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AMERICAN COMPETITIVENESS: 

THE ROLE OF RESEARCH AND DEVELOPMENT 

HEARING 

BEFORE THE

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, FEBRUARY 6, 2013 

Serial No. 113–1 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

DANA ROHRABACHER, California 

RALPH M. HALL, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

FRANK D. LUCAS, Oklahoma 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

STEVE STOCKMAN, Texas 

BILL POSEY, Florida 

CYNTHIA LUMMIS, Wyoming 

DAVID SCHWEIKERT, Arizona 

THOMAS MASSIE, Kentucky 

KEVIN CRAMER, North Dakota 

JIM BRIDENSTINE, Oklahoma 

RANDY WEBER, Texas 

CHRIS STEWART, Utah 

EDDIE BERNICE JOHNSON, Texas 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

FREDERICA S. WILSON, Florida 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

DAN MAFFEI, New York 

ALAN GRAYSON, Florida 

JOSEPH KENNEDY III, Massachusetts 

SCOTT PETERS, California 

DEREK KILMER, Washington 

AMI BERA, California 

ELIZABETH ESTY, Connecticut 

MARC VEASEY, Texas 

JULIA BROWNLEY, California 

MARK TAKANO, California 

VACANCY 
(III) 

C O N T E N T S 

Wednesday, February 6, 2013 

Page 

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

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

Opening Statements 

Statement by Representative Lamar S. Smith, Chairman, Committee on 

Science, Space, and Technology, U.S. House of Representatives ..................... 7 

Written Statement ............................................................................................ 8 

Statement by Representative Eddie Bernice Johnson, Ranking Minority Member, Committee on Science, Space, and Technology, U.S. House of Representatives ........................................................................................................... 8 

Written Statement ............................................................................................ 10 

Witnesses: 

Mr. Richard Templeton, President and CEO, Texas Instruments 

Oral Statement ................................................................................................. 11 

Written Statement ............................................................................................ 14 

Dr. Shirley Ann Jackson, President, Rensselaer Polytechnic Institute 

Oral Statement ................................................................................................. 24 

Written Statement ............................................................................................ 26 

Dr. Charles Vest, President, National Academy of Engineering 

Oral Statement ................................................................................................. 38 

Written Statement ............................................................................................ 41 

Appendix I: Answers to Post-Hearing Questions 

Mr. Richard Templeton, President and CEO, Texas Instruments ...................... 68 

Dr. Shirley Ann Jackson, President, Rensselaer Polytechnic Institute .............. 72 

Dr. Charles Vest, President, National Academy of Engineering ......................... 77 

(1) 

AMERICAN COMPETITIVENESS: 

THE ROLE OF RESEARCH AND 

DEVELOPMENT 

WEDNESDAY, FEBRUARY 6, 2013 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, D.C. 

The Committee met, pursuant to call, at 9:34 a.m., in Room 2318 

of the Rayburn House Office Building, Hon. Lamar S. Smith 

[Chairman of the Committee] presiding. 
2 

LAMAR S. SMITH, Texas 

CHAIRMAN 

(tongrc.ss of the 1anited ~tates 

i!tOU5C of 'iR.cprCSentlltiDcs COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

2321 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6301 

12021225-6371 

www.science.hou!le.gov 

Committee on Sdence, Space, and Technology Hearing 

EDDIE BERNICE JOHNSON, TlIlIliis 

RANKING MEMBER 

American Competitiveness: The Role of Research and Development 

Wednesday, February 6, 2013 

9:30 a.m. - 11:30 a.m. 

2318 Rayburn House Office Building 

Witnesses 

Mr. Richard Templeton, President and CEO, Texas Instruments 

Dr, Shirley Ann Jackson, President, Rensselaer Polytechnic Institute 

Dr. Charles Vest, President, National Academy of Engineering 
3 

Purpose 

U.S. HOUSE OF REPRESENTATIVES 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HEARING CHARTER 

American Competitiveness: rile Role of Researcll and Development 

Wednesday, February 6,2013 

9:30 a.m. -11:30 a.m. 

2318 Rayburn House Office Building 

On Wednesday, February 6, 2013, the House Committee on Science, Space, and 

Technology will hold a hearing to examine the status of and outlook for America's science and 

technology enterprise, examining the impact of research and development (R&D) on the lives of 

the American people and looking ahead to potential breakthrough innovations for the future. 

Witnesses will discuss the historical context for American R&D, how it is divided between 

public and private investments, where the U.S. ranks globally on innovation and investment, and 

what the future may hold for American innovation. 

Witnesses 

• Mr. Richard Templeton, President and CEO, Texas Instruments 

• Dr. Shirley Ann Jackson, President, Rensselaer Polytechnic Institute 

• Dr. Charles Vest, President, National Academy of Engineering 

Overview 

The National Academies report "Rising Above the Gathering Storm" 1 in 2005 initiated a 

renewed policy debate on the nature of America's competitiveness stature and the increasing 

investment of other countries in both research and science education. Although the U.S. still 

remains the leader in annual total investments by both the public and private sectors, nations 

such as China and India are making substantial investments in R&D and promoting policies to 

attract innovative companies and educate a technically-trained workforce. The Science, Space, 

and Technology Committee will continue to take the lead on legislation to provide direction on 

federal R&D spending and STEM (science, technology, engineering and mathematics) 

education. 

U.S. industry represents 62 percent of America's R&D investment, with more than threequarters of industry R&D dedicated to development instead of research. By contrast, the federal 

government funds more than 60 percent of all basic research, characterized by longer-term 

activities that industry cannot afford due to the higher risks and expenses. The federal 

government supports approximately $140 billion annually in R&D. More than half of the federal 

basic research is conducted by universities. 

I http://www.nap.edu/openbook.php?isbn=0309100399 
4 

Federally-funded basic research has supported the creation of technological capabilities 

that impact the lives of Americans every day, such as magnetic resonance imaging, global 

satellite navigation, lasers, and broadband internet. Though the relationship between federallyfunded R&D and technological innovation to the marketplace is complex, businesses that 

conduct or fund R&D have a much higher rate of innovation than those that do not? 

Tomorrow's innovations are expected to fut1her transform the way we live. However, 

the future of specific technological innovations is particularly difficult to predict, especially how 

they might be fully utilized and when these innovations will become readily available and used 

by the American public. 

This hearing will explore many science and technology policy issues, including specific 

recommendations for federal policies that ensure federal R&D innovations continue to drive 

American economic competitiveness. 

Some useful background information related to U.S. industry and federal R&D spending 

and U.S. exports and market share for hi-tech products are provided below. More information 

and context for this background information can be found at these websites: 

http://www-innovationtaskforce.org/docslBenchmarks%20-%2020 12.pdf and 

http://www.aaas.org/spplrd/guihist.shtml. 

Public and Private Distribution of R&D 

$250,000 

$200,000 

l!! 

~ $150,000 

'tI 

'0 

III 

'" 

~ $100,000 

:E 

$50,000 

Basic scientific research Development 

'Research, Development, Innovation, and the Science and Engineering Workforce; NSF 2012; 

http://nsf.gov/nsb/publications/20 12/0sb 1203 .pdf 

2 
5 

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$250 

$150 

$100 

$50 

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-$50 

-$100 

60% 

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til 

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'020% 

2! 

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10% 

0% 

The High-Tech Trade Balance for Selected Nations 

-United States 

~-~-China 

-Japan 

-Asia-9 

En. China and U.S. Share of Global Exnorts: 1995-2008 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

3 
6 

National R&D Investment 

percent of GOP 

........ South Korea 

, Japan 

........ Taiwan 

--EU·27 

-llII-China 

4 
7 

Chairman SMITH. The Science, Space, and Technology Committee 

will come to order. I will recognize myself for an opening statement, then the Ranking Member for her opening statement. 

The topic of today’s hearing, the first of this Committee in this 

Congress, is ‘‘American Competitiveness: The Role of Research and 

Development.’’ This is an appropriate hearing because much of the 

jurisdiction of this Committee relates to keeping America globally 

competitive. 

America’s ability to compete depends on whether we have the 

present vision to conduct the science that will define the future. As 

the wall behind me says, ‘‘Where there is no vision, the people perish’’—this Committee’s goal, and today’s hearing, is to help define 

that vision and ensure that America continues to be the leader of 

global innovation. 

Our first hearing today will begin this process by examining the 

positive impact of today’s R&D and looking forward to potential 

breakthrough innovations in the future. 

Americans have always been innovators and explorers. Our ancestors crossed oceans, opened frontiers and ventured to explore a 

new continent and even traveled to the Moon. From the Lewis and 

Clark Expedition to the International Space Station, from the telegraph to broadband Internet, Americans have led the exploration 

of the unknown and developed inventions of the future. In our 

short history we have produced world-famous scientists and inventors like Benjamin Franklin, Thomas Edison and Jonas Salk. 

But countless more American scientists who are not world-famous nonetheless have been changing this world. Have you heard 

of William Burroughs, John Bardeen or Ruth Benerito? According 

to the National Inventors Hall of Fame, Mr. Burroughs created the 

electronic calculator. Mr. Bardeen worked with the Nobel prizewinning team that developed the transistor and helped create Silicon Valley in California and Silicon Hills in Austin, Texas. And we 

can thank chemist Ruth Benerito for developing wrinkle-free cotton, which is in the shirts many Americans wear today, including 

mine. 

But is America as innovative as it used to be? Some wonder if 

America’s greatest technological achievements are behind us, and 

if other nations like China and India will soon surpass us, or perhaps already have. 

Some nations are creating environments so attractive to global 

manufacturers that companies have relocated much of their activities on foreign soil. Our global trade imbalance is growing as we 

export less and import more, and today, this imbalance includes 

many high-tech products. Other nations are changing their policies 

to become more competitive, and so should we. 

Fortunately, blazing trails into new frontiers is what America 

has always done best. To set the stage for this Congress and to understand where America is heading, we have very knowledgeable 

witnesses testifying before us today. Each of them thoroughly understands both public and private research and development efforts 

as well as where our global competitors are headed. Members of 

this Committee have the opportunity to work together on policies 

that will help America stay competitive, and today’s hearing is a 

first step. 
8 

[The prepared statement of Mr. Smith follows:] 

PREPARED STATEMENT OF CHAIRMAN LAMAR SMITH

The topic of today’s hearing, the first for this Committee in this Congress, is 

‘‘American Competitiveness: The Role of Research and Development.’’ This is an appropriate hearing because much of the jurisdiction of this Committee relates to 

keeping America globally competitive. 

America’s ability to compete depends on whether we have the present vision to 

conduct the science that will define the future. As the wall behind me says, ‘‘Where 

there is no vision, the people perish.’’ This Committee’s goal—and today’s hearing— 

is to help define that vision and ensure that America continues to be the leader of 

global innovation. 

Our first hearing today will begin this process by examining the positive impact 

of today’s R&D and looking forward to potential breakthrough innovations in the 

future. 

Americans have always been innovators and explorers. Our ancestors crossed 

oceans, opened frontiers and ventured to explore a new continent and even travel 

to the Moon. From the Lewis and Clark Expedition to the International Space Station, from the telegraph to broadband internet, Americans have led the exploration 

of the unknown and developed inventions of the future. 

In our short history we have produced world famous scientists and inventors like 

Benjamin Franklin, Thomas Edison and Jonas Salk. But countless more American 

scientists who are not world famous nonetheless have been changing the world. 

Have you heard of William Burroughs, John Bardeen or Ruth Benerito? According 

to the National Inventors Hall of Fame, Mr. Burroughs created the electronic calculator. Mr. Bardeen worked with the Nobel prize-winning team that developed the 

transistor and helped create Silicon Valley in California and Silicon Hills in Austin, 

Texas. And we can thank chemist Ruth Benerito for developing wrinkle-free cotton, 

which is in the shirts many Americans wear today. 

But is America as innovative as it used to be? Some wonder if America’s greatest 

technological achievements are behind us, and if other nations—like China and 

India—will soon surpass us, or perhaps already have. 

Some nations are creating environments so attractive to global manufacturers 

that companies have relocated much of their activities to foreign soil. Our global 

trade imbalance is growing as we export less and import more, and today, this imbalance includes many high-tech products. Other nations are changing their policies 

to become more competitive, and so should we. Fortunately, blazing trails into new 

frontiers is what America has always done best. 

To set the stage for this Congress and to understand where America is heading, 

we have very knowledgeable witnesses testifying before us today. Each of them thoroughly understands both public and private research and development efforts as 

well as where our global competitors are headed. 

Members of this Committee have the opportunity to work together on policies that 

will help America stay competitive. Today’s hearing is a first step. 

Chairman SMITH. That concludes my opening statement, and the 

gentlewoman from Texas, Ms. Johnson, is recognized for hers. 

Ms. JOHNSON. Thank you very much, Chairman Smith, for holding this hearing, and thank you also for yesterday’s bipartisan retreat, which was delightful. 

Chairman SMITH. Thank you. 

Ms. JOHNSON. I am looking forward to these very distinguished 

witnesses today and hope that all of us will listen attentively. I 

know that we will hear from our witnesses about the critical importance of federal research and development investments, and I look 

forward to their testimony. 

As the competition for scarce resources has intensified, there 

have been some who would describe the research community as 

just another special interest lobbying group to share the pie. I 

could not disagree more. They should have special interest and selfinterest, and I hope they do, whether they are representing universities or high-tech companies. But to label them as nothing more 

than another special interest group is, at best, misleading. Without 
9 

dismissing the value of many other investments we make with our 

limited discretionary budget, there is probably no single investment 

we make, other than education, that has done more to ensure our 

Nation’s long-term economic vitality than the investment in R&D. 

This holds true for the very long-term investments that the Federal Government is uniquely suited to make in exploratory research where we have no idea what, if any, applications will result. 

But it also holds true for the financial and intellectual partnerships 

we build with the private sector to address more mid-term R&D 

challenges. All of these investments yield immeasurable benefits to 

our economy and our society in terms of companies built, jobs created, and a society made healthier, safer, and more secure. They 

also have the secondary benefit of training the next generation of 

scientists and engineers who will contribute in all of these ways to 

their own generation, and I am particularly pleased to see a few 

of them sitting out there I hope will be some of those in the future. 

Some specific examples of groundbreaking innovations and companies that would not have been possible without federal R&D investments include the Internet, GPS, Google, the iPhone, and God, 

what we would do without barcodes? I expect that we will hear 

more examples from the witnesses, and we could probably spend 

our entire two hour hearing reading off such a list. 

And yet, I fear, some of my colleagues in Congress would still be 

unimpressed. We will still hear arguments that the Federal Government’s role should be restricted to so-called basic research because the private sector can do the rest alone, that everybody has 

to take a cut, that the 8.2 percent cuts looming on March 1 may 

hurt a bit but are better for the country in the long run. 

I happen to believe personally that we can invest it in unemployment and food stamps or we can invest it in our future that would 

eliminate the need for both. So let me attempt to briefly preempt 

some of these arguments. R&D is not a simple, linear process from 

basic to applied to development and so on to a final commercial 

product. It also doesn’t go in only one direction. R&D is part of a 

complex innovation process with many feedback loops. There is no 

clear line at which the public role ends and the private role begins 

and there has not been in any of our lifetimes. That is why partnerships between the public sector, namely our federal agencies, 

and the private sector, such as Mr. Templeton’s company, Texas Instruments, are so important. 

Second, I would like to say a word about the consequences of sequestration. At the risk of repeating myself, we would not just be 

turning off the lights on many groundbreaking research facilities 

and experiments today, we would be eating our seed corn for tomorrow. We would know that at the end of the tunnel, the lights 

are out. What talented young person would see a future in scientific research after sequestration does its damage? 

Our witnesses were asked in their testimony to speculate on 

what kind of breakthrough technologies we might see in the next 

5 to 20 years. I think if any of us knew the answer to that, we 

would really be rich. That is the point. We don’t know what directions our research might take, what unknown applications and innovations will be developed, and nor did our predecessors when 

they invested in what we have today. We cannot afford to overesti-
10 

mate what the private sector is prepared to do on its own, and we 

cannot afford to underestimate the negative consequences for the 

Nation’s R&D enterprise of letting sequestration go forward. 

With that, Mr. Chair, I yield back. 

[The prepared statement of Ms. Johnson follows:] 

PREPARED STATEMENT OF RANKING MEMBER EDDIE BERNICE JOHNSON

Thank you Chairman Smith for holding this hearing, and thank you to our distinguished witnesses for taking the time to appear before the Committee this morning. 

I know that we will hear from all of our witnesses about the critical importance of 

federal research and development investments, and I look forward to your testimony. 

As the competition for scarce resources has intensified, there have been some who 

would describe the research community as just another special interest group lobbying for their share of the pie. I could not disagree more. Yes, they have some selfinterest, whether they are representing universities or high-tech companies. 

But to label them as nothing more than another special interest group is, at best, 

misleading. Without dismissing the value of many other investments we make with 

our limited discretionary budget, there is probably no single investment we make, 

other than education, that has done more to ensure our nation’s long-term economic 

vitality than our investment in R&D. 

This holds true for the very long term investments that the federal government 

is uniquely suited to make in exploratory research—where we have no idea what, 

if any, applications will result. But it also holds true for the financial and intellectual partnerships we build with the private sector to address more mid-term R&D 

challenges. 

All of these investments yield immeasurable benefits to our economy and our society in terms of companies built, jobs created, and a society made healthier, safer, 

and more secure. They also have the secondary benefit of training the next generation of scientists and engineers who will contribute in all of these ways to their own 

generation, and so on. 

Some specific examples of the groundbreaking innovations and companies that 

would not have been possible without federal R&D investments include the internet, 

GPS, Google, the iPhone, and barcodes. I expect we will hear more examples from 

the witnesses. We could probably spend our entire two-hour hearing reading off 

such a list. 

And yet, I fear, some of my colleagues in Congress would still be unimpressed. 

We will still hear arguments that the federal government’s role should be restricted 

to so-called basic research because the private sector can do the rest alone. That 

everybody has to take a cut. That the 8.2 percent cuts looming on March 1 may hurt 

a bit but are better for the country in the long run. 

So let me attempt to briefly preempt those arguments. R&D is not a simple, linear 

process from basic to applied to development and so on to a final commercial product. It also doesn’t go in only one direction. R&D is part of a complex innovation 

process with many feedback loops. 

There is no clear line at which the public role ends and the private role begins 

and there has not been in any of our lifetimes. That is why partnerships between 

the public sector, namely our federal agencies, and the private sector, such as Mr. 

Templeton’s company, are so important. 

Second, I’d like to say a word about the consequences of sequestration. At the risk 

of repeating myself, we would not just be turning off the lights on many 

groundbreaking research facilities and experiments today, we would be eating our 

seed corn for tomorrow. 

What talented young person would see a future in scientific research after sequestration does its damage? 

