[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
FUELING AMERICAN INNOVATION AND
RECOVERY: THE FEDERAL ROLE IN
RESEARCH AND DEVELOPMENT
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, D.C., JULY 8, 2020
__________
Serial No. 116-28
__________
Printed for the use of the Committee on the Budget
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on the Internet:
www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
42-242 WASHINGTON : 2020
COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts, STEVE WOMACK, Arkansas,
Vice Chairman Ranking Member
HAKEEM S. JEFFRIES, New York ROB WOODALL, Georgia
BRIAN HIGGINS, New York BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania Vice Ranking Member
ROSA L. DELAURO, Connecticut JASON SMITH, Missouri
LLOYD DOGGETT, Texas BILL FLORES, Texas
DAVID E. PRICE, North Carolina GEORGE HOLDING, North Carolina
JANICE D. SCHAKOWSKY, Illinois CHRIS STEWART, Utah
DANIEL T. KILDEE, Michigan RALPH NORMAN, South Carolina
JIMMY PANETTA, California KEVIN HERN, Oklahoma
JOSEPH D. MORELLE, New York CHIP ROY, Texas
STEVEN HORSFORD, Nevada DANIEL MEUSER, Pennsylvania
ROBERT C. ``BOBBY'' SCOTT, Virginia DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas TIM BURCHETT, Tennessee
BARBARA LEE, California
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
RO KHANNA, California
Professional Staff
Ellen Balis, Staff Director
Becky Relic, Minority Staff Director
CONTENTS
Page
Hearing held in Washington, D.C., July 8, 2020................... 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Prepared statement of.................................... 4
Hon. Steve Womack, Ranking Member, Committee on the Budget... 6
Prepared statement of.................................... 8
Sudip Parikh, Ph.D., Chief Executive Officer, American
Association for the Advancement of Science................. 11
Prepared statement of.................................... 14
Paul Romer, Ph.D., Professor of Economics, New York
University................................................. 27
Prepared statement of.................................... 34
The Hon. Deborah Wince-Smith, President and Chief Executive
Officer, Council on Competitiveness........................ 150
Prepared statement of.................................... 152
Willy Shih, Ph.D., Professor of Management Practice, Harvard
Business School............................................ 161
Prepared statement of.................................... 164
Hon. Sheila Jackson Lee, Member, Committee on the Budget,
statement submitted for the record......................... 209
Hon. George Holding, Member, Committee on the Budget,
statement submitted for the record......................... 215
Hon. Ilhan Omar, Member, Committee on the Budget, questions
submitted for the record................................... 217
Hon. Scott H. Peters, Member, Committee on the Budget,
questions submitted for the record......................... 218
Answers to questions submitted for the record................ 219
FUELING AMERICAN INNOVATION
AND RECOVERY: THE
FEDERAL ROLE IN RESEARCH
.
AND DEVELOPMENT
----------
WEDNESDAY, JULY 8, 2020
House of Representatives,
Committee on the Budget,
Washington, D.C.
The Committee met, pursuant to notice, at 1:07 p.m., via
Webex, Hon. John A. Yarmuth [Chairman of the Committee]
presiding.
Present: Representatives Yarmuth, Moulton, Boyle, Price,
Schakowsky, Kildee, Panetta, Morelle, Scott, Jackson Lee,
Peters; Womack, Woodall, Johnson, Flores, Holding, Crenshaw,
and Burchett.
Chairman Yarmuth. The hearing will come to order.
Good afternoon, and welcome to the Budget Committee's
hearing on Fueling American Innovation and Recovery: The
Federal Role in Research and Development.
I want to welcome our witnesses who are here with us today.
At the outset, I ask unanimous consent that the Chair be
authorized to declare a recess at any time to address technical
difficulties that may arise with such remote proceedings.
Without objection, so ordered.
As a reminder, we are holding this hearing virtually in
compliance with the regulations for committee proceedings
pursuant to House Resolution 965.
First, consistent with the regulations, the Chair or staff
designated by the Chair may mute participants' microphones when
they are not under recognition for the purposes of eliminating
inadvertent background noise.
Members are responsible for unmuting themselves when they
seek recognition or when they are recognized for their five
minutes. We are not permitted to unmute Members unless they
explicitly request assistance. If I notice that you have not
unmuted yourself, I will ask you if you would like staff to
unmute you. If you indicate approval by nodding, staff will
unmute your microphone. They will not unmute you under any
other conditions.
Second, Members must have their cameras on throughout this
proceeding and must be visible on screen in order to be
recognized. As a reminder, Members may not participate in more
than one committee proceeding simultaneously.
Finally, to maintain safety, in light of the Attending
Physician's new guidance, any Members present in the hearing
room must wear a mask at all times when they are not speaking.
