But that conviction, like so many others in these unsettled economic times, is being challenged. Some economists now believe that our lagging productivity may not be a temporary phenomenon but a long term problem, with ominous implications for the future. Productivity growth is the most important factor governing how fast the economy can expand and how much living standards can rise over time. During the past two decades, U.S. productivity growth has slowed, from an annual average rate of 3.1 percent between 1947 and 1973 to an average of just 1.1 percent since then. One of our most powerful advantages in addressing America's productivity problem is our research universities and their capacity to create new products, new processes and ultimately new jobs for our citizens.
Biotechnology is a prime example.
The industry was born in California during the 1970s, when a joint team of researchers from the University of California at San Francisco and Stanford University successfully spliced the first gene. The University of California's nine campuses are a powerful magnet for private investment in biotechnology firms. One-third of all U.S. biotechnology companies are located in California and within 35 miles of a UC campus. One in six California biotech companies was started by UC scientists including the largest three. California has achieved international leadership in biomedical applications of biotechnology.