 26

Written Statement ............................................................................................ 27

Prepared Statement by Representative Vernon J. Ehlers, Chairman, Subcommittee on Environment, Technology, and Standards, Committee on

Science, U.S. House of Representatives ............................................................. 28

Prepared Statement by Representative Jerry F. Costello, Member, Committee

on Science, U.S. House of Representatives ........................................................ 28

Prepared Statement by Representative Eddie Bernice Johnson, Member, Committee on Science, U.S. House of Representatives ............................................ 29

Prepared Statement by Representative Michael M. Honda, Member, Committee on Science, U.S. House of Representatives ............................................ 30

Prepared Statement by Representative Russ Carnahan, Member, Committee

on Science, U.S. House of Representatives ........................................................ 30

Prepared Statement by Representative Sheila Jackson Lee, Member, Committee on Science, U.S. House of Representatives ............................................ 30

Prepared Statement by Representative Brian Baird, Member, Committee on

Science, U.S. House of Representatives ............................................................. 31

Witnesses:

Mr. Norman R. Augustine, Retired Chairman and CEO, Lockheed Martin

Corporation

Oral Statement ................................................................................................. 33

Written Statement ............................................................................................ 36

Biography .......................................................................................................... 44

Dr. P. Roy Vagelos, Retired Chairman and CEO, Merck & Co.

Oral Statement ................................................................................................. 44

Written Statement ............................................................................................ 46

Biography .......................................................................................................... 48

Dr. William A. Wulf, President, National Academy of Engineering

Oral Statement ................................................................................................. 49

Written Statement ............................................................................................ 51

Biography .......................................................................................................... 53

Discussion ................................................................................................................. 54

Page

IV

Appendix 1: Answers to Post-Hearing Questions

Responses on behalf of Norman R. Augustine, Retired Chairman and CEO,

Lockheed Martin Corporation; P. Roy Vagelos, Retired Chairman and CEO,

Merck & Co.; and, William A. Wulf, President, National Academy of Engineering .................................................................................................................. 72

Appendix 2: Additional Material for the Record

Rising Above the Gathering Storm: Energizing and Employing America for

a Brighter Economic Future, National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, February 2006 ...................... 77

(1)

SCIENCE, TECHNOLOGY, AND GLOBAL

ECONOMIC COMPETITIVENESS

THURSDAY, OCTOBER 20, 2005

HOUSE OF REPRESENTATIVES,

COMMITTEE ON SCIENCE,

Washington, DC.

The Committee met, pursuant to call, at 10:00 a.m., in Room

2318 of the Rayburn House Office Building, Hon. Sherwood L.

Boehlert [Chairman of the Committee] presiding.

2

3

HEARING CHARTER

COMMITTEE ON SCIENCE

U.S. HOUSE OF REPRESENTATIVES

Science, Technology, and Global

Economic Competitiveness

THURSDAY, OCTOBER 20, 2005

10:00 A.M.–12:00 P.M. 2318 RAYBURN HOUSE OFFICE BUILDING

1. Purpose

On Thursday, October 20, 2005, the House Science Committee will hold a hearing

to receive testimony on the report released by the National Academy of Sciences on

October 12 entitled Rising Above the Gathering Storm: Energizing and Employing

America for a Brighter Economic Future. The report, which was requested by Congress, recommends ways to strengthen research and education in science and technology.

2. Witnesses

Mr. Norman R. Augustine, Retired Chairman and CEO of the Lockheed Martin

Corporation. Mr. Augustine chaired the National Academy of Sciences (NAS) committee that wrote the report.

Dr. P. Roy Vagelos, Retired Chairman and CEO of Merck & Co. Dr. Vagelos

served on the NAS committee that wrote the report.

Dr. William A. Wulf, President of the National Academy of Engineering and Vice

Chair of the National Research Council, the principal operating arm of the National

Academies of Sciences and Engineering.

3. Overarching Questions

• What are the principal innovation-related challenges the United States faces

as it competes in the global economy?

• What specific steps should the Federal Government take to ensure that the

United States remains the world leader in innovation?

4. Brief Overview

• While the U.S. continues to lead the world in measures of innovation capacity—research and development (R&D) spending, number of scientists and engineers, scientific output, etc.—recent statistics on the level of U.S. support

for research relative to other countries indicate that this lead may be slipping. Overall U.S. federal funding for R&D as a percentage of gross domestic

product (GDP) has declined significantly since its peak in 1965, and the focus

of this R&D has shifted away from the physical sciences, mathematics, and

engineering—the areas of R&D historically most closely correlated with innovation and economic growth.

• At the same time, other nations—particularly emergent nations such as

China and India—have recognized the importance of innovation to economic

growth, and are pouring resources into their scientific and technological infrastructure, rapidly building their innovation capacity and increasing their ability to compete with the United States in the global economy.

• In May 2005, at the request of Congress, the National Academy of Sciences

(NAS) began a study of ‘‘the most urgent challenges the United States faces

in maintaining leadership in key areas of science and technology.’’ NAS assembled a high-level panel of senior scientists and business and university

leaders and produced a report in five months.

• The NAS report offers four broad recommendations: (A) increase America’s

talent pool by vastly improving K–12 science and mathematics education; (B)

sustain and strengthen the Nation’s traditional commitment to long-term

basic research; (C) make the United States the most attractive setting in

4

1See pages 18–19 of this charter for the pages of the NAS report that contain the sources

for these statistics.

which to study and perform research; and (D) ensure that the United States

is the premier place in the world to innovate. (The executive summary of the

NAS report is attached in Appendix A.)

• The NAS report also describes 20 explicit steps that the Federal Government

could take to implement its recommendations. The report estimates the total

cost of these steps to be $9.2–$23.8 billion per year.

5. Summary of NAS Report

In May of this year, Senators Lamar Alexander and Jeff Bingaman, Chairman of

the Energy Subcommittee and Ranking Member of full Senate Committee on Energy

and Natural Resources, respectively, asked the National Academy of Sciences (NAS)

to conduct a study of ‘‘the most urgent challenges the United States faces in maintaining leadership in key areas of science and technology.’’ In June, Science Committee Chairman Sherwood Boehlert and Ranking Member Bart Gordon wrote to

the NAS to endorse the Senate request for a study and suggest some additional specific questions (the text of the Senate and House letters are attached in Appendices

B and C). The study was paid for out of internal Academy funds, and NAS released

the report on October 12.

The Problem

The NAS report begins by describing how science and engineering are critical to

American prosperity. Technical innovations, such as electricity and information

technology, have increased the productivity of existing industries and created new

ones and improved the overall quality of life in the U.S. The report then examines

how the U.S. is doing relative to other countries in science and technology today— looking at indicators such as science and engineering publications, R&D investment,

venture capital funding, and student proficiency levels—to see if the U.S. is positioned to make the next generation of innovations needed to maintain U.S. competitiveness and security going forward.

‘‘Worrisome indicators’’ outlined in the report1 include:

• The United States today is a net importer of high-technology products. Its

share of global high-technology exports has fallen in the last two decades

from 30 percent to 17 percent, and its trade balance in high-technology manufactured goods shifted from plus $33 billion in 1990 to a negative $24 billion

in 2004.

• In 2003, only three American companies ranked among the top 10 recipients

of patents granted by the United States Patent and Trademark Office.

• In Germany, 36 percent of undergraduates receive their degrees in science

and engineering. In China, the figure is 59 percent, and in Japan 66 percent.

In the United States, the corresponding figure is 32 percent.

• Fewer than one-third of U.S. 4th grade and 8th grade students performed at

or above a level called ‘‘proficient’’ in mathematics (‘‘proficiency’’ was considered the ability to exhibit competence with challenging subject matter). About

one-third of the 4th graders and one-fifth of the 8th graders lacked the competence to perform basic mathematical computations.

The NAS report concludes that education, research, and innovation are essential

if the U.S. is to succeed in providing jobs for its citizenry.

Recommendations and Steps the Federal Government Should Take to Implement

Them

The NAS report makes four recommendations, each of which is supported by explicit steps that the Federal Government could take to implement the recommendations. These recommendations and steps are provided verbatim below; more details

on each step are available in the report executive summary in Appendix A.

10,000 Teachers, 10 Million Minds and K–12 Science and Mathematics Education

Recommendation A: Increase America’s talent pool by vastly improving K–12

science and mathematics education.

Implementation Steps:

• A–1: Annually recruit 10,000 science and mathematics teachers by awarding

four-year scholarships and thereby educating 10 million minds.

5

• A–2: Strengthen the skills of 250,000 teachers through training and education

programs at summer institutes, in Master’s programs, and Advanced Placement and International Baccalaureate (AP and IB) training programs and

thus inspire students every day.

• A–3: Enlarge the pipeline by increasing the number of students who take AP

and IB science and mathematics courses.

Sowing the Seeds through Science and Engineering Research

Recommendation B: Sustain and strengthen the Nation’s traditional commitment

to long-term basic research that has the potential to be transformational to maintain the flow of new ideas that fuel the economy, provide security, and enhance the

quality of life.

Implementation Steps:

• B–1: Increase the federal investment in long-term basic research by 10 percent a year over the next seven years.

• B–2: Provide new research grants of $500,000 each annually, payable over

five years, to 200 of our most outstanding early-career researchers.

• B–3: Institute a National Coordination Office for Research Infrastructure to

manage a centralized research infrastructure fund of $500 million per year

over the next five years.

• B–4: Allocate at least eight percent of the budgets of federal research agencies

to discretionary funding.

• B–5: Create in the Department of Energy an organization like the Defense

Advanced Research Projects Agency called the Advanced Research Projects

Agency-Energy (ARPA–E).

• B–6: Institute a Presidential Innovation Award to stimulate scientific and engineering advances in the national interest.

Best and Brightest in Science and Engineering Higher Education

Recommendation C: Make the United States the most attractive setting in which

to study and perform research so that we can develop, recruit, and retain the best

and brightest students, scientists, and engineers from within the United States and

throughout the world.

Implementation Steps:

• C–1: Increase the number and proportion of U.S. citizens who earn physicalsciences, life-sciences, engineering, and mathematics Bachelor’s degrees by

providing 25,000 new four-year competitive undergraduate scholarships each

year to U.S. citizens attending U.S. institutions.

• C–2: Increase the number of U.S. citizens pursuing graduate study in ‘‘areas

of national need’’ by funding 5,000 new graduate fellowships each year.

• C–3: Provide a federal tax credit to encourage employers to make continuing

education available (either internally or through colleges and universities) to

practicing scientists and engineers.

• C–4: Continue to improve visa processing for international students and

scholars.

• C–5: Provide a one-year automatic visa extension to international students

who receive doctorates or the equivalent in science, technology, engineering,

mathematics, or other fields of national need at qualified U.S. institutions to

remain in the United States to seek employment. If these students are offered

jobs by U.S.-based employers and pass a security screening test, they should

be provided automatic work permits and expedited residence status.

• C–6: Institute a new skills-based, preferential immigration option.

• C–7: Reform the current system of ‘‘deemed exports.’’

Incentives for Innovation and the Investment Environment

Recommendation D: Ensure that the United States is the premier place in the

world to innovate; invest in downstream activities such as manufacturing and marketing; and create high-paying jobs that are based on innovation by modernizing the

patent system, realigning tax policies to encourage innovation, and ensuring affordable broadband access.

Implementation Steps:

6

2For example, the U.S. Commission on National Security in the 21st Century (the Hart-Rudman Commission, Phase III, 2001) recommended doubling the federal research and development

budget by 2010. 3The six non-U.S. members of the G–7 are France, Great Britain, Germany, Japan, Italy and

Canada. 4 Booz Allen Hamilton’s Global Innovation 1,000 study was released on October 11, 2005 and

is available on line at http://www.boozallen.com. An example of their findings is that companies

in the bottom 10 percent of R&D spending as a percentage of sales under-perform competitors

on gross margins, gross profit, operating profit, and total shareholder returns. However, companies in the top 10 percent showed no consistent performance differences compared to companies

that spend less on R&D.

• D–1: Enhance intellectual property protection for the 21st century global

economy.

• D–2: Enact a stronger research and development tax credit to encourage private investment in innovation.

• D–3: Provide tax incentives for U.S.-based innovation.

• D–4: Ensure ubiquitous broadband Internet access.

Costs of the Recommendations

The NAS report provides a ‘‘back of the envelope’’ estimate of the annual cost to

the Federal Government of each of the implementation steps that are recommended.

• For the three steps in Recommendation A (increase America’s talent pool by

vastly improving K–12 science and mathematics education): $1.5–$2.4 billion

per year.

• For the six steps in Recommendation B (sustain and strengthen the Nation’s traditional commitment to long-term basic research): $1.1–$3.4 billion per

year.

• For the seven steps in Recommendation C (make the United States the most

attractive setting in which to study and perform research): $1.6–$3.6 billion

per year.

• For the four steps in Recommendation D (ensure that the United States is

the premier place in the world to innovate): $5.1–$14.4 billion per year.

The total cost of these steps would be $9.2–$23.8 billion per year.

6. Issues Related to Specific Recommendations in the NAS Report and Related Questions for the Witnesses

In the invitation letter for the hearing, each of the witnesses was asked to answer

questions about the three specific recommendations discussed below. These were

major recommendations that seemed to call for further elaboration.

Recommendation B–1: Increase the federal investment in long-term basic research

by 10 percent a year over the next seven years: Numerous reports and groups in recent years have suggested doubling federal funding for basic research, as the NAS

report recommends.2 (The authorization bill for the National Science Foundation the

Congress passed in 2002 called for doubling that agency’s budget, and Congress did

double the budget of the National Institutes of Health over the past six years or

so.) While these reports have included a rationale for increasing federal R&D spending, none has explained the reason why a specific level of spending needs to be

achieved by a particular date. The U.S. currently spends $56 billion annually on

non-defense R&D, more than the rest of the G–7 countries3 combined. Also, total

R&D spending (government and industry) in the U.S. has remained relatively constant as a percentage of the U.S. gross domestic product, indicating that investment

in R&D has grown as the U.S. economy has grown, begging the question of why increased federal investment is necessary. (This may be especially true if federal R&D

is being invested in the same kinds of research as private R&D rather than in kinds

of research, particularly basic research, that might otherwise be neglected.)

In addition, the NAS report argues that federal investment in basic research fuels

economic growth by contributing new ideas that can eventually lead to commercial

products. Yet recent surveys of industry suggest that companies’ investments in

R&D have had only a very limited impact on the success of the individual companies.4 What is true for individual companies is not necessarily true for nations as

a whole; R&D may contribute greatly to the relative economic success of the U.S.

as a whole, while not being so important to any individual company. (This would

make sense. Nations stay ahead through innovation, but individual companies may

have other comparative advantages.) But the company statistics and attitudes on

R&D at least raise the question about whether the contribution of R&D to economic

7

5 Energy Efficiency Progress and Potential, American Council for an Energy-Efficient Economy,

no date.

success is exaggerated, and how federal R&D investment contributes to overall economic success.

Questions in the witness letters on this recommendation:

• How did the study panel arrive at the recommended 10 percent annual increase in federally-sponsored basic research over the next seven years? What

other options did the panel consider and what led to the choice of 10 percent?

• Recent surveys of industry suggest that basic research performed at universities and transformational technological innovation have only a very limited

impact on the success of individual companies. Is the impact of research and

innovation different for the economy as a whole than it is for individual companies?

Recommendation B–4: Allocate at least eight percent of the budgets of federal research agencies to discretionary funding: A number of recent reports have expressed

concern that the current grant selection system in most agencies shies away from

daring proposals. The view is that when funding is tight (like now), researchers and

the peer review system both tend to favor incremental research proposals—projects

that are guaranteed to produce results—results that are generally in keeping with

existing ideas. In this situation, high-risk research (especially that proposed by

young investigators or involving interdisciplinary studies) can be underfunded or neglected entirely. The NAS report recommends that funding be set aside at federal

research agencies (and distributed at program officers’ discretion) for high-risk,

high-payoff research. While such research is valuable, so is the research that provides steady if incremental advances on existing scientific questions. In addition, not

every agency is equally well equipped to solicit and select high-risk projects. Finally,

even if setting aside such funding is a good idea, it’s unclear whether eight percent

is a reasonable amount.

Questions in the witness letters on this recommendation:

• How did the study panel arrive at the recommended eight percent allocation

within each federal research agency’s budget to be managed at the discretion

of technical program managers to catalyze high-risk, high-payoff research?

What other options did the panel consider and what led to the choice of eight

percent?

Recommendation B–5: Create in the Department of Energy an organization like the

Defense Advanced Research Projects Agency called the Advanced Research Projects

Agency-Energy (ARPA–E): The recommendation seems to assume that the main reason the U.S. has not made more progress in deploying technologies that use less energy or that use alternative energy sources is that the technology is not being developed. But numerous studies have concluded that the primary problem in energy

technology is that existing advanced technologies never get deployed. These studies

tend to recommend policy changes to encourage the deployment of advanced technologies, as opposed to recommending (or merely recommending) programs to develop new technologies. For example, a recent American Council for an Energy Efficient Economy study estimated that ‘‘adopting a comprehensive set of policies for

advancing energy efficiency could lower national energy use by 18 percent in 2010

and 33 percent in 2020.’’ 5 Similarly, a 2001 NAS study on automotive fuel economy

described numerous existing technologies that could reduce dependence on foreign

oil, but are not yet deployed.

In addition, it is not clear whether the DARPA analogy is entirely apt. DARPA

funds advanced technologies that will eventually be used by the Pentagon. The government itself would not be the main purchaser of technologies developed by ARPA–

E, so those technologies would still face existing problems in finding markets. It is

also unclear how the research that would be supported by ARPA–E would differ

from that already funded by the Department of Energy’s current conservation and

renewable energy research programs.

Questions in the witness letters on this recommendation:

• Industry and government have both developed numerous energy production

and energy efficiency technologies that have not been deployed. How did the

study panel arrive at its implicit conclusion that technology development is

the greater bottleneck (as opposed to policy) in developing energy systems for

a 21st century economy?

8

7. General Issues

Overall Federal Support for R&D

The amount of the country’s overall wealth devoted to federal R&D has declined

significantly since the post-Sputnik surge in support for R&D. According to Office

of Management and Budget statistics, in 1965, funding for federal R&D as a percentage of GDP (measured as outlays), also known as R&D intensity, was slightly

over two percent (Chart 1). In 2005, it is estimated to be 1.07 percent.

While this ratio has recently begun to increase again, turning upward over the

last five years, the majority of those increases have gone toward short-term defense

development and homeland security applications. For example, the Department of

Defense (DOD) R&D increases alone—most of which have supported development

projects that have very little impact on innovation or broader economic development—has accounted for almost 70 percent of the overall R&D increases of the last

five years. Of the remaining increases, 75 percent has gone to the National Institutes of Health (NIH) and the Department of Homeland Security (DHS). At $71 billion and $29 billion, respectively, the R&D budgets of DOD and NIH now account

for over 75 percent of all federal R&D. Meanwhile, funding for the physical sciences

and engineering—the areas historically most closely associated with innovation and

economic growth—have been flat or declining for the last thirty years.

Also, the long-term outlook for the federal budget does not favor future increases

in discretionary spending (through which almost all R&D is funded). Absent major

policy changes, the growth in mandatory federal spending—primarily for health and

retirement benefits and payments on the national debt interest—will demand a significantly greater share of the government’s resources.

Shift of Private Sector R&D

During the heyday of the corporate research laboratory in the middle decades of

the 20th century, U.S. corporate laboratories supported all stages of R&D, from

knowledge creation to applied research to product development, and were quite successful in their efforts to nurture innovation. The most notable example of this was

AT&T’s Bell Laboratories, which grew to be one of the world premier research organizations of the last century, developing numerous breakthrough technologies that

changed American life, including transistors, lasers, fiber-optics, and communications satellites. Researchers at Bell Labs and other corporate laboratories were eligible for, and received, grants from federal research agencies such as the National

Science Foundation and DOD, but they received core support from the parent company and they conducted basic and applied research directed toward developing

technology relevant to the company’s business.

9

While overall growth of industry-funded R&D has remained strong in recent

years, the focus of this R&D has shifted significantly away from longer-term basic

research in favor of applied research and development more closely tied to product

development. Because of market demands from investors to capitalize on R&D

quickly, large corporate laboratories of the Bell Labs model are increasingly rare

(notable exceptions include companies such as IBM and GE). Instead, corporations

now focus research projects almost exclusively on lower-risk, late-stage R&D

projects with commercial benefits, leaving the Federal Government as the predominant supporter of long-term basic research.

Increasing Competitiveness of Foreign Countries

While trends of support for the innovation system in the U.S. have showed signs

of slowing, other nations are committing significant new resources to building their

science and technology enterprises. More than one-third of OECD (Organization for

Economic Cooperation and Development) countries have increased government support for R&D by an average rate of over five percent annually since 1995. The European Union has recently established a target to achieve EU-wide R&D intensity of

three percent of the EU economy by 2010. (By comparison, the current U.S. R&D

intensity, public and private sector combined, is 2.6 percent of GDP.) Similarly, individual nations, including South Korea, Germany, the U.K. and Canada, have recently pledged to increase R&D spending as a percentage of GDP.

However, no nation has increased its support for innovation as dramatically as

China. It has doubled its R&D intensity from 0.6 percent of its GDP in 1995 to 1.2

percent in 2002 (this during a time of rapid GDP growth). R&D investments in

China by foreign corporations have also grown dramatically, with U.S. investments

alone increasing from just $7 million in 1994 to over $500 million in 2000. China

is now the third largest performer of R&D in the world, behind only the U.S. and

Japan.

The increased innovation capacity of other countries is also becoming evident in

output-based R&D benchmarks. For example, the U.S. share of science and engineering publications published worldwide declined from 38 percent in 1988 to 31

percent in 2001, while Western Europe and Asia’s share increased from 31 to 36

percent and 11 to 17 percent, respectively. Similar trends have occurred in the area

of U.S. patent applications and citations in scientific journals.

Education and Workforce Issues

While the supply and demand of future scientists and engineers is notoriously difficult to predict, most experts believe that the transition to a knowledge-based economy will demand an increased quality and quantity of the world’s scientific and

technical workforce. As is the case with R&D figures, trends in the distribution of

the world’s science and engineering workforce are also unfavorable to long-term U.S.

competitiveness.

The world is catching up and even surpassing the U.S. in higher education and

the production of science and engineering specialists. China now graduates four

times as many engineering students as the U.S., and South Korea, which has onesixth the population of the U.S., graduates nearly the same number of engineers as

the U.S. Moreover, most Western European and Asian countries graduate a significantly higher percentage of students in science and engineering. At the graduate

level, the statistics are even more pronounced. In 1966, U.S. students accounted for

approximately 76 percent of world’s science and engineering Ph.D.s. In 2000, they

accounted for only 36 percent. In contrast, China went from producing almost no

science and engineering Ph.D.s in 1975 to granting 13,000 Ph.D.s in 2002, of which

an estimated 70 percent were in science and engineering.

Meanwhile, the achievement and interest levels of U.S. students in science and

engineering are relatively low. According to the most recent international assessment, U.S. twelfth graders scored below average and among the lowest of participating nations in math and science general knowledge, and the comparative data

of math and science assessment revealed a near-monopoly by Asia in the top scoring

group for students in grades four and eight. These students are not on track to

study college level science and engineering and, in fact, are unlikely ever to do so.

Of the 25–30 percent of entering college freshmen with an interest in a science or

engineering field, less than half complete a science or engineering degree in five

years.

All of this is happening as the U.S. scientific and technical workforce is about to

experience a high rate of retirement. One quarter of the current science and engineering workforce is over 50 years old. At the same time, the U.S. Department of

Labor projects that new jobs requiring science, engineering and technical training

will increase four times higher than the average national job growth rate.

10

Industry Concerns and Reports

Some leading U.S. businesses have become increasingly vocal about concerns that

the U.S. is in danger of losing its competitive advantage. In an effort to call attention to these concerns, several industry organizations have independently produced

reports specifically examining the new competitiveness challenge and recommending

possible courses of action to address it. Prominent among these efforts is the National Innovation Initiative (NII), a comprehensive undertaking by industry and university leaders to identify the origins of America’s innovation challenges and prepare a call to action for U.S. companies to ‘‘innovate or abdicate.’’ The December

2004 NII final report, Innovate America: Thriving in a World of Challenge and

Change, is intended to serve as a roadmap for policy-makers, industry leaders, and

others working to help America remain competitive in the world economy.

Other industry associations that have also produced recent reports include AeA

(formerly the American Electronics Association), the Business Roundtable, Electronic Industries Alliance, National Association of Manufacturers, and TechNet.

While the companies and industry sectors represented by these organizations varies

widely, one general recommendation was common to all of the reports: the Federal

Government needs to strengthen and re-energize investments in R&D and science

and engineering education. The Science Committee held a hearing on July 21, 2005

on U.S. Competitiveness: The Innovation Challenge to examine the issues raised in

these reports and how federal science and engineering research and education investments impacts U.S. economic competitiveness.