Our witnesses were asked in their testimony to speculate on what kind of breakthrough technologies we might see in the next 5–20 years. I think if any of us knew 

the answer to that, we’d be rich. That’s the point—we don’t know what directions 

our research may take, what unknown applications and innovations will be developed. 

We cannot afford to overestimate what the private sector is prepared to do on its 

own. And we cannot afford to underestimate the negative consequences for the nation’s R&D enterprise of letting sequestration go forward. 

Chairman SMITH. Thank you, Ms. Johnson. 
11 

Let me introduce our witnesses. Our first witness is Mr. Richard 

Templeton, Chairman, President and CEO of Texas Instruments. 

Mr. Templeton has served as Texas Instruments’ Chairman of the 

Board since April 2008 and President and Chief Executive Officer 

since May 2004. In addition to his work with Texas Instruments, 

Mr. Templeton also serves as the Chair of the Task Force on American Innovation, a broad group of stakeholders that support scientific research. Mr. Templeton earned his B.S. in electrical engineering from Union College in New York. 

Our next witness is Dr. Shirley Ann Jackson, President of 

Rensselaer Polytechnic Institute since 1999. Prior to her tenure, 

Dr. Jackson served as the Chair of the U.S. Nuclear Regulatory 

Commission. She also has had an extensive career working in several prestigious physics laboratories researching subatomic parties. 

Dr. Jackson earned her Ph.D. in theoretical elementary particle 

physics from MIT. 

Our final witness is Dr. Charles Vest, President of the National 

Academy of Engineering. He was elected to this position in 2007 

and is serving a six-year term. Dr. Vest also is the President Emeritus of the Massachusetts Institute of Technology and earned his 

Ph.D. in mechanical engineering from the University of Michigan. 

Prior to his time in the academic world, Dr. Vest was Vice Chair 

of the U.S. Council of Competitiveness for eight years and a member of the President’s Committee of Advisors on Science and Technology during the Bush and Clinton Administrations. Both Dr. Vest 

and Dr. Jackson were also distinguished members of the panel that 

authored the original 2005 National Academy study Rising Above 

the Gathering Storm. This study recommended ways to keep American economically prosperous. 

Before I recognize Mr. Templeton, I just want to call attention 

to Members on their desk, they should have an op-ed from today’s 

Politico that was written by two of our witnesses today and which 

is well worth reading. It is called ‘‘A Critical Role in Innovation’’ 

by Richard Templeton and Shirley Ann Jackson. 

Chairman SMITH. Mr. Templeton, we will begin with you. 

TESTIMONY OF MR. RICHARD TEMPLETON, 

PRESIDENT AND CEO, TEXAS INSTRUMENTS 

Mr. TEMPLETON. I want to thank Chairman Smith, Ranking 

Member Johnson and of course all the Members of the Committee 

for convening this hearing so early in the new Congress on such 

an important topic. I really am honored to be here today with Dr. 

Jackson and Dr. Vest, really well-known innovators with great, 

keen insight into policy. 

Over the last 50 years, scientific and technological innovation 

has been responsible for as much as half of our economic growth. 

The United States has been a clear net global winner during this 

time, and while there are a number of factors that can explain 

that, I actually believe the investments by the Federal Government 

in basic research at our universities and at our federal labs were 

a critical factor in determining our success. 

I would point out as we think about this topic, this phrase of research and development, or R&D, is used inseparably many times, 

and I think it is important to point out that inside of research and 
12 

development, there is something called basic research, and to get 

a sense of that, it is really something that is done to discover basic 

principles without necessarily having a commercial purpose in 

mind. It could take 5 to as much as 15 years for that to pay off, 

or perhaps never. But when those basic principles are discovered 

and successful, they can have enormous dividends. 

For example, the Space Program and the Defense Department 

propelled many of the advancements in the semiconductor industry 

where today U.S.-headquartered firms hold nearly half of the 

worldwide market and support nearly 250,000 direct jobs. The 

Internet is another wonderful example. 

Basic research requires significant funding from the Federal Government because it can take the long-term view and make the 

scope of investment needed. This funding goes to universities, not 

to companies. I offer the Committee four points to consider when 

you think about research funding. 

First, the United States was a clear winner of the first round of 

the innovation game. We are home, as was noted in the opening 

comments, to some of those most innovative companies in the 

world, names like Apple, names like Google, names like Intel, and 

we of course like the name of Texas Instruments on that list. The 

United States is the net winner economically because these companies are headquartered here in the United States and they are not 

headquartered somewhere else. They are here in many ways because the basic research many years ago was done in the United 

States. We had the best research universities, which in turn attracted the smartest people from around the world to want to go 

practice at those best institutions. 

Second point, that this game is changing in round two. The relative advantages that the United States has had over the last 50 

years have significantly weakened. Today we risk that the next 

generation of these companies will in fact be started up and 

headquartered somewhere else. So there is really a few simple reasons as to why that could take place. First, other countries have 

seen the United States playbook and they are very interested in 

being able to replicate it. They see the benefits that it has yielded 

and they are busy putting in place programs to provide incentives 

for companies to try and start in their countries. The second element that has weakened the U.S. position is that federal investment in basic research, in physical sciences and engineering, as a 

percent of GDP has fallen to less than half the level since 1970. 

If you contrast that by some very key competitors, key competitors 

meaning countries like Korea or China, they are actually increasing their R&D in physical sciences as a percent of GDP. Lastly is 

skills. Our industry works because we have great minds, and there 

are two issues here. First, our immigration policies do not encourage today the best minds to come to the United States and in fact 

stay in the United States, and also the best minds have got other 

choices around the world. In fact, today we educate some of these 

best minds and then we show them the door to return home. Secondarily is our own K–12 STEM systems are faltering and we have 

to get that turned around. 

The third point that I would like to point out is that the stakes 

in the next round, the next 50 years, are even higher than they 
13 

were for the last 50 years. Leadership in nanoelectronics will impact many aspects of our economy: health care, energy, transportation, safety, security and much more. China and Korea understand that the country that leads in nanoelectronics will reap the 

economic benefits the way the United States has dominated the 

last 50 years, or the microelectronics era. 

Fourth point: I think there are four areas that changes in policies need to be focused to change the outcome. First, the federal 

funding in basic research. Even in tough economic times, we must 

protect the investments in the future. Second, we must make a priority for world-class STEM education, that is K–12, in the United 

States. This needs to be a national imperative, implemented on a 

local basis. Three, high-skilled immigration reform. I appreciate the 

leadership that, Mr. Chairman, you have shown, Ms. Lofgren, on 

the issues, and we look forward, hopefully, to a resolution to that. 

And then fourth is comprehensive tax reform for U.S. companies to 

build to compete globally. The world has changed considerably 

since 1986, the last time taxes were reformed. We must have an 

environment where U.S.-headquartered companies can compete effectively on a global basis because that is where 95 percent of the 

world’s population is. 

So my conclusion, investing in basic research at our universities 

has been critical to America’s success over the past 50 years, and 

I believe it will be more important going forward, and I am certainly happy to answer any questions. 

[The prepared statement of Mr. Templeton follows:] 
14 

..Ii~TEXAS 

V INSTRUMENTS 

American Competitiveness: The Role of Research and Development 

Testimony before the U.S. House Committee on Science, Space, and Technology 

Richard K. Templeton 

Chairman, President and CEO 

Texas Instruments Incorporated 

February 6, 2013 

Chairman Smith, Ranking Member Johnson, Members of the Committee - thank you for the 

opportunity to testify before you today on American Competitiveness: The Role of Research and 

Development. Texas Instruments has enjoyed a close relationship with this committee for many 

years given our mutual interest in research and STEM education. I applaud your convening this 

important hearing so early in the Congress. 

I am pleased to testify alongside Dr. Charles Vest and Dr. Shirley Ann Jackson, who have each 

done so much to draw attention to innovation issues. One ofTI's founders, Erik Jonsson, 

graduated from Rensselaer Polytechnic Institute in 1922, illustrating that even many decades 

ago, great educational institutions trained the entrepreneurs that create entirely new industries. 

I have been asked to address the industry perspective on research and development (R&D). I 

appear on behalf of the Task Force on American Innovation and as a board member of the 

Semiconductor Industry Association. I will draw heavily on my more than 30 years with Texas 

Instruments in my testimony. 

If! leave you with one message today, it is this: federal funding offundamental scientific 

research is critical to our nation's continued competitiveness, economic growth and workforce 

development. It will shape our future. It will launch new industries, undergird our scientific and 

engineering infrastructure, produce our next Nobel Laureates, ensure unparalleled academic 

excellence of our universities, and provide an economic future for the nation. It is not a switch 

that can be turned on and off. 

A fundamental theme will be the critical feedback loop between industry, universities, and 

government as a key characteristic of the U.S. innovation ecosystem. Innovation is a shared 

responsibility, and government plays an essential catalytic role in making it happen. Economists 

attribute as much as half of economic growth over the last fifty years to innovation, scientific, 

and technological progress - much of which would not have occurred without federal 

investments in university-based research. 

TI is the nation's second largest semiconductor manufacturer with more than 100,000 innovative 

products to help our 100,000 customers unlock the possibilities of the world as it could be-

-1-
15 

smarter, safer, greener, healthier and more fun. We make chips that go into everything from 

consumer electronics to automobiles, medical devices, motor controls - just about anything with 

an on and off switch. Innovation has been a cornerstone of our 83-year history. In 2012, TI 

invested nearly $1.9 billion in R&D, a figure that grew 9 percent compared with 2011, even as 

our annual revenue fell between the two years. This might seem counterintuitive. However, over 

the years I have observed that companies that invest during a downturn are better positioned for 

the recovery. 

The same concept applies to countries. Ifwe want the United States to remain the leader in 

cutting-edge technologies, in knowledge-based industries, and to create the related high-paying 

jobs and new companies, we must prioritize investment in research. 

My testimony today focuses on five areas: 1) types of R&D and funding sources, 2) industry 

approach to R&D, including model private-public partnerships, 3) global R&D incentives, 4) 

breakthrough technologies that might be realized, and 5) policy implications. 

R&D types and funding sources 

The term "R&D" is often used inseparably, but there is an important distinction between 

research and development. The days of the Bell Labs model of large-scale, corporate-funded 

exploratory research labs are long gone. Companies invest largely in development, and to a 

lesser extent in research. Development focuses on executing the next iteration of existing 

products and new products. This is particularly true in the high-technology sector. Companies 

must continually innovate or become obsolete. 

Research can be further segmented into fundamental (or basic) and applied. Fundamental 

research is exploratory in nature and conducted to understand basic principles without 

necessarily having a commercial purpose in mind. The benefits are broad, societal, and potential 

payoffs are further in the future. Applied research is undertaken with a specific end, an attempt to 

solve a practical problem in a much nearer term. 

Historically, the federal government has been the primary source of basic research funds and 

supports higher-risk, exploratory research that universities are best able to conduct. It is basic 

research upon which all other R&D rests, including that performed by the private sector. 

Individual companies or consortia are not able to perform basic research on the scale or sustained 

level of the federal government. Basic research requires patient capital. It can take 5-15 years or 

more to bear commercial results, if at all. However, when it does payoff, those payoffs to our 

society and to our economy are spectacular and many times, in unanticipated or unintended 

ways. And sometimes the pay back extends for years as researchers find new and innovative 

applications for these discoveries. If you look at examples of federally funded basic research 

outcomes - the laser, GPS, the Internet, and semiconductor advances all have revolutionized 

the world and how we interact with it. The fundamental research undertaken on these 

technologies began 50 to 60 years ago. 

The private sector, on the other hand, generally focuses on later stage research and development. 

As the Congressional Joint Economic Committee has stated, "Despite its value to society as a 

-2-
16 

whole, basic research is underfunded by private firms precisely because it is performed with no 

specific commercial applications in mind." 

Industry invests some $270 billion in R&D, but it focuses mainly on the "D" - the development 

of technologies that can be brought to use and markets in the near term. While it is essential to 

the innovation process, tlie long-term horizon of most scientific research conducted at 

universities, which perform a majority of basic research, is viewed by industry as too risky for 

significant private sector investment. This is why the federal government's support for basic 

scientific research is critical to innovation. 

In the United States, expenditures in R&D have largely remained stagnant for the last 30 years as 

measured as a percent ofGDP. U.S. national R&D from all funding sources was $400.5 billion 

in 2009, just shy of3 percent ofGDP. While the share of federal investment in R&D has 

declined, the private sector share has increased, which has maintained the ratio to GDP, but 

pulled activity toward the applied and development side of the continuum. 

R&D by Funding Source 

:;g 80 

B 60 ... 

'" 40 

f 2: 

'" 1953 1960 1967 1974 1981 1988 1995 2002 2009 

-Business ••• Federal government - - - - Other 

Source: National Science Foundation, Science and En.qineerin.q Indicotors, 2012, Fig 04·05 

National investment (all sources) in basic research was $76 billion in 2009 (0.53 percent of 

GDP), illustrating that resources are mostly focused on applied research or development. The 

federal government represented 53 percent of basic research investment, while industry funded 

22 percent of the total. University-performed basic research was $40.6 billion (0.28 percent of 

GDP), and of this, the federal government funded $24.2 billion (0.17 percent of GDP). I 

Industry approach to R&D 

Research is an essential element of any knowledge-based company. In the semiconductor 

industry, we have learned from experience to manage through challenging times. Few sectors are 

as cyclical as ours with great highs and very difficult lows. Yet, the semiconductor industry 

consistently invests nearly the same percentage of sales in R&D, even as sales growth has 

fluctuated. In 20 II, U.S. semiconductor companies invested $27 billion in R&D, or 18 percent 

of sales. 

-3-
17 

How TI invests in R&D 

Trs R&D work runs the gamut from basic research, undertaken in collaboration with others in 

the industry, to more near-term applied research and development. 

Nearer term research is embedded in business units throughout the company, enabling 

widespread access to innovative ideas that benefit II customers, and allowing R&D staff to 

quickly gauge customer reaction to new ideas. II also has additional R&D teams focused on 

broad areas of important technology, and around particularly promising applications. 

In 2008, on the 50th anniversary of the invention of the integrated circuit, II established Kilby 

Labs as a center of innovation at three sites within the company to inspire creative ideas for 

breakthrough technologies. The lab allows selected II researchers to work full time on a highrisk, high-reward project for several months to a year. Engineers assigned to those Kilby projects 

then return to their business units. Areas being explored today include energy management, 

medical and health care, cloud computing (and related infrastructure), and safety and security. 

The scope of projects is virtually unlimited within II's fields of interest and expertise, and they 

have ranged from terahertz clock sources to micromachines. TI often engages with university 

professors on these efforts. Kilby Labs are also a magnet for top students from around the world, 

some of whom start as surnmer interns and then join II after graduation. Student interns work 

with II staff on projects, gain insight into how TI operates and at the same time further their 

graduate studies. Interns have come to work at Kilby Labs from universities near and far, 

including are the University of Texas, MIT, Texas A&M, Stanford, Columbia, Georgia Tech, 

Rensselaer, UC Berkeley, UCLA, the University of Illinois, the University of Wisconsin and 

Cambridge University. 

Public-private partnerships: semiconductor industry examples 

II's basic research investments are almost always in collaboration with others to tackle 

fundamental technical challenges that no company or university can solve alone. The 

semiconductor industry has a wonderful tradition of supporting pre-competitive, collaborative 

research that dates back to the 1980s and which has evolved as the industry's needs and 

challenges have changed. 

For example, the Semiconductor Research Corporation (SRC), founded in 1982, is a consortium 

of semiconductor companies that collaboratively funds pre-competitive university research in 

semiconductor technology and design. II has been a member of SRC almost since its inception, 

contributing financial and human resources to maximize the impact and the value of the 

consortium. 

Over the past five years, SRC has administered $215 million in industry funding for university 

research, supporting more than 1,500 students annually. These industry dollars are matched or 

leveraged by federal, state and other sources of funds. SRC's consortium model facilitates 

interaction between industry and government, allowing for co-investment in basic research with 

various federal agencies, including the National Science Foundation (NSF), National Institute of 

Standards and Technology (NIST), and Defense Advanced Research Projects Agency (DARPA). 

U.S. universities represent 97 percent of the investments that SRC makes. 

-4-
18 

Three SRC-administered programs The Texas Analog Center of Excellence (TxACE), the 

Semiconductor Technology Advanced Research network (STARnet) and Nanoelectronics 

Research Initiative (NRI) - illustrate the pre-competitive research continuum, from nearest to 

longest term. 

TxACE: Through SRC, TI led an effort to establish a collaboration center at the University of 

Texas-Dallas that focuses on research in analog and radio frequency technologies to address 

challenges in such areas as energy efficiency, health care, and public safety, which are uniquely 

reliant on analog technology. The center involves 29 universities, in Texas and outside the state. 

Total funding for the center is $31.8 million over six years, of which TI and the SRC are 

providing a combined $15.9 million, and the State of Texas, through the university system and 

Emerging Technology Fund is providing the remainder. This collaboration of academia, 

industry, and government is an excellent example of how regional innovation is created. 

STARnet: Funded jointly by industry and the Defense Advanced Research Projects Agency 

(DARPA), the new Semiconductor Technology Advanced Research Network (ST ARnet) 

program will allocate a total of $194 million over the next five years to 39 universities across the 

country for leading-edge semiconductor research, concentrated along six thematic areas focused 

on extending and moving beyond the current CMOS technology 

(http://www.src.org/programistarnetl). STARnet is the successor to the Focus Center Research 

Program, also funded jointly by DARPA and industry in 1997-2012. 

NRI: NRI looks even farther into the future, supporting discovery-oriented research that is 

focused on finding the next technology that will allow the industry to continue to increase 

performance and decrease cost. Initiated in 2005 by five semiconductor companies, NRI has 

been recognized by the President's Council of Advisors on Science and Technology and others 

as a model collaboration that leverages funding and expertise from industry, NSF, and NIST, as 

well as contributions from state and even local governments. Since the program's inception, 

industry has contributed $17 million, NSF $20 million, and NIST $12 million. 

Why does investment in nanoelectronics research matter? Nanoelectronics is a game-changer for 

the industry and the country - a disruptive technology that could alter the dynamic of market 

leadership. The current chip technology, which has been used for four decades, is predicted to 

reach its scaling and power dissipation limits by 2020. Nanoelectronics holds the promise of a 

successor technology. The country that discovers this breakthrough research is likely to reap the 

related economic benefits. The U.S. federal government's research resources, specifically the 

NSF and NIST are critical to this effort. We appreciate the support that this committee has 

provided to this effort. 

What is important to point out is that in all points along the R&D continuum, industry has skin in 

the game. 

