/To meet the US innovation challenge, keep NSF’s mission intact (via Qpute.com)
To meet the US innovation challenge, keep NSF's mission intact

To meet the US innovation challenge, keep NSF’s mission intact (via Qpute.com)


Spurred largely by competition with China and the fear that the U.S. is losing ground in science and technology, Congress is moving to increase federal research and development (R&D) spending by billions of dollars over the next few years — and potentially dramatically restructure the U.S. federal science and technology enterprise.

There is certainly ample evidence that the U.S. must substantially increase investment in innovation programs. According to statistics compiled by the National Science Foundation (NSF), between 2000 and 2017, R&D spending in the U.S. grew 4.3 percent annually, compared to more than 17 percent for China in that time. Data also suggest that today, China has passed the U.S. in total annual R&D spending.

While there is clearly a case for the U.S. government to provide greater resources for federal science and technology programs, there is also the danger that Congress will end up just “throwing money” at the problem and that some proposed changes in the role of federal agencies will actually be counterproductive. This is particularly true with plans to expand the mandate of the NSF from its key role in funding and prioritizing basic research — tied closely to U.S. research universities — to the lead federal agency for technological development of strategic sectors.

The legislative situation is in flux, but many congressional leaders want to move quickly to enact reforms over the next few months. The central legislative vehicle before Congress is the Endless Frontier Act (EFA), first introduced last year by Sens. Charles SchumerChuck SchumerSchumer demands restoration of 24-hour New York subway service Overnight Health Care: US to ban most travel from India | 100 million Americans now fully vaccinated | Schumer backs Sanders on health care moves Schumer backs Sanders push on drug prices, lowering Medicare age MORE (D-NY) and Todd YoungTodd Christopher YoungAmerica can build back better through fair and open competition GOP senator supports ‘diplomatic boycott’ of 2022 Olympics in Beijing With federal support, the US can recreate Silicon Valley success nationwide MORE (R-IN). The bill, revised and reintroduced on April 20, enjoys wide bipartisan support, though questions regarding key elements have emerged in recent hearings. The White House has also backed the legislation, without committing to individual details.

In its present form, the EFA would authorize $100 billion over five years for a number of new and expanded technology programs. Within the NSF, it would create a new directorate for technology and innovation that would administer research and development of some ten key technologies including artificial intelligence, quantum computing, advanced computing, semiconductors, and biotechnology. Universities would become the focal point for translating research into advanced technologies — in alliance with the private sector.

Additionally, the legislation would allocate $10 billion to the Department of Commerce for a group of regional technology hubs and provide $2.4 billion to enhance U.S. manufacturing. Responding to initial criticisms from the research community, Schumer and his colleagues made significant changes to the original EFA bill: Most importantly, they reined in the new technology directorate’s independence and dropped the plans to mandate the directorate’s budget rise to almost $40 billion within the given year. Plans to rename the NSF the National Science and Technology Foundation were also scrapped.

These recent changes have moved the EFA closer to — though certainly not congruent with — a bill submitted by the House Committee on Science, Space and Technology, which is the authorizing committee for the NSF. Laying down a marker, this bill would double the NSF budget within five years to $18 billion, and add a new “Science and Engineering Solutions” directorate. The new directorate would grow to $5 billion over five years, but there are safeguards in the bill to protect funding for existing basic science directorates from being syphoned off to technology. And the NSF director is given greater flexibility in establishing “societal challenges” priorities for the new technology directorate.

Due to the large number of proposed amendments and continuing disagreements over structure and policy issues, the Senate Committee on Commerce, Science, and Transportation recently postponed the EFA’s markup for several weeks. Still, it seems highly likely that at the end of the day, NSF basic research directorates will see their current funding double over the next five years and that more than $50 billion to $100 billion over five years will be authorized for a group of “strategic” technologies.

However, despite the recent revisions, the EFA remains a flawed model for U.S. innovation. First, doubling the NSF budget over the next five years by itself will create formidable administrative problems for the agency’s excellent scientific staff, who will be tasked with dispensing the funds carefully to priority scientific disciplines. More importantly, inundating the NSF with more than $50 billion for strategic technologies would inevitably skew the agency’s priorities and undercut its central basic research role.

Finally, while the NSF has led applied (purpose-driven) research projects, it has no experience with large-scale mission-related projects, which will call for administrative and entrepreneurial skill far beyond NSF’s academic and national lab universe. This is why former NSF Director Arden L. Bement, Jr. has stated that it would be a “mistake for a technology directorate at NSF to serve as an offset to private funding for commercial innovation and entrepreneurship.”

A similar problem will arise with the EFA’s plan for universities to do big development projects for key technologies. Though large U.S. research universities have greatly expanded funding and resources for tech transfer programs — and attempted to draw in local and regional entrepreneurs — they still lack the ability to lead and manage a multitude of advanced technological efforts. As one group of experts noted: “Universities are not equipped to undertake large applied engineering projects, much less to translate the resulting new technologies into products and processes.”

Bement has suggested that such assignments should go to the relevant missions (Defense Advanced Research Projects Agency (DARPA), National Aeronautics and Space Administration (NASA) and the Departments of Commerce, Transportation and Energy, as examples). There have also been calls for a civilian DARPA to pick up research from scientists and advance it to the market.

The goal here is not to disparage increasing the vital funding resources for the U.S. innovation system, but rather to caution that in this brave new world of federal largesse, substantial attention should be paid to agency culture and the management skills necessary to translate frontier research into viable, competitive technologies.

Claude Barfield is a resident scholar in international trade policy at the American Enterprise Institute.

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