11

6For example, work by Robert Solow and Moses Abramovitz published in the middle 1950s

demonstrated that as much as 85 percent of measured growth in U.S. income per capita during

the 1890–1950 period could not be explained by increases in the capital stock or other measurable inputs. The big unexplained portion, referred to alternatively as the ‘‘residual’’ or ‘‘the

measure of ignorance,’’ has been widely attributed to the effects of technological change.

Appendix A

Executive Summary of National Academy of Sciences Report, Rising Above the Gathering Storm: Energizing and

Employing America for a Brighter Economic Future

The United States takes deserved pride in the vitality of its economy, which forms

the foundation of our high quality of life, our national security, and our hope that

our children and grandchildren will inherit ever-greater opportunities. That vitality

is derived in large part from the productivity of well-trained people and the steady

stream of scientific and technical innovations they produce. Without high-quality,

knowledge-intensive jobs and the innovative enterprises that lead to discovery and

new technology, our economy will suffer and our people will face a lower standard

of living. Economic studies conducted before the information-technology revolution

have shown that even then as much as 85 percent of measured growth in U.S. income per capita is due to technological change.6

Today, Americans are feeling the gradual and subtle effects of globalization that

challenge the economic and strategic leadership that the United States has enjoyed

since World War II. A substantial portion of our workforce finds itself in direct competition for jobs with lower-wage workers around the globe, and leading-edge scientific and engineering work is being accomplished in many parts of the world.

Thanks to globalization, driven by modern communications and other advances,

workers in virtually every sector must now face competitors who live just a mouseclick away in Ireland, Finland, China, India, or dozens of other nations whose economies are growing.

CHARGE TO THE COMMITTEE

The National Academies was asked by Senator Lamar Alexander and Senator Jeff

Bingaman of the Committee on Energy and Natural Resources, with endorsement

by Representatives Sherwood Boehlert and Bart Gordon of the House Committee on

Science, to respond to the following questions:

What are the top 10 actions, in priority order, that federal policy-makers could

take to enhance the science and technology enterprise so that the United States

can successfully compete, prosper, and be secure in the global community of the

21st Century? What strategy, with several concrete steps, could be used to implement each of those actions?

The National Academies created the Committee on Prospering in the Global Economy of the 21st Century to respond to this request. The charge constitutes a challenge both daunting and exhilarating: to recommend to the Nation specific steps

that can best strengthen the quality of life in America—our prosperity, our health,

and our security. The committee has been cautious in its analysis of information.

However, the available information is only partly adequate for the committee’s

needs. In addition, the time allotted to develop the report (10 weeks from the time

of the committee’s meeting to report release) limited the ability of the committee

to conduct a thorough analysis. Even if unlimited time were available, definitive

analyses on many issues are not possible given the uncertainties involved.

This report reflects the consensus views and judgment of the committee members.

Although the committee includes leaders in academe, industry, and government—

several current and former industry chief executive officers, university presidents,

researchers (including three Nobel prize winners), and former presidential appointees—the array of topics and policies covered is so broad that it was not possible

to assemble a committee of 20 members with direct expertise in each relevant area.

Because of those limitations, the committee has relied heavily on the judgment of

many experts in the study’s focus groups, additional consultations via email and

telephone with other experts, and an unusually large panel of reviewers. Although

other solutions are undoubtedly possible, the committee believes that its recommendations, if implemented, will help the United States achieve prosperity in the

21st century.

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FINDINGS

Having reviewed trends in the United States and abroad, the committee is deeply

concerned that the scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength. We

strongly believe that a worldwide strengthening will benefit the world’s economy—

particularly in the creation of jobs in countries that are far less well-off than the

United States. But we are worried about the future prosperity of the United States.

Although many people assume that United States will always be a world leader in

science and technology, this may not continue to be the case inasmuch as great

minds and ideas exist throughout the world. We fear the abruptness with which a

lead in science and technology can be lost—and the difficulty of recovering a lead

once lost, if indeed it can be regained at all.

This nation must prepare with great urgency to preserve its strategic and economic security. Because other nations have, and probably will continue to have, the

competitive advantage of a low-wage structure, the United States must compete by

optimizing its knowledge-based resources, particularly in science and technology,

and by sustaining the most fertile environment for new and revitalized industries

and the well-paying jobs they bring. We have already seen that capital, factories,

and laboratories readily move wherever they are thought to have the greatest promise of return to investors.

RECOMMENDATIONS

The committee reviewed hundreds of detailed suggestions—including various calls

for novel and untested mechanisms—from other committees, from its focus groups,

and from its own members. The challenge is immense, and the actions needed to

respond are immense as well.

The committee identified two key challenges that are tightly coupled to scientific

and engineering prowess: creating high-quality jobs for Americans and responding

to the Nation’s need for clean, affordable, and reliable energy. To address those challenges, the committee structured its ideas according to four basic recommendations

that focus on the human, financial, and knowledge capital necessary for U.S. prosperity.

The four recommendations focus on actions in K–12 education (10,000 Teachers,

10 Million Minds), research (Sowing the Seeds), higher education (Best and Brightest), and economic policy (Incentives for Innovation) that are set forth in the following sections. Also provided are a total of 20 implementation steps for reaching

the goals set forth in the recommendations.

Some actions involve changes in the law. Others require financial support that

would come from reallocation of existing funds or, if necessary, from new funds.

Overall, the committee believes that the investments are modest relative to the

magnitude of the return the Nation can expect in the creation of new high-quality

jobs and in responding to its energy needs.

10,000 TEACHERS, 10 MILLION MINDS IN K–12 SCIENCE AND MATHEMATICS EDUCATION

Recommendation A: Increase America’s talent pool by vastly improving K–12

science and mathematics education.

Implementation Actions

The highest priority should be assigned to the following actions and programs. All

should be subjected to continuing evaluation and refinement as they are implemented:

Action A–1: Annually recruit 10,000 science and mathematics teachers by

awarding four-year scholarships and thereby educating 10 million minds.

Attract 10,000 of America’s brightest students to the teaching profession every year,

each of whom can have an impact on 1,000 students over the life of their careers.

The program would award competitive four-year scholarships for students to obtain

Bachelor’s degrees in the physical or life sciences, engineering, or mathematics with

concurrent certification as K–12 science and mathematics teachers. The merit-based

scholarships would provide up to $20,000 a year for four years for qualified educational expenses, including tuition and fees, and require a commitment to five

years of service in public K–12 schools. A $10,000 annual bonus would go to participating teachers in underserved schools in inner cities and rural areas. To provide

the highest-quality education for undergraduates who want to become teachers, it

would be important to award matching grants, perhaps $1 million a year for up to

five years, to as many as 100 universities and colleges to encourage them to establish integrated four-year undergraduate programs leading to Bachelor’s degrees in

science, engineering, or mathematics with teacher certification.

13

Action A–2: Strengthen the skills of 250,000 teachers through training and

education programs at summer institutes, in Master’s programs, and Advanced Placement and International Baccalaureate (AP and IB) training

programs and thus inspires students every day. Use proven models to

strengthen the skills (and compensation, which is based on education and skill level)

of 250,000 current K–12 teachers:

• Summer institutes: Provide matching grants to state and regional one- to twoweek summer institutes to upgrade as many as 50,000 practicing teachers

each summer. The material covered would allow teachers to keep current

with recent developments in science, mathematics, and technology and allow

for the exchange of best teaching practices. The Merck Institute for Science

Education is a model for this recommendation.

• Science and mathematics Master’s programs: Provide grants to universities to

offer 50,000 current middle-school and high-school science, mathematics, and

technology teachers (with or without undergraduate science, mathematics, or

engineering degrees) two-year, part-time Master’s degree programs that focus

on rigorous science and mathematics content and pedagogy. The model for

this recommendation is the University of Pennsylvania Science Teachers Institute.

• AP, IB, and pre-AP or pre-IB training: Train an additional 70,000 AP or IB

and 80,000 pre-AP or pre-IB instructors to teach advanced courses in mathematics and science. Assuming satisfactory performance, teachers may receive

incentive payments of up to $2,000 per year, as well as $100 for each student

who passes an AP or IB exam in mathematics or science. There are two models for this program: the Advanced Placement Incentive Program and Laying

the Foundation, a pre-AP program.

• K–12 curriculum materials modeled on world-class standards: Foster highquality teaching with world-class curricula, standards, and assessments of

student learning. Convene a national panel to collect, evaluate, and develop

rigorous K–12 materials that would be available free of charge as a voluntary

national curriculum. The model for this recommendation is the Project Lead

the Way pre-engineering courseware.

Action A–3: Enlarge the pipeline by increasing the number of students

who take AP and IB science and mathematics courses. Create opportunities

and incentives for middle-school and high-school students to pursue advanced work

in science and mathematics. By 2010, increase the number of students in AP and

IB mathematics and science courses from 1.2 million to 4.5 million, and set a goal

of tripling the number who pass those tests, to 700,000, by 2010. Student incentives

for success would include 50 percent examination fee rebates and $100 mini-scholarships for each passing score on an AP or IB mathematics and science examination.

The committee proposes expansion of two additional approaches to improving K–

12 science and mathematics education that are already in use:

• Statewide specialty high schools: Specialty secondary education can foster

leaders in science, technology, and mathematics. Specialty schools immerse

students in high-quality science, technology, and mathematics education;

serve as a mechanism to test teaching materials; provide a training ground

for K–12 teachers; and provide the resources and staff for summer programs

that introduce students to science and mathematics.

• Inquiry-based learning: Summer internships and research opportunities provide especially valuable laboratory experience for both middle-school and

high-school students.

SOWING THE SEEDS THROUGH SCIENCE AND ENGINEERING RESEARCH

Recommendation B: Sustain and strengthen the Nation’s traditional commitment

to long-term basic research that has the potential to be transformational to maintain

the flow of new ideas that fuel the economy, provide security, and enhance the quality

of life.

Implementation Actions

Action B–1: Increase the federal investment in long-term basic research

by 10 percent a year over the next seven years, through re-allocation of existVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
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7The funds may come from anywhere in an agency, not just other research funds.

8One committee member, Lee Raymond, does not support this action item. He does not believe

that ARPA–E is necessary as energy research is already well funded by the Federal Government, along with formidable funding of energy research by the private sector. Also, ARPA–E

would put the Federal Government in the business of picking ‘‘winning energy technologies’’—

a role best left to the private sector.

ing funds7 or if necessary through the investment of new funds. Special attention

should go to the physical sciences, engineering, mathematics, and information

sciences and to Department of Defense (DOD) basic-research funding. This special

attention does not mean that there should be a disinvestment in such important

fields as the life sciences (which have seen growth in recent years) or the social

sciences. A balanced research portfolio in all fields of science and engineering research is critical to U.S. prosperity. This investment should be evaluated regularly

to realign the research portfolio—unsuccessful projects and venues of research

should be replaced with emerging research projects and venues that have greater

promise.

Action B–2: Provide new research grants of $500,000 each annually, payable over five years, to 200 of our most outstanding early-career researchers. The grants would be made through existing federal research agencies—the National Institutes of Health (NIH), the National Science Foundation (NSF), the Department of Energy (DOE), DOD, and the National Aeronautics and Space Administration—to underwrite new research opportunities at universities and government

laboratories.

Action B–3: Institute a National Coordination Office for Research Infrastructure to manage a centralized research-infrastructure fund of $500 million per year over the next five years—through reallocation of existing funds

or if necessary through the investment of new funds—to ensure that universities

and government laboratories create and maintain the facilities and equipment needed for leading-edge scientific discovery and technological development. Universities

and national laboratories would compete annually for these funds.

Action B–4: Allocate at least eight percent of the budgets of federal research agencies to discretionary funding that would be managed by technical

program managers in the agencies and be focused on catalyzing high-risk, high-payoff research.

Action B–5: Create in the Department of Energy (DOE) an organization

like the Defense Advanced Research Projects Agency (DARPA) called the

Advanced Research Projects Agency-Energy (ARPA–E).8 The Director of

ARPA–E would report to the Under Secretary for science and would be charged with

sponsoring specific research and development programs to meet the Nation’s longterm energy challenges. The new agency would support creative ‘‘out-of-the-box’’

transformational generic energy research that industry by itself cannot or will not

support and in which risk may be high but success would provide dramatic benefits

for the Nation. This would accelerate the process by which knowledge obtained

through research is transformed to create jobs and address environmental, energy,

and security issues. ARPA–E would be based on the historically successful DARPA

model and would be designed as a lean and agile organization with a great deal of

independence that can start and stop targeted programs on the basis of performance. The agency would itself perform no research or transitional effort but would

fund such work conducted by universities, startups, established firms, and others.

Its staff would turn over about every four years. Although the agency would be focused on specific energy issues, it is expected that its work (like that of DARPA or

NIH) will have important spin-off benefits, including aiding in the education of the

next generation of researchers. Funding for ARPA–E would start at $300 million the

first year and increase to $1 billion per year over 5–6 years, at which point the program’s effectiveness would be evaluated.

Action B–6: Institute a Presidential Innovation Award to stimulate scientific and engineering advances in the national interest. Existing presidential awards address lifetime achievements or promising young scholars, but the

proposed new awards would identify and recognize persons who develop unique scientific and engineering innovations in the national interest at the time they occur.

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9The H–1B is a nonimmigrant classification used by an alien who will be employed temporarily in a specialty occupation of distinguished merit and ability. A specialty occupation requires theoretical and practical application of a body of specialized knowledge and at least a

Bachelor’s degree or its equivalent. For example, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting,

law, theology, and the arts are specialty occupations. See http://uscis.gov/graphics/howdoi/

h1b.htm 10The controls governed by the Export Administration Act and its implementing regulations

extend to the transfer of technology. Technology includes ‘‘specific information necessary for the

‘development,’ ‘production,’ or ‘use’ of a product’’ [emphasis added]. Providing information that

is subject to export controls—for example, about some kinds of computer hardware—to a foreign

national within the United States may be ‘‘deemed’’ an export, and that transfer requires an

Continued

BEST AND BRIGHTEST IN SCIENCE AND ENGINEERING HIGHER EDUCATION

Recommendation C: Make the United States the most attractive setting in which

to study and perform research so that we can develop, recruit, and retain the best

and brightest students, scientists, and engineers from within the United States and

throughout the world.

Implementation Actions

Action C–1: Increase the number and proportion of U.S. citizens who earn

physical-sciences, life sciences, engineering, and mathematics Bachelor’s

degrees by providing 25,000 new four-year competitive undergraduate

scholarships each year to U.S. citizens attending U.S. institutions. The Undergraduate Scholar Awards in Science, Technology, Engineering, and Mathematics

(USA–STEM) would be distributed to states on the basis of the size of their congressional delegations and awarded on the basis of national examinations. An award

would provide up to $20,000 annually for tuition and fees.

Action C–2: Increase the number of U.S. citizens pursuing graduate study

in ‘‘areas of national need’’ by funding 5,000 new graduate fellowships each

year. NSF should administer the program and draw on the advice of other federal

research agencies to define national needs. The focus on national needs is important

both to ensure an adequate supply of doctoral scientists and engineers and to ensure

that there are appropriate employment opportunities for students once they receive

their degrees. Portable fellowships would provide funds of up to $20,000 annually

directly to students, who would choose where to pursue graduate studies instead of

being required to follow faculty research grants.

Action C–3: Provide a federal tax credit to encourage employers to make

continuing education available (either internally or though colleges and

universities) to practicing scientists and engineers. These incentives would

promote career-long learning to keep the workforce current in the face of rapidly

evolving scientific and engineering discoveries and technological advances and

would allow for retraining to meet new demands of the job market.

Action C–4: Continue to improve visa processing for international students and scholars to provide less complex procedures and continue to make improvements on such issues as visa categories and duration, travel for scientific meetings, the technology-alert list, reciprocity agreements, and changes in status.

Action C–5: Provide a one-year automatic visa extension to international

students who receive doctorates or the equivalent in science, technology,

engineering, mathematics, or other fields of national need at qualified U.S.

institutions to remain in the United States to seek employment. If these

students are offered jobs by United States-based employers and pass a security screening test, they should be provided automatic work permits and

expedited residence status. If students are unable to obtain employment within

one year, their visas would expire.

Action C–6: Institute a new skills-based, preferential immigration option.

Doctoral-level education and science and engineering skills would substantially raise

an applicant’s chances and priority in obtaining U.S. citizenship. In the interim, the

number of H–1B9 visas should be increased by 10,000, and the additional visas

should be available for industry to hire science and engineering applicants with doctorates from U.S. universities.

Action C–7: Reform the current system of ‘‘deemed exports.’’ 10 The new

system should provide international students and researchers engaged in fundaVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
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export license. The primary responsibility for administering controls on deemed exports lies with

the Department of Commerce, but other agencies have regulatory authority as well. 11The current R&D tax credit expires in December 2005.

mental research in the United States with access to information and research equipment in U.S. industrial, academic, and national laboratories comparable with the

access provided to U.S. citizens and permanent residents in a similar status. It

would, of course, exclude information and facilities restricted under national-security regulations. In addition, the effect of deemed-exports regulations on the education and fundamental research work of international students and scholars should

be limited by removing all technology items (information and equipment) from the

deemed-exports technology list that are available for purchase on the overseas open

market from foreign or U.S. companies or that have manuals that are available in

the public domain, in libraries, over the Internet, or from manufacturers.

INCENTIVES FOR INNOVATION AND THE INVESTMENT ENVIRONMENT

Recommendation D: Ensure that the United States is the premier place in the

world to innovate; invest in downstream activities such as manufacturing and marketing; and create high-paying jobs that are based on innovation by modernizing the

patent system, realigning tax policies to encourage innovation, and ensuring affordable broadband access.

Implementation Actions

Action D–1: Enhance intellectual-property protection for the 21st century

global economy to ensure that systems for protecting patents and other forms of

intellectual property underlie the emerging knowledge economy but allow research

to enhance innovation. The patent system requires reform of four specific kinds:

• Provide the Patent and Trademark Office sufficient resources to make intellectual-property protection more timely, predictable, and effective.

• Reconfigure the U.S. patent system by switching to a ‘‘first-inventor-to-file’’ system and by instituting administrative review after a patent is granted.

Those reforms would bring the U.S. system into alignment with patent systems in Europe and Japan.

• Shield research uses of patented inventions from infringement liability. One

recent court decision could jeopardize the long-assumed ability of academic researchers to use patented inventions for research.

• Change intellectual-property laws that act as barriers to innovation in specific

industries, such as those related to data exclusivity (in pharmaceuticals) and

those which increase the volume and unpredictability of litigation (especially

in information-technology industries).

Action D–2: Enact a stronger research and development tax credit to encourage private investment in innovation. The current Research and Experimentation Tax Credit goes to companies that increase their research and development spending above a base amount calculated from their spending in prior years.

Congress and the administration should make the credit permanent,11 and it should

be increased from 20 percent to 40 percent of the qualifying increase so that the

U.S. tax credit is competitive with that of other countries. The credit should be extended to companies that have consistently spent large amounts on research and development so that they will not be subject to the current de facto penalties for previously investing in research and development.

Action D–3: Provide tax incentives for United States-based innovation.

Many policies and programs affect innovation and the Nation’s ability to profit from

it. It was not possible for the committee to conduct an exhaustive examination, but

alternatives to current economic policies should be examined and, if deemed beneficial to the United States, pursued. These alternatives could include changes in

overall corporate tax rates, provision of incentives for the purchase of high-technology research and manufacturing equipment, treatment of capital gains, and incentives for long-term investments in innovation. The Council of Economic Advisers

and the Congressional Budget Office should conduct a comprehensive analysis to examine how the United States compares with other nations as a location for innovation and related activities with a view to ensuring that the United States is one of

the most attractive places in the world for long-term innovation-related investment.

From a tax standpoint, that is not now the case.

Action D–4: Ensure ubiquitous broadband Internet access. Several nations

are well ahead of the United States in providing broadband access for home, school,

17

and business. That capability will do as much to drive innovation, the economy, and

job creation in the 21st century as did access to the telephone, interstate highways,

and air travel in the 20th century. Congress and the administration should take action—mainly in the regulatory arena and in spectrum management—to ensure

widespread affordable broadband access in the near future.

CONCLUSION

The committee believes that its recommendations and the actions proposed to implement them merit serious consideration if we are to ensure that our nation continues to enjoy the jobs, security, and high standard of living that this and previous

generations worked so hard to create. Although the committee was asked only to

recommend actions that can be taken by the Federal Government, it is clear that

related actions at the State and local levels are equally important for U.S. prosperity, as are actions taken by each American family. The United States faces an

enormous challenge because of the disadvantage it faces in labor cost. Science and

technology provide the opportunity to overcome that disadvantage by creating scientists and engineers with the ability to create entire new industries—much as has

been done in the past.

It is easy to be complacent about U.S. competitiveness and pre-eminence in

science and technology. We have led the world for decades, and we continue to do

so in many research fields today. But the world is changing rapidly, and our advantages are no longer unique. Without a renewed effort to bolster the foundations of

our competitiveness, we can expect to lose our privileged position. For the first time

in generations, the Nation’s children could face poorer prospects than their parents

and grandparents did. We owe our current prosperity, security, and good health to

the investments of past generations, and we are obliged to renew those commitments in education, research, and innovation policies to ensure that the American

people continue to benefit from the remarkable opportunities provided by the rapid

development of the global economy and its not inconsiderable underpinning in

science and technology.

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1 Interview asked nearly 17,000 people the question: ‘‘Supposed a young person who wanted

to leave this country asked you to recommend where to go to lead a good life—what country

would you recommend ?’’ Except for respondents in India, Poland, and Canada, no more than

one-tenth of the people in the other nations said they would recommend the United States. Canada and Australia won the popularity contest. Pew Global Attitudes Project, July 23, 2005. 2The Web site http://www.payscale.com/about.asp tracks and compares pay scales in many

countries. Ron Hira, of Rochester Institute of Technology, calculates average salaries for engineers in the United States and India as $70,000 and $13,580, respectively. 3 CERN, http://public.web.cern.ch/Public/Welcome.html.

4For 2004, the dollar value of high-technology imports was $560 billion; the value of hightechnology exports was $511 billion. See Appendix Table 6–01 of National Science Board’s

Science and Engineering Indicators 2004. 5 ‘‘No Longer The Lab Of The World: U.S. chemical plants are closing in droves as production

heads abroad,’’ Business Week (May 2, 2005). 6 National Center for Education Statistics, Trends in International Mathematics and Science

Study, 2003, http://nces.ed.gov/timss. 7Data are from National Science Board. 2004. Science and Engineering Indicators 2004 (NSB

04–01). Arlington, VA: National Science Foundation. Chapter 1.

8Data are from National Science Board. 2004. Science and Engineering Indicators 2004 (NSB

04–01). Arlington, VA: National Science Foundation. Chapter 1.

9 Roach, Steve. More Jobs, Worse Work. New York Times. July 22, 2004. 10 U.S. Patent and Trademark Office, Preliminary list of top patenting organizations. 2003,

http://www.uspto.gov/web/offices/ac/ido/oeip/taf/top03cos.htm.

SOME WORRISOME INDICATORS

• When asked in spring 2005 what is the most attractive place in the world in

which to ‘‘lead a good life,’’ 1 respondents in only one of the 16 countries polled

(India) indicated the United States.

• For the cost of one chemist or one engineer in the United States, a company

can hire about five chemists in China or 11 engineers in India.2

• For the first time, the most capable high-energy particle accelerator on Earth

will, beginning in 2007, reside outside the United States.3

• The United States is today a net importer of high-technology products. Its

share of global high-technology exports has fallen in the last two decades

from 30 percent to 17 percent, and its trade balance in high-technology manufactured goods shifted from plus $33 billion in 1990 to a negative $24 billion

in 2004.4

• Chemical companies closed 70 facilities in the United States in 2004 and have

tagged 40 more for shutdown. Of 120 chemical plants being built around the

world with price tags of $1 billion or more, one is in the United States and

50 in China.5

• Fewer than one-third of U.S. 4th grade and 8th grade students performed at

or above a level called ‘‘proficient’’ in mathematics; ‘‘proficiency’’ was considered the ability to exhibit competence with challenging subject matter. Alarmingly, about one-third of the 4th graders and one-fifth of the 8th graders

lacked the competence to perform basic mathematical computations.6

• U.S. 12th graders recently performed below the international average for 21

countries on a test of general knowledge in mathematics and science. In addition, an advanced mathematics assessment was administered to U.S. students

who were taking or had taken precalculus, calculus, or Advanced Placement

calculus and to students in 15 other countries who were taking or had taken

advanced mathematics courses. Eleven nations outperformed the United

States, and four countries had scores similar to the U.S. scores. No nation

scored significantly below the United States.7

• In 1999, only 41 percent of U.S. 8th grade students received instruction from

a mathematics teacher who specialized in mathematics, considerably lower

than the international average of 71 percent.8

• In one recent period, low-wage employers, such as Wal-Mart (now the Nation’s largest employer) and McDonald’s, created 44 percent of the new jobs,

while high-wage employers created only 29 percent of the new jobs.9

• In 2003, only three American companies ranked among the top 10 recipients

of patents granted by the United States Patent and Trademark Office.10

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11Data are from National Science Board. 2004. Science and Engineering Indicators 2004 (NSB

04–01). Arlington, VA: National Science Foundation, Appendix Table 2–33. 12 Colvin, Geoffrey. 2005. ‘‘America isn’t ready.’’ Fortune Magazine, July 25. H–1B visas allow

employers to have access to highly educated foreign professionals who have experience in specialized fields and who have at least Bachelor’s degree or the equivalent. The cap does not apply

to educational institutions. In November 2004, Congress created an exemption for 20,000 foreign

nationals earning advanced degrees from U.S. universities. See Immigration and Nationality Act

Section 101(a)(15)(h)(1)(b). 13Geoffrey Colvin. 2005. ‘‘America isn’t ready.’’ Fortune Magazine, July 25. 14 U.S. research and development spending in 2001 was $273.6 billion, of which industry performed $194 billion, and funded about $184 billion. (National Science Board Science and Engineering Indicators 2004). One estimate of tort litigation costs in the United States was $205

billion in 2001. (Leonard, Jeremy A. 2003. How Structural Costs Imposed on U.S. Manufacturers

Harm Workers and Threaten Competitiveness. Prepared for the Manufacturing Institute of the

National Association of Manufacturers. http://www.nam.org/s—nam/

bin.asp?CID=216&DID=227525&DOC=FILE.PDF.