Global competition 

Sustained funding of scientific research is required to maintain U.S. leadership and 

competitiveness. Numerous benchmarks used to measure our nation's innovation efforts, such 

as the numbers of scientific and engineering degrees awarded, scientific papers and patents 

-5-
19 

produced, and total research investments, indicate that other regions and nations, particularly 

China and the other rapidly developing economies of Asia, are vigorously investing in science 

and technology in hopes that they can eventually surpass the United States in key scientific 

fields. 

The United States was once the leader in research intensity, or R&D as a percentage ofGDP; it 

now ranks 8th according to the OECD. U.S. share of global R&D spending is slipping, from 39 

percent in 1999 to 34.4 percent in 2010. While U.S. R&D spending has risen on average 3.2 

percent, other countries are accelerating their investment - South Korea at 8 percent and China at 

20 percent. 2 

For my own industry - which remains the global leader and has on average been the top U.S. 

export over the last decade - this trend is disturbing. Although the industry has its roots in 

American innovation, our leadership cannot be taken for granted. Other countries want to attract 

this industry and many have specifically identified semiconductors in national development 

plans, establishing aggressive incentives to encourage semiconductor design, manufacturing and 

R&D. They see the benefits that result from a robust chip industry in terms of both economic 

activity as well as increased innovation. They are building talent, pouring resources into R&D, 

and in some cases trying to develop national champions with policies that favor domestic 

companies and create unique technical standards to force technology transfer. 

A quick read of China's 12'h five-year plan identifies seven emerging industries in which it hopes 

to become world-class competitors, including energy-efficiency and environmental protection, 

next generation information technology, bio-technology, advanced equipment manufacturing, 

new energy, new materials and new-energy vehicles. All are very innovation-driven, R&D 

intensive sectors. And China is making the investments. This is a challenge we need to address. 

R&D incentives have become a highly popular way for countries to attract and develop their 

research base. Most of these are tax based. The United States once had the most competitive 

R&D tax credit. But according to the Information Technology Innovation Foundation, we now 

rank 24th of 42 countries, and because our credit is temporary it undercuts the very incentive it is 

supposed to provide. We welcomed the recent extension of the R&D tax credit, yet it is very 

difficult for companies to plan, or even prepare financial reports, when it is continually renewed 

retroactively or at the eleventh hour. 

In addition to the R&D incentives, all our competitor countries have lower overall corporate tax 

rates, and many offer special incentives to specific industries such as tax holidays or reduced tax 

rates for semiconductor companies. A combination of these incentives can in some cases allow a 

company to operate up to 10 years virtually tax-free.3 

Breakthrough technologies: semiconductors 

History 

I want to reiterate the game-changing implications of research by looking a bit to the past but 

also projecting out to the future. When Jack Kilby invented the integrated circuit at II, NASA 

and the Defense Department were some of the first supporters. Federal funding was critical to 

development of semiconductor manufacturing technologies in the 1960s and 1970s. 

-6-
20 

The invention of the integrated circuit has propelled space travel, enhanced national security, 

revolutionized computing and communications, created safer cars and energy-efficient 

appliances, and improved health care technology. Today, semiconductors represent a $300 

billion worldwide market, enable the more than $1 trillion global electronics market, and drive 

productivity in every sector of the economy. The industry has delivered a 10-fold drop in cost 

every six years. Investment in R&D is what makes this possible. 

An example of a TI product that can trace its roots to federal research is Digital Light Processing 

(DLP®) technology, which is a digital mirror device. DLP® has its origins in DARPA projects 

from the 1970s to improve aircraft cockpit displays. The first commercial use TI found for the 

technology was for airline ticket printing. In 1989, DARPA funded a program to spur 

development of high-definition TV industry, which resulted in TI developing the first prototype 

digital mirror device. Now DLP® is an amazing imaging technology that uses millions of tiny, 

rapidly-moving mirrors moving thousands oftimes per second to generate up to 35 trillion 

colors. DLP® is used in nearly half of the world's projectors, including the handheld Pico, 3D 

television and movies, and revolutionary medical imaging. TI worked with the University of 

Texas-Arlington on some exciting research resulting in medical technology that uses DLP® for 

hyperspectral imaging, which uses electromagnetic spectrum bands to image beyond what the 

human eye can see, and has applications for non-invasive diagnoses. DLP® applications are 

being developed for 3D biometrics and there are numerous other projects underway. For TI, 

DLP® now generates about 6 percent of our revenue and supports hundreds of employees, most 

in the United States. Perhaps even more importantly, it also supports over 300 companies that are 

using our technology to create new applications for medical, automotive, and industrial sectors, 

illustrating that as technology becomes pervasive, it strengthens the broader economy as a 

byproduct. 

Looking ahead 

But that's just the beginning. What semiconductors made possible for the information 

technology industry will now revolutionize health care, security, energy, and transportation. 

Bioengineering, at the intersection of medicine and engineering, is an incredibly exciting area. 

Research has helped develop retinal implants that will allow the blind to see, bionic prostheses, 

and wireless body sensor patient monitoring. 

Other research-based technologies on the horizon include 3D biometrics, video analytics, 

perpetual devices (powered by ambient light, heat, or vibration), intelligent driverless cars, and 

wearable electronic devices (clothing, fingertips, and glasses). Emerging infrastructure and 

applications such as smart grid/energy management, cloud computing, data analytics, and the 

Internet of Things are driving new innovations. The possibilities are limitless. And research 

remains at the heart of making it all work. 

Policy Implications 

Prioritizing research investment 

The physical sciences and engineering are integral disciplines to the semiconductor industry and 

many others. Federal investment in these fields has declined as a percentage of GDP over the last 

four decades. 

-7-
21 

The key agencies funding physical science and engineering research are the National Science 

Foundation (NSF), National Institute of Standards and Technology (NIST), Department of 

Defense, Department of Energy Office of Science, and National Aeronautics and Space 

Administration (NASA). 

Federal Funding of Research in Physical Sciences and Engineering 

0.150% 

0.125"/0 

0... 0.100% Q 

0 

...... 

0 0.075% 

~ l: 

<J 0... 0.050% 

0.025% 

0.0000/" !-'-'-'-'-I ' , , , I ' , , , I ' • , , I ' , , , I ' • , , !-,~-~ 

1970 1975 1980 1985 1990 1995 2000 2005 

Source: Task Force on American Innovation 

As the continuing resolution expires in March, I urge you to provide predictable and sustained 

funding for scientific research at these key agencies. Boom and bust funding cycles for scientific 

research hamper scientific progress and discourage students from pursuing scientific and 

technical careers that are critical to maintaining U.S. scientific leadership. Worse yet, those 

doing research here in the United States will increasingly consider lucrative offers to continue 

their research overseas, where the funding stream is more constant and dependable. When 

research moves out of the United States, the high skilled talent, the intellectual property and 

possible spinoff companies and corresponding jobs all leave with them. 

Building and retaining talent 

Research funding is one of the best tools we have to encourage graduate students in STEM 

fields. The federal investment in scientific research is essential to producing the next generation 

of scientists and engineers. Thousands of graduate students and post -doctorates, as well as 

undergraduates, obtain their most important laboratory experience in projects funded by federal 

research grants. The American system of combining research with training of young scientists 

and engineers has been enormously successful, and it would be impossible without federal 

funding. 

-8-
22 

In the case of public-private partnerships, these graduate students have excellent opportunities to 

interact with both academia and industry, paving the way for transition to either sector. Through 

its history, SRC has supported over 7,000 students as part of its unique collaborative research 

model. Of the SRC-supported students, most graduates have joined sponsoring companies or 

university faculties, or have continued on to pursue a higher degree. The opportunities graduate 

students are provided through research funding offer invaluable training for the future workforce 

of innovative industries and technical drivers of start-up companies. 

A major regulatory challenge to research is the U.S. immigration system. Foreign nationals earn 

55 percent of the masters' degrees and 63 percent of the PhDs in electrical engineering from our 

own U. S. universities. Yet these individuals face waits for permanent resident status (green card) 

lasting several years up to a decade, keeping professional and personal lives in limbo. We need 

to fix the high skilled immigration system to enable these highly educated professionals to 

remain in the United States. We are grateful for the leadership that you, Mr. Chairman, and 

Congresswoman Lofgren in particular have provided in this area. We encourage the Congress to 

address immigration reform this year. We are pleased that so many bipartisan discussions and 

initiatives are being developed on this front. 

STEM education 

Business and govemment must work together to build the pipeline of STEM students through 

initiatives that improve math and science proficiency, enhance teaching effectiveness, and ensure 

accountability. There is a skills gap in this country for every unemployed person in the United 

States, there are two STEM job postings. The gap will only widen if we don't engage now to 

address STEM education at the elementary and high school levels. In 2011, only 45 percent of 

U.S. high school graduates were ready for college work in math and only 30 percent were ready 

in science. We also need to engage underrepresented groups in STEM - women, African 

Americans, and Hispanics. In particular, I'd like to recognize Ranking Member Johnson for her 

work over the years to address this issue. Creating policies and practices that foster STEM will 

eventually bring greater equilibrium between job seekers and job opportunities, and in the 

process strengthen U.S. competitiveness. 

TI supports a number of programs designed to encourage student interest and achievement in 

STEM fields. In addition, TI actively promotes educational excellence with federal, state, and 

local governments. TI is an active member of Change the Equation, a U.S. private-sector 

organization of more than 100 chief executive officers focused on improving math and science 

education by scaling proven practices. 

Tax policy 

TI supports the efforts to enact comprehensive tax reform to make the United States more 

globally competitive. Corporate reform should fully contemplate the global nature of business. 

The worldwide marketplace is complex and highly competitive. We want to be sure that U.S. 

companies can compete effectively and that the United States becomes a highly attractive 

location in which to invest. Specifically, our industry seeks to align the U.S. tax system with 

those our global competitors enjoy by reducing the corporate tax rate, adopting a market-based 

tax system, and enacting permanent, robust incentives for research and innovation competitive 

with other countries. 

-9-
23 

Conclusion 

As political leaders, you are facing some tough budget decisions in a challenging economic 

environment. I urge you to approach this challenge in a thoughtful, strategic way, allocating 

scarce funds in a manner that gives us the best chance to create economic growth and security 

both now and in the future. The semiconductor industry may be a useful example to demonstrate 

how prioritizing investment in research and establishing collaborations that leverage federal 

participation are an effective and workable model of engagement. Good times or bad, you must 

manage for the future. Innovation is the pathway there. 

Federal funding of scientific research fuels the new ideas and technologies on which our 

economy, our health, and our national security depend. Predictable and sustained investments in 

scientific research funding is essential to our efforts to address many of the fundamental issues 

our society faces, such as energy, national security, and the continuing search for new life-saving 

medical technologies, vaccines and cures for diseases. 

If we want the United States to remain the leader in cutting-edge technologies and knowledgebased industries, both government and industry must support science and engineering research. 

Investing in research means investing in our universities, in great ideas, and in talented people. It 

means investing in America. 

1 Science and Engineering Indicators, National Science Foundation, 2012. GDP percentages 

calculated. 

2 Rising to the Challenge: u.s. Innovation Policy for Global Economy, National Academies 

Press, 2012. 

3 Maintaining America's Competitive Edge, Dewey and LeBoeuf study for the Semiconductor 

Industry Association, March 2009. 

-10-
24 

Chairman SMITH. Thank you, Mr. Templeton. 

Dr. Jackson. 

TESTIMONY OF DR. SHIRLEY ANN JACKSON, 

PRESIDENT, RENSSELAER POLYTECHNIC INSTITUTE 

Dr. JACKSON. Chairman Smith, Ranking Member Johnson, distinguished Members of the Committee, thank you for the opportunity to testify before you on American competitiveness, the role 

of research and development. 

I have to say that Rensselaer Polytechnic Institute graduates 

have been an integral part of America’s promise through discovery 

and innovation since the university was founded in 1824. More importantly, America’s health, prosperity, security and global leadership depend upon our strength, as you have heard, in science and 

technology. Our investments in scientific research and education 

have made a difference in people’s lives. Let me illustrate. 

The New York Times reported that in October 2004, in Afghanistan, a mortar severely injured a U.S. Marine corporal, Isaias Hernandez. He is an example of so many of our wounded warriors. 

Shrapnel tore away 70 percent of the muscle in his thigh and fractured his femur. He endured four years of surgeries and physical 

therapy to little effect until Dr. Stephen Badylak of the McGowan 

Institute of Regenerative Medicine at the University of Pittsburgh 

implanted in the corporal’s thigh a new gel-based therapy called 

the extracellular matrix derived from pig bladders. After about 6 

weeks, the implanted mixture spurred the growth of muscle tissue, 

tendons and vasculature and restored physical strength. This work 

is part of a government-supported regenerative medicine research 

program at Pittsburgh. 

Now, this and much more is the kind of work that faculty and 

students at Rensselaer do, at MIT do, understanding the role of the 

extracellular matrix in cell signaling and tissue regeneration, developing enzyme-based coatings that kill antibiotic-resistant bacteria on contact, bioengineering synthetic heparin, all dependent 

upon federal support of research across the life and physical 

sciences, chemical and biological engineering, industrial engineering, nanotechnology and data analytics. Life-changing, job-creating, 

security-sustaining, scientific discoveries and technological innovations have rested on strong collaboration among business, government and academia. This three-way partnership has created an innovation ecosystem that has driven our economy, prosperity and 

well-being for decades. 

Federal investments in scientific research and development built 

the foundations for a broad range of industries. Many leading U.S.- 

based global companies including Texas Instruments, Genentech, 

Google and Cisco Systems all trace their roots to federal research 

investments. 

As you have heard, China, India and other nations are emulating 

our model by making concomitant investments to gain the benefits 

we enjoy. If we are to remain globally competitive, we must sustain 

and enhance the U.S. innovation ecosystem. This requires four 

things: first, strategic focus to choose important and promising 

areas to explore and develop and match them to the talent, resources and opportunities we have or can attract; second, game- 
25 

changing idea generation that arises out of basic research that 

pushes the boundaries of human knowledge; third, translational 

pathways that bring discoveries into commercial or societal use; 

fourth—capital, financial, infrastructural and human capital to 

support the development and exploitation of promising new technologies. 

We need a new financial model for technology-based startups 

that overcomes the so-called valley of death. We need tax reform. 

We need physical capital including shared infrastructure, which allows new technologies to be improved and scaled for the marketplace. For example, the Computational Center for Nanotechnology 

Innovations, a joint effort of IBM, New York State and Rensselaer, 

holds one of the world’s most powerful university-based supercomputers, used for research by our faculty and students and by companies of all sizes to perform research and development and to tap 

the expertise of Rensselaer scientists and engineers. We must draw 

more young Americans into STEM fields. We must improve science 

and mathematics education for all of our children. Retaining highcaliber talent from abroad is important, especially those obtaining 

advanced degrees in science and engineering from American universities. Advanced manufacturing requires that we make comprehensive education and retraining a priority. 

Now, we remain the world leader in scientific discovery and technological innovation but the health of our innovation ecosystem is 

in jeopardy. As the Congress debates funding for research in these 

austere times, we know that there are significant challenges, but 

the nations that invest in research, educate the next generations 

and make commitments to build effective innovation ecosystems 

will be the global leaders of tomorrow. 

Thank you, Mr. Chairman. I look forward to your questions. 

[The prepared statement of Dr. Jackson follows:] 
26 

Congressional Testimony Wednesday, February 6,2013 

President's Remarks to 

U.S. House of Representatives Science, Space, and Technology Committee 

Presented by 

Shirley Ann Jackson, Ph.D. 

President, Rensselaer Polytechnic Institute 

Washington, DC 

Wednesday, February 6, 2013 

Thank you, Mr. Chairman, Ranking Member, distinguished 

Members of the Committee. It is a pleasure to be here today to 

talk to you about the status of the research and development 

enterprise in the United States. 

I am President of the nation's oldest private technological 

research university, Rensselaer Polytechnic Institute. Our 

graduates have been an integral part of America's promise, 

through discovery and innovation, since the university was 

founded in 1824. America's health and prosperity, our security, 

and the availability of good jobs depend upon our leadership in 

science and technology. As a nation, we have invested in 

education and scientific research. These investments have made 

a difference in people's lives. 

Let me illustrate how with a true-life story. The New York 

Times reported that, in October 2004 in Afghanistan, a mortar 

exploded, and a US Marine Corporal (Isaias Hernandez) was 

Pagel of12 
27 

Congressional Testimony Wednesday, February 6,2013 

nearly ripped apart by shrapnel, which tore away seventy percent 

of the muscle in his right thigh, and fractured his femur. Corporal 

Hernandez endured four years of surgeries and physical therapy 

- to little affect; until he met a doctor (Stephen 8adylak) of the 

McGowan Institute of Regenerative Medicine at the University of 

Pittsburgh, who cut open (once again) the Corporal's thigh, and 

applied what is known as the extracellular matrix - derived from 

pig bladders. 

The extracellular matrix fills the space around the body's 

cells. It contains hormones, structural proteins, and other 

molecules that maintain cell function and health, mediate intercellular communication, and, importantly, guide tissue growth. 

Miraculously, after about six weeks, the implanted gel mixture 

spurred the growth of muscle tissue, tendons, and vasculature, 

and, with it, restored physical strength to the marine's thigh. 

Dr. Badylak does not really know how the extracellular 

matrix works. But, what is known is this: it becomes part of the 

existing tissue, it draws stem cells to the implant location, it 

changes the body's immune response from rejection to 

reconstruction. By recruiting the body's own stem cells and 

putting them to work, the extracellular matrix obviates the need 

Page 2 of12 
28 

Congressional Testimony Wednesday, February 6, 2013 

for controversial and difficult stem cell implants. Think of it as a 

kind of biological catalyst. The work I have described is part of a 

($70 million) government-supported regenerative medicine 

research program. 

This is the kind of work that researchers at Rensselaer are 

engaged in - deriving breakthroughs in the use of adult stem 

cells, understanding the role of the extracellular matrix in cell 

signaling and tissue regeneration, developing enzyme-based 

coatings that kill antibiotic-resistant bacteria (MRSA) on contact, 

bioengineering synthetic heparin, and much more. 

Heparin-like molecules are key components of the 

extracellular matrix, serving to mediate the exquisite control of 

signals that enables the extracellular matrix to serve as a highly 

tuned niche for cell function. 

Interestingly, heparin also serves as the most widely used 

intravenous anticoagulant drug with more than 100 tons produced 

annually worldwide. Heparin was discovered in 1916 and entered 

early clinical trials as the first "biologic" drug during the 1930s, 

before the establishment of US Food and Drug Administration. 

Heparin is produced today much like in the early years of the last 

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29 

Congressional Testimony Wednesday, February 6,2013 

century. The raw material is isolated from pig intestines in a large 

number of small factories in countries with little quality control. 

This largely unregulated raw heparin is then converted into 

the actual drug within well-controlled and regulated processing 

facilities here in the U.S. Nevertheless, this lack of regulation 

opened the door for the purposeful contamination of several raw 

heparin batches, which resulted in the purified drug also being 

contaminated, and further resulting in nearly 100 deaths in the 

U.S. This contamination served as a wake-up call to the 

pharmaceutical industry and the FDA, as well as other regulatory 

agencies worldwide, which led to a major multidisciplinary effort, 

spearheaded by Robert Linhardt at Rensselaer Polytechnic 

Institute, to develop a non-animal sourced, bioengineered 

heparin. 

The large-scale production of bioengineered heparin 

involves the use of enzymes, nature's catalysts, which place key 

chemical moieties onto the heparin backbone, thereby endowing 

the molecule with its well-known anticoagulant properties. By 

immobilizing (or attaching) these enzymes onto finely tuned 

materials, these enzymes are stabilized to enable economically 

viable, large-scale production of bioengineered heparin. While 

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30 

Congressional Testimony Wednesday, February 6,2013 

heparin is medically important, bioengineered heparin is built on 

the intersection of chemistry, biology, materials science, and data 

and computational science largely supported by the National 

Science Foundation and the various agencies within the 

Department of Defense. 

Immobilized enzymes have other uses too, including those 

that can impact long-term space missions. Nature uses enzymes 

in many ways, including protection from pathogens. An enzyme in 

our tears, lysozyme, acts as a disinfectant by killing bacteria that 

enter the eye. Similarly, some bacteria produce enzymes that kill 

other bacteria that encroach on their environment. By putting 

these enzymes into surface coatings, researchers at Rensselaer 

Polytechnic Institute led by Jonathan Dordick have developed a 

paint that kills methicillin-resistant Staphylococcus aureus 

(MRSA) on contact, yet does not harm human cells. 

In fact, this enzyme-containing paint was used on the final 

mission of the Space Shuttle Atlantis and was just as effective in 

space as here on earth. This has important implications for longterm space flights, whether on the International Space Station 

or a mission to Mars, where pathogen-free environments are 

critical to the health and well being of the crew. 

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31 

Congressional Testimony Wednesday, February 6,2013 

The extracellular matrix-based therapy described, as well as 

the bioengineered heparin breakthrough, comes not just from one 

discipline, but from research results based in the life sciences, 

chemical and biological engineering, nanotechnology and 

materials science, industrial engineering, space science, and 

earth and environmental sciences. So, once again, the 

confluence of fundamental science and real-world applications is 

built on the shoulders of federal funding of basic and applied 

research. 

We already are seeing how genomics, transplanted organs 

and limbs, artificial organs, embedded sensors, and expert 

systems are transforming medical care and treatment. 

Undoubtedly, there will be even more breakthroughs that will 

surprise us, and continue to change lives. 

An important point is that these breakthroughs come from a 

spectrum of basic research funded by the federal government -

across a broad disciplinary front and at the intersection of 

disciplines. 

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Congressional Testimony Wednesday, February 6,2013 

Life changing, job creating, security sustaining scientific 

discoveries and technological innovations in the United States 

have long been driven by a strong collaboration among business, 

government, and academe. This three-way partnership has 

created an "innovation ecosystem" that has driven our economy, 

our prosperity, and our well being for decades. 

Federal investments in scientific research and development 

built the foundations for a broad range of industries such as 

information technology, communications, and advanced 

materials. Many leading U.S.-based global companies including 

Genentech, Google, and Cisco Systems all can trace their 

roots to federal research investments. 

The roots of Genentech lie in breakthroughs from 

government supported research that led to the discovery of 

DNA and the ability to manipulate it. 

Google's business rides on the backbone of the 

Internet, the Global Positioning Satellite System (GPS), and 

breakthroughs in computer science - all derived from 

research and infra-structure supported or built by the Federal 

government, often for mission driven purposes, but later 

opened up for commercial use. 

Cisco, likewise, has benefitted from government 

sponsored research and infrastructure. 

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33 

Congressional Testimony Wednesday, February 6,2013 

Along with the research support was linked federal support 

for the people -- the scientists and engineers who did the 

work - often, including students. 

The successes of the innovation ecosystem in the United 

States have not gone unnoticed. China, India, and other nations 

have studied our approaches to collaborative support - including 

government support - for education, research, and development, 

and they are emulating our model by making concomitant 

investments so they can gain the same benefits for their citizens. 

If the U.S. is to remain globally competitive, we must sustain and 

enhance the U.S. innovation ecosystem. We must be positioned 

to apply science to address the key global challenges of access to 

clean water, food security, energy security, health security, and 

disease mitigation, and the corresponding risks of climate change 

and resource allocation. Research in the areas of 

nanotechnology, big data, biotechnology, and smart systems hold 

great promise for producing new products and processes and 

changing our lives. 

But what is the special brew that will help us to strengthen 

the U.S. innovation ecosystem? Our system rests on the threelegged stool of industry, academia, and government, and 

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34 

Congressional Testimony Wednesday, February 6,2013 

collaboration among them. Each sector has its role to play, and 

each must participate effectively and cooperatively. 

An innovation ecosystem requires four things: 

First is strategic focus. Among a world of possibilities, we 

must choose important and promising areas to explore and 

develop, and these must match the talent, resources, and 

opportunities we have or can attract. 

Second is idea generation. Game-changing ideas tend to 

arise out of basic research, which pushes the boundaries of 

human knowledge. Universities are critical players here, because 

basic research dovetails magnificently with our educational 

mission. 

The third element requires translational pathways that 

bring discoveries into commercial, or societal, use. The 

protection, regulation, and exploitation of intellectual property are 

the front-end of translation. Support for start-ups, business 

incubators, specialized industry collaborations, and public/private 

partnerships are all key in this process. 

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Congressional Testimony Wednesday, February 6,2013 

The fourth element of a robust innovation ecosystem is the 

financial, infrastructural, and human capital to support the 

development and exploitation of promising new technologies. 

We clearly need a new financial model that can overcome 

the so-called "valley of death," for entrepreneurial, technologybased start-ups -- between venture funding and full-blown major 

investment -- when no financing is obtainable. 

Equally important is the physical capital that allows new 

technologies to be improved and scaled for the marketplace -

facilities for applied research - including shared infrastructure --

for the prototyping and testing of new technologies, for the 

development of advanced manufacturing processes for modeling 

and simulation. 

Good examples exist. The Computational Center for 

Nanotechnology Innovations (CCNI) is a joint project of IBM, 

New York State, and Rensselaer. It not only hosts one of the 

world's most powerful university-based supercomputers, used for 

research by our faculty, it also allows companies of all sizes to 

perform research, and to tap the expertise of Rensselaer 

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36 

Congressional Testimony Wednesday, February 6,2013 

scientists. The CCNI has 800 discrete users, and 25 corporate 

partners. 

The most crucial of capital required for our ecosystem is 

human capital. 

We must draw more young Americans into science, 

technology, engineering and mathematics, and educate them 

well. We must address what I have called the the "Quiet Crisis" 

of a looming loss of STEM talent due to pending and actual 

retirements of today's scientists and engineers, without enough 

young people in the pipeline being prepared to enter these fields. 

We must improve mathematics and science education from the 

very beginning of our children's educational careers. And, if we 

want to remain competitive, we must sustain our commitment to 

these students throughout their academic careers. Retaining high 

caliber talent from abroad is equally important, especially those 

obtaining advanced degrees in science and engineering from 

American universities. 

Clearly, the skilled labor demands of advanced 

manufacturing require that we make comprehensive education 

and retraining efforts a priority if the U.S. is to remain competitive. 

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37 

Congressional Testimony Wednesday, February 6,2013 

Retaining technological leadership is not a given. We still 

experience the benefits of our system, but, as many recent 

reports have pointed out, its health is in decline. Perhaps most 

pressing for you, as Members of the Congress, funding for 

research in these austere times is facing significant challenges. 

Those nations that educate the next generations, invest in 

research, and make commitments to building effective innovation 

ecosystems are poised to become the global leaders of tomorrow. 

There should be no disagreement about the wisdom of educating 

our children in science and technology, without compromise. And 

our commitment, in terms of investment, rhetoric, and vision 

should be unmistakable and unshakable. 

Mr. Chairman, thank you for the opportunity to submit this 

testimony today. 

Page 12 of12 
38 

Chairman SMITH. Thank you, Dr. Jackson. 

Dr. Vest. 

TESTIMONY OF DR. CHARLES VEST, 

PRESIDENT, NATIONAL ACADEMY OF ENGINEERING 

Dr. VEST. Chairman Smith, Ranking Member Johnson, honorable 

Members, it is a privilege to be here today. 

Today, the process of R&D that we have been discussing moves 

new scientific knowledge and new technology developments to marketed products and services at an ever-accelerating speed. It is an 

increasingly complicated process. It is a globalized process that is 

at once both highly competitive and cooperative, and it is a process 

driven by basic research—and one that would ultimately die without basic research. 

Some examples of 20th-century innovations that all began primarily with university research include computers, lasers, the 

Internet, the deployment of the Worldwide Web, the basics of the 

GPS system, numerically controlled machining for manufacturing, 

the genomic revolution and most of modern medicine. I contend 

that there is not a job in America today that does not depend directly on one or more of just these six examples. 

Now, predictions of future technologies are very difficult. When 

I graduated from undergraduate school at West Virginia University 

as a mechanical engineer in 1963, none of us talked about going 

into the information technology industry because the IT industry 

did not exist, but our generation invented it and it became the 

dominant source of employment for engineers in the intervening 

years. So I am a true believer that if we invest well in basic research and education, we undoubtedly will be surprised by what 

the new innovations are that actually arise. 

Let me say three barriers to continued success of our wonderful 

American innovation system. Our K–12 system is failing far too 

many of our young people. Our current federal policies, as has been 

said, make it difficult for brilliant foreign graduate students to stay 

on in the United States yet such immigrants from the recent decades have contributed hugely as professors and especially as entrepreneurs to our system. And our federal R&D tax credit, among 

other things, needs to be made permanent. 

I was asked to comment on National Academy’s reports, and I 

want to cite three that are particularly relevant to the topic of this 

hearing. I start with our 2005 baseline report, Rising Above the 

Gathering Storm, and thank this Committee for supporting the authorization, passage and reauthorization of the America COMPETES Act that is largely based on it. Our findings and recommendations in Rising Above the Gathering Storm are as relevant 

today as they were when they were drafted, and indeed, you heard 

that from Mr. Templeton. This report offered four broad recommendations, each backed by specific evidence and 20 specific action items, but the big-picture items were four: move K–12 STEM 

education in the U.S. to a leading position by global standards, 

double federal investments in basic research in physical sciences 

and engineering over seven years, encourage more U.S. students to 

pursue science and engineering careers, and rebuild the competi-
39 

tive ecosystem through reform and tax, patent, immigrant and litigation policies. 

The second report I would note just came out this last June titled 

Research Universities and the Future of America, a group that was 

chaired by Chad Holliday, former CEO of Dupont. It presented a 

bipartisan congressional group that requested it with 10 breakthrough actions vital to our Nation’s prosperity and security. Now, 

one of the things that is somewhat unique about this report, and 

we are very proud of it, is that it proposes actions not just by the 

Federal Government but by state governments, business and universities themselves as well. The report recommends that the Federal Government should adopt stable and effective policies, practices and funding for university-performed research and graduate 

education. It also recommends reducing or eliminating regulations 

on university-sponsored research that increase cost and impede 

productivity. We are very grateful to Representative Mo Brooks, 

who has requested the GAO to determine ways in which this regulatory burden might be reduced. 

Now, what actions are other countries taking? A couple of years 

ago, the then-Premier of China, Wen Jaibao, said flatly, ‘‘I believe 

firmly that science is the ultimate revolution.’’ China’s policies, investments and rapid progress derive from such beliefs of their political leaders. Just in January of this year, the European Union 

announced that it would fund two huge science projects, each at 1 

billion euros, to ‘‘keep Europe competitive, to keep Europe as the 

home of scientific excellence.’’ And looked at broadly, R&D investments by both industry and governments use to be totally dominated by the United States. Today, worldwide R&D investments 

are about a third in North America, about a third in Europe and 

about a third in Asia. This is a sea change. A final report at the 

request of the Department of Defense, the National Academies recently issued a report, ‘‘The S&T Strategies of Six Countries: Implications for the United States. It provides an overview and analysis 

of programs of China, Singapore, Russia, India, Japan and Brazil. 

Finally, I would like to comment that in a lot of these discussions, and Ranking Member Johnson really headed me off at the 

pass because she clearly understands it very well, there is a lot of 

confusion of terminology of basic research, applied research and so 

forth, and I would like to use with the Chairman’s permission, just 

a little bit of time to give you a perspective on this. Basic research 

is the search for knowledge by scientists of the natural world and 

how it works. Applied research, often conducted by engineers, suggests taking that knowledge, scientific knowledge, and conducting 

further investigations to forge into a useful application. Development moves the actual design to a mockup of a real product. So 

basic research gave us the electron and the structure of DNA, applied research gave us high-strength steel and the original Internet, development allows us to produce and market a new aircraft 

or a new computer system. 

But things are changing. Today, much of what we do, I like to 

use the term ‘‘use-inspired basic research.’’ This is work that is 

driven for—driven by the quest for an ultimate application goal but 

requires new fundamental, scientific and technological knowledge 

to get there. Use-inspired basic research gave us the transistor but 
40 

it also gave us a lot of new discoveries about materials and quantum physics. Today, use-inspired basic research is giving us applications of new genomic understandings to medical treatment. 

Now, 50 years ago, most R&D was conducted in big companies 

in the United States and it followed a sequential, linear process 

that you did a lot of basic research, got a lot of ideas. You sort of 

let the market figure out which one of these would be important. 

You then moved it to applied research, then you did development, 

finding the market of the product. Today, industry focuses primarily on development and it most certainly does not use this sequential linear process because technology moves too fast. It can’t 

afford to do—industry can’t afford to do much basic research where 

it is not clear that company will receive the payoff, and finally, the 

results of what we use to call applied research and development 

feeds so rapidly into the basic research itself that you just can’t ignore it and follow the simple linear path. 

Now, one of these two European projects I mentioned is to try 

to build the most sophisticated computer model in the world of how 

the brain works. Now, when you work on a problem like that, as 

we do in the United States, though will perhaps not at the scale 

the EU will—we will find out—you learn not only more things 

about the brain but you learn how to build better computers and 

it just circles around and all boats rise. But the one message I 

want to leave you with is that basic research is still done in universities primarily, including this new world of use-inspired basic research, with good interaction with companies and so forth produces 

the indispensable feedstock for companies and especially for young 

entrepreneurial companies that increasingly drive innovation, new 

products and jobs. 

Mr. Chairman, Ranking Member Johnson, thank you so much for 

the opportunity to be here. I will be happy to answer any questions. 

[The prepared statement of Dr. Vest follows:] 
41 

Testimony of 

Charles M. Vest 

President, National Academy of Engineering 

The National Academies 

before the 

Committee on Science, Space, and Technology 

U.S. House of Representatives 

"American Competitiveness: The Role of Research and Development" 

February 6, 2013 
42 

Chairman Smith, Ranking Member Johnson, Honorable Members: 

I am Chuck Vest, President of the National Academy of Engineering and former 

president of MIT. Today I am representing the National Academy of Sciences, the 

National Academy of Engineering, and the Institute of Medicine. 

It is a privilege to participate in this hearing. 

We live in an age in which the ways we live, learn, work, travel, communicate, defend 

ourselves, and entertain are dominated by technology. New technology and evolving 

technology are the products of a process broadly known as research and development 

(R&D). Today, in 2013, the process of R&D is: 

• Accelerating to higher and higher speeds of moving new scientific knowledge and 

new technology developments to marketed products and services, 

• An increasingly complex process, 

• A globalized process that is at once highly competitive but also cooperative, and 

• A process that is driven by basic research and ultimately would die without basic 

research. 

Let me cite six examples of20tl1 century innovations, all of which started with basic 

research conducted primarily or exclusively in American universities: 

• Computers 

• Lasers 

• The Internet 

• Deployment of the World Wide Web 

• Basics of the GPS System 

• Numerically Controlled Machines 

• The Genomic Revolution 

• Most of Modern Medicine. 

There is not a job in America that does not depend directly on one or more of these. 

There is every reason to believe that for American citizens to have a vibrant economy, 

security, and good health in the 21 st century we will be even more dependent on rapid 

advances in fundamental scientific knowledge, development of new technologies based 

on these advances, and the ability of our innovation system to competitively deploy these 

advances into global markets as new or improved products and services. Furthermore, 

we face grand challenges in areas like sustainability, security, and health that are very 

large in scale and by definition global. 

In this fast paced world, predictions about future technologies are difficult When I 

graduated from engineering school, no one talked about going into Information 

Technology, because the IT industry didn't exist. Yet engineers of my generation 

invented it and it became our dominant source of employment. Today, things are moving 

2 
43 

even faster. As Thomas Friedman recently pointed out, when he wrote his book The 

World is Flat just a few years ago in 2004, Facebook, Twitter, iPhones, iPods, iPads, and 

cell phone apps didn't exist or were in their infancy. 

So if we invest well in basic research and in education, we undoubtedly will be surprised 

by what new innovations arise. Despite my hesitation to make specific predictions, I 

would look for things such as amazing new materials for everything from smaller and 

dramatically faster computer and communication circuits to better roads and bridges and 

to lighter and safer automobiles and airplanes. So called Big Data and a new generation 

of artificial intelligence will likely enable us to better understand our world and 

organizations, dramatically improve medical diagnosis, and inform better policy and 

decision making. It is likely that a new generation of advanced robotics will affect 

everything from manufacturing to defense and highway safety, as we are seeing already 

in the growing importance of drones and an early generation of self-driving cars. There 

may well be unexpected practical advances in esoteric fields like quantum or biological 

computing, that might result in far more effective computer security and enable us to 

solve problems far more complex than we can now. Hopefully the current intense 

progress in studying the human brain and mind will lead to therapies for debilitating 

mental illness and also improve our learning and communication. It is likely that we will 

see serious breakthroughs in new energy technologies and new batteries or other storage 

devices. These are just a few personal thoughts and observations. 

What are the barriers to continued success of our American innovation system? 

Let me cite three major barriers that will be familiar to you, but that I believe to be of 

overriding importance: 

• Our K-12 education system is failing far too many of our young people. We need 

to improve learning, especially in STEM fields for all American boys and girls so 

that they are prepared to enter the 21 st century workforce and to be informed 

citizens. In my view, necessary improvements include preparing teachers with far 

better contemporary knowledge of the fields they teach, adoption across the 

country of voluntary education standards that promote exciting and sound 

learning through projects and experience rather than just boring memorization of 

facts, and sufficient investment in schools and teachers in underserved urban and 

rural areas. 