• In Germany, 36 percent of undergraduates receive their degrees in science

and engineering. In China, the figure is 59 percent, and in Japan 66 percent.

In the United States, the corresponding figure is 32 percent.11

• The United States is said to have 10.5 million illegal immigrants, but under

the law the number of visas set aside for ‘‘highly qualified foreign workers’’

dropped to 65,000 a year from its 195,000 peak.12

• In 2004, China graduated over 600,000 engineers, India 350,000, and America

about 70,000.13

• In 2001 (the most recent year for which data are available), U.S. industry

spent more on tort litigation than on R&D.14

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Chairman BOEHLERT. The hearing will come to order.

Before we start the official part of today’s hearing, I would like

to take a moment to recognize a real person to illustrate the importance of the issues we are going to be discussing today. Neela

Thangada, who is in the audience today. Neela, would you please

stand?

Just yesterday, she won the Discovery Channel Young Scientist

Challenge. She got into the finals of this contest by doing an individual project on plant cloning and won by demonstrating leadership, teamwork, and scientific problem-solving on a series of experiments related to forces of nature, a very timely thing for this year’s

contest. Now let me point out that Neela is 14. She is in the seventh grade. What she is doing is so exciting. She is accompanied

by her mom. Where is mom, Neela? You know, when I first met

Neela, this is not as a politician, this is just an observation, I didn’t

know which one was the student and which one was the mom.

Mom, please stand and be recognized. I want to thank you for the

guidance you are providing.

Neela is what this whole hearing is about and what the whole

Augustine report is about, so we are so pleased to see you, and

thank you for joining us.

It is a pleasure to welcome everyone here this morning for our

hearing on the new and vitally important National Academy report, ‘‘Rising Above the Gathering Storm.’’ This report is already

getting an unusual amount of media coverage, and how refreshing

that is to have the media concentrating on something that is not

sensational but is critically important, a tribute, in part, to the reputations and work of our witnesses here today, and that is helping

to jump-start, and in other quarters, to intensify, a national discussion on research and education and the Nation’s future.

The overarching message of the report is simple and clear, and

it is one the Congress had better heed. And the message is this:

complacency will kill us. ‘‘Where there is no vision, the people perish.’’ If the United States rests on its withering laurels in the competitive world, we will witness the slow erosion of our preeminence,

our security, and our standard of living. That is a very sobering

message. We used to be so far ahead of everybody else in the global

enterprise that when we looked around, we couldn’t even find a

person in second place. Now we can’t even take a nanosecond to

look over our shoulder, because they are breathing down our neck.

It is a message that this committee has been trying to send for

many, many years, and now, joined by Chairman Wolf of the Appropriations Committee and some of our other friends over there

who get it, indeed this committee has pressed, sometimes successfully and, unfortunately, sometimes not, for many of the specific

proposals in the Academy report. So Mr. Augustine, you guys are

really helping us, and I appreciate it.

We have authorized increased spending on basic research, including funding for research equipment and for more daring and crossdisciplinary research, and we have created programs like the Noyce

Scholarships to try to attract more top students into teaching. And

Neela, consider teaching as a career, will you please? And like Tech

Talent to get more students who express interest in science, math,

and engineering to complete majors in those fields.

25

We have pushed for greater funding for the education directorate

at the National Science Foundation and for the basic and applied

research programs at the Department of Energy.

But clearly, we haven’t done enough. We have all of the zeal of

the most fervent missionary, and we are trying, but we haven’t

done enough, and we haven’t succeeded nearly as much as we

would like. That is why the Augustine report helps this. Science

programs still have to scrounge around for every additional cent.

Young scientists still have to beg for funds. Our education system

is still producing too many students who can not compete with our

counterparts around the world. And the Federal Government is

still ignoring our fundamental energy problems while wasting

money pandering to special interests.

So I urge our witnesses today, who are among the most prominent and respected leaders in the Nation, to redouble your efforts

to get the word out about this report. We need a lot more missionary work, especially in this era of fiscal constraint. While Congress turns its attention to fixing the immediate problems caused

by the literal storms that have hit our coasts, we can’t skimp on

the funds needed to address the gathering storm described so

starkly in your report.

There is an exchange in a Hemingway novel in which one character asks another how he went bankrupt. He answers, ‘‘Two ways.

First gradually and then suddenly.’’ As a nation, we are gradually

going bankrupt now in the ways described in the Academy report.

If we don’t act, we are going to wake up one day and find ourselves

suddenly unable to compete.

I look forward to further guidance this morning on exactly what

we should do to compete. And I hope we will have a spirited discussion about the details of the Academy report recommendations. But

as we argue about the specifics, and it won’t be so much an argument, it will be sort of a debate, I hope we can all come away with

an open and even greater commitment to address the problems

that the report lays before us.

[The prepared statement of Chairman Boehlert follows:]

PREPARED STATEMENT OF CHAIRMAN SHERWOOD L. BOEHLERT

It’s a pleasure to welcome everyone here this morning for our hearing on the new

and vitally important National Academy report ‘‘Rising Above the Gathering

Storm.’’ This report is already getting an unusual amount of media coverage—a tribute, in part, to the reputations and work of our witnesses today—and that is helping

to jump-start (and in other quarters, to intensify) a national discussion on research

and education and the Nation’s future.

The overarching message of the report is simple and clear, and it’s one the Congress had better heed. And the message is this: complacency will kill us. If the

United States rests on its withering laurels in this competitive world, we will witness the slow erosion of our preeminence, our security and our standard of living.

It’s a sobering message.

It’s also a message that this committee has been trying to send for many years,

now joined by Chairman Wolf and some of our other friends on Appropriations. Indeed, this committee has pressed—sometimes successfully, sometimes not—for

many of the specific proposals in the Academy report.

We have authorized increased spending on basic research, including funding for

research equipment and for more daring and cross-disciplinary research; and we

have created programs like the Noyce Scholarships to try to attract more top students into teaching, and like Tech Talent to get more students who express interest

in science, math and engineering to complete majors in those fields.

26

We have pushed for greater funding for the education directorate at the National

Science Foundation (NSF) and for the basic and applied research programs at the

Department of Energy.

But we clearly haven’t done nearly enough. Science programs still have to

scrounge around for every additional cent; young scientists still have to beg for

funds; our education system is still producing too many students who cannot compete with their counterparts around the world; and the Federal Government is still

ignoring our fundamental energy problems while wasting money pandering to special interests.

So I urge our witnesses today—who are among the most prominent and respected

leaders in this nation—to redouble your efforts to get the word out about this report.

We need a lot more missionary work, especially in this era of fiscal constraint.

While Congress turns its attention to fixing the immediate problems caused by the

literal storms that have hit our coasts, we can’t skimp on the funds needed to address the ‘‘gathering storm’’ described so starkly in your report.

There’s an exchange in a Hemingway novel in which one character asks another

how he went bankrupt. He answers, ‘‘Two ways. First gradually and then suddenly.’’ As a nation, we’re gradually going bankrupt now in the ways described in the Academy report. If we don’t act, we’re going to wake up one day and find ourselves ‘‘suddenly’’ unable to compete.

I look forward to getting further guidance this morning on exactly what we should

do to compete, and I hope we have a spirited discussion about the details of your

recommendations. But as we argue about the specifics, I hope we can all come away

with an even greater commitment to address the problems this report lays before

us.

Chairman BOEHLERT. With that, it is a pleasure to turn to my

partner in this venture, the Ranking Member from Tennessee, Mr.

Gordon.

Mr. GORDON. Thank you, Mr. Chairman.

Let me, once again, concur with your statements and also say

that I have witnessed firsthand your passion for these issues. You

are a leader in the area, and I appreciate working with you on it.

Let me also thank the Committee for the work you have done,

Mr. Augustine. Once again, you have done a tremendous service for

the country.

And let me say this, without diminishing what you have done.

To a great extent, what you have done is just rehash what we already knew and brought it together from different sources. There

is not a lot new here, and I don’t mean that as—I mean, I think

it is good that we have brought it together. I think that it is good

that we can look to your report and say these are leaders in academia, with the private sector, and hopefully get us more energy

in trying to accomplish something here. But again, as our Chairman has pointed out, this committee has passed many of these

things already.

And so really, what I would like to hear you talk a little bit

about is how do we get the private sector, and what do you intend

to do to help implement these proposals. I mean, again, you know,

we have to have more energy. Clearly, what we are doing is not

enough. And I would like to hear something about that.

The other thing that I noted reading through this report is that,

with the exception of talking about R&D credits, there really

wasn’t much said about the private sector in this area. Now maybe

you didn’t think that was your charge, but I think the charge said

what are some federal policies that deal with it. The R&D credit

is one of those. And I pose this question that I would like to hear

more about. There seems to be a growing disparity between top

level CEO and other kind of salaries and the salaries of others in

those companies in relationship to other countries. And is this leadVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
27

ing us to a situation where those top executives are so pushed because of this type of compensation that they have to be so quarterly

oriented to having results that the private sector is not doing its

part in R&D? And is there some, I mean, I guess, one, is this accurate? And if it is not, then that is fine. If it is accurate, then is

there a federal role in somehow trying to encourage looking beyond

the quarter? Looking beyond. I mean, right now folks, in two or

three years, can make all of the money they can spend the rest of

their life. So you know, as long as they keep the stock up, why

should I worry about five years from now? Why should I make

these investments?

Again, if I am wrong, I would like to know.

The other thing is in your statement, and it was $10 billion, I

hate to say, is a modest amount of money, but it is not, I think in

terms of investment and in terms of our budget, it is a reasonable

amount of money to spend. And you are talking about how we need

to reallocate. We can get part of this by reallocating some funds

within, I guess, our current budget. But I didn’t see the section

about what to allocate and what were those specifically. So if you

have some suggestions in addition to reallocate, which ones we

should reallocate, I would like to hear that today.

So with that in mind, again, I want to thank you. This is an important document. This is a document that we all need to wave and

that we all need to charge forward with. It is important to our kids

and our grandkids. So I thank you for it.

Again, my questions did not try to diminish what you did but to

try to take this a step farther.

Thank you.

[The prepared statement of Mr. Gordon follows:]

PREPARED STATEMENT OF REPRESENTATIVE BART GORDON

I want to join Chairman Boehlert in welcoming everyone to this morning’s hearing.

I also want to thank our distinguished panel for not only taking the time to appear before us today, but for their time and effort in preparing this report.

The title of this report, ‘‘Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future,’’ summarizes the challenge before

us.

There is a general uncertainty about our country’s future economic prospects and

a desire for guidance on how to move forward. I think that the report provided by

the Panel takes some steps towards providing that guidance.

A few disturbing facts from the report jumped out at me:

The large wage disparity between U.S.-based scientists and engineers and their

competitors in China and India; and

The 110 chemical facilities that have closed or are slated for closure in the U.S.

coupled with the 120 large chemical plants currently under construction globally—one new plant in the U.S. and 50 in China.

China is producing more than 600,000 engineers per year.

As the report notes, ‘‘Thanks to globalization, workers in virtually every sector

must now face competitors who live just a mouse-click away, . . .’’ I’m left wondering where will the good high-paying jobs be for the next generation—in the U.S.

or in some other country.

The report outlines a number of specific actions we can take to improve the innovation environment in the U.S. Many of these recommendations are familiar to us

because they are what the Science Committee has advocated in legislation.

For example, substantial increases in funding for NSF and the Office of Science

at DOE. In the area of science education, the Committee has authorized scholarships for math, science and engineering students to obtain teaching certificates as

28

well as the math and science partnership program to improve the training of new

teachers.

There seems to be a broad consensus on what the U.S. should be doing, but the

Administration has not followed through in its funding requests.

This report highlights that our current federal R&D investment strategies are not

up to meeting the global competitive paradigm of the 21st century. The recommendations represent a challenge to the Administration and to Congress to take

action now.

I am interested about one of the Panel’s statements which is that some of its recommendations ‘‘require funds that would ideally come from the re-allocation of existing funds.’’ What is not identified is what funds should be re-allocated or why.

I hope our witnesses will provide some more detail into the Panel’s thinking.

We can all agree that more R&D will result in more innovation, but one issue

not addressed by this report is will it really generate more and better jobs in the

U.S.? Or will the exploitation of these innovations quickly move to countries with

lower cost labor?

I hope the panel has some thoughts on how to ensure that the development of

new technologies leads to the creation of new jobs in the U.S. One only has to look

at most types of consumer electronics—the history of VCR technology as an example—to see that we have often lost the economic payoff from technology invented

here.

In closing, it seems that we understand the challenges we face and we have agreement on how to address these challenges. What is lacking is the political will to

make the investment.

I would like to point out that his report represents a consensus of panelists representing business, academic, and education leaders. I would challenge the Panel to

press the Administration and Congress to fund their recommendations. As a nation,

we cannot afford not to.

[The prepared statement of Mr. Ehlers follows:]

PREPARED STATEMENT OF REPRESENTATIVE VERNON J. EHLERS

I am delighted with the Academy for producing this report, and am pleased that

the Committee is taking the time to delve into the report’s recommendations and

proposed implementation.

For many years, I have stressed the need to increase our national investment in

fundamental research and education. Despite passing an authorization bill to double

the budget of the National Science Foundation (NSF) by 2008, we are still falling

very short of that goal set by Congress in 2002. Each year, the chasm between the

authorization and appropriation broadens, while at the same time the NSF education budget continues to diminish. But today there are an increasing number of

voices joining the chorus recognizing the need for change. The voices are louder and

clearer as the message begins to unify: build our science, technology, engineering

and math skills, and we will maintain the strength and competitiveness of the

United States. Business, industry and academic leaders are all drawing attention

to the connection between our prosperity and a technically-skilled workforce. As we

see the indications that our science and math education is slipping, we are jeopardizing our quality of life and national security, especially for our children and grandchildren. Without bolstering our science and technology infrastructure, we cannot

expect these trends to change.

There are many challenging questions raised by the report; it will take the strong

dedication of the Committee and Chair to share these recommendations with a variety of stakeholders. I thank the witnesses today for their good work, and encourage

them and the others they represent to continue to publicize this problem and lobby

Members of Congress to make national competitiveness a priority through their

strong support of fundamental research and education. I commend the witnesses for

being here today, and look forward to continuing to work with you to not only share

your report recommendations, but to actively seek solutions.

[The prepared statement of Mr. Costello follows:]

PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO

Good morning. I want to thank the witnesses for appearing before our committee

to discuss the report released by the National Academy of Sciences (NAS) on October 12, 2005 entitled, Rising Above the Gathering Storm: Energizing and Employing

America for a Brighter Economic Future. I commend Chairman Boehlert and Ranking Member Gordon for holding this hearing today because the recommendations

29

this report issued will provide our committee with good policy options to explore to

ensure new ideas and innovation.

In June of this year, Chairman Boehlert and Ranking Member Gordon wrote to

NAS to endorse the Senate request for a study of ‘‘the most urgent challenges the

United States faces in maintaining leadership in key areas of science and technology,’’ to provide advice and recommendations for maintaining U.S. leadership in

science and technology in the face of growing global competition. Today, Americans

are feeling the effects of globalization because a substantial portion of our workforce

finds itself in direct competition for jobs with lower-wage workers around the globe.

It comes as no surprise that high-tech jobs are being out-sourced to foreign countries

like China and India. Without high-quality, knowledge intensive jobs and the innovative enterprises that lead to discovery and new technology, our economy will suffer and our constituents will face a lower standard of living. I am very concerned

about the issue of off-shoring and out-sourcing and how these trends will affect current scientists and engineers, as well as the future employment opportunities and

career choices of students.

A few months ago, Ranking Member Gordon and I hosted our first in a series of

several bipartisan roundtable discussions to frame what is known and unknown

about supply and demand for the Science and Technology workforce, outline factors

that influence supply and demand, and explore policy options. From the first Roundtable, we learned that it is difficult to determine how many jobs we have lost because we do not have sufficient or accurate data on the problem. I believe we have

to raise awareness of this issue—the federal research and development budget—in

order to keep high wage science and engineering jobs here in the U.S.

Despite claims to the contrary by the Administration, the Federal R&D budget

is not faring well, particularly the non-defense component which has been flat for

30 years. In FY06, the Administration proposed a 1.4 percent spending reduction

in the federal science and technology budget. Reductions like this continue to chip

away at the U.S. research base and jeopardize our economic strength and long-term

technological competitiveness. Innovation does indeed drive our economic growth,

but we must have the knowledge base to drive innovation. Encouraging more children in careers in math and science is a needed start but only the beginning. We

must do better in understanding the global competition facing our science and engineering workforce.

I hope this hearing will draw us closer to an answer of how we can ensure the

U.S. benefits from innovation, compete with foreign scientists and engineers without

lowering salaries, increase funding for basic research in the physical sciences and

engineering, and improve teacher recruitment and retention so we can increase student interest levels and their knowledge and understanding of these valuable subjects.

I welcome our panel of witnesses and look forward to their testimony.

[The prepared statement of Ms. Johnson follows:]

PREPARED STATEMENT OF REPRESENTATIVE EDDIE BERNICE JOHNSON

Thank you, Mr. Chairman and Ranking Member.

The United States has slashed its federal investment in scientific research. In

1965, in the Sputnik era, funding for federal research and development as a percentage of gross domestic product was slightly over two percent. In 2005, it is estimated to be 1.07 percent.

As a result, scientists are not getting the money they need and are pursuing alternative careers. Young people see the trend and opt not to study science.

Meanwhile, other nations have ramped up their technical infrastructure and

workforce. The National Academies’ recent report on the United States and global

competitiveness found that in Germany, 36 percent of undergraduates receive their

degrees in science and engineering. In China, the figure is 59 percent, and in Japan

66 percent. In the United States, the corresponding figure is 32 percent.

I concur that these are ‘‘worrisome indicators’’ indeed. Our competitiveness is

quietly slipping. We are a net importer of high technology products, and soon we

will be a net importer of people with high technology expertise.

I am glad the National Academies published this report and hope the leadership

of this Congress will act on these recommendations. Progress is expensive, but decay

is intolerable.

[The prepared statement of Mr. Honda follows:]

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PREPARED STATEMENT OF REPRESENTATIVE MICHAEL M. HONDA

Chairman Boehlert and Ranking Member Gordon, I thank you for holding this important hearing today and for requesting that the study ‘‘Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future’’

be undertaken.

This report makes a many good recommendations in a number of areas. In the

area of education, for example, it suggests that we should recruit new science and

math teachers, that we should strengthen the skills of teachers the math, science,

and engineering subject areas, and we increase the number of students who take

math and science courses.

But what I do not see in the recommendations troubles me. What I think is missing is the idea of teaching innovation.

I’m worried that if we simply try to produce a bunch of new scientists and engineers with the same skills as the ones who are unemployed back home in my district today, things aren’t going to get any better here. China and India will be able

to produce more scientists and engineers than us, and if they are paid less, work

will still be done overseas.

We have been lucky in the past that a few people who were innately innovative

and inventive also had enough knowledge in math and science to make breakthroughs in these areas that started entirely new industries. Skilled scientists and

engineers have been able to sustain incremental progress in these new industries,

but the pressure from other nations is growing ever greater.

While some people are simply blessed with the special skills of innovation and invention and they have prospered in the past, we need to realize that these skills

are teachable and bring them into our curriculum. An MIT–Lemelson/NSF study on

invention recognized this and suggested incorporating innovation into our curriculum, and Singapore’s Minister of Education has begun to make such changes to

his own country’s curriculum to prepare his country for the future.

I hope that the witnesses will address this shortcoming of their report during the

hearing, and that the Committee will pay attention to this important issue in the

future.

[The prepared statement of Mr. Carnahan follows:]

PREPARED STATEMENT OF REPRESENTATIVE RUSS CARNAHAN

Mr. Chairman and Mr. Ranking Member, thank you for again bringing this important issue to our attention in the Science Committee.

For years, the U.S. has felt the backlash of an increasingly competitive global

market, most sharply felt in the loss of jobs as they shift overseas. I applaud the

effort to look beyond the problems and causes associated with competing in a global

marketplace and to look toward solutions.

It is our duty as leaders of this nation to wisely consider options and vigorously

advocate for the right changes. Our workforce, and thus many of our constituents’

livelihoods, depend on it.

Mr. Augustine, Dr. Vagelos, and Dr. Wulf, thank you for your efforts with this

report and for appearing before us today. I look forward to hearing your testimony.

[The prepared statement of Ms. Jackson Lee follows:]

PREPARED STATEMENT OF REPRESENTATIVE SHEILA JACKSON LEE

Mr. Chairman, let me first thank you for holding this important hearing regarding the recent report published by the National Academy of Sciences. I would also

like to thank our witnesses, Mr. Augustine, Dr. Vagelos, and Dr. Wulf, for being

here today.

The report being presented to us today highlights what is becoming more and

more apparent in recent years, that the United States is losing footing as the dominant knowledge, innovation, and business center of the world; our policies are resulting in the deterioration of our economy. As highlighted in the testimony, an

overwhelming amount of evidence points to this. Students today are less prepared

to face the global market than they once were, and foreign students are becoming

more and more prepared. The most glaring statistic to me contained in the testimony was that in 2003, foreign students earned almost 60 percent of engineering

doctorates awarded in U.S. universities!

Our children today are not being given the tools necessary to compete in the world

of tomorrow. We are not giving them the proper training, the proper teachers or incentive to succeed. This is an issue that must cross party lines and rest at the heart

31

of all Americans because this is about the future strength of our nation. We became

the world’s greatest economic power through innovation and education, and today

we must renew that challenge to push the boundaries of discovery.

The importance of a strong scientific and technological enterprise is a primary factor in driving economic growth. Substantial and sustained U.S. investments in research and education over the last 50 years spawned an abundance of technological

breakthroughs that transformed American society and helped the U.S. to become

the world’s dominant economy. Economists estimate that these technological advances have been responsible for half of U.S. economic growth since the end of

World War II. The relationship between innovation and economic growth has only

grown in recent years as the world shifts to an increasingly knowledge-based economy. In an age where information travels around the world at previously unimaginable speeds, the United States must continue to stay steps ahead of everyone else.

This means that status quo policies on education will not work.

At the same time, other nations—particularly emerging nations such as China

and India—have recognized the importance of science and technology to economic

growth, and are pouring resources into their scientific and technological infrastructure, rapidly building their human capital and dramatically increasing their ability

to compete with U.S. businesses on the world stage.

As was mentioned in the testimony, there unfortunately will not be a Sputniklike event, where the United States gets a powerful wakeup call. Instead, our decline in competitiveness is occurring slowly, and from a combination of many factors.

The foundation our mothers and fathers laid for us slowly crumbles around us. This

is why I find this hearing to be so important. We as the Federal Government must

ensure that our nation does not lag behind in innovation and discovery. We must

ensure that our children are properly prepared to face the increasingly challenging

global market. Finally, we must continue to ensure that we in the United States

continue to be the Nation that sets the bar for everyone else.

I would again like to thank our witnesses for being here today, and I look forward

to an open and enlightened conversation on the powerful suggestions made in this

report.

[The prepared statement of Mr. Baird follows:]

PREPARED STATEMENT OF REPRESENTATIVE BRIAN BAIRD

Mr. Chairman, I would like to thank you and Ranking Member Gordon for raising

importance to the issue of math and science education as it relates to scientific and

technological competitiveness. I would also like to thank the witnesses—Mr. Augustine, Dr. Vagelos, and Dr. Wulf—for testifying today on the recently released National Academy of Sciences report entitled, ‘‘Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.’’ One of the recommendations made in this report is to vastly improve K–12 math and science education. I could not agree more. This should be one of the highest priorities of the

Federal and State governments and I look forward to reviewing the testimony of our

witnesses and the specific recommendations from this report to translate these recommendations into Congressional action.

With the topic of today’s discussion centering around science competitiveness, it

could not be more appropriate to honor a guest visiting the Committee today, as she

can speak directly to the importance of a quality science education—and she can do

so quite well I might add. This honoree is Neela Thangada, the winner of the Discovery Channel Young Scientist Challenge, and her mother, Mrudula Rao

Thangada. Neela was named ‘‘Top Young Scientist’’ at an awards ceremony yesterday evening for her project, ‘‘Effects of Various Nutrient Concentrations on the

Cloning of the Eye of the Solanum Tuberosum at Multiple Stages’’ or, in laymen’s

terms, she set out to explore potato cloning.

I had the chance to meet with her and her mother before the hearing, and was

impressed with her enthusiasm for science and discovery and her ability to effectively speak about her research. She is indeed an incredible young lady.

Her trip to the House Science Committee today from her home in Texas was the

result of an important public-private partnership initiated by the Discovery Channel. Every year since 1999, Discovery has launched the competition in partnership

with Science Service to nurture the next generation of American scientists at a critical age when interest in science begins to decline. The cutting-edge competition

gives 40 of the Nation’s top middle school students the opportunity to demonstrate

their scientific know-how and push the limits of their knowledge in the quest for

the title of America’s ‘‘Top Young Scientist of the Year.’’

32

More than 9,500 middle school students have formally entered the Challenge

since its inception, and these students are drawn from an initial pool of 75,000 students annually. Previous winners have attained more than $500,000 in scholarship

awards and participated in science-related trips that have taken them to the far corners of the globe, from the Galapagos Islands to the Ukraine.

This year’s finalists traveled to Washington, D.C., to compete in team-based,

interactive challenges designed around the theme of ‘‘Forces of Nature.’’ In the wake

of the recent natural disasters that ravaged the Gulf Coast of the United States and

Southeast Asia, each student faced simulated challenges—from fog banks to hurricanes to tsunamis—that utilized their broad range of knowledge in order to understand the implications and scope of natural disasters.

Public-private partnerships such as these exist to challenge and engage our students and we must continue to support such programs. However, we must also better prepare and inspire our math and science teachers to provide the highest-quality

education for all students throughout the country. We can start by implementing

some of the recommendations laid out here today.

Chairman BOEHLERT. Thank you very much.

And you will notice the similarity in theme between, you know,

this is not a division. The center of this committee separating the

Democrats from the Republicans doesn’t separate us at all on the

importance of the subject matter today. This is something that Mr.

Gordon and I and every single Member of this committee, on both

sides, believe passionately in and work, we think, hopefully, effectively on. And that is why we welcome what you bring to the table.

And we want to give it as much attention as possible.

I would suggest that this probably, if we are looking on the

grand scheme of things on the Hill today of what is going on, there

is probably no more important discussion than the one we are having right here. And quite frankly, it doesn’t have a lot of sex appeal

for a lot of the media. And so we don’t get a lot of coverage. I don’t

care if they print what I say, but I darn sure care about printing

what you guys are going to say to us. That message has to get out.

And the other observation I would make, and we have had it in

private conversations, but I will make it again for the official

record, I know that some of the captains of industry, in circles you

travel, you know and they know and we know that we have got to

do better. And in the polite conversation we have at these various

functions, they will talk about such needs as getting back to the

basics of greatly improving K–12 science and math education.

There is no more basic building block for the foundation of the future development of this nation than that. And they will talk to me

all of the time about it. Some of the great names in the captains

of industry will talk to me about that. And then they will talk to

me about the importance of our investment in long-range research,

about how magnificent the National Science Foundation is, sponsoring university-based research, and why we need young scholars

like I have been privileged to introduce here today to inspire them

to greater heights. And I say to them, ‘‘You know what?’’ I have

told these guys, ‘‘You people have got more lobbyists running

around this Hill, high-priced lobbyists who know what they are

doing, and they are very smart, and they are very effective, and

they knock on the door and they come in. You know, they don’t

come in to talk to me about the importance of K–12 science and

math education or investing more in the science enterprise. They

are in to discuss the latest tweaking needed in the tax policy or the

adjustment necessary for trade policy. They are thinking of the moment and the bottom line for the next quarterly statement.’’ And

33

I understand that. But there is never enough time to get to the second part of their agenda, which is what we are discussing today.

So that is why I think this is very important, and that is why

I applaud what you have done, and so does Mr. Gordon. I mean,

we have had conversation about your work, and boy, we couldn’t

be happier. And we just want to try to—we are going to play the

role of dentist this morning and sort of pull from you some new

ideas on what we can do beyond the report, because this town is

filled with reports that have gone on for years and the libraries of

the various Committee rooms and offices have reports that are

gathering dust. They read them initially and say, ‘‘Oh, what a

great report,’’ and then go on to the next thing and never go back

to look at the report.

I pledge to you, and I think I can do it for both of us, that we

are going to follow through, because some of the things that you

have mentioned here we are already doing, but we are nickel-anddiming the issue. We have got to make some substantial investments, and it is an investment that is going to pay handsome dividends.

With that, let me present our distinguished panel.

Mr. Norman Augustine, Retired Chairman and CEO, Lockheed

Martin Corporation. Mr. Augustine is a frequent visitor to this

committee and to Capitol Hill and has served in so many capacities

in government and in the private sector with great distinction. Dr.

P. Roy Vagelos, Retired Chairman and CEO, Merck & Company.

And Doctor, you are preceded by your reputation, and we thank

you for the great work you are doing. And a dear friend of long

standing who is constant counsel for this committee, Dr. William

Wulf, President of the National Academy of Engineering.

Every day, what good comes from government usually comes because government has the common sense, to work with leaders in

the private sector to interact and to be guided and to develop an

agenda that offers some positive approaches to some thorny problems. And we have before us three people who are always there to

propose workable solutions. And for that, we are eternally grateful.

With that, let me say the general rule, and you know the ground

rules, is don’t get nervous when the light comes on, but we would

ask that you summarize your opening statement. And I’m not even

going to put an arbitrary time limit on it, because this is so important and you are the only panel. And we will go right to it.

With that, Mr. Chairman, the floor is yours.

STATEMENT OF MR. NORMAN R. AUGUSTINE, RETIRED

CHAIRMAN AND CEO, LOCKHEED MARTIN CORPORATION

Mr. AUGUSTINE. Well, thank you, Mr. Chairman, and Members

of the Committee. And I thank you in particular for all of your efforts in this area in the past—really, it was by virtue of your committee and your colleagues in the Senate that gave us the opportunity to take on our study. And we, all 20 members, I can assure

you, feel very compassionate about the topic.

Also, I would like to congratulate Neela. My congratulations and

ours. She is an example to why we are here.

I would, Mr. Chairman, with your permission, like to submit a

longer statement for the record and brief——

34

Chairman BOEHLERT. Without objection, your entire statement

will appear in the record. And summarize it in any manner you

think is appropriate.

Mr. AUGUSTINE. Thank you very much.

The thrust of our committee’s findings are fairly straightforward.

They would begin by saying that we conclude that individuals’ prosperity, the prosperity of individuals, depends very heavily upon

the quality of the jobs they can hold. And collectively, our prosperity depends very heavily on the tax revenues that our government can acquire, which, in turn, depend upon the quality of the

jobs our citizens can hold. So quality jobs are at the root of our discussions.

But there has been a major change brought about by technology

largely in this scenario. That change some people refer to as the

‘‘death of distance’’. And it has been brought about by the advent

of advanced information processing, storage and transmissions that

have made those functions almost free in today’s world. What that

means is that jobs that used to have to be performed by people who

are in near proximity to their work or to each other now can be

performed by people all around the world. And that, in turn, means

that Americans, when they compete for jobs, will no longer compete

with their neighbors. They will compete with people throughout the

globe. And that is true not only at the so-called lower end of the

job spectrum, it will be true throughout the job spectrum. This is

in a world where there are three billion new capitalists who have

appeared in the last 15 years since the end of the Cold War.

The United States operates at a considerable disadvantage today

in this competition for jobs. You could—I was in Vietnam recently.

You could hire 20 assembly workers for the minimum U.S. wage.

In India today, you could hire 11 engineers for the cost of one in

the United States. And they are very good engineers. Many of them

trained at our universities.

And as I said, few jobs are safe. Today, if you go to many hospitals in this country and have a CAT scan or an X-ray, there is

a fair chance it will be read by a physician in Bangalore. Similarly,

there is an office very near to where we are now that, if you go in

their building, they have a flat screen on the wall, and their receptionist there very pleasantly helps you find the person you are supposed to go see and controls access to the building. She is in Bangalore. I am sure you are familiar with many other examples of

this type.

Is this not good that the rest of the world is prospering? And our

committee’s conclusion is a resounding yes. It will make the world

safer. It will create more customers for our products, and it will

create less costly products for our consumers. But as with all times

of tectonic changes, there are likely to be winners, and there are

likely to be losers. And our committee’s goal is to help assure that

America will be among the winners.

There is an enigma, and your quote from Hemingway, Mr. Chairman, summarizes it better than I am able to do it. But we are in

an environment where we are not likely to see sudden warnings

such as we had on 9/11, Pearl Harbor, Sputnik. It is more like the

proverbial frog being gradually boiled. Thomas Friedman has summarized by saying, in his great book ‘‘The World is Flat,’’

35

globalization has ‘‘accidentally made Beijing, Bangalore, and Bethesda next door neighbors.’’ And indeed, when it comes to seeking

a job, those jobs are just a mouse click away to many people

throughout the world.

We operate at a severe disadvantage in the labor cost area, but

there are other indicators that are not particularly good, either.

One of the things that has been keeping us going, as this committee knows so well, in the area of science, has been the number

of very talented foreign-born individuals who have chosen to come

to America and live and work here. Today, 38 percent of the Ph.D.s

in America working in science and technology are foreign-born.

Fifty-nine percent of last year’s doctorates in engineering were foreign students, and that is at U.S. universities.

But if you look at how we are doing ourselves with our nativeborn population, a recent test of mathematical understanding

among about tenth grade students conducted in various nations of

the world, the United States was in 27th place.

This sort of thing is propagating into the industrial world where

last year U.S. chemical companies closed 70 plants in the United

States. They have earmarked 40 more to close. At the same time,

there are 120 new chemical plants being built in the world, each

with a price tag of $1 billion or more. Of those, one is in the United

States and 50 are in China.

U.S. companies now spend more money on litigation and related

costs than they spend on research and development, Mr. Gordon,

to your point. These are trends that we can not long survive. And

as we know, once you lose your lead in R&D, it takes a very long

time to recover it, if, indeed, one can at all.

The committee that we assembled through the auspices of the

National Academies included 20 members, four or five CEOs or

former CEOs of Fortune 100 companies, three nobel laureates,

presidents of five or six major universities, several former presidential appointees, as far as I know, from both parties. We didn’t

ask that question. And they, as you said, Mr. Chairman, with regard to your committee, come together in a spirit of unanimity on

each of the issues that we have discussed.

I will close my opening remarks by indicating that we have provided four recommendations. They tend to be rather broad. We

have backed them with 20 quite specific implementing actions,

things you can go do, some of which you are doing, some of which

we do need to do more of.

Of the four general recommendations, the one that all 20 of us

agree is the highest priority, is to fix the K–12 science and technology education system in this country, public education. Secondly

is to put more money into basic research in specific fields, namely

into the physical sciences, mathematics, engineering, and computer

sciences. This should be done not to disinvest in the health and biological sciences, which are very important, but they have just seen

a period of major investment. Thirdly, to encourage more students

to study math and science and engineering and to make it easier

to attract foreign students to study and stay in our country in

those fields. And then lastly, to create an environment that makes

the United States an attractive place for innovation that will atVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00043 Fmt 6633 Sfmt 6601 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
36

tract companies from abroad as well as our own companies to invest here rather than abroad.

So with that opening, I will turn to my colleagues and thank you

for this opportunity. And we look forward to your questions.

[The prepared statement of Mr. Augustine follows:]

PREPARED STATEMENT OF NORMAN R. AUGUSTINE

Mr. Chairman and Members of the Committee,

Thank you for this opportunity to appear before you on behalf of the National

Academies’ Committee on Prospering in the Global Economy of the 21st Century.

As you know, our effort was sponsored by the National Academy of Sciences, National Academy of Engineering and Institute of Medicine (collectively known as the

National Academies). The National Academies were chartered by Congress in 1863

to advise the government on matters of science and technology.

The Academies were requested by Senator Alexander and Senator Jeff Bingaman,

members of the Senate Committee on Energy and Natural Resources to conduct an

assessment of America’s ability to compete and prosper in the 21st century—and to

propose appropriate actions to enhance the likelihood of success in that endeavor.

This request was endorsed by Representatives Sherwood Boehlert and Bart Gordon

of the House Committee on Science.

To respond to that request the Academies assembled 20 individuals with diverse

backgrounds, including university presidents, CEOs, Nobel Laureates and former

presidential appointees. The result of our committee’s work was examined by over

forty highly qualified reviewers who were also designated by the Academies. In undertaking our assignment we considered the results of a number of prior studies

which were conducted on various aspects of America’s future prosperity. We also

gathered sixty subject-matter experts with whom we consulted for a weekend here

in Washington and who provided recommendations related to their fields of specialty.

It is the unanimous view of our committee that America today faces a serious and

intensifying challenge with regard to its future competitiveness and standard of living. Further, we appear to be on a losing path. We are here today hoping both to

elevate the Nation’s awareness of this developing situation and to propose constructive solutions.

The thrust of our findings is straightforward. The standard of living of Americans

in the years ahead will depend to a very large degree on the quality of the jobs that

they are able to hold. Without quality jobs our citizens will not have the purchasing

power to support the standard of living which they seek, and to which many have

become accustomed; tax revenues will not be generated to provide for strong national security and health care; and the lack of a vibrant domestic consumer market

will provide a disincentive for either U.S. or foreign companies to invest in jobs in

America.

What has brought about the current situation? The answer is that the prosperity

equation has a new ingredient, an ingredient that some have referred to as ‘‘The

Death of Distance.’’ In the last century, breakthroughs in aviation created the opportunity to move people and goods rapidly and efficiently over very great distances.

Bill Gates has referred to aviation as the ‘‘World Wide Web of the 20th century.’’

In the early part of the present century, we are approaching the point where the

communication, storage and processing of information are nearly free. That is, we

can now move not only physical items efficiently over great distances, we can also

transport information in large volumes and at little cost.

The consequences of these developments are profound. Soon, only those jobs that

require near-physical contact among the parties to a transaction will not be opened

for competition from job seekers around the world. Further, with the end of the Cold

War and the evaporation of many of the political barriers that previously existed

throughout the world, nearly three billion new, highly motivated, often well educated, new capitalists entered the job market.

Suddenly, Americans find themselves in competition for their jobs not just with

their neighbors but with individuals around the world. The impact of this was initially felt in manufacturing, but soon extended to the development of software and

the conduct of design activities. Next to be affected were administrative and support

services. Today, ‘‘high end’’ jobs, such as professional services, research and management, are impacted. In short, few jobs seem ‘‘safe’’:

37

• U.S. companies each morning receive software that was written in India overnight in time to be tested in the U.S. and returned to India for further production that same evening—making the 24-hour workday a practicality.

• Back-offices of U.S. firms operate in such places as Costa Rica, Ireland and

Switzerland.

• Drawings for American architectural firms are produced in Brazil.

• U.S. firm’s call centers are based in India—where employees are now being

taught to speak with a mid-western accent.

• U.S. hospitals have X-rays and CAT scans read by radiologists in Australia

and India.

• At some McDonald’s drive-in windows orders are transmitted to a processing

center a thousand miles away (currently in the U.S.), where they are processed and returned to the worker who actually prepares the order.

• Accounting firms in the U.S. have clients tax returns prepared by experts in

India.

• Visitors to an office not far from the White House are greeted by a receptionist on a flat screen display who controls access to the building and arranges contacts—she is in Pakistan.

• Surgeons sit on the opposite side of the operating room and control robots

which perform the procedures. It is not a huge leap of imagination to have

highly-specialized, world-class surgeons located not just across the operating

room but across the ocean.

As Tom Friedman concluded in The World is Flat, globalization has ‘‘accidentally

made Beijing, Bangalore and Bethesda next door neighbors.’’ And the neighborhood

is one wherein candidates for many jobs which currently reside in the U.S. are now

just a ‘‘mouse-click’’ away.

How will America compete in this rough and tumble global environment that is

approaching faster than many had expected? The answer appears to be, ‘‘not very

well’’—unless we do a number of things differently from the way we have been doing

them in the past.

Why do we reach this conclusion? One need only examine the principal ingredients of competitiveness to discern that not only is the world flat, but in fact it may

be tipping against us.

One major element of competitiveness is, of course, the cost of labor. I recently

traveled to Vietnam, where the wrap rate for low-skilled workers is about twentyfive cents per hour, about one-twentieth of the U.S. minimum wage. And the problem is not confined to the so-called ‘‘lower-end’’ of the employment spectrum. For

example, five qualified chemists can be hired in India for the cost of just one in

America. Given such enormous disadvantages in labor cost, we cannot be satisfied

merely to match other economies in those other areas where we do enjoy strength;

rather we must excel . . . markedly.

The existence of a vibrant domestic market for products and services is another

important factor in determining our nation’s competitiveness, since such a market

helps attract business to our shores. But here, too, there are warning signs: Goldman Sachs analysts project that within about a decade, fully 80 percent of the

world’s middle-income consumers will live in nations outside the currently industrialized world.

The availability of financial capital has in the past represented a significant competitive advantage for America. But the mobility of financial capital is legion, as evidenced by the willingness of U.S. firms to move factories to Mexico, Vietnam and

China if a competitive advantage can be derived by doing so. Capital, as we have

observed, crosses geopolitical borders at the speed of light.

Human capital—the quality of our work force—is a particularly important factor

in our competitiveness. Our public school system comprises the foundation of this

asset. But as it exists today, that system compares, in the aggregate, abysmally

with those of other developed—and even developing—nations . . . particularly in the

fields which underpin most innovation: science, mathematics and technology.

Of the utmost importance to competitiveness is the availability of knowledge capital—‘‘ideas.’’ And once again, scientific research and engineering applications are

crucial. But knowledge capital, like financial capital, is highly mobile. There is one

major difference: being first-to-market, by virtue of access to new knowledge, can

be immensely valuable, even if by only a few months. Craig Barrett, a member of

our committee and Chairman of Intel, points out that 90 percent of the products

his company delivers on December 31st did not even exist on January 1st of that

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same year. Such is the dependence of hi-tech firms on being at the leading edge of

scientific and technological progress.

There are of course many other factors influencing our nation’s competitiveness.

These include patent processes, tax policy and overhead costs—such as health care,

regulation and litigation—all of which tend to work against us today. On the other

hand, America’s version of the Free Enterprise System has proven to be a powerful

asset, with its inherent aggressiveness and discipline in introducing new ideas and

flushing out the obsolescent. But others have now recognized these virtues and are

seeking to emulate our system.

But is it not a good thing that others are prospering? Our committee’s answer to

that question is a resounding ‘‘yes.’’ Broadly based prosperity can make the world

more stable and safer for all; it can make less costly products available for American

consumers; it can provide new customers for the products we produce here. Yet it

is inevitable that there will be relative winners and relative losers—and as the

world prospers, we should seek to assure that America does not fall behind in the

race. The enigma is that in spite of all these factors, America seems to be doing quite

well just now. Our nation has the highest R&D investment intensity in the world.

We have indisputably the finest research universities in the world. California alone

has more venture capital than any nation in the world other than the United States.

Two million jobs were created in America in the past year alone, and citizens of

other nations continue to invest their savings in America at a remarkable rate.

Total household net worth is now approaching $50 trillion.

The reason for this prosperity is that we are reaping the benefits of past investments—many of them in the fields of science and technology. But the early indicators of future prosperity are generally heading in the wrong direction. Consider the

following:

• For the cost of one engineer in the United States, a company can hire 11 in

India.

• America has been depending heavily on foreign-born talent. Thirty-eight percent of the scientists and engineers in America holding doctorates were born

abroad. Yet, when asked in the spring of 2005, what are the most attractive

places in the world in which to live, respondents in only one of the countries

polled indicated the U.S.A.

• Chemical companies closed seventy facilities in the U.S. in 2004, and have

tagged forty more for shutdown. Of 120 new chemical plants being built around the world with price tags of $1 billion or more, one is in the U.S. Fifty

are in China.

• In 1997 China had fewer than 50 research centers managed by multi-national

corporations. By 2004 there were over 600.

• Two years from now, for the first time, the most capable high-energy particle

accelerator on Earth will reside outside the United States.

• The United States today is a net importer of high technology products. The

U.S. share of global high tech exports has fallen in the last two decades from

30 percent to 17 percent, while America’s trade balance in high tech manufactured goods shifted from a positive $33B in 1990 to a negative $24B in 2004.

• In a recent international test involving mathematical understanding, U.S.

students finished in 27th place among the nations participating.

• About two-thirds of the students studying chemistry and physics in U.S. high

schools are taught by teachers with no major or certificate in the subject. In

the case of math taught in grades five through 12, the fraction is one-half.

Many such students are being taught math by graduates in physical education.

• In one recent period, low-wage employers like Wal-Mart (now the Nation’s largest employer) and McDonald’s created 44 percent of all new jobs. Highwage employers created only 29 percent.

• In 2003 foreign students earned 59 percent of the engineering doctorates

awarded in U.S. universities.

• In 2003 only three American companies ranked among the top 10 recipients

of patents granted by the U.S. Patent Office.

• In Germany, 36 percent of undergraduates receive their degrees in science

and engineering. In China, the corresponding figure is 59 percent, and in

Japan it is 66 percent. In the U.S., the share is 32 percent. In the case of

engineering, the U.S. share is five percent, as compared with 50 percent in

China.

39

• The United States is said to have over 10 million illegal immigrants, but the

number of legal visas set-aside annually for ‘‘highly qualified foreign workers’’ was recently dropped from 195,000 per year down to 65,000.

• At a time when the world’s nations are clamoring to obtain science and engineering talent, U.S. law will grant a visa for outstanding foreign students to

attend U.S. universities only if they promise they will go home when they

graduate.

• In 2001 (the most recent year for which data are available), U.S. industry

spent more on tort litigation and related costs than on research and development.

As important as jobs are, the impact of these circumstances on our nation’s secu- rity could be even more profound. In the view of the bipartisan Hart-Rudman Commission on National Security, ‘‘. . .the inadequacies of our system of research and

education pose a greater threat to U.S. national security over the next quarter century than any potential conventional war that we might imagine.’’ The good news is that there are things we can do to assure that America does

in fact share in the prosperity that science and technology are bringing the world.

In this regard, our committee has made four broad recommendations as the basis

of a prosperity initiative—and offers 20 specific actions to make these recommendations a reality. They include:

Æ ‘‘Ten Thousand Teachers, Ten Million Minds’’—which addresses America’s K– 12 education system. We recommend that America’s talent pool in science,

math and technology be increased by vastly improving K–12 education.

Among the specific steps we propose are:

• Recruitment of 10,000 new science and math teachers each year through

the award of competitive scholarships in math, science and engineering

that lead to a Bachelor’s degree accompanied by a teaching certificate— and a five-year commitment to teach in a public school.

• Strengthening the skills of 250,000 current teachers through funded

training and education in part-time Master’s programs, summer institutes and Advanced Placement training programs.

• Increasing the number of students who take Advanced Placement science

and mathematics courses.

Æ ‘‘Sowing the Seeds’’—which addresses America’s research base. We recommend strengthening the Nation’s traditional commitment to long-term

basic research through:

• Increasing federal investment in research by 10 percent per year over the

next seven years, with primary attention devoted to the physical sciences,

engineering, mathematics, and information sciences—without

disinvesting in the health and biological sciences.

• Providing research grants to early career researchers.

• Instituting a National Coordination Office for Research Infrastructure to

oversee the investment of an additional $500M per year for five years for

advanced research facilities and equipment.

• Allocating at least eight percent of the existing budgets of federal research agencies to discretionary funding under the control of local laboratory directors.

• Creation of an Advanced Research Projects Agency–Energy (ARPA–E),

modeled after DARPA in the Department of Defense, reporting to the Department of Energy Undersecretary for Science. The purpose is to support

the conduct of out-of-the-box, transformational, generic, energy research

by universities, industry and government laboratories.

• Establish a Presidential Innovation Award to recognize and stimulate scientific and engineering advances in the national interest.

Æ ‘‘Best and Brightest’’—which addresses higher education. In this area we recommend:

• Establishing 25,000 competitive science, mathematics, engineering, and

technology undergraduate scholarships and 5,000 graduate fellowships in

areas of national need for U.S. citizens pursuing study at U.S. universities.

• Providing a federal tax credit to employers to encourage their support of

continuing education.

40

• Providing a one-year automatic visa extension to international students

who receive a science or engineering doctorate at a U.S. university, and

providing automatic work permits and expedited residence status if these

students are offered employment in the U.S.

• Instituting a skill-based, preferential immigration option.

• Reforming the current system of ‘‘deemed exports’’ so that international

students and researchers have access to necessary non-classified information or research equipment while studying and working in the U.S.

Æ ‘‘Incentives for Innovation’’—in which we address the innovation environment

itself. We recommend:

• Enhancements to intellectual property protection, such as the adoption of

a first-to-file system.

• Increasing the R&D tax credit from the current 20 percent to 40 percent,

and making the credit permanent.

• Providing permanent tax incentives for U.S.-based innovation so that the

United States is one of the most attractive places in the world for longterm innovation-related investments.