• Immigrants, many of whom came to the u.S. as graduate students in engineering 

or science, have contributed hugely to our society and wellbeing, especially as 

faculty members and entrepreneurs. Yet in recent years, especially post 9-11, our 

federal policies have made it very difficult for the current generation of brilliant 

foreign graduate students to stay in the U.S. I would urge members of this 

important committee to promote policies that, as our Silicon Valley colleagues 

like to say, enable us to "staple a green card" to every PhD degree in engineering 

or science. In my view, we also need to allow larger numbers of tech-savvy 

3 
44 

entrepreneurs to come to our country to help keep our free-market innovation 

system rolling, even as we improve the education of OUf own young people. 

• It is very familiar to you that for decades, the U.S. has had an R&D tax credit to 

promote corporate investment in research and development. However, this credit 

is debated and adopted year after year, leaving a troubling uncertainty that makes 

good corporate planning very difficult. So I also want to repeat a frequent plea 

that the R&D tax credit be made permanent. 

As requested, I would like to delve further into policies that the National Academies of 

Sciences, Engineering, and the Institute of Medicine recommend the federal government 

pursue to ensure a leadership role in scientific discovery, technology development, and 

maintaining a highly trained and innovative workforce. Parenthetically, I very much 

appreciate the Committee's use of the term "leadership". Sometimes we talk so much 

about just being competitive that we lose sight of our traditional American goal of 

leading. 

I must begin by referring to our baseline report from 2005, RiSing Above the Gathering 

Storm and thank this Committee for supporting the authorization, passage and 

reauthorization of the America COMPETES Act that is largely based upon it. 

I had the privilege of serving on the Gathering Storm committee - as did my colleague 

Shirley Ann Jackson - under the remarkable leadership of its chair, former LockheedMartin CEO Norm Augustine. The committee was composed of20 leaders of American 

industry, academia, philanthropy, and former government officials. It included three 

Nobel Prize winners and two members, Robert Gates and Steven Chu, who subsequently 

became cabinet secretaries. 

This committee was requested by a bipartisan group of members of the House and Senate 

to answer a specific question: 

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 

21 51 century? What strategy, with several concrete steps, could be used to 

implement each of these actions? 

It is the belief of the National Academies that the findings and recommendations of 

Rising Above the Gathering Storm are as relevant, and perhaps even more relevant today 

as when they were drafted. The reason is that after much discussion, the committee 

concluded that what needed to be tended to were the basics, and this need is unchanged. 

In summary, this report offered four broad recommendations, each backed by specific 

evidence and 20 explicit suggested actions: 

I. Increase America's talent pool by vastly improving K-12 science and 

mathematics education. 

4 
45 

2. Sustain and strengthen the nation's traditional commitment to long-term basic 

research. 

3. 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. 

4. Ensure that the United States is the premier place in the world to innovate; invest 

in downstream activities; and create high-paying jobs based on innovation. 

Among the specific suggested implementing actions were a federal scholarship program 

to annually recruit 10,000 science and math teachers who would major in a science, 

engineering, or math discipline and also be prepared for teacher certification; an annual 

increase of 10% in federal investment in long-term basic research each year for 7 years; 

establish an Advanced Research Projects Agency (ARPA-E) in the Energy Department to 

bring new entrepreneurial and academic players into energy innovation; provide 25,000 

new competitive 4-year undergraduate scholarships in STEM fields to attract the best and 

brightest U.S. students; improve the visa and immigration processes for talented 

engineers and scientists; and enhance intellectual property protection for the 21 st century 

global economy. 

The America COMPETES Act has made significant strides in implementing some of our 

recommendations, but in our view, the responses to the education challenges at both the 

K-12 and university level have not been adequate to the scale of our problems. 

There are two very recent National Academy Reports that I would like to commend to the 

Committee and its professional staff. Each deals with an aspect of American 

competitiveness in science and technology and/or analysis of actions in other countries. 

Research Universities and the Future of America, released last June, was requested by a 

bipartisan group of representatives and senators and presents "ten breakthrough actions 

vital to our nation's prosperity and security". This study was chaired by former DuPont 

CEO Chad Holliday and included business leaders, academic leaders of both public and 

private universities, and former government officials including former Senate Majority 

Leader Bill Frist, and former chair of the White House Council of Economic Advisors 

Laura Tyson. This report makes specific recommendations for action by four parties: the 

federal government, state governments, business, and the universities themselves. 

This report recommends that "within the broader framework of U.S. innovation and R&D 

strategies, the federal government should adopt stable and effective policies, practices, 

and funding for university-performed R&D and graduate education so that the nation will 

have a stream of new knowledge and educated people to power our future, helping us to 

meet national goals and ensure prosperity and security." 

Because the invitation to this hearing explicitly asked about regulatory barriers, I note 

that one of this study's recommendations is "Reduce or eliminate regulations [on 

universities and sponsored research] that increase administrative costs, impede research 

productivity, and deflect creative energy without substantially improving the research 

5 
46 

environment." This recommendation is made with full acknowledgment of the 

importance of "accountability, transparency, and implementation of important policy and 

regulatory requirements". However, as one of many examples of the problem, the report 

notes that one public university reported that the costs of managing its Sponsored Project 

Research Pool grew from $3.5 million in 2005 to nearly $6 million in 2010. This is 

inefficient use of precious federal funds and there is a problem to be solved. A very 

major step in this direction could be made if the federal government and other research 

sponsors would strive to meet the full cost of research projects they procure from 

universities in a consistent and transparent manner. 

We are very grateful that Representative Mo Brooks has requested the GAO to determine 

ways to reduce the regulatory burden on university research. 

Although this report takes a broad view of public and private research universities, the 

overwhelming finding is the danger in the dramatic loss of state support for our public 

research universities. State appropriations to our public universities have dropped overall 

by 30% since the mid 19905. The Universities of California, Michigan, and Washington 

have lost more than 50% of their state support in the last decade. 

Although the federal government plays the absolutely essential role through research 

sponsorship, this report emphasizes the need for a problem-solving partnership of the 

federal government, state governments, business, and the universities. The National 

Academies are holding a series of working sessions around the country to gather ideas 

and build such partnerships. The first two workshops were held in Pittsburgh and 

Nashville. They attracted governors, U.S. senators, business leaders and others for very 

productive discussions and initiation of action plans. 

What actions are other countries taking? 

A couple of years ago, then-Chinese Premier Wen laibao stated flatly, "I firmly believe 

that science is the ultimate revolution." China's policies, investments, and rapid progress 

derive from such beliefs of their political leaders. 

Last month, the European Union announced that it will fund two huge science projects at 

$1 billion Euros each in order to "keep Europe competitive, to keep Europe as the home 

of scientific excellence". The E.U. Human Brain Project aims to create the most accurate 

simulation ever of the functioning brain. The other project is in materials science and 

will focus on a material called ultrathin graphene that is both an excellent conductor of 

electricity and 300 times stronger than steel. 

Looked at broadly, R&D investments by both industry and governments used to be 

dominated by the U.S. Today, worldwide R&D investments are about one-third in North 

America, one-third in Europe, and one-third in Asia. This is a sea change with large 

ramifications for U.S. science and industry. 

6 
47 

At the request of the Department of Defense, the National Academies recently issued a 

report, S&T Strategies o/Six Countries: Implications/or the United States. It provides 

an overview and analysis of the science and technology strategies of China, Singapore, 

Russia, India, Japan, and Brazil, all countries that have dramatically increased their 

emphasis on science and technology for national objectives. Our study committee 

examined both investments and scientific and technological output of these countries and 

analyzed their progress toward their stated goals and objectives. In addition to 

documenting progress, this committee arrived at an unexpected conclusion: "cultural 

characteristics, rather than measurable indicators of economic and intellectual output, 

were the most valuable predictors of a country's success in meeting its S&T objectives." 

They concluded that of the countries examined, China and Singapore have made the 

greatest strides, having demonstrated an ability to adapt cultural characteristics to 

facilitate S&T advancement. It appears that successfully shaping a nation's ability to 

achieve its long-term S&T goals requires steps such as increasing the value given to 

education, eliminating corruption, gaining popular support for change, or dissolving 

social divisions that negatively impact a country's workforce. 

This report recommends that the "U.S. should assess the national security implications of 

the continuing revolution of global S&T as a matter of urgency. That assessment should 

include an examination of its own ability to integrate successfully into the global 

innovation environment, to ensure that it remains in a position that allows for continued 

prosperity and national security." 

I have found in many discussions about R&D and innovation that certain terms, including 

"basic research" and "applied research" cause confusion. Let me give you my 

perspective. 

Basic research in science is the search for knowledge of the natural world and how it 

works. Applied research, often conducted by engineers, suggests taking the scientific 

knowledge discovered by scientists and conducting further investigations to forge it into a 

useful application. Development moves to the actual design and mock up of a product. 

So basic research discovered the electron and the structure of DNA. Applied research 

gave us high-strength steel and the original Internet. Development prepares us to produce 

and market a new aircraft or a computer systcm. 

But there is another very important type of research called use-inspired basic research. 

This is work driven by the quest for an ultimate application goal that requires discovering 

additional fundamental new scientific knowledge to get there. Use-inspired basic 

research gave us the transistor - together with a lot of new discoveries about materials 

and quantum physics. It also is giving us applications of genomics to medical treatment. 

Fifty years ago, most R&D was conducted in large companies that followed a sequential 

linear process starting with basic research, moving to applied research, then doing 

product development, and finally marketing that product. 

7 
48 

Today, this situation is more complicated. Almost no companies do all ofthis work in 

house, and they do not follow the sequential process. Companies do very little basic 

research because they can't afford it especially when it is not clear that the company itself 

will be the primary beneficiary of the results. Companies do not follow the sequential, 

linear process because technology moves too fast, and because the results of applied 

research and development rapidly feed back into the basic research. 

In the United States, industry focuses mainly on development work. Universities now do 

most of the basic research and use-inspired basic research, and the federal government is 

the dominant supporter of this work. Thus university research produces the indispensible 

feedstock for companies, and especially for young entrepreneurial companies that 

increasingly drive innovation, new products, and jobs. 

Mr. Chairman and Ranking Member Johnson, this concludes my testimony. I hope I 

have responded to your questions in a way that is useful. Much of our economic future 

depends on us being smart and agile stewards of the U.S. R&D base, and we in the 

science and engineering community are ready to help you accomplish that. I'll be happy 

to answer any questions you may have. 

##### 

8 
49 

Chairman SMITH. Thank you, Dr. Vest, and thank you all for 

your testimonies today, and I will recognize myself for five minutes 

to ask questions. 

And Mr. Templeton, I would like to address my first question to 

you, and let me preface it by saying this, that in the United States 

every year, $400 billion is spent on research and development. 

About $140 billion comes from the Federal Government. Those are 

huge amounts of money but they also have the potential to do a 

huge amount of good. So my question is, where would you target 

the government’s research and development funds to get the best 

returns, and what might those returns be? 

Mr. TEMPLETON. Well, Chairman Smith, I guess the way I would 

describe it is, if you take a look at the innovations that Dr. Vest 

just described, investment in physical sciences has really been diminishing over the past 30 years as a percent of GDP. A lot of the 

studies, like in 2007 with Rising Above the Gathering Storm talked 

about doubling that over the next seven years. So I think that direction is the correct direction, and then to the question which is 

an important one, how do you shape that or how do you make decisions of where to apply it, I think we have got some good examples 

that have worked well in both federal agencies as well with universities, and with public companies to have peer-review processes to 

understand where are the most promising ideas, and if we had— 

someone had noted, if we had an exact view of what the future 

was, we would be magical. We are not going to get that but what 

we want to do is use our best minds to try to shape that in the 

peer-review process. I think that is going to be the best line. 

Chairman SMITH. Thank you, Mr. Templeton. 

Dr. Jackson, you mentioned in your testimony a few minutes ago, 

STEM education—science, technology, engineering and math—the 

Federal Government spends more than $3 billion a year to improve 

STEM education in our country but we have yet to see significant 

results from this investment. Do you have any suggestions as to 

what we should do to improve that record? 

Dr. JACKSON. I do have a few. Thank you. First, I would say that 

there are three areas we need to focus on. One is improvement in 

K–12 education, the second is stemming losses in the undergraduate pipeline in STEM education, and the third, creating appropriate bridges to the next level. 

With respect to K–12 education, believe it or not, I fundamentally am one that says let us get back to basics. I am a theoretical 

physicist by background, and one cannot do that without a very 

strong, sophisticated math background, but to do that, one has to 

be able to do calculus and partial differential equations and all of 

that, but one can’t do that without understanding geometry, trigonometry, algebra, etc. One cannot do those things if one cannot 

add, subtract, multiply, divide, understand a little bit about logarithms, fractions, percentages, etc. So the point is, it is cumulative, 

so we have to think about that, as we think about how K–12 education is structured. Secondly, we need it to be outcomes focused, 

not just in terms of testing but in terms of the ability to use concepts, to use what is learned. Third, we have to strengthen the 

teacher corps, and I am one who happens to believe that at least 

for upper-level secondary science and math subjects, that having 
50 

discipline-based teachers is useful. And finally, we need to be able 

to use technology itself in a smart way. We are educating digital 

natives. I am a digital immigrant, latecomer, but we need to be 

able to use technology to create the right kind of immersive experiences, to educate those in science and technology. 

The point about the undergraduate pipeline is that there is a 

much larger dropout rate than people might realize in the first two 

years of undergraduate education, generally, but including in 

STEM subjects where students opt—out of those subjects. So there 

are beginning to be discussions about looking at how science is 

taught in the first two years of the universities and colleges. And 

third, when I speak of bridges to the next level, there really needs 

to be work that puts the basics and applications together. That is 

how we can draw in young people and they are learning things 

without even knowing they are learning. Thank you. 

Chairman SMITH. Thank you, Dr. Jackson. 

Dr. Vest, in your testimony you said if we invest well in basic 

research and in education, we undoubtedly will be surprised by 

what new innovations arise. What are some of those new innovations? 

Dr. VEST. Well, ‘‘surprise’’ is the keyword, but since this is one 

of the questions that was forwarded to us prior to the hearing, I 

tried to give it a little bit of thought, and as Mr. Templeton was 

reminding us earlier today, it has been often said that the best way 

to find out what the future is, is to invent it, and I guess that is 

what we are all about. But I would point out a few areas that I 

think are likely. One is new materials. Investment in material 

science and engineering works on everything from smaller, faster 

computer circuits to better highways to better bridges. Mr. 

Templeton’s company is actually driven by a philosophy on what is 

happening in materials available for semiconductors, for example. 

The second area is the combination of so-called big data and the 

new generation of artificial intelligence that if we use it well is 

going to help us understand the world better, make better decisions 

and probably give us dramatic improvements in areas like medical 

diagnosis and working together with humans, by the way, computers plus humans doing better medical diagnoses and better policy and decision making. Then it is likely that this rapidly advancing new generation of advanced robotics is going to affect everything. For manufacturing, not just on the big fancy, high-tech company side but on the small manufacturing side as well and also obviously has implications to areas like defense and highway safety. 

We are already seeing controversial—though it may be this growing—importance of drones, which is a form of robotics, and a new 

generation of self-driving cars. There is lots of reasons to sort of intuitively be worried about that but there is lots of data that is 

showing that it could build us ultimately in a couple of decades a 

much safer highway system. 

And finally, these really unexpected things, there are these very 

esoteric fields like quantum computing and biological computing 

that just may pop up as reality one of these days, giving us much 

better computer security, which we all know is a big issue, and allowing us to solve more complex problems than we currently can. 

But surprise is the big thing, and I want to just underscore what 
51 

my good friend Dr. Jackson said: all this work today by the young 

people crosses all the traditional disciplines and it is really these 

unusual or used to be unusual combinations of scientific and technological input that will give us the real surprise innovations. 

Thank you. 

Chairman SMITH. Thank you, Dr. Vest. 

The gentlewoman from Texas, the Ranking Member, Ms. Johnson, is recognized for her questions. 

Ms. JOHNSON. Thank you very much. And let me express my appreciation for all of the witnesses. 

My question is pretty basic. I was around during the Rising 

Storm. We are in the midst of a storm, and I am not sure how 

much change we have made, though we try. But the most recent 

research that I have read about students getting into college and 

then changing from the STEM interest concerns me greatly. It concerns me because the students who seem to leave those fields more 

frequently are the women and minorities, the growing population. 

What storm do we need to get gathering here to see if we can 

change the course of this? Because I really sincerely feel this is the 

future of our Nation and competitiveness. Anybody who wants to 

try? 

Dr. JACKSON. Well, since I do educate a few of them, as I said, 

I think we are finding that the first two years seem to be very seminal in terms of how students are educated, how they are nurtured. 

At Rensselaer, we actually have a multigenerational approach for 

women in engineering. We have faculty who mentor postdocs who 

mentor graduate students who mentor undergraduates, and what 

we find is that once the women—and this is women across all ethnic groups, by the way—opt truly into science or engineering. They 

actually graduate at higher rates than the men. So I think there 

are subtleties to how this all works. 

There remains a problem with respect to underrepresented minority males, but it is actually embedded in an issue that has to 

do with the fact that young men overall are not graduating at the 

same rates as women. So we are undertaking a special task force 

at the university to look at this question about how do we create 

more stickiness for students in the first two years, and looking at 

our teaching methodologies while at the same time undertaking a 

particular study about male students and what is happening with 

them; and we do think there are lots of issues having to do with 

cognition and learning, how we structure courses. And in fact, I am 

a member of PCAST and we in fact issued a report discussing some 

of these things. 

Dr. VEST. I would only like to add to that that we need to move 

our perspective back, not to make an excuse, but we need to move 

it back to the K–12 system and build a good continuum from K– 

12 through the kinds of things that RPI and MIT and so many 

other schools are now trying to do, and I would add to the very, 

in my view, correct list that Dr. Jackson gave earlier. I want to emphasize one of her points and add one thing to it. I really believe 

that exposing kids from inner city to countryside to suburbs to 

science and math teachers who have actually graduated in the field 

they teach. We can do this. This is the primary A number one recommendation of the Gathering Storm report and very little hap-
52 

pened to it. So the idea is very simple. We need to deploy a set of 

scholarships to attract young men and women to go to college, to 

major in computer science or electrical engineering or physics or 

chemistry and at the same time be certifiable as K–12 teachers. 

Secondly, and I hope I am not getting a little too much to the 

political side, I am a big believer that we need to adopt voluntary 

standards, voluntary standards across our states in STEM fields 

just as we have in mathematics and in English, and these standards need to emphasize learning science by doing it, project based, 

bringing the excitement, the sense of discovery. This is what is 

going to attract more kids. Just look at things like the Maker 

movement. It attracts kids from all over the socioeconomic spectrum. Look at Dean Kamen’s first project that is in every inner city 

in the country as well as the wealthy suburbs. This is the way kids 

today get excited. They get excited by doing. And I think if we 

could sort of focus on those two things, we could get more people 

in a more dedicated way into the pipeline, and then if we can top 

that off by improving the way we teach in universities somewhat 

along similar directions, maybe we can get there, but this—to me, 

this division between where kids come from and what their chances 

are to succeed, it is not America. We really have to get at this. 

Chairman SMITH. Thank you, Ms. Johnson. The gentleman—— 

Ms. JOHNSON. Well, I think Mr. Templeton—— 

Chairman SMITH. Mr. Templeton? 

Mr. TEMPLETON. I was going to say amen. 

Ms. JOHNSON. Thank you very much. 

Chairman SMITH. Thank you, Ms. Johnson. 

The gentleman from California, Mr. Rohrabacher, is recognized 

for his questions. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. 

Let me ask Mr. Templeton, does your company benefit directly 

from federal research projects? Do you actually get direct money 

from the Federal Government to do research for your company? 

Mr. TEMPLETON. And that was one of my comments. To be very 

clear, this is about funding going into university systems for basic 

research, not our company, so a very simple answer. 

Mr. ROHRABACHER. Okay. So there is a certain amount of money 

that your company is supporting going to a direct research project 

for a university which then your company, as other companies, 

then benefit from that research? 

Mr. TEMPLETON. No, we have a choice and we do choose to participate alongside the Federal Government in long-term basic research as well. Very much some of the same vehicles could be the 

Nanoelectronics Research Initiative, NRI, or focus centers, so this 

will be TI putting funding into universities for long-term basic research, and we will do a small percentage of that, so we are at the 

table and helping to shape an opinion of where that—— 

Mr. ROHRABACHER. How much money does your company actually invest in this type of long-term future investment? 

Mr. TEMPLETON. It would be tens of millions on an annual basis, 

so it is not a trivial amount. 

Mr. ROHRABACHER. Okay, tens of millions. Now, let me ask you 

this. Your company manufactures chips? 

Mr. TEMPLETON. Yes, sir. 
53 

Mr. ROHRABACHER. Okay. What percentage of your production is 

in the United States, and do you manufacture in China? 

Mr. TEMPLETON. The majority of our production today is in the 

United States. We opened our most recent wafer fab, and in our 

industry, 300-millimeter wafers or 12-inch-diameter wafers are 

leading edge. We opened that facility in Richardson, Texas, back in 

2007, broke ground, put it online in 2010. I would estimate that 

probably 40 percent of our chips are manufactured in the United 

States but we also, to your direct question, manufacture some chips 

in Europe. We have a facility in China. We have facilities in Japan 

as well, so we are a global manufacturer. 

Mr. ROHRABACHER. What percentage of your chips are manufactured in China? 

Mr. TEMPLETON. It would be a very small percentage right now. 

Mr. ROHRABACHER. Ten percent? 

Mr. TEMPLETON. Oh less, significantly less. 

Mr. ROHRABACHER. But your industry, there are major components of your industry that are engaged in manufacturing these 

types of things in China. 

Mr. TEMPLETON. There are other parts of the industry that do 

manufacture in China, yes. 

Mr. ROHRABACHER. Well, we appreciate the fact that your company is doing a lot of manufacturing here, and we appreciate that 

investment. 

It says here we have $400 billion in this type of research that is going on. Does that figure, $400 billion annually, does that calculate in what individual inventors put in to the mix or are they 

just not part of the calculation? 

Mr. TEMPLETON. I don’t know if they are. They are probably not 

going to be a significant percentage, okay, as measured by dollars 

but about 60 percent of that would come from private or companies 

and 40 percent of that, as Chairman Smith commented, would be 

federal funding. 

Mr. ROHRABACHER. When we are talking about private inventors 

and their impact on new discoveries, how would you place them in 

terms of government programs coming up with something new, corporations coming up with something new versus the individual inventor community coming up with something new? 

Mr. TEMPLETON. I think if you look at and take Dr. Vest’s list 

of the types of breakthroughs over the past 50 years, the invention 

of the transistor or ARPANET, which led to the Internet, these 

tended to be very significant basic research programs that weren’t 

in the minds of any one individual, even at a university but typically a network of universities and a network of people. 

Mr. ROHRABACHER. So the foundation, but we do know that some 

very significant fortunes have been made utilizing that information 

and creating something that really was put to use in the marketplace, and my time is running here, but just in terms of the inventors, yesterday we heard about the investment again and government provided the money for the direct research that ended up 

with somebody in the very end of the process was the MRI. Well, 

I happen to know the guy who has the patent for the MRI, and, 

you know, without him, there wouldn’t have been an MRI as well. 

Do you think that there has been—do you think our patent protec-
54 

tion for these innovators, the inventors, is going in the right direction or the wrong direction? 

Mr. TEMPLETON. I think in general it has moved in a positive direction over the past five years, trying to find that very careful balance of what is good to protect invention but not, you know, move 

off into where patent trolls and many debates go around that topic. 

Depending on who you are, you have a strong opinion one way or 

the other. 

Mr. ROHRABACHER. The Chairman and I have differences of opinion on this. Thank you very much for sharing your views with us 

today, and thank you, Mr. Chairman. 

Chairman SMITH. Thank you, Mr. Rohrabacher. 

The gentlewoman from Oregon, Ms. Bonamici, is recognized for 

her questions. 

Ms. BONAMICI. Thank you very much, Mr. Chairman, and thank 

you so much for scheduling this hearing. Thank you to all the witnesses, panelists. I really appreciated the article in the Politico, 

Mr. Templeton and Dr. Jackson. 

The testimony that you all presented to the Committee contains 

many common elements, and indeed, they are topics that are frequently discussed in this room, especially the importance of promoting STEM education and the role of creativity and innovation 

in maintaining America’s leadership position in the global economy. 

Now, when I am out talking with constituents and industry leaders about this topic in my district in Oregon, especially about the 

role that creativity and innovation play in driving our economy forward, many of them express the importance of STEAM education, 

which is integrating arts and design in traditional STEM fields. Innovative companies across my district from companies like Nike 

and tech giants like Intel rely on employees with a mind for science 

but an eye for design, and we have discussed how integrating arts 

and design education into traditional science education can yield 

the sort of creative, innovative workforce that many of you identify 

as essential. And beyond just the benefit for the industry, bringing 

arts and design into STEM classrooms can help keep students engaged, and I know, Dr. Jackson, you talked about drawing students 

in. I want to tell you, I visited a STEAM elementary school in my 

district that took STEM and added arts and design. Those kids 

were engaged. They were acting things out. They were studying 

soil erosion and graphing things and drawing charts and planting 

a garden and playing with worms. I mean, they were really, really 

engaged in everything that they were doing. 

So in order to keep students engaged, I want to have a discussion 

about STEAM. And Mr. Templeton, you affirmed that government 

primarily conducts basic research while industry focuses on the D 

side of R&D, developing products for commercial application. In 

your experience at Texas Instruments, can you discuss the importance of creativity and design to this product development process? 

Dr. Vest, you discussed improving learning in the STEM fields 

for students and suggested promoting exciting learning through 

projects and experiences rather than just boring memorization of 

facts, and as you see it, could arts and design play a role in STEM 

education, especially in the learning atmosphere you envision with 

your comments? Thank you. 
55 

Mr. TEMPLETON. Well, on the aspect of creativity, the simple answer on that is yes. It is one thing to have numbers and concepts. 

If they cannot be brought together and visualized and turned into 

a product, it is knowledge that will not lead to productive things. 

It is also the case then if you look at STEAM efforts, we have very 

recently done something with one of the school districts in North 

Texas, and I think it has got great potential for the creativity that 

brings along. I do think it is important while we look at that, back 

to Dr. Jackson’s comments, we have to be mindful of the basics, be 

it the math and science principles, because if we don’t have that 

foundation in place, you can never get to some of the higher-level 

concepts as well, so I think keeping those in balance is a wonderful 

thing. 

Ms. BONAMICI. Thank you. 

Dr. Vest? 

Dr. VEST. It is a very perceptive question, in my view, and one 

I get pretty excited about, so you may have to shut me off, Mr. 

Chairman. But I cannot imagine MIT without its visual and performing arts component. It would not be MIT. We would not attract 

the same kind of kids. And it is very much a part, in my opinion, 

of what has to happen at both K–12 and in undergraduate and 

even graduate education in our universities. Rising Above the Gathering Storm tried to emphasize, we are not telling all kids we want 

them to become professional scientists and engineers but everybody 

needs to know some fundamentals today about science and engineering. My experience, if you look at virtually any of the real good 

high schools that are succeeding, High Tech High in San Diego and 

so forth, the integration of arts into their curriculum is a very important part. I commented on the Maker movement. This attracts 

kids from left brain, right brain, everything in between, and I am 

frankly a big believer in the STEAM movement. There is a hearing 

somewhere in Congress coming up over the next several weeks that 

my wonderful friend John Maeda from RISD, the Rhode Island 

School of Design, is helping to organize. So I am a big believer in 

this, but it always leaves me in an odd position because I also 

know that we are failing in our core STEM areas, so it is difficult 

to talk about the breadth, but yes, arts and the humanities are a 

very important part of building creativity. 

Ms. BONAMICI. Thank you. And I am afraid I am out of time, but 

Dr. Jackson, if you wanted to—— 

Dr. JACKSON. You didn’t pose the question to me, but we believe 

so much in it that we have built an experimental media and performing arts center at Rensselaer, and it is both a very high-end 

cultural and performing arts platform and it is a research platform 

at the same time. It brings the arts, engineering, the sciences, computer sciences all together, and we have various venues within it, 

but one in particular allows us to do visualization, animation, simulation, acoustics, haptics, haptics where you can simulate touch. 

All of this requires bringing all of the disciplines together, including in the arts. We have a games and simulation arts and sciences 

curriculum, and it uses that whole structure to animate what students do, but at the same time, we feel that fundamental studies 

in certain fields of the humanities, arts and social sciences are 

critically important and so we have built those up as well. 
56 

But you know, it is funny, we have gotten into these buckets 

about what constitutes the liberal arts versus what constitutes 

science and engineering, but if you go all the way back to Cardinal 

Newman about the original definition of the liberal arts, they were 

in fact together. 

Ms. BONAMICI. Thank you very much. And I am out of time, and 

that meeting is a week from tomorrow, and we will let the Committee Members know if they would like to attend. 

Chairman SMITH. Thank you, Ms. Bonamici. 

The Chairman Emeritus, the gentleman from Texas, Mr. Hall, is 

recognized. 

Mr. HALL. Mr. Chairman, thank you very much, and this is a 

very unusual and talented group that are giving us your time, the 

time it took you to get here, the time it took you to appear before 

us, give us your testimony, get back to your place of occupation. I 

know Rich Templeton very well and admire him. Eddie Bernice 

and I, I am sure Eddie helped to ask you to come here, Rich. We 

are proud of TI. Erik Jonsson, Gene McDermott, Cecil Green, all 

those people created the University of Texas at Dallas and were 

very generous in giving around 1,100 acres to that university. I 

was the Senate sponsor of that with a guy from the House and I 

am very proud of the university that you all have created. And Mr. 

Rohrabacher asked about your support. I could talk all day about 

the support of that university. 

I will ask you this one question about STEM graduates. And I 

know that your dream of Dallas Engineering School finally became 

a reality in 1986 and the students that you have and you have 

been a part of TI’s history. What about the STEM graduates? Are 

there enough available in the United States to meet your current 

and future needs? 

Mr. TEMPLETON. Well, Mr. Hall, first, thank you for the very 

complimentary statements about many of our founders, who also 

had deep histories at both MIT and at RPI. If you look in many 

ways, the percentage or the amount of people that we hire on an 

annual basis, we are fortunate because of our reputation that there 

is enough available. The danger is, that does not apply, I believe, 

to all industries as you go down through that and I think that supply will be under continued pressure if we don’t get K–12 STEM 

education turned and moving in the correct direction. 

Mr. HALL. What are some of the key factors in motivating students to pursue STEM degrees? 

Mr. TEMPLETON. Well, I think it has been touched on by both—— 

Mr. HALL. Well, I had to leave, and I have to leave soon to go 

back to another Committee to vote. I am sorry to touch on it a second time if it has already been asked. 

Mr. TEMPLETON. Oh, no, I will make it very simple. I think it has 

been talked about. Make the business come alive. If you look at 

many high school students, especially if you look at women trying 

to consider a career in science and technology, if you get to the undergraduate level that Dr. Jackson had talked about, and you see 

nothing but four years of math and science classes ahead of you before you can apply it to something that makes it come to life, you 

lose a lot of people during that time. When we look at the world 

of bioengineering to where you really can’t see the impact you can 
57 

make in lives and it really brings the potential career and the impact that you can have alive in young people’s minds, then I think 

that is the secret to grow or to turn that trend around. 

Mr. HALL. The best practices that the Federal Government could 

implement to strength our Nation’s R&D and maximize the use of 

taxpayers’ dollars, are you a witness to that? 

Mr. TEMPLETON. Well, I pay attention more to results, and right 

now if I look at the results coming out of K–12 STEM education 

in the United States, we continue to be ranked very low on most 

national or most global ranks, so I think the work that we have 

as a Nation is still in front of us on that. 

Mr. HALL. All right. I thank you, and I thank you, Mr. Chairman. 

Chairman SMITH. Thank you, Mr. Hall. 

The gentleman from Massachusetts, Mr. Kennedy, is recognized. 

Mr. KENNEDY. Mr. Chairman, thank you, Madam Ranking Member, thank you very much for calling this important hearing. To the 

witnesses, thank you all very much for your testimony. As a resident of Massachusetts, we are acutely aware of the importance of 

R&D and greatly appreciate your time in coming here today. 

Mr. Templeton, I actually have a quick question for you that is 

slightly off topic but of important interest back in my district in 

Massachusetts and so, Mr. Chairman, I hope you will forgive a 

quick diversion. As I am sure you are aware, Mr. Templeton, Texas 

Instruments operated a manufacturing facility in Attleboro, Massachusetts, for several decades. Until it was sold in 2006, the company was a major employer in the area and an active member of 

the local community. It remains well respected in the city and in 

the surrounding areas still today. That being said, in the years 

since the Attleboro plant was closed, the cancer rate amongst 

former employees has been alarming. Specifically affected are those 

men and women who were employed by the company between 1953 

and 1968 when TI was involved in the federal nuclear program. As 

part of the Energy Employees’ Occupational Illness Compensation 

Program through the Department of Labor, money has thankfully 

been made available to those workers who are now suffering from 

crippling illness. I know that TI has designated an internal point 

person for the former workers who are seeking information from 

EEOIC, and I commend you and TI for doing so. 

But what I am hearing from many residents back in the district 

is that very few of the thousands of former employees in the Attleboro area are even aware that this program exists and that there 

are benefits available to them at all. They have seen minimal outreach efforts to ensure that those in need know how to get the help 

they so deserve. I read this week about Steve Foster from Taunton 

in the local newspaper. He is suffering from thyroid cancer. His 

brother also has cancer. His wife and father both died of cancer. 

All four worked in the Attleboro plant. Yesterday I spoke to Larry 

Darcy, a resident of Rehoboth, Massachusetts, who was diagnosed 

with kidney cancer in 1992. Larry went out of his way to credit 

your company for the opportunities that it gave him and his coworkers. Over 180 of those coworkers from the Attleboro plant that 

he is aware of have contracted some type of cancer. 
58 

I tell this story, sir, not to cast blame. The human cost of this 

country’s nuclear development in the 1950s and 1960s is not 

unique to Texas Instruments or to Attleboro, but I do believe that 

TI along with the Federal Government has a responsibility to the 

men and women that we put in harm’s way. While we can’t take 

back the exposure to the radioactive or toxic material that so many 

suffered, what we can do is absolutely everything in our power to 

make sure that we ease their pain today. So, sir, I would like your 

opinion on how my office can work with your company and the Department of Labor and Department of Energy to ensure that we 

are doing all that we can to get the compensation for those who 

need it. To start, I am wondering if, one, there is any light you can 

shed on the process that TI goes through to redoubt the former employees in this situation or similar situations, and two, what my office or the Federal Government can do to assist you in this process? 

The money is there, the program is there and the need, tragically, 

is also there. The communication is not, and we need to try to fix 

that. 

Mr. TEMPLETON. I think, Mr. Kennedy, first, as you know, we 

have been in very close contact with the DOL, or Department of 

Labor, as well as the Department of Energy, and I think you described the actions we need to take which is, we need to stay in 

contact both between the appropriate government agencies and 

your office. We have been very active with the Departments to 

make sure any information we could help with was available. We 

need to continue that and take a look. If there is more than can 

be done, we should be doing it with you. 

Mr. KENNEDY. Thank you, Mr. President. Which—is there—I 

would appreciate further communication with you and the designated point person from your office to try to understand if there 

are employee lists that go back to that time. I understand you have 

a very generous pension plan, that there are still health care benefits that are being paid to your employees, which your employees 

went out of the way to credit Texas Instruments for, but if we can 

somehow facilitate that transfer of information to the government 

so that they can reach out to those individuals, many of whom 

don’t even know that there is benefits there to cover medical bills 

that are now soaring into the thousands of dollars? 

Mr. TEMPLETON. We can certainly get the right contacts to you 

so that can be done. 

Mr. KENNEDY. Thank you, sir. I yield the balance of my time, Mr. 

Chairman. Thank you. 

Chairman SMITH. Thank you, Mr. Kennedy. 

The gentleman from Georgia, Mr. Broun, is recognized. 

Mr. BROUN. Our government is broke. Many Members of Congress are either oblivious or in denial of that fact. We are spending 

more money than we are bringing in. We are headed towards a 

total economic meltdown of America if we don’t make some 

changes. Now, both parties have been guilty of uncontrolled spending here in Washington. Promoting science as well as research and 

development is extremely important for America to get back on a 

sustainable fiscal course. We must start making responsible decisions and choices here in Congress. 
59 

With that said, Mr. Templeton, it is well known that the United 

States has the highest corporate tax rates in the world. It is 35 

percent at the federal level. When you add state and local taxes, 

it is much higher than that for employers and job creators here in 

America. Please discuss how the rate impacts businesses and how 

it affects those investment decisions, including how it can be 

factored into decisions regarding where to locate manufacturing facilities or how much to invest in R&D. How would business investment, hiring and overall U.S. competitiveness be impacted if we 

eliminated corporate taxes altogether such as my JOBS Act does? 

The JOBS Act will permanently reduce corporate taxes to zero and 

capital gains taxes to zero, and I think personally it would be a 

huge economic boon, and instead of raising taxes would raise taxpayers with good-paying jobs. Could you please discuss that, Mr. 

Templeton? 