• Ensuring ubiquitous broadband Internet access to enable U.S. firms and

researchers to operate at the state-of-the-art in this important technology.

It should be noted that we are not confronting a so-called ‘‘typical’’ crisis, in the

sense that there is no 9/11, Sputnik or Pearl Harbor to alert us as a nation. Our

situation is more akin to that of the proverbial frog being slowly boiled. Nonetheless,

while our committee believes the problem we confront is both real and serious, the

good news is that we may well have time to do something about it—if we start now.

Americans, with only five percent of the world’s population but with nearly 30

percent of the world’s wealth, tend to believe that scientific and technological leadership and the high standard of living it underpins is somehow the natural state of

affairs. But such good fortune is not a birthright. If we wish our children and grandchildren to enjoy the standard of living most Americans have come to expect, there

is only one answer: We must get out and compete.

I would like to close my remarks with a perceptive and very relevant poem. It

was written by Richard Hodgetts, and eloquently summarizes the essence of innovation in the highly competitive, global environment. The poem goes as follows:

Every morning in Africa a gazelle wakes up. It knows it must outrun the fastest

lion or it will be killed.

Every morning in Africa a lion wakes up. It knows it must outrun the slowest

gazelle or it will starve.

It doesn’t matter whether you’re a lion or a gazelle—when the sun comes up,

you’d better be running.

And indeed we should.

Thank you for providing me with this opportunity to testify before the Committee.

I would be pleased to answer any questions you have about the report.

Response to House Committee on Science Questions

1. How did the study panel arrive at the recommended 10 percent annual

increase in federally-sponsored basic research over the next seven

years? What other options did the panel consider and what led to the

choice of 10 percent?

After reviewing the proposals for enhanced research funding that have been made

in recent years, the committee concluded that a 10 percent annual increase over a

seven-year period would be appropriate. This achieves the doubling that was in

principle part of the NSF Authorization Act of 2002 approved by Congress and the

President, but would expand it to other agencies and focus that increase on the

physical sciences, engineering, mathematics, and the information sciences as well as

DOD basic research.

The committee viewed enhanced funding in these fields as urgent. It chose the

10 percent level and seven-year time frame as the best way for these funds to be

spent effectively. The base for this doubling (federal funding for the fields listed plus

DOD basic research—not including the specified fields so there is no double-counting) was approximately $8 billion in FY 2004.

41

1 COSEPUP. 1993. Science, Technology, and the Federal Government: National Goals for a

New Era. Washington, DC: National Academy Press.

By taking this action, the balance of the Nation’s research portfolio in fields that

are essential to the generation of both ideas and skilled people for the Nation’s econ- omy and national/homeland security would be restored. That does not mean that

there should be a disinvestment in such important fields as the life sciences (which

have in fact seen growth in recent years) or the social sciences. A balanced research

portfolio in all fields of science and engineering research is critical to U.S. prosperity.

As indicated in the National Academies Committee on Science, Engineering, and

Public Policy’s (COSEPUP) 1993 report Science, Technology, and the Federal Government: National Goals for a New Era

The United States needs to be among the world leaders in all fields of research

so that it can

• Bring the best available knowledge to bear on problems related to national objectives even if that knowledge appears unexpectedly in a field

not traditionally linked to that objective.

• Quickly recognize, extend, and use important research results that occur

elsewhere.

• Prepare students in American colleges and universities to become leaders

themselves and to extend and apply the frontiers of knowledge.

• Attract the brightest young students.1

2. How did the study panel arrive at the recommended eight percent allocation within each federal research agency’s budget to be managed at

the discretion of technical program managers to catalyze high-risk,

high-payoff research? What other options did the panel consider and

what led to the choice of eight percent?

The committee found that at many agencies approximately one to three percent

of a program’s budget is to be managed at the discretion of the program managers.

The committee believes, as shown through the Defense Advanced Research Projects

Agency (DARPA) model, that more risky research that crosses disciplinary lines can

be funded by using the ‘‘strong program manager’’ approach as is the case at

DARPA. Some committee members believed that five percent was sufficient, others

10 percent—in the end a compromise was reached at eight percent. The committee

is flexible about the specific number as long as the goal of catalyzing high-risk,

high-payoff research (as opposed to incremental research) is achieved. Experience

shows that research investments of this type are exceptionally highly leveraged.

3. Industry and government have both developed numerous energy production and energy efficiency technologies that have not been deployed.

How did the study panel arrive at its implicit conclusion that technology

development is the greater bottleneck (as opposed to policy) in developing energy systems for a 21st century economy?

The committee believes that both policy and technology play a role in responding

to the Nation’s need for clean, affordable, and reliable energy.

While the implementation of some technologies, such as nuclear energy, is discouraged by policy, we still face environmental and safety challenges only science

and engineering research can ameliorate—even if policy-makers were willing to deploy that technology today. There are no doubt questions of cost and policy that affect use of various energy technologies. When was the last nuclear plant commissioned? But those policy decisions are often directly linked to technical capabilities

or the absence thereof. No ‘final’ solutions without serious problems are waiting in

the wings for policy changes. Nuclear energy is an (the) important potential source

of energy but it has security and waste disposal/storage problems that have not been

handled satisfactorily. That is a prime example of a policy problem that requires research to unlock it.

Similarly, the Nation, as the report indicates, has made substantial strides in efficiency, but much more can be done. Yes there is existing efficiency technology that

can be deployed, and, following market forces if oil prices do not return to recent

levels, will probably be used increasingly.

As a result, the Nation will not significantly decrease energy dependence without

technology—policy changes alone are insufficient. The production of electricity and

mobility on a worldwide basis cannot go on for ever in their present form. This country is running a significant risk of remaining substantially dependent on foreign oil.

42

The history of science and technology suggests that radical new solutions may

well be available. The field of energy has not been viewed as exciting by a generation of engineering students. The time required to effect an energy solution from research to implementation is considerable. The rate of growth of the energy problem

(usage) worldwide is likely to have profound effects.

We believe that the Advanced Research Projects Agency (ARPA–E) proposed by

the committee can jump start new approaches to high risk/high payoff research of

the type that DARPA has historically performed to great effect for the military. It

can capture the talents of outstanding young people in industry and academia.

DARPA is a demonstrably effective approach to advanced research and development, and Energy is one of the most important challenges to our nation’s future.

4. Recent surveys of industry suggest that basic research performed at universities and transformational technological innovation have only a very

limited impact on the success of individual companies. Is the impact of

research and innovation different for the economy as a whole than it is

for individual companies?

There is broad consensus among economists that for decades the growth of the

U.S. economy has been driven by technological advances and innovation. These

come almost exclusively from two sources—companies and universities. Companies

are devoting fewer and fewer resources to longer-term research that contributes to

the common base of technology that is available to all; i.e., work that improves our

national capacity but doesn’t necessarily directly drive that company’s profits. Universities are increasingly the only avenue for the research that will lead to fundamentally new things and to a highly-educated workforce. Most large companies

now strive for a large percentage of their products to have been developed within

the last two or three years. This requires constant and focused innovation. The immediate crowds out the strategic.

Truly transformational technologies do not come along every day, and cannot be

readily predicted. But one thing is certain—if we do not invest in research and advanced training for scientists and engineers, they will not occur at all—at least not

in the United States.

Because of this, the committee disagrees with the first premise in the question.

Industry gains not only from the new knowledge generated as a result of academic

research, but also from the skilled people generated as a result of research.

Although many industries as diverse as the pharmaceutical and banking industry

understand the linkage of their business to science and technology, others do not

always fully understand the linkages between its day-to-day activities and science

and technology. For example, at one point, we thought that the trucking industry

was not particularly sensitive to science and technology. But the trucking industry

certainly has been able to enhance its competitiveness by using tools such as the

global positioning system, advanced lightweight materials, the ability to use the

Internet, and weather forecasting to enhance its ability to locate the best route to

a destination thus lowering its operating cost. In addition, its competitiveness could

be enhanced further if new ways are developed for the industry to be more efficient

in its use of fuel and if more affordable fuels are developed.

As a result, when looking at its primary operations, a single company may not

see direct use of basic research if it has not licensed a patent, contracted for studies

or undertaken its own work. But slightly below the surface the substantial contribution of basic research to essentially every company is evident.

For some industries, research provides them with the talented people they need

whose education is influenced in substance, thinking and methods by basic research

experience/training. Talented graduates for corporate laboratories are a primary deliverable of basic research operations at universities. Many major companies, in addition, support basic research at universities first and foremost to gain access to

these people.

Secondly, essentially every company buys technology whose function and cost are

controlled by basic research conducted earlier. So companies that assemble products

using others’ components may not be involved in basic research directly but their

business remains dependent on the basic research behind the component technologies that they use.

Third, basic research creates the new technologies and new enterprises that these

companies will sell to, or buy from or even become. Frankly, it is difficult to think

of a company that does not use technology at some level, and that technology

evolved from basic research.

Fourth, the people generated as a result of the higher education they receive,

underpinned by basic research, create whole new industries and jobs. For example,

in 1997, BankBoston conducted the first national study of the economic impact of

43

a research university. It found that graduates of the Massachusetts Institute of

Technology founded 4,000 firms which, in 1994 alone, employed at least 1.1 million

people and generated $232 billion of world sales. Further, if the companies founded

by MIT graduates and faculty formed an independent nation, the revenues produced

by the companies would make that nation the 24th largest economy in the world.

Within the United States, the companies founded by MIT graduates employed a

total of 733,000 people in 1994 at more than 8,500 plants and offices in the 50

states—equal to one out of every 170 jobs in America. Eighty percent of the jobs

in the MIT-related firms are in manufacturing (compared to 16 percent nationally),

and a high percentage of products are exported.

COMMITTEE BIOGRAPHIC INFORMATION

NORMAN R. AUGUSTINE [NAE*] (Chair) is the retired Chairman and CEO of

the Lockheed Martin Corporation. He serves on the President’s Council of Advisors

on Science and Technology and has served as Under Secretary of the Army. He is

a recipient of the National Medal of Technology.

CRAIG BARRETT [NAE] is Chairman of the Board of the Intel Corporation.

GAIL CASSELL [IOM*] is Vice President for Scientific Affairs and a Distinguished

Lilly Research Scholar for Infectious Diseases at Eli Lilly and Company.

STEVEN CHU [NAS*] is the Director of the E.O. Lawrence Berkeley National Laboratory. He was a co-winner of the Nobel prize in physics in 1997.

ROBERT GATES is the President of Texas A&M University and served as Director

of Central Intelligence.

NANCY GRASMICK is the Maryland State Superintendent of Schools.

CHARLES HOLLIDAY JR. [NAE] is Chairman of the Board and CEO of DuPont.

SHIRLEY ANN JACKSON [NAE] is President of Rensselaer Polytechnic Institute.

She is the Immediate Past President of the American Association for the Advancement of Science and was Chairman of the U.S. Nuclear Regulatory Commission.

ANITA K. JONES [NAE] is the Lawrence R. Quarles Professor of Engineering and

Applied Science at the University of Virginia. She served as Director of Defense Research and Engineering at the U.S. Department of Defense and was Vice-Chair of

the National Science Board.

JOSHUA LEDERBERG [NAS/IOM] is the Sackler Foundation Scholar at Rockefeller University in New York. He was a co-winner of the Nobel prize in physiology

or medicine in 1958.

RICHARD LEVIN is President of Yale University and the Frederick William

Beinecke Professor of Economics.

C.D. (DAN) MOTE JR. [NAE] is President of the University of Maryland and the

Glenn L. Martin Institute Professor of Engineering.

CHERRY MURRAY [NAS/NAE] is the Deputy Director for Science and Technology

at Lawrence Livermore National Laboratory. She was formerly the Senior Vice

President at Bell Labs, Lucent Technologies.

PETER O’DONNELL JR. is President of the O’Donnell Foundation of Dallas, a

private foundation that develops and funds model programs designed to strengthen

engineering and science education and research.

LEE R. RAYMOND [NAE] is the Chairman of the Board and CEO of Exxon Mobil

Corporation.

ROBERT C. RICHARDSON [NAS] is the F.R. Newman Professor of Physics and

the Vice Provost for Research at Cornell University. He was a co-winner of the

Nobel prize in physics in 1996.

P. ROY VAGELOS [NAS/IOM] is the retired Chairman and CEO of Merck & Co.,

Inc.

CHARLES M. VEST [NAE] is President Emeritus of MIT and a Professor of Mechanical Engineering. He serves on the President’s Council of Advisors on Science

and Technology and is the Immediate Past Chair of the Association of American

Universities.

44

GEORGE M. WHITESIDES [NAS/NAE] is the Woodford L. & Ann A. Flowers University Professor at Harvard University. He has served as an adviser for the National Science Foundation and the Defense Advanced Research Projects Agency.

RICHARD N. ZARE [NAS] is the Marguerite Blake Wilbur Professor of Natural

Science at Stanford University. He was Chair of the National Science Board from

1996 to 1998.

BIOGRAPHY FOR NORMAN R. AUGUSTINE

NORMAN R. AUGUSTINE was raised in Colorado and attended Princeton University where he graduated with a BSE in Aeronautical Engineering, magna cum

laude, an MSE and was elected to Phi Beta Kappa, Tau Beta Pi and Sigma Xi.

In 1958 he joined the Douglas Aircraft Company in California where he held titles

of Program Manager and Chief Engineer. Beginning in 1965, he served in the Pentagon in the Office of the Secretary of Defense as an Assistant Director of Defense

Research and Engineering. Joining the LTV Missiles and Space Company in 1970,

he served as Vice President, Advanced Programs and Marketing. In 1973 he returned to government as Assistant Secretary of the Army and in 1975 as Under Secretary of the Army and later as Acting Secretary of the Army. Joining Martin Marietta Corporation in 1977, he served as Chairman and CEO from 1988 and 1987, respectively, until 1995, having previously been President and Chief Operating Officer. He served as President of Lockheed Martin Corporation upon the formation of

that company in 1995, and became its Chief Executive Officer on January 1, 1996,

and later Chairman. Retiring as an employee of Lockheed Martin in August, 1997,

he joined the faculty of the Princeton University School of Engineering and Applied

Science where he served as Lecturer with the Rank of Professor until July, 1999.

Mr. Augustine served as Chairman and Principal Officer of the American Red

Cross for nine years and as Chairman of the National Academy of Engineering, the

Association of the United States Army, the Aerospace Industry Association, and the

Defense Science Board. He is a former President of the American Institute of Aeronautics and Astronautics and the Boy Scouts of America. He is currently a member

of the Board of Directors of ConocoPhillips, Black & Decker and Procter & Gamble

and a member of the Board of Trustees of Colonial Williamsburg and Johns Hopkins

and a former member of the Board of Trustees of Princeton and MIT. He is a member of the President’s Council of Advisors on Science and Technology and the Department of Homeland Security Advisory Board and was a member of the Hart/Rudman Commission on National Security.

Mr. Augustine has been presented the National Medal of Technology by the President of the United States and has five times been awarded the Department of Defense’s highest civilian decoration, the Distinguished Service Medal and has received

the Joint Chiefs of Staff Distinguished Public Service Award. He is co-author of The

Defense Revolution and Shakespeare In Charge and author of Augustine’s Laws and

Augustine’s Travels. He holds eighteen honorary degrees and was selected by Who’s

Who in America and the Library of Congress as one of the Fifty Great Americans

on the occasion of Who’s Who’s fiftieth anniversary. He has traveled in nearly 100

countries and stood on both the North and South Poles.

Chairman BOEHLERT. Thank you very much.

Dr. Vagelos.

STATEMENT OF DR. P. ROY VAGELOS, RETIRED CHAIRMAN

AND CEO, MERCK & CO.

Dr. VAGELOS. Thank you, Mr. Chairman and Committee Members. I am delighted to be here to talk about my specific interest

in this committee work.

And let me start with K–12 education since that was mentioned

by both the Chairman and Mr. Gordon. Mr. Gordon made the statement that much of what is recommended is a rehash of old material. And to some degree, that is true. The problem is that if you

go to the American public today, they will tell you that they are

not pleased with the results of what we are doing in K–12 education, and therefore, the committee looked very hard. And as

45

Norm just mentioned, among the committee of 20 people, the unanimous number one priority was to do something in K–12 education.

So let me tell you a couple of things that we focused on. First

of all, a recognition that if one is going to teach in science and

mathematics, that one should have had some expertise and some

courses in those fields that are going to be taught in K–12, especially in grades eight through twelve. What we have found is that

many of the teachers have had no major, and not even a good

course in the subjects that they are teaching. So you will have a

teacher teaching physics or chemistry or mathematics never having

had a major course in those areas. And so can we expect such

teachers to turn on our young people to be able to enter these

fields?

We decided not, and therefore, what are we recommending?

We are suggesting several programs that are aimed at just that

kind of thing. For instance, there are students who are already majoring as undergraduates in mathematics, science, and engineering,

and there is a program, for instance, it is called ‘‘U Teach’’ at the

University of Texas in Austin, which selects these students and offers them scholarships if they will also take some courses in education and learn to teach during the four years that they are already majoring in these subjects that they are going to potentially

teach. Now these are the people who really understand their subjects.

And so one of the recommendations is 10,000 students per year

of that sort nationally who are going to be expert in their field and

who are becoming teachers, and the payback is that they teach for

five years.

Another program that we have. So that would cover 10,000 new

teachers coming through the mill. If you take the large numbers

of people who are already teaching in these subjects and say can

we resuscitate them because they don’t really have the expertise.

And we have a program, several programs for them.

The one I like best is those people who are willing to come back

for a Master’s degree and spend two years, two summers and weekends to take a Master’s in subject matter, whether it is physics,

chemistry, technology, or mathematics, and they end up, at the end

of two years, as master teachers, really understanding deeply their

subject and being able to turn out other teachers and certainly to

recruit and excite students.

In addition to these Master’s programs, there are programs that

are summer institutes, large numbers of these, where teachers

come back for two to four weeks annually have their education in

specific subject matter improved. So these are the kinds of people

who can turn people on and students on.

Now we can do that for teachers. We can also increase the number of students that are going through middle and high schools who

go into science and math by inducing them to take advanced placement courses and tests or international baccalaureate subjects. And

there is a program, again which was tested and has been going for

10 years in Texas, centered in Dallas in this instance, where both

the teachers are trained in the summer institutes to teach advanced courses, and students are induced by offering them scholarships, and then if they pass the test, they get a bonus of $100. Not

46

only do the students get $100, but the teachers get $100. Now this

program has been going on for 10 years, and the number of students taking these advanced placement courses and tests has gone

up tenfold, 10 times over the course of 10 years. Now the beauty

of that is that these students who are now taking advanced courses

are more likely to go into such courses when they go to college.

Okay. So those are two programs that I think are really important and have been demonstrated to work. And so this is what we

would recommend.

We would also recommend a development of a curriculum, a national curriculum, that would be voluntary and available through

the Internet to, available to all teachers nationally and all school

districts that could be optimizing all of these subjects that we are

talking about.

To jump ahead, to get students then to go into science, engineering, mathematics, computer sciences, there would be scholarships,

undergraduate scholarships at the level of $25,000 per year, competitive, picking the best students in the country to go into these,

also 5,000 fellowships for graduate study in such subjects to get our

students in there and in the same subjects, and finally, as Norm

just talked about the international students, we would like to have

a correction and improvement in both the visa and the immigration

policies so that we can continue to attract or attract again those

kinds of top students internationally who were coming to the

United States and have been slowed down because of various problems since 9/11.

So I think, in summary, I think we all agree that K–12 is important. Certainly our higher education is also important. But it is not

only important for competitiveness, it is important for the jobs, the

high-knowledge jobs of the future that are going to dictate our

economy.

Thank you, Mr. Chairman.

[The prepared statement of Dr. Vagelos follows:]

PREPARED STATEMENT OF P. ROY VAGELOS

Mr. Chairman and Members of the Committee.

Thank you for this opportunity to appear before you on behalf of the National

Academies’ Committee on Prospering in the Global Economy of the 21st Century.

As you know, our effort was sponsored by the National Academy of Sciences, National Academy of Engineering and Institute of Medicine (collectively known as the

National Academies). The National Academies were chartered by Congress in 1863

to advise the government on matters of science and technology.

Mr. Augustine, Chair of the Committee, has discussed the overall concerns the

Committee has about the future vitality of the United States economy. During my

testimony, I will focus on the problems that we’re having in K through 12 education.

The Committee believes the education issue is the most critical challenge the United

States is facing if our children and grandchildren are to inherit ever-greater opportunities for high-quality, high-paying jobs—and our solution and recommendations

to respond to the Nation’s challenge in K–12 science, mathematics, engineering, and

technology education were the Committee’s top priority.

The Committee found that the American public is not satisfied with the K

through 12 education available for their children. They are worried about the international comparative surveys that show that children outside the United States—

even those in countries with far less resources than ours—rank higher than their

own children in their understanding of mathematics or science.

The Committee then made the recommendation we call ‘‘10,000 teachers, 10 million minds’’ which proposes increasing America’s talent pool by vastly improving K–

12 science and mathematics education.

47

In developing its action steps to reach this goal, the Committee first focused on

what part of K–12 science, mathematics, engineering, and technology education was

of greatest concern. The Committee immediately recognized that many of these

teachers do not have sufficient education in these fields, and its recommendations

respond to that concern.

Of all its action steps, the Committee’s highest priority is a program that would

annually recruit 10,000 of America’s brightest students to the science, mathematics,

and technology K–12 teaching profession. The program would recruit and train excellent teachers by providing scholarships to students obtaining Bachelor’s degrees

in the physical or life sciences, engineering, or mathematics to gain concurrent certification as K–12 science and mathematics teachers. Over their careers, each of

these teachers would educate 1,000 students, so that each annual cadre of teachers

educated in this program would impact 10 million minds. The program would provide merit-based scholarships of up to $20,000 a year for

four years for qualified educational expenses, including tuition and fees, and would

require a commitment to five years of service in public K–12 schools. A $10,000 annual bonus would go to program graduates working in under-served schools in inner

cities and rural areas.

To provide the highest-quality education for undergraduates who want to become

K–12 science and mathematics teachers, it would be important to award matching grants, perhaps $1 million a year for up to five years, to as many as 100 universities

and colleges to encourage them to establish integrated four-year undergraduate programs leading to Bachelor’s degrees in science, engineering, or mathematics with

concurrent teacher certification.

This program, modeled after a very successful program in Texas (and which is

being replicated in California), takes advantage of those people who are already in

science, mathematics, engineering, and technology higher education programs and

offer them the ability to get into teaching. It also incorporates in-classroom teaching

experiences, master K–12 teachers, and ongoing mentoring—the combination of

which produces highly qualified teachers with the skills and support to remain effective in the classroom.

Our second action step focuses on strengthening the skills of 250,000 current K– 12 science and mathematics teachers through summer institutes, Master’s programs, and Advanced Placement and International Baccalaureate (AP and IB) professional development programs. Each of these activities also builds on very successful model programs that can be scaled up to the national level.

In the case of the summer institutes, the Committee recommends that the Federal

Government provide matching grants for state-wide and regional one- to two-week

summer institutes to upgrade the content knowledge and pedagogy skills of as many

as 50,000 practicing teachers each summer. The material covered would allow teachers to keep current with recent developments in science, mathematics, and technology and allow for the exchange of best teaching practices. The Merck Institute

for Science Education is a model for this recommendation.

For the science and mathematics Master’s programs, the Committee recommends

that the Federal Government provide grants to universities to develop and offer

50,000 current middle-school and high-school science, mathematics, and technology

teachers (with or without undergraduate science, mathematics, or engineering degrees) two-year, part-time Master’s degree programs that focus on rigorous science

and mathematics content and pedagogy. The model for this recommendation is the

University of Pennsylvania Science Teachers Institute.

In the case of AP, IB, and pre-AP or pre-IB training, the Committee recommends

that the Federal Government support the training of an additional 70,000 AP or IB

and 80,000 pre-AP or pre-IB instructors to teach advanced courses in mathematics

and science. Assuming satisfactory performance, teachers may receive incentive payments of up to $2,000 per year, as well as $100 for each student who passes an AP

or IB exam in mathematics or science. There are two models for this program: the

Advanced Placement Incentive Program and Laying the Foundation, a pre-AP program.

The Committee also proposes that high-quality teaching be fostered with worldclass curricula, standards, and assessments of student learning. Here, the Committee recommends that the Department of Education convene a national panel to

collect, evaluate, and develop rigorous K–12 materials that would be available free

of charge as a voluntary national curriculum. The model for this recommendation

is the Project Lead the Way pre-engineering courseware.

Why are we doing this? Because, as Mr. Augustine mentions, many of the teachers who are teaching subjects have no background in the subjects that they are

teaching. It is very hard for someone who does not have a physics education to turn

students on to physics, because they have no basic feeling for the subject. Teachers

48

with strong content knowledge, either through a Bachelor’s or Master’s program,

who also have strong pedagogy skills and access to ongoing skills updates can be

truly effective at encouraging students in science, mathematics, and technology

fields. That is the thesis that we’ve built on.

The Committee also proposes a program that will enlarge the pipeline by encouraging more students to take AP and IB science and mathematics courses and tests

through providing more opportunities and incentives for middle-school and highschool students to pursue advanced work in science and mathematics. The Committee suggests a national goal of increasing the number of students in AP and IB

mathematics and science courses from 1.2 million to 4.5 million, and setting a goal

of tripling the number who pass those tests, to 700,000, by 2010. Student incentives

for success would include 50 percent examination fee rebates and $100 mini-scholarships for each passing score on an AP or IB mathematics and science examination.

The reason we are encouraging more students to participate in AP/IB courses is

because we have found, through the Dallas-based AP Incentive Program, that those

students who take AP/IB courses are twice as likely to enter and complete college

as those who do not. Of particular interest is the ability of programs such as the

University of California College Prep Program to reach currently under-served areas

or populations of students with specific learning needs through online access to

teachers and tutors.

We also propose scholarships for American undergraduates who are willing to go

into science and technology and engineering and fellowship programs for those

pursing graduate science and engineering degrees in areas of national need.

In sum, the Committee is proposing a whole spectrum of recommendations that

will enhance the quality of science, mathematics, engineering, and technology education for all American students and providing incentives for Americans to pursue

higher education degrees in these fields. By taking the proposed actions, we believe

that the United States will be better positioned to compete as a country for future

high knowledge jobs.

Thank you for providing me with this opportunity to testify before the Committee.

I would be pleased to answer any questions you have about the report.

BIOGRAPHY FOR P. ROY VAGELOS

Dr. Vagelos served as Chief Executive Officer of Merck & Co. Inc., for nine years

from July 1985 to June 1994. He was first elected to the Board of Directors in 1984

and served as its Chairman from April 1986 to November 1994.

Dr. Vagelos joined the worldwide health products firm in 1975 as Senior Vice

President of Research and became President of its research division in 1976; in addition, starting in January 1982, he served as Senior Vice President of Merck with

responsibility for strategic planning. He continued to hold both positions until 1984,

when he was elected Executive Vice President.

Before assuming broader responsibilities of business leadership, Dr. Vagelos had

won scientific recognition as an authority on lipids and enzymes and as a research

manager. This followed a decision early in his career to put his principal energies

into research rather than the practice of medicine.

Dr. Vagelos received a A.B. degree (1950) from the University of Pennsylvania,

where he was elected to Phi Beta Kappa, the academic honor society. He received

his M.D. from Columbia University (1954) and was elected to Alpha Omega Alpha,

the medical honor society. After internship and residency (1954–56) at Massachusetts General Hospital in Boston, he joined the National Institutes of Health in Bethesda, Maryland.

At the NIH (1956–66) he served in the National Heart Institute, holding positions

in cellular physiology and biochemistry—first as Senior Surgeon and then as Head

of Section of Comparative Biochemistry, both in the Laboratory of Biochemistry.

In 1966, Dr. Vagelos joined Washington University in St. Louis, Missouri, as

Chairman of the Department of Biological Chemistry of the School of Medicine. In

addition, from 1973 to 1975, he assumed more extensive responsibilities as Director

of the University’s Division of Biology and Biochemical Sciences, which he founded.

Dr. Vagelos has received honorary Doctor of Science degrees from Washington

University (1980) for his research achievements and important influence on national

science policy; Brown University (1982) for distinguished contributions to the advancement of knowledge as a teacher, research scientist, and head of one of the Nation’s outstanding laboratories; the University of Medicine and Dentistry of New

Jersey (1984) for outstanding leadership in biomedical research leading to drugs and

other therapeutic agents of direct benefits to mankind; New York University (1989)

for contributions in helping to discover and produce medicines that both extend and

enhance life; Columbia University (1990) for an extraordinary range of accomplishVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00056 Fmt 6633 Sfmt 6621 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
49

ments in biological science, pharmaceutical research, and leadership in the pharmaceutical industry; the New Jersey Institute of Technology (1992) for his contributions to medical research; Pamukkale University in Turkey (1992); and the University of New York at Stony Brook (1994) for outstanding achievement; Mount Sinai

Medical School (1997); and the University of British Columbia (1998). He received

Honorary Doctor of Laws degrees for leadership in the battle to conquer diseases

from Princeton University (1990), the University of Pennsylvania (1999) and Harvard University (2003). Rutgers University (1991) granted him honorary Doctor of

Humane Letters degree in recognition of his ‘‘ambitious agenda to develop effective

cures for the most perplexing illness of our time.’’ The author of more than 100 scientific papers, he received the Enzyme Chemistry

Award of the American Chemical Society in 1967. He was elected in 1972 to the

American Academy of Arts and Sciences and the National Academy of Sciences, and

in 1993 to the American Philosophical Society. In 1989 he received the Thomas Alva

Edison Sciences Award from Governor Thomas Kean. In 1993, he received the Lawrence A. Wien Prize in Social Responsibility from Columbia University. In 1994 he

received the C. Walter Nichols Award from New York University’s Stern School of

Business. In 1995 he received the National Academy of Science Award for Chemistry in Service to Society. In 1998 he was awarded the Prince Mahidol Award conferred by His Majesty the King in Bangkok (Thailand). In 1999 he received the

Othmer Gold Medal from the Chemical Heritage Foundation and Bower Award in

Business Leadership from Franklin Institute.

Dr. Vagelos was Chairman of the Board of Trustees of the University of Pennsylvania from October 1994 to June 1999, having served as a trustee since 1988. He

also served as Co-Chairman of the New Jersey Performing Arts Center from 1989–

99, was President and CEO of the American School of Classical Studies at Athens

from 1999–2001 and served in the National Research Council Committee on Science

and Technology for Countering Terrorism in 2002.

He is currently Chairman of Regeneron Pharmaceuticals, Inc. and Theravance,

Inc., two biotech companies. He is also Chairman of the Board of Visitors at Columbia University Medical Center where he also chairs the Capital Campaign. He

serves on a number of public policy and advisory boards, including the Donald Danforth Plant Science Center and the Danforth Foundation.

Dr. Vagelos is married to the former Diana Touliatos. They live in New Jersey,

and have four children and seven grandchildren.

Dr. Vagelos was born on October 8, 1929, in Westfield New Jersey.

Chairman BOEHLERT. Thank you very much, Doctor.

Dr. Wulf.

STATEMENT OF DR. WILLIAM A. WULF, PRESIDENT, NATIONAL

ACADEMY OF ENGINEERING

Dr. WULF. Good morning, Mr. Chairman.

I have to say I am particularly delighted to be here this morning

with Norm and Roy. I would point out that Norm Augustine is a

member of the National Academy of Engineering, and in fact, was

its Chairman a few years ago.

Just echoing your comments before, I think the issue that we are

talking about today is the most important issue facing our country.

It may not be the most urgent, but I believe it is the most important.

I wasn’t a member of Norm’s committee, and so I can’t hope to

represent the content of ‘‘Rising Above the Gathering Storm’’ as

well as Norm or Roy, so I am not going to try, but I would like to

make three points.

First, as Norm suggested, the problem is, itself, a creeping crisis.

In fact, it is not a problem; it is a set of problems. And those set

of problems I view as rather like tiles in a mosaic. Each one of

them viewed up close, perhaps, doesn’t sound like a crisis and isn’t,

perhaps, likely to provoke action, but if you stand back and you

look at the overall mosaic, a pattern emerges. It is a pattern of

short-term thinking, a pattern of lack of long-term investment. It

50

is a pattern for preserving the status quo rather than reaching for

the next big goal. It is a pattern that presumes that we in the

United States are entitled to a better quality of life than others and

that all we have to do is to circle the wagons and defend that entitlement. It is a pattern that does not balance the dangers and opportunities in current circumstances.

I don’t have time to talk about all of the tiles in this mosaic, and

I would largely be redundant with the report that is the subject of

this hearing if I did, but they include the dramatic decline in industry-based basic research, the flat-to-declining federal support of

research in the physical sciences and engineering, the increasingly

short-term risk averse nature of the research that is supported, the

discouraging effect on foreign students and scholars of our current

visa policy and its impact on our ability to get the world’s best and

brightest to come to the United States and to contribute to our security and prosperity, the draconian proposals for handling of

deemed exports in basic research, and their chilling impact on longterm basic research at universities, and finally, the rapid growth

in the use of the category of sensitive but unclassified information

and its impact on the free flow of scientific information.

My second point is that although the problems depicted in ‘‘Rising Above the Gathering Storm’’ may not have a Sputnik-like

wake-up event, that does not mean they are unimportant. Quite

the contrary. In my view, collectively, they are the most important

issue currently facing the United States.

I am hardly alone in that view. There is an increasingly wide

recognition of it, I believe. In my written testimony, there are references to some recent reports from a variety of sources that reflect

this deep concern, from the National Academies, from the private

sector, from government agencies, and from academia. Despite the

differing perspectives of the authoring organizations, there is surprising consistency among this report.

As is said in the American Electronics Association report, and I

quote, ‘‘We are slipping. Yes, the United States still leads in nearly

every way one can measure, but that does not change the fact that

the foundation on which this lead was built is eroding. Our leadership in technology and innovation has benefited from an infrastructure created by 50 years of continual investment, education, and

research. We are no longer maintaining that infrastructure.’’

In my view, the erosion alluded to by the AEA, if unchecked, will

lead to a poorer quality of life for our grandchildren, and quite possibly to a world that is less secure and less free.

My third, and final, point is that it is all about innovation and

the multifaceted environment that supports innovation. There is

wide agreement in the reports cited in my written testimony that

the U.S. ability to innovate has been the source of its prosperity,

and hence that ensuring our ability to continue to innovate is central to our future prosperity and security. Each of these reports

proposes specific policy options to do this. Many of them are similar, few are identical. I think that is because there is no simple formula for innovation. There is, instead, a multi-component environment that collectively encourages, or discourages, innovation. Just

to mention a few of the components of this environment: there

must be a vibrant research base; there must be an educated workVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00058 Fmt 6633 Sfmt 6601 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
51

force; there must be a culture that permits and even encourages

risk taking; there must be a social climate that attracts the best

and brightest to practice engineering, whether from within the

country or outside it; there must be ‘‘patient capital’’ available to

the entrepreneur; the tax laws must reward investment; there

must be adequate and appropriate protection for intellectual property; and there must be laws and regulations that protect the public but also encourage experimentation.

To prosper in the future, we need to attend to all of these components of the innovation environment.

In summary, by almost any objective measure, the United States

is doing very well at the moment. But, the prosperity and security

that we now enjoy is the result of decades of investment, research,

and education. We now see a pattern, a mosaic, of disinvestment,

of a retreat from bold research, and of a declining interest of American youth in education in science and engineering. We see a pattern suggesting a shift from creating the new to protecting the status quo. No single tile in this mosaic is going to ruin the American

economy, which perhaps makes it all the more dangerous. There is

a chance that we won’t take action until the consequences become

apparent in a decade or two, at which point it may be too late.

Thank you for the opportunity to testify, Mr. Chairman.

[The prepared statement of Dr. Wulf follows:]

PREPARED STATEMENT OF WILLIAM A. WULF

Good afternoon, Mr. Chairman and Members of the Committee. My name is William (Bill) Wulf and, since 1996, I have been on leave from the University of Virginia to serve as President of the National Academy of Engineering (NAE).

Founded in 1964, the NAE provides engineering leadership in service to the Nation. It operates under the same congressional act of incorporation that established

the National Academy of Sciences, signed in 1863 by President Lincoln. Under this

charter the NAE is directed ‘‘whenever called upon by any department or agency

of the government, to investigate, examine, experiment, and report upon any subject

of science or art [technology].’’ The NAE’s 1998 strategic plan, however, goes beyond

this reactive, ‘‘whenever called upon,’’ role to one in which we are to ‘‘Promote the

technological health of the Nation. . ..’’ It is much in the latter spirit that I am here

today.

I am particularly delighted to be here in the company of Norm Augustine, former

Chairman of the NAE, to testify on what I believe to be the most important (as opposed to urgent) issue facing our country. I was not a member of Norm’s Committee,

but I participated in its initial meeting and tracked its progress closely, so I first

want to acknowledge and thank all of the stellar committee members for the enormous energy and creativity that went into producing the report. I hope that the

Science Committee will appreciate that the Academies’ committee’s willingness to

spend countless hours on this report was the result of their depth of concern over

our nation’s future.

I cannot hope to represent the content of ‘‘Rising Above the Gathering Storm’’ as

well or as fully as Norm Augustine or Roy Vagelos, so I won’t try—but I would like

to draw attention to three points.

First, unfortunately the problem is a ‘‘creeping crisis.’’

Unfortunately the problems we are concerned about don’t have a Sputnik-like

wake-up call.

You all know the storied procedure for boiling a frog. They say that if you drop

a frog in boiling water, it will jump out. But, if you put a frog in cool water and

heat it very slowly, the frog won’t jump out, and you’ll get a boiled frog. The theory

is that each small, incremental rise in temperature is not enough of a crisis to make

the frog react. I don’t know if this story is true, but it fits my purpose—the slowly

warming water is a creeping crisis for the frog!

Our creeping crisis is not a slow, one-dimensional change like the frog’s water

temperature. We are facing a number of problems—each one like a tile in a mosaic.

52

1 National Academy of Engineering. 2005. Engineering Research and America’s Future: Meeting the Challenges of a Global Economy. Washington, D.C.: Nation Academies Press. 2 National Academy of Sciences, National Academy of Engineering, Institute of Medicine.

2005. Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future. Washington, D.C.: National Academies Press. 3 AeA (American Electronics Association). 2005. Losing the Competitive Advantage? The Challenge for Science and Technology in the United States. Washington, D.C. AeA. 4 Business Roundtable. 2005. Tapping America’s Potential: The Education for Innovation Initiative. Washington, D.C.: U.S. Chamber of Commerce. 5 Business Roundtable. March 2005. Securing Growth and Jobs: Improving U.S. Prosperity in

a Worldwide Economy. Washington, D.C.: U.S. Chamber of Commerce. 6 Council on Competitiveness. 2004. Innovate America. Washington, D.C.: Council on Competitiveness. 7 Electronics Industry Alliance. 2004. The Technology Industry at an Innovation Crossroads.

Arlington, VA. Electronic Industry Alliance. 8 National Association of Manufacturers. 2005. The Looming Workforce Crisis: Preparing

American Workers for 21st Century Competition. Washington, D.C.: National Association of Manufacturers. 9 National Intelligence Council. 2004. Mapping the Global Future: Report of the National Intelligence Committee’s 2020 Project. Washington, D.C.: National Intelligence Council. 10 National Science Board. August 2003. The Science and Engineering Workforce: Realizing

America’s Potential. Report NSB 03–69. Arlington, Virginia: National Science Foundation. 11President’s Council of Advisors on Science and Technology. January 2004. Sustaining the

Nation’s Innovation Ecosystems, Information Technology Manufacturing and Competitiveness.

Washington, D.C. 12President’s Council of Advisors on Science and Technology—Workforce Education Subcommittee. June 2004. Sustaining the Nation’s Innovation Ecosystem: Maintaining the Strength

of Our Science & Engineering Capabilities. Washington, D.C. 13 Council of Graduate Schools. June 2005. NDEA 21: A Renewed Commitment to Graduate

Education. Washington, D.C.: Council of Graduate Schools. 14 American Association of Universities, To be released.

No one of these problems by itself creates the sort of crisis that provokes action.

But if you stand back and look at the collection of problems, a disturbing picture

emerges—a pattern of short-term thinking and a lack of long-term investment. It’s

a pattern for preserving the status quo rather than reaching for the next big goal.

It’s a pattern that presumes that we in the United States are entitled to a better

quality of life than others and that all we have to do is circle our wagons to defend

that entitlement. It’s a pattern that does not balance the dangers and opportunities

in current circumstances.

I do not have the time to discuss all the tiles in this mosaic, and I would be largely redundant with the report that is the subject of this hearing if I did, but they

include:

— The dramatic decline in industry-based basic research.

— The flat-to-declining federal support of research in the physical sciences and

engineering.

— The increasingly short-term, risk-averse nature of the research that is supported.

— The discouraging effect on foreign students and scholars of our current visa

policies, and its impact on our ability to get the world’s best and brightest

to come to the U.S. and contribute to our security and prosperity.

— The draconian proposals for handling of ‘‘deemed exports’’ in basic research,

and their chilling impact on long-term basic research at universities.

— The rapid growth in the use of the category of ‘‘sensitive but unclassified’’

information, and its impact on the free flow of scientific information.

Second, nonetheless the problem is both important and widely recognized.

Although the problems depicted in ‘‘Rising Above the Gathering Storm’’ may not

have a Sputnik-like wake-up event, that does not mean they are unimportant. Quite

the contrary; in my view collectively they are the most important issue currently

facing the United States. I am hardly alone in that view; there is an increasingly

wide recognition of it. Below are references to recent reports from a variety of

sources that reflect this deep concern:

— From the National Academies1,2

— From the private sector3,4,5,6,7,8

— From government agencies,9,10,11,12 and

— From academia13,14

53

Despite the differing perspectives of the authoring organizations, there is surprising consistency among these reports. They all identify problems like the tiles in

my mosaic as representing serious long-term problems for the country—problems

that require action now! As is said in the American Electronics Association (AeA)

report33:

‘‘We are slipping. Yes, the United States still leads in nearly every way one can

measure, but that does not change the fact that the foundation on which this

lead was built is eroding. Our leadership in technology and innovation has benefited from an infrastructure created by 50 years of continual investment, education and research. We are no longer maintaining this infrastructure.’’

In my view, the erosion alluded to by the AeA, if unchecked, will lead to a poorer

quality of life for our grandchildren—and quite possibly to a world that is less secure and less free.

Third and finally, it’s all about innovation and the multi-faceted environment that supports innovation.

There is wide agreement in the reports cited above that the U.S. ability to innovate has been the source of its prosperity—and hence that ensuring our ability to

continue to innovate is central to our future prosperity and security. Each of these

reports proposes specific policy options to do this—many of them are similar, but

few are identical. I think that is because, in my view, there is no simple formula

for innovation. There is, instead, a multi-component ‘‘environment’’ that collectively

encourages, or discourages, innovation. Just to mention a few of the components of

this environment:

• There must be a vibrant research base.

• There must be an educated workforce.

• There must be a culture that permits and even encourages risk-taking.

• There must be a social climate that attracts the best and brightest to practice

engineering—whether from within the country or outside it.

• There must be ‘‘patient capital’’ available to the entrepreneur.

• The tax laws must reward investment.

• There must be adequate and appropriate protection for intellectual property.

• There must be laws and regulations that protect the public while also encouraging experimentation.

To prosper in the future we must attend to all the components of this innovation

environment—and in particular we need to be sure that they are attuned to the current and future technologies rather than those of the past (when many of the components of the environment were first created).

In Summary

By almost any objective measure, the U.S. is doing very well at this moment. But,

the prosperity and security that we now enjoy is the result of decades of investment,

research and education. We now see a pattern, a ‘‘mosaic,’’ of disinvestment, of a

retreat from bold research, and of a declining interest of American youth in education in science and engineering. We see a pattern suggesting a shift from creating

the new to protecting the status quo. No single tile in this mosaic is going to ruin

the American economy—which perhaps makes it all the more dangerous. There is

the chance that we won’t take action until the consequences become apparent in a

decade or two, at which point it will be too late.

Thank you for the opportunity to testify, Mr. Chairman. I would be pleased to answer any questions the Committee might have.

BIOGRAPHY FOR WILLIAM A. WULF

Personal:

Wm. A. Wulf, President, National Academy of Engineering, 2101 Constitution

Ave., NW, Washington, DC; e-mail: wwulf@nae.edu

University Professor and AT&T Professor of Engineering and Applied Science, Department of Computer Science, Thornton Hall, University of Virginia

Education:

B.S., Engineering Physics, University of Illinois, 1961

M.S., Electrical Engineering, University of Illinois, 1963

54

Ph.D., Computer Science, University of Virginia, 1968

Positions:

President, National Academy of Engineering, 1996 to present.

AT&T Prof. of Engr., University of Virginia, 1988 to present.

Assistant Director, National Science Foundation, 1988 to 1990.

Chairman & CEO, Tartan Laboratories Inc., 1981 to 1987.

Professor, Carnegie-Mellon University, 1975 to 1981.

Associate Professor, Carnegie-Mellon University, 1973 to 1975.

Assistant Professor, Carnegie-Mellon University, 1968 to 1973.

Instructor, University of Virginia, 1963 to 1968.

Descriptive Biography:

Dr. Wulf was elected President of the National Academy of Engineering (NAE) in

April 1997; he had previously served as Interim President beginning in July 1996.

Together with the National Academy of Sciences, the NAE operates under a congressional charter and presidential executive orders that call on it to provide advice

to the government on issues of science and engineering.

Dr. Wulf is on leave from the University of Virginia, where he is a University Professor and the AT&T Professor of Engineering and Applied Science. Among his activities at the University were a complete revision of the undergraduate Computer

Science curriculum, research on computer architecture and computer security, and

an effort to assist humanities scholars exploit information technology.

In 1988–90 Dr. Wulf was on leave from the University to be Assistant Director

of the National Science Foundation (NSF) where he headed the Directorate for Computer and Information Science and Engineering (CISE). CISE is responsible for computer science and engineering research as well as for operating the National Supercomputer Centers and NSFNET. While at NSF, Dr. Wulf was deeply involved in the

development of the High Performance Computing and Communication Initiative and

in the formative discussions of the National Information Infrastructure.

Prior to joining Virginia, Dr. Wulf founded Tartan Laboratories and served as its

Chairman and Chief Executive Officer. Before returning to academe, Dr. Wulf grew

the company to about a hundred employees. Tartan developed and marketed optimizing compilers, notably for Ada. Tartan was sold to Texas Instruments in 1995.

The technical basis for Tartan was research by Dr. Wulf while he was a Professor

of Computer Science at Carnegie-Mellon University, where he was Acting Head of

the Department from 1978–1979. At Carnegie-Mellon Dr. Wulf’s research spanned

programming systems and computer architecture; specific research activities included: the design and implementation of a systems-implementation language

(Bliss), architectural design of the DEC PDP–11, the design and construction of a

16 processor multiprocessor and its operating system, a new approach to computer

security, and development of a technology for the construction of high quality optimizing compilers. Dr. Wulf also actively participated in the development of Ada, the

common DOD programming language for embedded computer applications.

While at Carnegie-Mellon and Tartan, Dr. Wulf was active in the ‘‘high tech’’ community in Pittsburgh. He helped found the Pittsburgh High Technology Council and

served as Vice President and Director from its creation. He also helped found the

CEO Network, the CEO Venture Fund, and served as an advisor to the Western

Pennsylvania Advanced Technology Center. In 1983 he was awarded the Enterprise

‘‘Man of the Year’’ Award for these and other activities.

Dr. Wulf is a member of the National Academy of Engineering, a Fellow of the

American Academy of Arts and Sciences, a Corresponding Member of the Academia

Espanola De Ingeniera, a Member of the Academy Bibliotheca Alexandrina (Library

of Alexandria), and a Foreign Member of the Russian Academy of Sciences. He is

also a Fellow of five professional societies: the ACM, the IEEE, the AAAS, IEC, and

AWIS. He is the author of over 100 papers and technical reports, has written three

books, holds two U.S. Patents, and has supervised over 25 Ph.D.s in Computer

Science.

DISCUSSION

Chairman BOEHLERT. Thank you for leaving us with some degree

of comfort by your closing statement, ‘‘By almost any objective, the

United States is doing very well at this moment.’’ Guess what?

55

That is not good enough. That might make us feel better, we may

be doing very well, but our competition is doing a lot better a lot

quicker. So this is serious business.

And Dr. Vagelos, you know, you emphasized something that is so

very important. Right back to the basics, K–12 science and math

education. You know, I am sort of tired of appearing before business groups, as I do frequently, and to get some guy raising his

hand, I will call on him, and you know, he starts moaning and

groaning about K–12 education and the high schools are graduating students that we can’t hire because they can’t function, and

we have to start training them. And I listen to them moan and

groan, and I acknowledge that it is a serious problem we have got

to address, and then I will say to him and all of the other representatives of business in the audience, and I did this a couple of

times at a Chamber of Commerce meeting and a National Association of Manufacturers, ‘‘All right, you hot shots in business. Let me

ask you a question.’’ All right. Well, that is sort of unusual. I say, ‘‘How many of your employees, Mr. President of this company, Mr.

Manager of that company, how many of your employees serve on

a local school board?’’ You know. The answer, usually the response

is, ‘‘Gee, we don’t know.’’ ‘‘Go back and check, will you, please? And

then, in a couple weeks, let me know.’’ And I never hear back. You

know why? They check and they don’t run. Well, gee, we are in

business to make a profit, and it is too important. And why not

have them run for school boards?