Mr. TEMPLETON. I will not disagree with your final conclusion. I 

also know it brings the double taxation dialog that many debate, 

especially in difficult budget times. But I think the conclusion that 

you are leading to in the question is very clear. We compete 

against companies that could be headquartered in Taiwan, for example, and some of them because of government policy virtually 

have a zero tax rate, and so if we try to operate in the United 

States market or work against some number incrementally at the 

35 percent level and you have got shareholders that have an expectation for a company in Taiwan that operate at zero, it puts a very 

difficult situation in place for the long term, and even further to 

the point, and you have seen some of it where companies are faced 

with, should they move their corporate headquarters to different 

countries if they are trying to be responsible to their shareholders. 

I think that is a really dangerous slope to end up on as a country. 

So I think that the conclusion of your points is very accurate on 

that. 

I think it also does come back to by investing in university research, by having those ideas being developed here, we do give advantages to being U.S. headquartered and what we need to do is 

not be uncompetitive against some of these other countries and 

then I think we can get great gains from where we are today. 

Mr. BROUN. Mr. Templeton, I believe that the high tax rate and 

the regulatory burden that the Federal Government has put on 

business and industry is what is driving manufacturing jobs offshore, and I believe very firmly that we have to bring those jobs 

back to America because that is what is going to get our economy 

going again, create those good-paying jobs, particularly in areas of 

science, technology and engineering, medical science. I am a physician. Do you have any suggestions about how we can look at the 

regulatory burden and tax burden, besides passing my JOBS bill, 

which I think is critical to bring those manufacturing jobs back to 

America? Can you give us some suggestions about what we can do 

to look at the regulatory burden as well as the tax burden and give 

us help in getting these shackles off of business and industry, our 

job creators, so that we can start having a strong manufacturing 

industry here in this country? And thank you for—I want to thank 

you for Texas Instruments having the manufacturing that you all 

do here in this country. 
60 

Mr. TEMPLETON. Mr. Broun, you know, the simplest way that I 

think about this is, we have five percent of the world’s population, 

which says 95 percent of it is somewhere else. So when we think 

about economic growth for our country and for companies that are 

headquartered in the United States, we have to have policies and 

plans that let U.S.-headquartered companies compete globally because it ends up creating great opportunities and great economic 

growth in the United States. I think therein lies the beginning of 

that policy on how can our U.S.-headquartered companies be highly 

competitive. That then brings in issues of tax. That brings in issues 

like today’s hearing on research and investment into basic universities. It brings into scope, you know, issues on regulation. We 

want to be able to operate well but we need to also be able to operate competitively on a global basis, and when that frame is in 

place, I think you can get to those points or those conclusions pretty quickly. 

Mr. BROUN. Thank you, Mr. Templeton. I yield back. 

Chairman SMITH. Thank you, Mr. Broun. 

The gentleman from California, Mr. Bera, is recognized. 

Mr. BERA. Mr. Chairman, thank you for convening this hearing. 

I will make a quick comment. As a former Associate Dean at the 

University of California Medical School, we did look extensively at 

the loss of undergraduate talent, and that clearly is tied to our K– 

12 system, particularly in lower-income communities and students 

just not being prepared. If we can hold on to those students when 

they get to their junior year, they do make up the gap, but we lose 

far too many of our students there. 

My question, I will direct it at Dr. Jackson. You are also coming 

out of a research university background. A key element that we 

need to focus on is that technology transfer issue, how academia 

and industry partner, and if you could give us some specific recommendations, and I would open it up to any of the panelists, how 

we can do that better, how we can work on that partnership? 

Dr. JACKSON. Thank you. I would say a couple of things. First, 

there are many mechanisms. This whole question about technology 

transfer, how ideas go from the university into the marketplace is 

a complex one and it happens within multiple groups. They are 

public. They are university-industry partnerships, industrial liaison 

programs. There are entrepreneurs who take the intellectual property they develop in the university, out of the university. The university licenses out intellectual property. All of these things are 

pathways for that. I think there is a balance that one has to strike, 

as a university president, in terms of the focus on the basic research and the fundamental learning that goes along with that, 

and the exploitation of the intellectual property to move it into the 

marketplace and fundamentally we are focused on both. We actually have a 1,250-acre technology park that is actually home to 

about 70 enterprises, primary technology based. We have what is 

called the Emerging Ventures Ecosystem, which specifically seeks 

into the research, work with our faculty, find where there is exploitable, important intellectual property, and then look for the 

right translational pathway, whether that pathway has to do with 

licensing, with helping the faculty member launch a company, joint 

venturing, etc. We also operate, as part of, that an incubation pro-
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gram, but in our case, we went from having one fixed incubator to 

having kind of a virtual incubator where we broker the right space 

for companies. This is very important. 

And I spoke in my oral remarks about shared infrastructure. A 

big problem for many startup companies, particularly in areas of 

new technology, has to do with the so-called valley of death where 

they go from the sort of very initial startup phase and they may 

get angel investors for that, to be able to scale what they do, to do 

prototyping and then ultimately get larger investment. And so 

there has to be a way for that to happen. It is interesting that we, 

in some ways, do that through certain mechanisms like OPIC and 

the Ex-Im Bank when it comes to companies doing things out of 

the country. But we need something that relates to that kind of 

thing inside the country. So these are some of the things I would 

say. 

The other has to do with patent policies, and on the one hand, 

the new patent legislation is very helpful. It is very helpful to companies in particular. But it has caused universities to rethink, particularly the piece having to do with ‘‘First to File.’’ On the other 

hand, in terms of the kind of domain within which to operate and 

how to ensure that, it has been helpful. So all of these kinds of 

mechanisms exist. I also believe that—and Chuck talked about 

making the R&D tax credit permanent. That has an effect that 

spurs, I think, companies to do more, but it also, in an interesting 

way because of that spur can increase the interest of companies in 

working with universities in more basic areas. 

Mr. BERA. Great. Thank you. 

Chairman SMITH. Thank you, Mr. Bera. 

Dr. VEST. Mr. Chairman, may I add to that? 

Chairman SMITH. Yes, Dr. Vest. 

Dr. VEST. Just very quickly, I learned four things about this in 

14 years as President of MIT and two of them have been greatly 

supplemented by what I have learned at the National Academies. 

First of all, we need a simplified policy patent, and I am not talking about federal policy now; I am talking about agreements between universities and companies, at least for modest-scale 

projects. It should be a boilerplate, no negotiation kind of package, 

and we are making some progress toward that. 

Second, what we most need with big companies, long-term strategic partnerships, sticking with it in ways that honestly the Federal Government frequently can’t do. There is a great example of 

Mr. Templeton’s company and a few faculty at MIT in the area of 

signal processing. It has been running for decades, not at a terribly 

high financial level but it has been really productive. 

Third, and not every university can do this, I would admit, but 

we need some large-scale partnerships by which I mean significant 

multimillion-dollar partnerships between the university and a company because only then do you get real interaction with the 

thought-leaders in the company. You can’t do many of them but a 

few of them are important. 

And finally, on the entrepreneurial side, which is so much of 

what is ‘‘technology transfer’’ today at an RPI or an MIT or virtually any of our great public or private universities, creating opportunities for young people to get coached. Hands-on coaching by 
62 

real entrepreneurs and real VCs is just worth its weight in platinum. It is the real key to building up that ecostructure. Thank 

you. 

Chairman SMITH. Thank you, Dr. Vest. Thank you, Dr. Bera. 

The gentleman from Mississippi, Mr. Palazzo, is recognized for 

questions. 

Mr. PALAZZO. Thank you, Mr. Chairman, and I thank our witnesses for being here today. There has been some very good discussion. 

You know, there is no doubt that foreign competitors present a 

substantial challenge to U.S. economic competitiveness and some of 

those reasons why they are doing well is some of the self-inflicted 

wounds that we have caused to ourselves such as having an antiquated tax code that really is punishing our corporate job creators 

in America as well as the job-killing regulatory regime that is 

pushing a lot of American jobs overseas and actually pushing a lot 

of businesses just out of business, killing small business as well. 

One field of endeavor for American competition is still space. So 

my question is going to be space-specific. I am pretty much a onetrick pony when it comes to this Committee, and anything space 

and aeronautics is what I like to talk about. 

America used to be in a space race with the Soviet Union, and 

today, unfortunately, NASA purchases seats on the Russian Soyuz 

rockets at $16 million per astronaut to launch to the International 

Space Station that we built with the now-retired space shuttle. So 

my question is for everyone. How do you think America’s ceding 

leadership in space like that translates to the sense among many 

Americans that we are no longer a technology leader? And we will 

start with Mr. Templeton. 

Mr. TEMPLETON. You know, I think in many ways, as many on 

this Committee probably know, the space race was a very polarizing, very inspiring challenge back in the 1960s and provided tremendous investments that led to things like the semiconductor industry. I suspect when the space race was underway there was no 

one sitting around in federal labs or at an agency planning out 

semiconductor industry leadership 30 years from when they began 

that race. So, you know, I am not qualified to comment about the 

specifics of space or not, but I think wonderfully challenging goals, 

okay, really help this country, really bring energy and inspiration 

to invest and go try to do great things, and whether that is a space 

objective or things in the biomedical field that were talked about, 

I think those have, you know, great potential when we think about 

this challenge in front of us. 

Mr. PALAZZO. Dr. Jackson? 

Dr. JACKSON. Thank you. You know, it turns out that one of my 

predecessors as President of RPI, Rensselaer, was George Lowe, 

who basically was the operations director who ran the Apollo program that put man on the moon. As well, a number of our graduates have been involved in more recent work in designing and 

launching the Mars Rover. So it is a big part of our history and 

tradition. But what I would say is the following. There are a number of pieces, some having to do with basic research, and I will 

mention just a couple of things with that, some having to do with 
63 

infrastructural questions, and then the third having to do with the 

overall industrial capability to do these things. 

On the basic research, if you think about space missions, they depend on fundamental science and people want to explore space for 

that reason. The knowledge of it, as well, is particularly important 

for various kinds of missions including potential manned missions. 

It requires computational capability. It requires strength in material science and engineering. It requires strength in aerospace and 

thinking about new propulsion systems. You mentioned our having 

to use other people’s rockets to get people to the International 

Space Station. We also use other people’s rockets to launch our satellites and so that is an infrastructural question. 

And then, you know, there is an overall question about overall 

industrial and manufacturing capacity to continue to make and develop these sorts of technologies, and I am sure Mr. Templeton can 

speak more directly to that, but these are areas that concern me 

as we go forward. 

Mr. PALAZZO. Before I go to Dr. Vest, I do want to ask one more 

question because I know we are getting short on time. Dr. Jackson, 

does the space exploration, American space exploration, still excite 

children to study science, math, engineering and technology? 

Dr. JACKSON. It sure does. We had a presentation at Rensselaer 

and it was during one of our alumni weekends of the landing of the 

Mars Rover, and that is because our Dean of Science, in fact, had 

two experiments on the Rover and was there the day the latest 

Rover landed. We also had some of the engineers in who were involved with the design and development of the latest Rover, and 

frankly, half the space, and we had it in a concert hall in our experimental media and performing arts center that holds about 

1,200 people and half the people were young people and they were 

so excited. So absolutely, but I think it relates to Mr. Templeton’s 

point that a big idea, something that we galvanize around, we rally 

around is really what captures people’s imagination. 

Mr. PALAZZO. Thank you. 

Dr. VEST. I am going to speak out of both sides of my mouth, 

first by saying this generation has its own great challenges that it 

needs to be and is excited about, sustainability and energy security 

and resilience, provision of health care. It has got big challenges of 

its own that are even more important than the space race was, and 

we need to give some focus to that. 

Having said that, I will admit I am a space cadet. I grew up in 

the 1950s and 1960s and lived through all this wonderful period. 

It is still—when we survey incoming freshmen at MIT, space is still 

the largest single motivator among these kids of why they went 

into science and engineering. That is the reason we need to keep 

at it. 

But having said that, these programs are so big and so expensive 

that I think we need to find the right way to do them internationally. At one level it hurts me, but my logic, it doesn’t bother me 

too much that at least for a period of time we are launching humans with a Russian rocket. We need this kind of synergy and integration. But I will tell you, nobody has done anything as exciting 

as this Mars lander. I mean, it was unbelievable. 
64 

And very quickly, you may know the story of the guy who managed the actual engineering of that project and that landing was 

a drop-out from high school who became a rock musician and eventually decided he wasn’t going to make it with that and one night 

literally was driving home and looked up in the sky and saw Venus 

and he started thinking about this and he got more and more excited, and he said, you know, this is my destiny is to get out there 

somewhere, and I apologize for not having his name at my fingertips. He went back to community college, got a technology degree, 

started to work, eventually went to university and became an engineer and ran that project. You know, that is the kind of excitement 

we need, and we can kind of duplicate that with what we do in 

education. But I was very disappointed by the short time scale of 

America’s attention to that program because I can’t imagine anything more exciting. I have to—— 

Chairman SMITH. I am afraid to interrupt you all. Votes have 

been called and I am going to try to squeeze in one more Member 

to ask questions. Mr. Palazzo, thank you for your questions. 

And also, let me sort of explain the situation to everyone who is 

here. The series of votes will mean we will not be able to come back 

for about an hour. Our Democratic friends are getting on buses immediately after these votes to go to an out-of-town retreat, and I 

am just wondering how many Members really would come back in 

an hour and if they might consider submitting questions in writing, 

and if that is not acceptable, we will come back, but if that is acceptable, I just apologize to you for not having time for Members. 

Does that sound all right? Okay. Thank you for your consideration. 

The gentleman from California, Mr. Swalwell, is recognized for 

his questions. 

Mr. SWALWELL. Thank you, Chairman Smith and Madam Ranking Member Johnson, and thank you, Mr. Templeton, Dr. Jackson 

and Dr. Vest. 

We have talked a lot about startups today, and I am a startup 

Member of Congress, having just arrived here. I came to Congress 

wanting to support the innovation agenda, and as a freshman and 

a new Member in Congress, and a new Member to this Committee, 

I am encouraged that our first hearing is on research and development. I represent California’s East Bay, where people understand 

that to do big things, you have to take big risks, and I am excited 

to be on this Committee because I truly do believe in science, and 

I believe in what science can do, and as our Ranking Member mentioned, the number of innovations that have come out of the Federal Government’s role in science is very important to me. 

I wanted to talk to you a little bit about Dr. Jackson and her testimony about collaboration between government and business and 

also Mr. Templeton discussed good examples of public R&D partnerships in the semiconductor industry. In Livermore, California, 

we have what is called IGATE, Innovation for Green Advanced 

Transportation Excellence. It is a regional public-private partnership designed to support small businesses and maximize the economic potential of green transportation and clean energy technologies. It is a partnership with the cities in the surrounding communities, Sandia and Lawrence Livermore National Laboratories 
65 

and also the University of California, the Berkeley and Davis campuses. 

And so my question is, we are just starting to see this project get 

off the ground, but as you can imagine, one of the biggest challenges is access to capital, to have an incubator-type setting where 

you can have small startups, medium-size startups come in and do 

the work that they need to do to create local made in America jobs. 

And so a couple questions. One, is there still a role for the Federal 

Government to play? Because I believe you need a federal partner 

if you are ever going to activate a region like that. Two, what can 

we do to increase access to capital as a Congress so that we can 

see those startups get going and create jobs? And three, how do 

we—and when we talk about the ecosystems of innovation, how do 

we also find those pipelines to the students where we have those 

businesses not just working on creating jobs but also transferring 

their knowledge to high school and college students who are going 

to be the next generation in those industries? So is there a role, 

how do we get the access to capital, how do we educate our children? 

Dr. JACKSON. I will try to be succinct. I would say absolutely, 

there is a role. Now, we have talked about one element of that role 

having to do with support for basic research, support for students, 

both at the undergraduate level and importantly where we have 

not talked about it for graduate education and its linkage to research. But importantly, you mentioned energy, green energy technologies. Energy tends to be a huge kind of—there are any number 

of demonstration projects early in kinds of things people can do but 

it is the kind of activity that requires a certain degree of activity 

at scale, and so that kind of infrastructural support is very important, and the Federal Government can do any number of things, 

but one is simply to provide a safe harbor for corporate partners 

to come together, not unlike SEMATECH, to bring them together 

with universities, particularly in precompetitive research including 

applied research areas, to help support shared infrastructure and 

that is where smaller companies that really need to do prototyping. 

Some of the national labs are providing their major computational 

facilities to help companies with modeling and simulation, to be 

able to improve and begin to think about how to scale what they 

do. So it is kind of a daisy chain going from the fundamental research to creating the kind of safe harbors and partnerships that 

can allow roadmaps to be developed and people to move along, with 

the shared infrastructure as well. I am sure I have left something 

out, but these are some of the things that we try to do, and we 

don’t have the benefit of being in Silicon Valley, we are in upstate 

New York, and so we don’t have a big national lab. So the state 

has stepped in and done a lot of things, and then the universities 

themselves have come together. Thank you. 

Mr. SWALWELL. Thank you. I yield back the balance of my time. 

Chairman SMITH. Thank you. We have got about four minutes 

left to go vote. I thank you for yielding back. 

Let me thank our witnesses today for their just wonderfully inspiring testimony. It has been very helpful, very informative, and 

I hope those who are watching this hearing either in person or on 

C–SPAN recognize that we are talking about a wonderful future for 
66 

them and their children and grandchildren if we make the kind of 

investments in research and technology that we should. It is just 

going to pay a vast amount of rewards. It will improve productivity. 

It will improve people’s standard of living, and that will benefit us 

all, but thank you all for your participation today. 

[Whereupon, at 11:12 a.m., the Committee was adjourned.] 
(67) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
68 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Mr. Richard Templeton 

U.S. House Committee on Science, Space, and Technology 

American Competitiveness: The Role of Research and Development 

Response to Questions for the Record 

Richard K. Templeton 

Chairman, President and CEO 

Texas Instruments 

Honorable Randy Neugebauer (R-TX) 

1. Do you think the government should prioritize funding basic, fundamental 

research over applied research? . 

Investing in basic research should clearly be a top priority for the federal government. 

Excluding the Recovery Act funding, federal agency investment in basic research has 

actually decreased 2.8% over the past decade in constant terms. (Source: American 

Association for the Advancement of Science) 

That said, it should be noted that there is not a bright-line distinction between what is 

"basic" and what is "applied" research. The process of innovation is not always 

necessarily linear with basic research leading to applied research and then to 

technological development. In fact, basic research advances can and do often feed off, 

and depend on, advances in applied research. Thus, distinctions between "basic" and 

"applied" research are often very grey, at best. 

Many agencies, such as DOD, DOE and NASA are specifically oriented towards 

supporting mission-oriented research for which trying to draw clear and distinct lines 

between basic and applied research can be difficult. In fact, there are many areas of 

long-term "use inspired" or mission-oriented research where government support may be 

crucial to the early development of particular technologies far before they are ready to be 

developed by the private market place. There are also areas of research that have high 

risk, high payoff potential in which private industry will not invest. The federal 

government has the resources and ability to be patient, which is what basic and certain 

applied research requires. No individual company has the resources to perform much of 

the research that the federal government underwrites. 

2. Are you concerned about the government's potential ability to pick winners 

and losers in funding more applied research and development better suited to the 

private sector? 

The government should not fund research that industry will readily fund. Industry does 

an enormous amount of research and development, and eclipses the R&D investment of 

the federal government. However, the reality is that most industry spending is on 

development, not research. 

The assumption that applied research and development is better suited to the private 

sector does not take into account research challenges with real-world implications. 

Relevant examples of interest to the semiconductor industry might include areas such as 

medical applications, automotive safety, and security solutions, where the end use may 

be clear, but research and technical challenges remain, best solved in collaboration with 

universities and the federal government. 

1 
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TI strongly supports the peer review process in funding both basic and applied research, 

as this allows funding to flow to the best ideas and avoids the possibility of political 

motives in "picking winners and losers." 

The federal government should and can playa role in helping to foster strategic publicprivate partnerships and in supporting R&D efforts that are in our nation's best interests. 

The federal government has a long history of support not only for basic research, but 

also in high risk applied research programs and creative pre competitive ideas in order to 

nurture new technologies, technology platforms, drugs and vaccines that can then 

become the target of private research dollars. 

Often this has been done when the government is both the supplier and user of the 

research in which it invests - such as national defense. In defense, the U.S. has a long 

history of supporting basic research, applied research and development. If it were not 

for those government investments, the U.S. might have missed critical and strategic 

opportunities to lead the world in critical areas of technology. Federal investments 

provided to SEMATECH during a period of extreme market uncertainty helped to ensure 

continued U.S. leadership in the semiconductor industry. 

Even when the big industrial labs, such as Bell Labs, were engaged deeply in research, 

the federal government still needed to invest nearly $5B over 10 years to deliver the first 

prototype of a semiconductor diode. DOD funded this with a partnership between the 

government, university, and industry labs in order to ensure technical superiority in air 

missile technology. Bell Labs then invested an additional $25M - a very large 

investment from an individual company's perspective - to create the first commercial 

version that launched the IT revolution. 

Another example is the Internet, which originated from research conducted at the 

Department of Defense and then the NSF, long before anyone ever imagined its 

commercial potential and before any private company had an interest in making such 

investments. 

3. Would you agree that budget proposals from the Obama Administration -

which are overwhelmingly focuses on late stage technology developmentshould be redirected to place a higher priority on basic research? 

It is not clear which specific budget proposals are being referenced here, so it is difficult 

to comment. TI recognizes that in a tight fiscal climate trade-offs must be made, but 

these are choices for which we must prevail upon Congress to decide in light of the 

broader national perspective. Each program has to be carefully examined individually 

and assessed based upon a careful examination of various scientific and technological 

challenges, market forces, and national needs. As previously mentioned, a strong merit 

and peer review process is essential to funding the best R&D. 

4. Do you support prioritizing basic research in the physical sciences over areas 

such as technology development and commercialization of new technologies? 

Within basic research, TI certainly supports robust funding for the physical sciences and 

engineering, which have been declining as a percent of GDP since the 1970s. These 

are key disciplines for TI and the semiconductor industry. Support for basic research 

2 
70 

must be a top government priority. That being said, as noted above, the government 

does playa role in supporting high risk, high payoff research efforts and/or facilitating 

and nurturing the development of emerging technologies and technology platforms. As 

mentioned, Congress must weigh the trade-offs of where the funding goes, both within 

the R&D portfolio and broadly with other government programs. 

5. How are these energy production driven (hydraulic fracking) spillover benefits 

affecting manufacturing facility operations or planning decisions at TI, its 

suppliers, or others in the semiconductor industry? 

Energy is certainly a major cost in TI's manufacturing operations and a number of factors 

affect energy costs, not just supply. Tllooks at a number of ways to reduce its energy 

costs, including renewable energy use. 

Shale gas and slant drilling have reduced drilling costs - especially where they are also 

finding liquids - and have increased the supply of gas and increased reserves. Other 

factors, like the price of gas demand (including electric generation), amount of gas in 

storage, and short term effects from weather affect pricing as well. 

Overall though, TI has benefited from lower gas prices primarily due to its impact on 

electricity prices over the past few years. This has made our U.S. factories more 

competitive. 

Honorable Randy Hultgren (R-IL) 

1. In what ways can we, policymakers on the Science Committee better tell the 

story of the role basic research plays in our lives? 

The best examples are concrete, historical ones that relate to technologies used today, 

such as life-saving medical breakthroughs or personal technology devices that have 

their roots in government-funded research. For instance, technologies like the Internet, 

barcodes, fiber optics, speech recognition, magnetic resonance imaging (MRI), global 

positioning systems (GPS), lasers, data encryption, computer aided design (CAD), 

advanced sensors and the mouse are all items that affect nearly everyone on earth. 

Members of the Science Committee should prioritize educating other Members of 

Congress and the public as to the tangible benefits of federal funding for basic science 

research. For example, briefings such as the "Deconstructing the iPad" organized by the 

Task Force on American Innovation and sponsored by you and other members can be 

an effective means to bring the value of basic research to life for lawmakers and their 

staff. 

The FDA just approved retinal implants that allow the blind to see - this technology has 

its roots in university research at the University of Southern California. The effort had 

early and continuing support from NSF, the National Institutes of Health and the 

Department of Energy, with grants totaling more than $100 million, with nearly equal 

matching private sector support. 

Paired with those historical examples, it is important to look forward at what is possible 

through research. Nanotechnology could have revolutionary applications in medicine, 

energy, electronics, security, and materials. Bioengineering is another example, where 

3 
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exciting developments at the intersection of electronics and medicine will literally change 

lives. 

2. What effect do you think a lasting 4-5 year budget and appropriations certainty 

would have on American competitiveness? 

Certainly, predictability and sustained, stable funding would benefit the R&D ecosystem. 

R&D is not a switch that can easily be turned off and on. Unpredictable funding streams 

make it particularly difficult for university professors and students to have the continuity 

with projects that breakthrough research requires. Even worse, sudden stops and starts 

in funding send a very strong negative signal to students about the future in that 

discipline, and could have the effect of discouraging the very STEM talent we are trying 

to nurture to benefit American competitiveness. If Congress were to adopt a longer-term 

budget and appropriations cycle, it would need to be flexible enough to be able to 

respond to new research priority areas. 

Our U.S. research universities are the best in the world and attract the best students 

from around the world to study here. However, without the sustained robust funding for 

basic research done at U.S. universities, foreign researchers and even our own home 

grown future scientists will look to universities in countries that are making a strong 

investment in research. 

As a result, the top talent educated abroad will end up working there for our foreign 

competitors and not for U.S. companies. Start up ventures and the jobs associated with 

this university research will be created overseas as will the corresponding IP and 

revenue. This is a no win situation for American competitiveness and our economy. It's 

imperative that we reverse this trend immediately. 

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Responses by Dr. Shirley Ann Jackson 

Representative Randy Neugebauer (R-TX) 

1. Do you think the federal government should prioritize funding basic, 

fundamental research over applied research? 

As was discussed during the hearing, the economic prosperity of our 

nation is linked directly to our nation's ability to generate scientific discoveries 

and technological innovations. These advances have sprung from both basic and 

applied research. 

In the extracellular matrix-based therapy example I described in my 

hearing testimony, the breakthrough did not come from just one scientific 

discipline or just one type of research. The breakthrough was made possible by 

research in the life sciences, chemical and biological engineering, 

nanotechnology, materials science, industrial engineering, space science, and 

earth and environmental science. In addition the success came about through a 

confluence offundamental and applied science. Much of this work was 

appropriately funded by the Federal Government. 

I do agree that, in order to have a well-functioning innovation ecosystem, 

it is imperative to prioritize. As I stated in my testimony, one must have strategic 

focus. The possibilities for research are limitless, but funding is not. Therefore, it 

Is important to choose carefully promising areas to explore and develop, and 

these must match the talent, resources, and opportunities that the U.S. has or 

can attract. Furthermore, our focus must be realistic with regard to timing. We 

cannot afford to be working on yesterday's challenges. 

The urgent global concerns that our nation faces in the 21st centuryaccess to clean water, food security, energy security, environmental stewardship, 

health security, and disease mitigation- are some of the priority areas I would 

recommend. 

2. Are you concerned about the government's potential ability to pick winners 

and losers in funding more applied research and development better suited to 

the private sector? 

There is broad agreement that the government should not pick winners 

and losers for specific commercial activities. However, as a nation we do have a 

vested interest in providing U.s. industries the tools to compete and thrive. 

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Emerging technologies in nanoelectronics or bioengineering may well demand 

the kind of computational power, instrumentation, robotics, and clean rooms 

that no single company can afford. 

The Federal Government should begin to develop infrastructure that can 

be shared by nascent industries as a new kind of capital to undergird innovation. 

Such infrastructure could be based at universities or national laboratories or 

could be developed by industry with federal assistance. 

There are examples of the Federal Government supporting precompetitive private sector research. As I mentioned in the hearing, Sematech, 

the semiconductor consortium formed in 1987, with support from the u.s. 

Department of Defense, offers an interesting model. It was created to enable the 

development of manufacturing processes crucial to the industry that no single 

company could finance alone. It provided a "safe harbor" with respect to 

antitrust concerns. It allowed the companies to come together for precompetitive research, sometimes in collaboration with universities. The 

consortium laid out a semiconductor research and development roadmap, which 

has been followed to position the u.s. as a leader in the semiconductor industry 

in advanced chip design and manufacturing. A combination of federal trade 

policy and funding, for efforts such as Sematech, has helped the semiconductor 

industry in the u.s. flourish. 

3. Would you agree that budget proposals from the Obama administrationwhich are overwhelmingly focused on late-stage technology developmentshould be redirected to place higher priority on baSic research? 

To strengthen the economy, to address key global challenges, and to 

remain globally competitive, it will be essential for the U.s. government to 

sustain a comprehensive investment in a broad range of scientific research and 

development activities, with a primary focus on basic and early applied research. 

The United States also has a vested interest in supporting advanced 

manufacturing and leading edge technologies. In most cases, that support 

comes through funding for basic and some early applied scientific research. 

Indeed, when one digs deep into the budgets of our federal civilian research 

agencies, a majority of their funding falls into these two categories. But in some 

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74 

areas such as advanced manufacturing a more hands-on approach may be 

necessary. 

It is instructive to look at the ways research and development activities 

have changed, especially in light of more global competition for technological 

advantage. Countries such as Denmark, Finland, France, Iceland, Ireland, Japan, 

the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, 

Switzerland, and the United Kingdom all now have national agencies that 

specifically promote technological innovation in their domestic industries. These 

nations also fund basic research at research universities and national 

laboratories. 

The President's Council of Advisors on Science and Technology used a 

definition of advanced manufacturing in our 2011 report, tilted, Ensuring 

American Leadership in Advanced Manufacturing. that I find useful: "advanced 

manufacturing, a family of activities that (a) depend on the use and coordination 

of information, automation, computation, software, sensing, and networking, 

and/or (b) make use of cutting edge materials and emerging capabilities enabled 

by the physical and biological sciences, for example nanotechnology, chemistry, 

and biology." Our nation's abilities to invent things and make things are 

inherently linked. The innovation ecosystem is not one-directional, especially 

with regard to advanced manufacturing. For example, what we learn through 

the process of making new materials advances new discoveries in basic science. 

At its core our innovation ecosystem is based on discoveries in basic 

research, and this should remain the main focus of federal research dollars. 

However, in our globally competitive world we also need to be concerned about 

those translational pathways that bring discoveries to the commercial space in a 

more deliberate way than in the past. This will take more than just funding. 

Taxes, trade, intellectual property, education and training all playa part in the 

innovation ecosystem. 

4. Do you support prioritizing basic research in the physical sciences over areas 

such as technology development and commercialization of new technologies? 

Physical sciences are not inherently more or less valuable than the life 

sciences or the social sciences. Whether it is new approaches to energy 

generation and storage, the ability to fabricate new organs, planning for 

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75 

disasters, advanced approaches to urban design, or space travel to Mars- these 

endeavors will require contributions from many disciplines. 

The 2012 National Research Council report Rising to the Challenge 

provides case studies on innovation policies in countries including China, India, 

Singapore, Taiwan, Germany, Japan and others. The report paints the vivid 

picture of other nations vigorously adopting poliCies and programs "to change 

the competitive landscape in their favor." 

I would suggest that federal policymakers must expand the discussion 

beyond false choices among basic research, applied research, development, and 

commercialization. As I indicated in my previous answer, basic research remains 

a key driver to our innovation ecosystem. But funding for basic research alone 

will not be the only factor in helping the u.s. sustain the economy and retain its 

technological leadership. 

Representative Randy Hultgren (R-ILl 

1. In what ways can we, as policy makers on the Science Committee, better tell 

the story of the role basic research plays in our lives? 

We see the influence of federally funded research every day in both big 

and small ways. One can pick up any major newspaper - or more likely these 

days read it online - and find examples of advanced technology in our lives front 

and center. But does the general public recognize the work behind these 

discoveries and innovations? Do you as Members of Congress celebrate the 

successes of science and engineering? Do you value the people doing this work? 

It is a strange paradox that, in a nation whose economy so depends on 

scientific and technological progress, scientific illiteracy is common and 

acceptable. Many Americans have an easy intimacy with electronic devices, yet 

are at loose ends when asked to describe an integrated circuit or semiconductor. 

We must evolve our national culture to celebrate not only the iPhone, the 

Kindle, and the handheld ultrasound, but also the spirit of inquiry, the discipline 

and focus, and the investment that yields such devices. Teachers alone cannot 

effect such a change. Scientists, engineers, mathematicians, executives, and 

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76 

entrepreneurs must find a way to communicate the joyous aspects of their work 

to the young - and the simple truth that America's future depends on its ability 

to innovate. 

As Members of Congress you have a public platform to promote science, 

to celebrate its successes and the scientists and engineers who do the work. Visit 

classrooms and lab in K-12 schools and colleges and universities in your districts, 

talk to sCientific entrepreneurs, start a science section on your Congressional 

websites (as Congressman Hultgren has suggested). As elected officials, you 

have the opportunity to use your positions to influence minds, use that influence 

in a positive way to promote all of the STEM disciplines. 

2. What effect do you think lasting 4-S year budget and appropriations certainty 

would have on American competitiveness? 

The Mars Rovers, Hubble Space Telescope, Large Hadron Collider, and the 

Human Genome Project were all massive multi-year scientific projects that have 

captured imaginations, and are helping humanity make great leaps in our 

scientific knowledge. The U.s. scientific enterprise could certainly benefit from 

multi -year certainty in federal budgeting and appropriations, especially for such 

large multi-year projects. Yearly budget uncertainty causes significant and 

sometimes costly difficulties in construction and personnel disruptions. 

Even without longer term appropriations, Congress and the Executive 

Branch could do more to increase sustainability and predictability of federal 

research funding. Examining the example of NIH, its appropriations doubled 

between 1998 and 2003, then declined 11.6 percent in real (inflation-adjusted) 

dollars over the next five years. In 2009-2010 the NIH received a temporary 

increase from the American Recovery and Reinvestment Act, but then continued 

to decline. This kind of roller coaster budgeting can cause disruptions when 

research is a long term endeavor. Steadier, less volatile long -term funding for 

science should be a goal shared by both budgeting branches of the Federal 

Government. 

If the United States does not want to lose its technological leadership to 

our competitors, we must make the long term strategic investments to maintain 

and build our national capacity to do so. 

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Responses by Dr. Charles Vest 

QUESTIONS FOR THE RECORD 

THE HONORABLE RANDY NEUGEBAUER (R-TX) 

U.S. House Committee on Science, Space, and Technology 

American Competitiveness: The Role of Research and Development 

Friday, February 6, 2013 

1. Do you think the federal government should prioritize funding basic, 

fundamental research over applied research? 

External funding to universities and independent laboratories must include a 

substantial portion of truly basic research, our ultimate "seed corn." 

However, in the 21st century the line between "basic" and applied" research 

is very fuzzy, and some of the most productive research can be thought of as 

"use-inspired basic research." In my opinion, the best way to sort this out is 

through strong merit-based award processes, because this creates a 

marketplace of ideas in which the best will be funded. 

2. Are you concerned about the government's ability to pick winners and losers in 

funding more applied research and development better suited to the private 

sector? 

Market-facing industry will make the best decisions in highly applied 

research and product development. Today, universities and independent 

laboratories should - and generally do - focus on those areas that the private 

sector does not support, usually because the time horizons to 

commercialization are too long, or because individual companies do not 

believe that they will reap the primary benefits of the work. 

3. Would you agree that budget proposals from the Obama Administration -

which are overwhelmingly focused on late-stage technology development -

should be redirected to place a higher priority on basic research? 

Basic research should be the highest priority for federal funding of research 

in universities and independent laboratories. Having said this, I do support 

efforts such as ARPA-E that focuses on clear national need and brings new 

players such as universities and young entrepreneurial companies to the 

table in high~risk, high-payoff research, most of which fits the "use-inspired 

basic research" category, and prepares promising technologies to move into 

the private sector. 
78 

4. Do you support prioritizing basic research in the physical sciences over areas 

such as technology development and commercialization of new technologies? 

Basic research should be the highest priority for funding of universities and 

independent laboratories. 
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Æ 

QUESTIONS FOR THE RECORD 

THE HONORABLE RANDY HULTGREN (R-IL) 

U.S. House Committee on Science, Space, and Technology 

American Competitiveness: The Role of Research and Development 

Friday, February 6, 2013 

1. In what ways can we, as policy makers on the Science Committee, better tell the 

story of the role basic research plays in our lives? 

I know that as members of Congress, you have many issues to balance, but I 

believe that if you could simply work to get your colleagues outside the 

committee to recognize that without basic research, our economic system will 

run out of steam, it would be enormously helpful. I also respectfully suggest that 

simply mentioning this routinely, in your speeches to constituents and 

discussions with journalists, it would go a long way. As you well know, making 

this point with specific, human and business examples of success, especially 

from your districts, is very effective. I am certain that the science and 

engineering communities, and key faculty in universities in your districts or 

states would be more than 

happy to assist in suggesting great examples. 

2. What effect do you think that certainty of a 4 or 5-year budget and 

appropriations process would have on American competitiveness? 

Individual researchers and research groups strongly value the ability to plan 

with some certainty for a multi-year period. They also spend far too much time 

writing numerous proposals for short-term funding - time that would better be 

spent in research and teaching. To the extent that a longer budget and 

appropriations process would enhance this, efficiency would be increased and it 

should be seriously considered in my opinion.