And then the other thing is, and I am giving you some of my pet

theories, but I want to work together, because I want to follow

through on this and go forward on this. How many letters do you

think the average Member of Congress gets from his or her constituents saying, ’’You know, we have got to invest more in basic

research, as a government,’’ or, ‘‘We should do better by the National Science Foundation,’’ which is a primary funder of all university-based research? Do you know how many letters? Probably the

average congressperson gets zero. And I doubt if there is a sitting

Member of either the House or the Senate who campaigned on

doing better by the science enterprise. You know, we have got to

reform Social Security. We are going to get out of Iraq. We are

going to do all of these things, but they don’t talk about these

things. And I say, once again, Mr. Augustine, I will say to people

like the Chairman of the Board of Lockheed Martin, your former

position, ‘‘Why don’t you look at your Board of Directors?’’ It reads

like a Who’s Who in America. All well compensated, all very heavily influential in the political process, some Republican, some Democrat. They are all over the lot. I would suggest that if Board Member X from central Oklahoma or Board Member Y from northern

Kansas called up his or her representative and said, ‘‘Look. Here

is something that Congress is ignoring, and this is very important.

You have got to do better by K–12 science and math education, and

I don’t see how the hell you propose to do so if you are cutting

funding for the Education Directorate at the National Science

Foundation, and I want you to do something about that.’’ People

would begin to take notice.

So I don’t think this is too daunting a task, and I want to have

some follow-through with you guys after this. You know, there are

56

435. You get 435 master cards, and we can get a file on each Member of Congress. And then we can just sort of work them and figure

out how we can get them to focus on this subject area.

So with that, a sort of preamble of my speech, let me ask you

this. Help us prioritize your recommendations. And help us explain

how you decided on a 10 percent increase. Can we go with those

two?

Mr. Augustine.

Mr. AUGUSTINE. Thank you.

I will be glad to begin.

The question of prioritizing, we feel, quite strongly, that one has

to view our recommendations as a package. We did single out as

the highest priority K–12, because that seemed to underpin everything we are doing. If we don’t solve that problem, we have lost.

Beyond that, the reason we view it as a package is, for example,

to create more scientists and engineers but to not increase the research budget for them to work on just creates people without jobs.

And so this is a closely-knit package that we have proposed. We

gathered 60 experts in various fields who came to Washington for

two days with us, and they made recommendations as to what we

should recommend to you. They made over 150 recommendations,

which we boiled down and refined. So what you are seeing is our

prioritized list of the very top ones. There were others we didn’t

consider.

Your question of why 10 percent, and you are referring to the increase in basic research in the specific fields. Our motivation was

to, rather quickly, increase the budget in those fields, which have

been basically flat in real dollars for 20 years. That contrasts

sharply with the progress in the biological sciences. So we wanted

to do it as quickly as we could, but we also want to be sure the

money is spent efficiently. And it is our view that about 10 percent

per year, this is obviously judgmental, is about what you can increase and spend very efficiently. It might be 15 percent. It might

be eight percent, but it would be in that range.

The question of why we put the seven-year limit on it; it turns

out, of course, that 10 percent per year for seven years roughly

doubles the existing $8 billion budget in this area. That is encouraging to us, and seems rational in the sense that the Congress,

with your leadership, recently proposed that the NIH budget be

doubled. And the Administration supported that. That was through

the authorization process, unfortunately not through the appropriations process.

So that would be my answer to your question. I am sorry. Did

I say NIH? I meant NSF.

Chairman BOEHLERT. Yeah. Yeah. It is NSF. Well, you know, we

are following the NIH model, and everybody got nervous, because

we doubled the NIH budget over five years, and I really think the

basic reason is because it does so much in research in things like

Alzheimer’s and cancer and everything else, and Members couldn’t

vote fast enough, because they had looked out and said there, but

for the grace of God, go I and vote aye. And we ought to do the

same thing with the physical sciences and following that model.

And a lot of people with biological sciences interested in NIH were

concerned that I was trying to cut their funding. I don’t want to

57

cut their funding one dime. It is important. But I want to elevate

NSF.

But the basic problem is, and this is our problem on Capitol Hill.

We passed the legislation putting the NSF on a path to double its

budget over five years. We had a big ceremony down at the White

House. The president signed it, we patted each other on the back.

Boy, we felt good. But that didn’t appropriate one dime. And while

we put the agency on a path with authorization from this committee to double a budget over five years, you know, the percentage

increase is a little better than flat, but not a heck of a lot better.

You know what the total budget is? I bet you if you asked the

board members of Merck or Lockheed Martin or anybody else, what

do you think NSF gets. You know, they sponsor, basically, all university-based research in America. They wouldn’t know, $5 billion

a year. You know what, they spend more than that in a coffee

break over in the Pentagon. That is another place you are associated with. And I am for national defense, but we have got to get

some priorities in order.

My time is expired.

Mr. Gordon.

Mr. GORDON. As I said earlier, I admire my Chairman’s passion

for this issue. I am also the beneficiary of, hopefully, some extra

time that could be allocated to me over the next few weeks because

of all of his passion here. And I do admire it.

As the Chairman said, the National Science Foundation, we

passed an authorization to double it. It was signed by the President, yet the President never has made those requests. I think one

of the benefits of your proposal is that you went beyond flowery

rhetoric and gave us some specific recommendations.

You also have specific recommendations for an action plan. You

gave us an action plan on what to do. What about an action plan

on how to get it implemented, how to get the President to make

these proposals, how to get Congress to go forward? Or do you feel

like your job is over? Have you given us the sheet and now you all

are going home? Mr. Augustine, is there another step?

Mr. AUGUSTINE. No, we believe that our job has just begun, and

we do have a plan. I should say that we are in a difficult position,

because the National Academies don’t lobby, by policy. On the

other hand, the National Academies do provide information, disseminate information, share views, and we intend to do a lot of

that. And we would hope that we will have the opportunity to do

that broadly with the Business Roundtable, with labor unions, with

other organizations that are interested in this topic, with teachers.

And indeed, we do plan to pursue this, and our members have——

Mr. GORDON. Good.

Mr. AUGUSTINE.—in fact, been——

Mr. GORDON. Well, I would hope that you would put together,

around my office, I, you know, sort of have a, I don’t know whether

it is a saying, but if it is not written down, it is not a plan. And

we would hope that, not as extensively as this, but that you might

put together an action plan for implementing, whether informally

or formally, meet with us and tell us how we can help. And we

would all like to work together on that.

58

The second question that I have, back when the original President Bush was President, he and Congress got together and passed

something called PAYGO. We had a big deficit, and we wanted to

do something about it, and we all know that the first thing you do

when you are in a hole, you stop digging. And that is what PAYGO

tried to do. Every time there was legislation that came to the Floor,

it had to have a fiscal note to say what it cost. And you had to have

either additional revenue or you had to have offsets for that. That

was passed two more times under, again, under two Presidents and

several Congresses. Unfortunately, it expired in 2002, and we can’t

get the current Congress to renew that.

But going back to that same type of idea, it is going to be hard

to get additional funds. Nobody likes to talk about taxes, and

maybe we will just say fee or something here. Do you have any

suggestions as to a fee that might be appropriate on, maybe, the

business sector somewhere that would be dedicated for this $10 billion? You know, and that it would be a, you know, somewhat of a

tit for tat if we have, you know, one-eighth of a percent additional

something here that would go to these various teaching programs?

Do you have any recommendations on that?

Mr. AUGUSTINE. I am afraid I will have to disappoint you here,

because our committee’s charter really didn’t include looking for

offsets of—— Mr. GORDON. Well, I am just asking you as informed individuals

and——

Mr. AUGUSTINE. As an individual, and not speaking for the committee, you know, kind of the way I look at it is that we have gross

domestic product of $12 trillion. The Federal Government spends,

as you know, $2 trillion a year. Last year, I am told that our citizens lost $7 billion betting on the Super Bowl. The cost of litigation

to corporations in America is about 10 to 20 times what we have

asked for here. And so it is our belief that this kind of money can

be found. Now I have my own personal list, as I am sure everybody

else does, of, you know, where I would start looking for money, but

it is not particularly relevant, because I have no expertise in the

subject.

Mr. GORDON. Well, we are not voting on a budget today, because

there wasn’t the ability, the will, or whatever to go from a $35 bil- lion reduction to $50 billion. So that was $15 billion that apparently couldn’t be found. And it was a pretty hard effort. Now

maybe they will find it next week, I don’t know. So yes, there is

probably, you know, there is enough money sloshing around. But

if that is the answer, then we are not going to get this done.

Mr. AUGUSTINE. Well, you know, I, as an individual, feel, I can’t

speak for other CEOs. I feel so strongly that it is in the best interest of our companies that if it requires an additional tax of some

kind to fix some of these problems, and it is not a huge amount

of money in the grand scheme of things, I personally would support

that kind of thing. But again, I can’t speak for the—— Mr. GORDON. Well, I think that would be another, again, the follow-up, both in the action plan and implementing this, and if the

business community thinks it is important, it would give a lot of

credibility and a lot of cover for folks. And I think that we want

it as small as possible. It needs to be dedicated so that you know

59

where it is going, and this old PAYGO kind of process. So I would

hope that, again, with all of those big thinkers as you are around

doing big thinking, that that might be added to the agenda.

And again, thank you all for your, well, let me add, does anyone

else want to comment on any of those subjects?

Dr. VAGELOS. Mr. Gordon, I haven’t really thought on the source,

but there are sources, even within the current research budget of

the government that I think could be reallocated. I would not like

to discuss them at this time, because I—they just haven’t been generalized, but I certainly have ideas. And I certainly would support,

also, an increase in taxes that would cover these subjects.

But let me say that although the statements that I have heard

today that corporations are not doing enough is a general statement that doesn’t cover all corporations. And let me give you an

example. At Merck, 15 years ago, we started what we called the

Merck Institute for Science Education and developed a program for

K–6 students in the region around our locations in the United

States, of which there are several. And we have a person who

heads that, Carlo Parravano, who is previously a professor of physical chemistry at a university and with a passion for teaching

young people. And the idea is to train teachers in the K–6 level to

understand some level of hands-on science in order to excite and

demystify science for young children, because it demystifies for

those teachers who are exposed in summer institutes, and then

they are followed by master teacher visitations during the course

of a year to get the children excited about science. Merck started

this program about 15 years ago, and it has continued. It is so good

that the NSF actually is replicating some of it. And Merck continues to invest in that regard.

So some companies, at least, are doing that. And I know of other

companies doing similar programs. So I would like not to leave

with a negative thought of all corporations not being interested in

K–12, because they are, indeed. And certainly in higher education,

many research corporations invest in universities and in high

schools to bring up the number of people who are going into technology because they are looking at their future workforce, frankly.

It really benefits them to have better people coming through the

pipelines.

Mr. GORDON. Yeah, I don’t think, hopefully no one overtly or insinuated that everyone is in that boat. What we want is to find incentives to increase that leadership.

But thank you very much.

Chairman BOEHLERT. Thank you.

Mr. GORDON. I would also, in fact, I would like to request if you

do have any kind of material on the Merck program——

Dr. VAGELOS. Yes.

Mr. GORDON.I would like to see that so we might be able to see

how we could replicate it, also.

Chairman BOEHLERT. Well, just let me stress that what Merck

has done, what Lockheed is doing, Westinghouse scholarships, corporate America is magnificent in its generosity in so many instances, so I don’t want anyone to go away from this with the impression that this committee, particularly, does not acknowledge

the great contributions corporate America is making. But they need

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to do a better job, and so do we. And you know, before we start

asking you to do a better job, we have got to look ourselves in the

mirror and say are we doing a better job. And I hope it—yes, Doctor. Did you want to make an observation?

Dr. VAGELOS. I just want to say something about the long-term

investment in research, because it is so crucial to what we are talking about. First of all, we have to have people who can do it, so

that is K–12 and higher education. But are corporations really

making a difference? And have we impacted health? Yeah, we have

spent, the Nation has spent, you know, billions in the last 25 years.

Has it been worth it? Well, I will give, as an example, what happened in 1981. There was the identification of a new thing called

AIDS. It turned out a couple years later, the virus was identified

through work at NIH and the Pasteur Institute, but then the universities and industry both focused on how do you handle this

virus, a virus which caused the disease which was 100 percent lethal. And within, you know, a decade, you have the development

of several different mechanisms of antiretroviral drugs that, in

combination, converted a 100-percent lethal disease to a disease,

which is a chronic infection where people leave hospitals, go back

to work, and live normal lives. Now that is the interaction between

basic research investing by government and research investment

by industry.

There are other things that are coming today. We heard in the

paper today an advance in breast cancer outcomes using Herceptin,

a drug that has been around for a while, but it is a monochromal

antibody. Here is a technology that has been essentially developed

in the United States over the last 25 years and is having an impact

now. There is a vaccine being developed both by Merck and by GSK

that will prevent cervical cancer. This is against human papilloma

virus. This has come from years of basic research now converted

to—do you know how long it takes to make a vaccine?

Chairman BOEHLERT. Oh, I know that.

Dr. VAGELOS. And do you know the panic now over influenza,

avian flu?

Chairman BOEHLERT. Well, that gets into a different subject. Let

us get to Ms. Biggert, because she will get us back on course here,

because this is such an enthusiastic group that we all could talk

forever, but I hope it should not go unnoticed that we have a higher percentage of both sides of the aisle participating in this hearing

than I will bet you any other hearing on Capitol Hill, which is a

testament to the importance that we view the subject and to the

distinguished panel we have.

Ms. Biggert.

Ms. BIGGERT. Thank you, Mr. Chairman.

First of all, I just wanted to mention that I did serve as President of my local high school school board, and I appreciate all that

you are doing. The problem that we always had was, first of all,

to find the teachers that were the best and the brightest for what

we wanted in our school. And then the second was to keep up with

technology and the equipment that changed so to have available for

the students.

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But I really wanted to talk about or ask questions to focus attention on energy and your proposal for the creation of a DARPA-like

entity at the Department of Energy.

It has been my experience representing a DOE National Lab,

and serving as the Chairman of the Subcommittee on Energy here

in this committee, that the bigger problem is technology transfer,

getting new technologies or the products of government-funded research from the lab to the market. And I know that so many times

things, for example, right after 9/11, we found that the labs really

had done the research, had the products that then could go, for example, to the subway to identify, you know, foreign chemicals in

there and things like that that were there, but nobody had ever

really processed that or gone further.

So my first question is what specific problem was the committee

trying to address through this recommendation, recommendation

B5?

Mr. AUGUSTINE. There you go. Your question is a very good one

and touches on a number of points we have debated at length.

Really, the problem we saw, maybe I should say, in the way of

background, the company I had the privilege of serving has operated for the DOE a number of National Labs, and so we had some

experience with the challenges. And the notion with ARPA–E was

to do for the Department of Energy what DARPA has done for the

Department of Defense, specifically to take high-risk, very highpayoff transformational research, support that research, and then

to transfer it into industry, and to where it could produce products.

There does seem to be a gap between the DOE’s ability to produce

great new products, great new ideas, just as you have cited, and

to make something happen. And our hope was that this might provide that transformational mechanism.

The reason we think it could well work is that ARPA–E, the Advanced Research Projects Agency–Energy that we have proposed,

would not do research itself. It would support research that was

done in universities and done in industry and possibly in the labs

of National Labs themselves. It would be competitively awarded,

and so there would be a built-in involvement of industry and of

universities that you don’t have in the labs themselves. And part

of the reason we don’t have it in the labs is the well-meaning conflict of interest rules we have that makes it hard for companies to

access some of this information.

Ms. BIGGERT. I understand that there were a couple, one or more

members, that did not agree with this recommendation, and——

Mr. AUGUSTINE. Yes, of all of the 20 recommendations we made,

one member disagreed with one recommendation, and it was this

one. And this particular individual felt, and I hope I can do justice

to his views, that we already are spending a great deal of money

on energy research in the government and that the industrial firms

in the field are also devoting a great deal of money to research.

And this individual believed that there was no more money needed

at this point and also that the government would be in a position

of picking winners and losers in terms of research and companies,

and that wouldn’t be healthy. Now I personally don’t share that

view, but I think I have done justice to his position.

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Ms. BIGGERT. Well, it sounds like, then, that this really is a way

to move from the lab to market. Is that the major focus of it, or

just the basic research itself?

Mr. AUGUSTINE. Well, I think it is two things. The first is what

you said. It is a way to build a bridge to getting ideas and research

out and applied. The second is to be able to spend more money on

transformational, breakthrough, high-risk, long-term research that

companies just won’t perform and that the NSF and the NIH and

Defense Department are all doing much less of because of their

risk aversion.

Ms. BIGGERT. So much, particularly in the labs, it seems like, you

know, the basic research in physical sciences, so many times, what

might start out to be a project to work on one item will be able to

discover something else, and it will probably, you know, be much

more of the thing that is going to change the world or whatever.

Will this destroy that at all by having to compete for these grants

on specific types of research?

Mr. AUGUSTINE. Not at all. And your point is such a good one.

And that is one reason, of course, why industry is reluctant to invest in basic research, because what you come up with may help

your competitor more than it helps you, and whereas the ARPAE idea would promote that.

In addition, we had another recommendation that you are familiar with, I am sure, that the government labs be provided latitude

to spend eight percent of their budget at the discretion of the people in the lab that know better than the central managers where

those other opportunities are popping up.

Ms. BIGGERT. I think some people have tried to cut that back,

which is disturbing, because that is a very—— Chairman BOEHLERT. The gentlelady’s time has expired. Thank

you very much.

Ms. BIGGERT. Thank you.

Chairman BOEHLERT. Mr. Miller, the Floor is yours for 300 seconds.

Mr. MILLER. Thank you, Mr. Chairman.

Mr. Chairman, I rarely pass the chance to ask questions to amplify some point, but this panel has made all of the points that I

think need to be made.

Mr. Chairman, I will disagree with you on one point. You said

you thought no Member of Congress campaigns on the need to fund

basic research to provide for science education and to try to move

ideas, the product research, from the laboratory to the market. Mr.

Chairman, I do. I represent a textile District. I represent a District

that has lost a lot of jobs, and I voted against CAFTA, but I tell

the folks who ask me all of the time not how are we bringing the

jobs back, but where are the new jobs coming from, that our future

can not be having low-skilled jobs in labor-intensive industries. It

has to be the most innovative economy in the world, and that

means research, funding research. It means science education. It

means a commitment to community colleges where people learn

new job skills throughout their lifetimes and will have to go back

again and again. And it means efforts to move to provide the funding and the assistance to take research out of the laboratory to the

marketplace.

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So Mr. Chairman, I am delighted to be here, and my enthusiasm

for this topic, I think, may be the equal of yours.

Chairman BOEHLERT. Dr. Ehlers.

Mr. EHLERS. Thank you, Mr. Chairman.

And I will join Mr. Miller in the ranks of those who campaign

for science. In fact, my very first election, I scored a coup on a live

TV debate when all of the attorneys running against me were saying that they would come here and straighten out the laws, the

business people were coming here saying they would come here to

balance the budget. And I pointed out that if we elected an attorney, we would add one to the 175 already here, and I didn’t think

that would make much difference. If we elected a businessperson,

we would add one to the 137 already here, and I didn’t think that

would make much difference. But if they elected me, they would

double the number of scientists in the Congress, and that would

make a difference, and it seemed to resonate with the people.

I also am in somewhat the same camp as Mr. Miller. When I

read your executive summary, I haven’t had time to read the whole

report yet, but I just checked them off, and virtually everything,

with one small exception, is exactly what I have been advocating

for 12 years here. And I want to thank you very, very much for an

excellent report, not just because you agree with me, but because

you make the case well, and it is what this country needs. And now

it is up to us, as a Congress, to implement that.

So I congratulate you. I am afraid I have to go vote somewhere

else, but let me just try to clarify one point.

We talked about ARPA–E. And by the way, I think it would be

better to call it ‘‘DARPE,’’ and maybe you could have a stuffed doll

named ‘‘DARPE,’’ you know, as a symbol. Come up with something

catchy. But DARPA has been a powerful force in basic research in

this country. All right.

Chairman BOEHLERT. Only a physicist would have his cell phone

with Beethoven’s Fifth.

Mr. EHLERS. No, it is only a fourth. I don’t drink.

But DARPA has been extremely successful, but it has been very

much a basic research agency. And yet, in the discussion I just

heard, it sounded like you are talking about this as much a tech

transfer as a basic research entity. And I think the Department of

Energy badly needs this sort of thing. I am not questioning that,

but it is not clear to me precisely what you are trying to accomplish

here. If the goal is to have the Department of Energy address, in

a more direct way, the national problems that we face, I would

heartily welcome that. We have huge energy problems here, and I

would like to see that happen. But tech transfer, we have CRADAs.

I don’t know if they are still around, but they were very successful.

And we could address technology transfer through an MEP-like

type of program or agriculture extension program, which I would

also favor.

But could you just give me a little clarification, a little more clarification I would say? What are you really trying to achieve with

the ARPA–E proposal?

Mr. AUGUSTINE. I am glad you asked to give us an opportunity

to clarify, and I will call on my colleagues, with your permission,

to add, and so I will be brief.

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The intent with the ARPA–E is, indeed, to focus on basic research of a specific kind, namely high-risk, high-payoff, long-term,

generic applications. That is the focus. I think where I misled you

is I was addressing the question of how, once you have done that,

do you get that applied, get it out where it becomes useful. And my

answer to that was that ARPA–E would not do research of its own,

but rather, with funds, work by others, including universities, industry, and the National Labs competitively awarded. And that is

the way I was suggesting that the knowledge could be transferred.

Mr. EHLERS. Yeah. I guess my response to that, and I heard that

answer, but that, in itself, won’t transfer it unless you have industrial partners for each grant, or something of that sort. But NSF

gives direct grants to universities, and that doesn’t guarantee the

results get transferred. I think you really have to build in a specific

mechanism to do it, and that is what I was trying to clarify.

Dr. VAGELOS. May I add something to that, Norm, and that is

there is the feeling on the committee, as the majority of the committee, that there are ideas and basic observations that are made

at universities principally which are not mature enough to be

picked up by either industry or the VCs. And these just will not

be funded, because they are sort of falling in between the cracks.

People are not yet recognizing that these can be applied, and therefore, there would be a committee that includes industry people,

who are identifying these ideas that are otherwise not going to be

funded, but the best of these to be brought along so that they

would gain the visibility so that they would be either picked up by

industry or capitalized in some other way.

Mr. EHLERS. So you basically want to bridge the valley of death?

Dr. VAGELOS. Exactly.

Mr. EHLERS. Yeah. Well, thank you very, very much for an excellent report. I really appreciate what you have done. Thank you.

Mr. HALL. [Presiding] The Chair recognizes Mr. Green, the gentleman from Texas.

Mr. GREEN. Thank you, Mr. Chairman. And I thank the Ranking

Member as well.

Mr. Augustine, your comments were quite shocking, and I appreciate the way you presented them. They were very much an awakening, to a certain extent. And I appreciate each member of the

panel for what you have presented.

I would like to start, if I may, with Dr. Wulf.

Dr. Wulf, sir, your colleagues had indicated that they would support a tax increase, if you will. Do you have a similar view?

Dr. WULF. Well, of course, I am not a captain of industry like the

two gentlemen sitting to my right, but I have to say that more than

one CEO has said to me that they can’t invest in research within

their own company easily, because that detracts from the bottom

line, and it is an optional cost. And so the market, Wall Street, will

penalize them for doing that. And I think Norm has a marvelous

story about that. But if they were taxed the same amount and that

money was guaranteed to go into research, they would be happy.

Mr. GREEN. Thank you.

A quick comment. It appears that with reference to fixing, as it

was articulated, K–12, it appears that many of our young people,

and even their parents, don’t see education as the way out. And I

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think that is very unfortunate, but the Powerball, lottery, athletics,

rock stars, they seem to dominate the persona of the successful person. And unfortunately, there is this belief among too many young

people that that is the way out for them.

So my first question is, is there a one-size-fits-all remedy for fixing K–12, because you have urban versus rural, you have inner city

versus outer city, you have some cultural concerns that, in my

opinion, will have to be addressed? How do we make sure that

when we fix K–12, we fix it for all of the children, regardless of

whether they are rural or they are urban, whether they are inner

city or outer city? It seems that there is a little bit more to concern

ourselves with, if we truly want to leave no child behind.

And I would like for each of you, if you would, to address the aspect of leaving no child behind. And I will start with you, Mr. Augustine, if you would, please.

Mr. AUGUSTINE. Well, thank you for that question. And I am

very glad you asked it.

Certainly, there has been a change that today the students don’t

look at education or being a physicist, by and large, as the way out.

In my own case, I was the first in my family to go to college. I was

the second to go to high school. But my parents made very clear

to me that the way out, the way ahead, was education. And that

was just fundamental. We have lost that, to a great degree.

The way I think that we address this question of the different

backgrounds, different interests of students, is through the teachers, because the one thing that all of those students have in common is the teachers. And if we give them good teachers that show

them that know their subject, that know what they are talking

about, that inspire them, demand excellence, I don’t think it matters where you come from, that is going to make a difference in

your life, I think. So that is why we focused on teachers.

Roy?

Dr. VAGELOS. Yeah, well, you took the words right out of my

mouth on focusing on teachers and getting them to understand the

subjects that they teach.

Mr. Green, you come from the State of Texas, and you may have

caught, I don’t know whether you have caught or were in the room

when I mentioned that the advanced placement incentive program,

which originated in Dallas, really introduces the concept that you

can train teachers who are already teaching to be able to teach advanced placement. You can incentivize students to take that by offering them the courses and a $100 bonus, if they pass. And taking

a school district, which is largely poor and has many immigrants

and under-served minorities, you can increase the number of students taking advanced placement courses and passing them by tenfold with such a program, it is those students, they won’t be stars,

or they may not be all of the athletes, but you can increase, including minority students, the number of students taking these advanced programs and the advanced programs are in math and

science. So that is one thing that can affect every city. And that

is one of the programs we are recommending.

Dr. WULF. Just to answer your question very directly, no, I do

not believe that one size fits all. I think all of my adult life we have

been collectively, as a society, talking about the problems we have

66

with K–12 education. And we have made, in my view, very, very

little progress. We have this seminal event of ‘‘A Nation at Risk’’

being published and getting a lot of attention focused on the problem, and yet, I think if you objectively look at where we are relative to, what, 15 years ago, when that report was published, I

would find it very hard to argue that we have made very much

progress. And I think a lot of the reason is that people have advanced one silver bullet after the next and that is not just going

to work. We have to attack it on a very broad front. I happen to

concur that focusing on teachers is a very, very, very important

piece of it, but that is not all of it, either.

Chairman BOEHLERT. Thank you very much.

The gentleman’s time has expired.

Let me point out that we created a scholarship program, an incentive program, to get the best and the brightest in the undergraduate years majoring in science, math, and engineering, and

agreed to give them a stipend each year and in exchange for an

agreement to teach for two years, and we had that on the books

authorized from this committee for several years before we got one

thin dime. And now we are spending a grand total, I think, of

about $5 million a year on it. That shows you where our priorities

are, unfortunately.

Mr. Hall.

Mr. HALL. I thank you. And I thank this panel here. And I thank

the very distinguished Mr. Chairman, you have mentioned the attendance here. It is no wonder when you read the array of men and

women who are giving their time. And Norm Augustine is no

stranger here. The Augustine report was a bible for us for about

10 years in the ’80s. Thank you for that and others of you.

And I think it is very, very important that we seek ability to

compete in this century with jobs and especially for older people.

You know, Norm, I am the oldest guy in Congress, or in the House,

and when that guy from West Virginia finally takes everybody’s advice and leaves, well, I will be the oldest in Congress. And jobs are

important. Other than my opponents, my wife has even suggested

that, you know, I should quit, but at 82, I checked with Wal-Mart,

and they weren’t hiring any greeters. I didn’t have a cap and a pistol. I couldn’t be a crossing guard for anybody, but what a wonderful thing it is for you to give your valuable time, and your time to

prepare to get here, to give us your time here, and your time staying here.

You know, with China calling us out on the world energy allocation and their end of the space program now, we have got so many,

so many reasons to listen to this group here.

But let me ask you this, the 60 subject matter experts, are they

of the same caliber? And how do you all work together? And when

do the 20 and the 60 ever get together?

Dr. VAGELOS. Well, sure. These were experts that were recommended largely by the committee. The committee was invited by

the President of the National Academy of Sciences. Twenty-one

people were called, as I understand it. Twenty people responded,

which is an incredible response rate.

Mr. HALL. Right.

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Dr. VAGELOS. Now they were asked to suggest their priorities individually and other experts in the United States who would be

able to speak to these subjects, and they also were asked to

prioritize their recommendations. And then there was one major

long weekend around-the-clock meeting, and then numerous conference calls and trading of tons of information through the Internet. That is the way we ran the thing.

Mr. HALL. Peter O’Donnell is a special friend of mine, and—— Dr. VAGELOS. He was right in the middle of it.

Mr. HALL.—a great and giving person in our part of the country.

And because I was late getting here, I have been on other committees, I don’t know what questions have been asked, but if I have

any questions, I will submit them to you later, but I am sure that

the Chairman and Ranking Member have asked, probably, the

proper questions, and I can refer to the record for that.

And I thank you for your time. Very much I thank you for giving

your ability to your country.

I yield back.

Chairman BOEHLERT. Thank you very much.

Mr. Honda.

Mr. HONDA. Thank you, Mr. Chairman.

I will be real quick and to the point, because we are going to be

asked to vote.

I went through the report and just generally perused the recommendations and everything, and I was captivated by the term

‘‘innovation’’ running through the whole report, but you have never

addressed the concept of teaching innovation creativity. And I

think that that is the piece that we are missing. And when I speak

with some of the other folks in education and who have just recently retired from high tech or, you know that their main concern

is that if we are talking about producing more science students and

more folks adept at math and science, that we will still be outperformed by India and China, because they are going to do the

same thing. When we talk about the history of Silicon Valley, we

know that Silicon Valley is not only a geographic place, but it is

a phenomena of a combination of folks or of factors. And one of the

factors is the talent and the people. And one of the factors of the

talent of the people is their innate ability to be creative and inventive. We don’t teach that, and it is a teachable skill to be able to

teach innovation and creativity.

What is your opinion about making education a goal for this nation, the teaching of innovation and creativity? And what do you

think the costs may be and with the insights you have from your

own report?

Dr. WULF. One of the things that I have focused a lot of my attention on in the last nine years that I have been President of the

Academy has been engineering education reform. And a strong

theme running through that is that engineering is all about creativity. It is all about—as Theodore von Karman said, ‘‘creating

what has never been.’’ And so making engineering education better

adapted and suited to the actual environment that engineers are

going to practice in really involves teaching creativity and innovation.

Mr. HONDA. But there——

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Dr. WULF. And so that is starting to happen.

Mr. HONDA. Right. But there is no curricula that speaks to creativity or innovation, and in the discussion in the report, I don’t

see that as being highlighted or important. It is mentioned, but you

know, teaching math and science, if we keep teaching the way we

have taught, we still teach youngsters and people a compartmentalized approach to math and science, and it should be multi-disciplinary and integrated and then teaching how to teach innovation

and creativity. And if that is not a stated goal, how will we understand and know that that is going to be one of the outcomes?

Dr. WULF. There actually are a number of engineering schools

around the country now, which make innovation and creativity central to the curriculum.

Mr. HONDA. Would you be willing to have a long discussion on

that——

Dr. WULF. I sure would.

Mr. HONDA.—in your report?

Dr. WULF. Well, the report is the report.

Mr. HONDA. Well, the report is a document that people look at

to refer to from experts in the field, and if it is not specifically mentioned as a goal, but it is only mentioned as one of the things that

we look for, but is not specifically addressed, I wonder whether it

is going to have the impact that we are looking for.

Dr. WULF. I would be happy to share with you another pair of

reports, which collectively have the title, ‘‘The Engineer of

2020’’——

Mr. HONDA. Okay. Thank you.

Dr. WULF.—which focuses on that.

Mr. HONDA. Dr. Vagelos, I thought maybe you might have a comment.

Dr. VAGELOS. Well, the teaching innovation, I think, is very difficult than you are suggesting. Because the innovators, you can

have great scientists who make key observations and then someone

else comes along and takes that observation to the next step. An

example, the discovery of penicillin, which was about 1928, something like that, by Fleming, and it sat around in his lab for a couple of years, and he essentially gave up. This was taken up by a

scientist about 10 years later who saw that it was important, and

they took the step to make it in large amounts and discover what

this substance was that was able to kill organisms and might be

a drug. And so it takes certain kinds of people. And I don’t know

that it is. A lot of it is innate. There were lots of people thinking

about programming when Bill Gates came along. There is only one

Bill Gates.

Mr. HONDA. But to say that teaching innovation and creativity

is difficult is to beg the issue of whether it should be taught or not,

and it is a teachable skill. As a teacher, I know that processes are

important. And to have our youngsters in our schools subjected to

traditional instruction and not being challenged to think outside

the box is, you know. We have a lot of Ph.D.s in my valley that

are unemployed. And if we are going to be competitive, I think

that, you know, to think out of the box and have them be able to

grasp this concept or this ability to innovate—— Chairman BOEHLERT. Point well taken.

69

Mr. HONDA.—we will lose—— Chairman BOEHLERT. The gentleman’s time has expired. We

have a vote on the Floor.

Mr. Carnahan, we would like to get you in. You have been faithful here all morning.

Mr. CARNAHAN. Thank you, Mr. Chairman, and thank you. I

share your passion for this, and Mr. Matheson, I guess I have join

him, because I talked about this back home as well, research and

innovation, and had a fascinating tour back home in St. Louis recently with the company there who is competing internationally,

and not just competing, actually expanding their operations, and

they are able to do that because of innovation in unique products.

And so it was a great boost for me to see a local company doing

that, and to see the power of that innovation.

I also want to compliment all of you for your big ideas and for

your frankness about how to really go to the next steps and what

this is going to cost, but also talk about how you believe it is worth

the cost, because it is so important to our future.

I really wanted to focus on a couple of questions in our short

time here.

I think your idea about the scholarships for younger, newer

teachers is a good idea. There are some of those out there, but I

think we can do more there. I also like the idea of trying to get

some of our scientists and engineers that may be laid off or retired

to try to get them into teaching programs. But the bottom line is,

our ability, I believe, to really improve our system is so much based

upon our teachers. And salary levels, we all know, drive that. You

know, what about including in these initiatives, you know, doubling the salaries of our teachers in our country? To me, that is

fundamental, and I would like your comments about that.

Thank you.

Mr. AUGUSTINE. You have raised a point that was difficult for

our committee in the sense that we were asked to address things

that could be done at the federal level, and so we didn’t spend a

lot of time on teachers unions, on increasing teachers’ salaries. But

I think it would be safe to say there is not a one of us that wouldn’t

think that teachers’ salaries should be substantially increased. But

I suspect most of us would have added the footnote that the increase should be merit-based and performance-based, that we

shouldn’t just double every teachers’ salary tomorrow. I am sure

you didn’t imply that. But I think that we would strongly support

an increase in teachers’ salaries, if it was based on performance.

Yes.

Dr. VAGELOS. And we did, in part, in some of our recommendations, suggested that the teachers who go through these programs

go back with an additional salary increase of $10,000. This is a recommendation, but of course these school districts have to decide

what they are going to pay. We can make these recommendations.

And if the private sector gets in and buys into these programs, as

they have done into the advanced placement incentive program in

Texas, then the extra funds can come privately to complement

what is being done otherwise.

Mr. CARNAHAN. I just want to say in closing, I came from our

state legislature, where I had served on our Education AppropriaVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00077 Fmt 6633 Sfmt 6601 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
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tions Committee. Not once did we ever hear from anyone from the

business community talking about education policy. So to me, it is

another important thing. I know you are talking about federal level

recommendations, but since the bulk of our education funding and

policy is driven at the state level, I think it is vital that we engage

policy-makers at the State level to begin some of these innovations

and also address some of these key funding issues.

So thank you very much.

Chairman BOEHLERT. Thank you very much.

And unfortunately, time has run out. We have to get over to the

Floor for a series of votes, and we are not going to ask you to remain. We understand your busy schedules. We will be submitting,

Ms. Jackson Lee, Mr. Wu, and others will be submitting questions,

and we would ask that you would consider them and respond in a

timely manner.

Let me just conclude the hearing by saying how much we appreciate the service that all of you have contributed to the Nation. The

compensation is not high in terms of material value. As a matter

of fact, it is zero. But I always tell people that serve as well as you

do and as effectively as you do, and Mr. Augustine, I am so familiar with your work over the years, and Dr. Wulf, too. Doctor, I don’t

mean to exclude you, but I know you by reputation. Now I have

had the privilege of meeting you. Your compensation is a rich and

rewarding experience, and the satisfaction of knowing you have

contributed something of significance.

And with that, the hearing will adjourn, but not before I remind

Mr. Augustine of an outstanding invitation to participate in the December 6 conference summit on competitiveness, and we have just

had confirmation this morning that Dr. Jack Marburger, the President’s Science Advisor, will be a participant.

And I will tell you what my goal is, Norm, for this summit. I

want people to be madder than hell that they didn’t get an invitation, because we have got a small group, and you got one of them,

and I want you to respond in a positive way.

With that, the hearing is adjourned.

Mr. AUGUSTINE. Thank you.

[Whereupon, at 11:42 a.m., the Committee was adjourned.]

(71)

Appendix 1:

ANSWERS TO POST-HEARING QUESTIONS

72

ANSWERS TO POST-HEARING QUESTIONS

Responses on behalf of Norman R. Augustine, Retired Chairman and CEO, Lockheed

Martin Corporation; P. Roy Vagelos, Retired Chairman and CEO, Merck & Co.;

and, William A. Wulf, President, National Academy of Engineering

Questions submitted by Representative Bart Gordon

Q1. Is there a mismatch between the skill sets of graduating scientists and engineers

in the U.S. and industry’s needs? Did the NAS committee consider whether there

is a need to rethink the Ph.D. degree, or the relative production of Ph.D.s versus

professional masters degrees or some another type of advanced degree that

would be more valuable to industry?

A1. This is a recurrent question about American universities that needs to be revisited periodically. In 1995, for example, the National Academies Committee on

Science, Engineering, and Public Policy (COSEPUP) released a report titled ‘‘Reshaping the Graduate Education of Scientists and Engineers.’’

As part of that effort, COSEPUP surveyed employers and asked for their evaluation of Ph.D. training. In sum, these employers indicated that they were satisfied

with the current structure and concept of Ph.D. training and affirmed U.S. superiority in graduate education, although there are some specific difficulties in the relationship between academe and the profession. Some specific comments include the

need for an:

• Understanding of the nature of industrial research and an appreciation for

applied programs;

• Faster response by graduate programs to changing national policies and industrial needs;

• Education with more breadth as opposed to narrow specialization;

• Expansion of educational experiences beyond the academic environment

through hands-on experiences and in multi-disciplinary teams;

• Training in communication skills including teaching and mentoring.

This survey was conducted 10 years ago and conditions may have changed. It is

also likely that some progress has been made on these issues since that point.

In terms of the need to rethink the Ph.D., we still support the recommendations

in the COSEPUP graduate education report. This report recommended the following:

• Offer a broader range of academic options, while maintaining local initiative

and not compromising the need to maintain research excellence, control time

to degree, and attract women and minority-group members. Specific actions

include:

Æ Discourage students from overspecializing

Æ Enhance communication skills and the ability to work in teams

Æ Focus federal financial support mechanisms for graduate students on

traineeships as opposed to research assistantships.

• Provide better information and guidance to graduate students and engineers

and their advisers so they can make informed decisions about professional careers. Specific actions should include:

Æ Development by the National Science Foundation, in concert with other

federal agencies, a national database on employment options and trends;

Æ Provision of career information and advice by academic departments to

both prospective and current students in a timely manner;

Æ Encouragement of students once they have met their qualifying requirements to consider the current job market and then reflect on three alternative pathways—Master’s degree, traditional Ph.D., or Ph.D. with a dissertation of high standards, but designed for non-academic career and

which would take less time to complete.

• Devise a national human resource policy for advanced scientists and engineers that would involve examination of the goals, policies, conditions, and

unresolved issues of graduate level human resources.

On the issue of the relative production of Master’s degree versus Ph.D.s, we have

insufficient information to answer that question. In addition, the answer is likely

73

to change over time. However, based on personal experience, it is the opinion of one

of us (Augustine) that there is a need, from a industrial standpoint, to greatly increase emphasis on the Master’s degree—not at the expense of the Ph.D. but rather

at the expense of the Bachelor’s as a terminal degree.

Q2. In addition to sponsoring more basic research, should the Federal Government

focus more resources on applied, pre-competitive research aimed at the gap between support for basic discovery and support for development up to the stage

where the private sector is willing to assume the risk of commercialization? Did

the NAS committee consider the need for greater federal support for this kind

of bridge funding for applied research between basic research and proof-of-concept?

A2. The committee that developed the Gathering Storm report agrees that it is important to address this gap—which some have called the ‘‘valley of death.’’ It discussed many different options, and among those, placed priority on the establishment of the Advanced Research Projects Agency–Energy (APRA–E). If it proves successful, it could be replicated for other national goals as well.

Q3. During the past two years the Science Committee has heard from academic and

industry witnesses about the need for bridge funding, and these witnesses have

strongly urged funding for the Advanced Technology Program (ATP). Did the

NAS committee consider the ATP program or other possible approaches for addressing this issue?

A3. The committee did discuss the ATP and other related programs. The strengths

and weaknesses of ATP have been assessed in prior National Academies studies.

It did not re-evaluate these programs per se, but it did determine that they were

insufficient to address the gap described above and so recommended ARPA–E.

Questions submitted by Representative Jerry F. Costello

Q1. I fully agree with your belief that we need better science and math education

in our schools. The scholarship idea to provide math, science and engineering

students with teaching certificates seems a good idea. But how attractive will

teaching be to these students in the long-term? For example, how does the average teacher salary compare to that of a scientist or engineer? How do you think

this issue will factor into a student’s decision on which track to pursue?

A1. Economic studies do indicate that the compensation paid to a teacher affects

both the teaching pool and teacher tenure. Certainly, the committee would encourage any efforts to enhance compensation for effective science, mathematics, and

technology teachers; however, the committee was asked to address actions that

could be taken at the federal level not the State or local level where compensation

issues are generally addressed. The committee did, however, develop several mechanisms to enhance teacher compensation through bonuses as opposed to salary increases. For example,

• New teacher recruitment program (action A–1) provides scholarships of up to $20,000 per year and $10,000 per year bonuses for those who teach in underserved schools in inner cities and rural areas;

• Current teachers (action A–2) who participate in the continuing education

programs (summer institutes, Master’s programs, advanced placement/international baccalaureate (AP/IB) teacher training) would receive incentive stipends of $10,000 annually as long as they engage in classroom and leadership

activities;

• AP/IB teachers receive a $100 bonus for each student who passes the AP or

IB exam in mathematics or science.

Also important are mentoring programs, particularly for new teachers, which are

also recommended as part of these programs.

Q2. The perception of many college students is that science and engineering jobs are

not remunerative, important and exciting career options. How can careers in

science and engineering be made more attractive to students who have the option

of pursuing other well paid professional careers with shorter preparation time?

Is it enough to offer new scholarships and fellowships as recommended in the

NAS report?

A2. The excitement of science and engineering is best conveyed through inquirybased education and teachers who have a science, engineering, or mathematics

background themselves. The committee believes that by enhancing the science and

74

engineering background of those who teach at the middle and high school level, the

excitement of those careers can be conveyed to students. Those students will then

take the classes necessary for them to pursue science and engineering careers.

The time for preparation at the Bachelor degree level is somewhat longer in engineering than that in other fields, but the starting compensation is also higher (it

is not widely appreciated that the average salary in engineering is very close to that

of lawyers, which involves an additional two years of study). Unfortunately, compensation for engineering tends to peak at a lower level than for those business,

management, banking, or other such fields. At the graduate level there are also disparities. The National Academies have recommended in past reports that the time

to Ph.D. be decreased.

In terms of compensation, salary is just one motivator of those interested in

science and engineering careers. Perhaps a bigger influence than compensation on

those deciding whether or not to pursue graduate level education is the potential

for viable employment and interesting research opportunities. The committee’s recommendations in the ‘‘Sowing the Seeds’’ section of the report are meant to address

those concerns.

Q3. We know that other nations are increasing their science and technology capabilities and are developing large and very capable technical workforces. In addition,

U.S. companies are moving, not only manufacturing, but R&D operations

abroad. In light of these trends, what kinds of skills will U.S. scientists and engineers need to be able to command a premium in salary over foreign scientists

and engineers? That is, how do we compete in the global economy without lowering U.S. salaries and standard of living?

A3. The United States will continue to be challenged to compete on a pure salary

basis with developing countries such as India and China; the primary way to respond to that challenge is to increase the value of our engineers and scientists. The

primary mechanism for this is improved education at all levels—which is what the

committee suggests. Innovation has been a key U.S. national advantage, and enhancing our emphasis on it at all educational levels plays to our strength. When

innovations occur in the United States, it is able to capture at least the near-term

market in that innovation area. To maintain the Nation’s innovation capacity the

Nation needs to invest regularly in its people and its research.

Question submitted by Representative David Wu and Representative Jerry

F. Costello

Q1. The report contains convincing arguments and recommendations to foster a climate of innovation in the U.S. But an important question is whether innovations

generated in the U.S. will be exploited in the U.S., or abroad. For example, VCR

technology was developed in the U.S., but the market was taken over by Asian

countries. Traditionally, it has been the exploitation of new technologies, producing products and delivering novel services, which created new, high-paying

jobs. What do we need to do to ensure that the fruits of research and innovation

result in the creation of substantial numbers of good jobs in the U.S.?

A1. As indicated in the question, traditionally it has been the exploitation of new

technologies, producing products and delivering novel services, that have created

high paying jobs. For the United States to benefit from the jobs created by that innovation, the research that led to that innovation needs to occur to the United

States and the environment in the U.S. must be conducive to innovation in general.

That research will only occur in the United States if there are economic incentives

for companies to stay here as opposed to moving overseas and if the human talent

is available to develop and implement the ideas.

In its report, the committee calls for a study that will focus on developing the best

economic policies to enable the United States to be one of the most attractive places

in the world for long-term innovation-related investment. As time passes, some industries will migrate overseas when the technical skills are adequate and the labor

market is less expensive. But that does not happen immediately, and until it does

the U.S. is able to benefit in terms of the jobs created by that innovation. This is

less likely to be the case if the innovation occurs elsewhere.

The U.S. patent system is the Nation’s oldest element of policy on intellectual

property. A sound system for patent enhances social welfare by encouraging invention and the dissemination of useful technical information. So, in addition, the

United States should enhance intellectual property protection for the 21st century

global economy to ensure that systems for protecting patents and other forms of inVerDate 11-MAY-2000 11:58 May 20, 2006 Jkt 024132 PO 00000 Frm 00082 Fmt 6601 Sfmt 6621 C:\WORKD\FULL05\102005\24132 SCIENCE1 PsN: SCIENCE1
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tellectual property underlie the emerging knowledge economy but allow research to

enhance innovation. The patent system requires reform of four specific kinds:

• Provide the U.S. Patent and Trademark Office with sufficient resources to

make intellectual property protection more timely, predictable, and effective.

• Reconfigure the U.S. patent system by switching to a ‘‘first-inventor-to-file’’ system and by instituting administrative review after a patent is granted.

Those reforms would bring the U.S. system into alignment with patent systems in Europe and Japan.

• Shield research uses of patented inventions from infringement liability. One

recent court decision could jeopardize the long-assumed ability of academic researchers to use patented inventions for research.

• Change intellectual property laws that act as barriers to innovation in specific

industries, such as those related to data exclusivity (in pharmaceuticals) and

those that increase the volume and unpredictability of litigation (especially in

information-technology industries).

Questions submitted by Representative Eddie Bernice Johnson

Q1. Action A–1 of the NAS report’s recommendations suggests awarding ‘‘competitive

four-year scholarships.’’ However, I am concerned that minority and underserved students will be at a disadvantage for these awards because they are already noncompetitive due to their circumstances. Why did the Academy not consider this issue?

A1. We share the Congresswoman’s concern; however, the committee did consider

this issue and identified a wide range of existing federal and non-federal awards

available for minority and under-served students should these students decide to become scientists and engineers. The challenge is not so much funding these students

at the undergraduate level, but rather providing them with the resources they need

at the middle and high school level—these students particularly need teachers with

science and engineering backgrounds who will excite them about science and engineering and encourage them to pursue careers in these areas. Action A–1, therefore,

provides a $10,000 bonus to teachers who graduate from this program and who

teach in under-served schools in inner cities and rural areas. It is committee’s belief

that strengthening the teaching of science and math in the early grades will benefit

all students and better prepare all students to compete in life.

Q2. The total cost of the Academy’s Implementation recommendation is between $9.2 to $23.8 billion per year. The entire NIH budget is around $30 billion per year.

How realistic is it that this plan will be implemented and how do we get the

public to agree to such an expensive proposition?

A2. This proposal includes far more than research funding and should be viewed

as an investment in the Nation’s future, rather than an expense. All four recommendations in the report are part of the fundamental building blocks for the Nation’s economy.

Supporting innovation is a cornerstone of the report’s conclusions and innovation

requires much more than research. To be sure a vibrant research base is essential,

but so are an educated workforce, a culture that supports risk-taking, a tax climate

the encourages investment, and a host of other things. The report presents a package of proposals that revitalize many of these necessary components of the ‘‘innovation ecosystem.’’

Without quality science, mathematics, and technology teachers, our students will

not be prepared to be part of a highly technical workforce.

Without students who are well-educated and excited about science and engineering, too few Americans will pursue undergraduate and graduate education in

science, engineering, and mathematics. And, if we discourage international talent

from coming to the U.S., we will have even less talent available.

If the Nation lacks scientific and technical talent, it will not be able to generate

the innovative ideas that create whole new industries. And, if industries relocate

overseas because other countries offer better financial incentives, then we won’t

have high-quality jobs for those in science and engineering or Americans in general.

Americans may not fully appreciate the importance of research, but they do recognize the benefits that flow from such research and understand the importance of

well paying jobs.

In short, if the Nation’s leaders assign as high a priority to the concerns which

have been raised, as does this National Academies committee, the proposed funding

will be able to compete very strongly with other demands on the federal budget.

(76)

Appendix 2:

ADDITIONAL MATERIAL FOR THE RECORD

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