For those Members not wanting to wear a mask, the House rules
provide a way to participate remotely from your office without
being physically present in the hearing room.
Now I am proud to introduce our witnesses this afternoon.
We will be hearing from Dr. Sudip Parikh, CEO at the American
Association for the Advancement of Science; Dr. Paul Romer, a
professor in economics at New York University; the Honorable
Deborah Wince-Smith, president and CEO at the Council on
Competitiveness; and Dr. Willy Shih, professor of management
practice at Harvard Business School.
I will now yield myself five minutes for an opening
statement.
Since our last hearing, there have been more than 600,000
new confirmed coronavirus cases and more than 9,000 Americans
have succumbed to the virus. Our economy is in free-fall, and
unemployment is forecast to remain in the double digits for the
foreseeable future. Across the country, men, women, and
children are still marching and advocating for a more just and
peaceful future.
While the state of our Union remains uncertain, there is
hope and there are answers yet to be discovered. Reinvigorating
our science and engineering capabilities could help our nation
address the crises we face today while better preparing our
nation for the future.
But despite its immense potential and history of success,
the federal commitment to research and development has
declined, while this Administration systematically suppresses,
distorts, ignores, or thwarts scientific research in the name
of false hope.
Last year, nondefense discretionary funding as a percent of
GDP equaled its lowest level in 50 years, and government
support for science and engineering has been one of the
casualties. Federal R&D funding as a share of the economy has
fallen from barely 1.9 percent in the mid-1960's to less than
0.7 percent in 2018, hindering advancements and slowing
innovation. Not surprisingly, we are increasingly outranked by
global competitors like China on international benchmarks of
competitiveness.
Now, COVID-related disruptions and the Administration's
failure to take this health threat seriously threaten to
further derail U.S. innovation. Meanwhile, other nations are
working to solve both the global health and economic crises by
ramping up investments in R&D, spurring their recovery while
planning for future advancements that will help them maintain
their competitive edge in the global market.
Experts have stressed the importance of aggressive,
responsible, and strategic investments to our recovery from
COVID-19 and the economic fallout. Aside from the obvious, like
developing vaccines and treatments for COVID-19, Federal R&D
investments would also help spur an inclusive recovery, boost
regional economies, and put Americans back to work.
Targeting federal investments to increase diversity,
equity, and inclusion in the research and innovation ecosystem
would allow us to fully tap into talents of all our citizens
and would accelerate discovery, while also increasing GDP per
capita by as much as 3 to 4 percent.
Localized clusters of federally supported R&D in labs and
universities can increase regional economic opportunities,
creating jobs in the short and long term. We have seen this
work before. Evidence indicates that Recovery Act stimulus
investments in R&D had a large and positive employment effect.
This investment would attract, not displace, additional
private investment while creating new opportunities across the
country and fueling revolutionary solutions to pressing
problems. It could spur entirely new industries that many
established companies find too risky or cost-prohibitive to
explore.
Recognizing the value of federal investments, Congress has
begun the work to restore R&D funding. The Bipartisan Budget
Agreement of 2019 added significantly to both defense and
nondefense discretionary funds that would otherwise have been
at austerity levels. And Congress has appropriated additional
supplemental resources for NIH and CDC as we fight the
coronavirus pandemic.
But Congress needs a committed partner in the White House
to ensure scientific evidence, data, and research are once
again incorporated meaningfully into federal policy. Instead,
the Trump Administration has routinely sabotaged the work of
federal scientists and experts, prioritized politics over
progress, buried data, purposely misled the public on issues
ranging from climate change to the impact of chemical exposure
on our children's health. And now this disdain for science has
made America a global hotspot for coronavirus infection.
It shouldn't take a lawsuit for this Administration to
release data on the racial disparities of coronavirus
infections. Scientists and experts should never be muzzled and
prevented from sharing potentially lifesaving information with
the public. The American people are being forced to withstand
the tragic results of the Administration's devotion to
ignorance in favor of political points and division.
From putting a man on the Moon and the invention of the
internet to groundbreaking medical advancements, federal
investments in R&D have fueled our economic growth, helped us
tackle problems home and abroad, and made America a beacon of
innovation and discovery. Without a renewed commitment to
science and innovation, we risk squandering our recovery and
the opportunity to move our nation forward as a global force
for good.
We will not be able to defeat the virus and foster an
inclusive recovery if our communities don't have the tools,
knowledge, and freedom to do it. That will take investment and
an administration that respects science and facts.
I look forward to this important discussion, and I am eager
to hear from our witnesses.
I now yield to the Ranking Member, Mr. Womack, to unmute
his microphone and give his opening statement.
[The prepared statement of Chairman Yarmuth follows:]
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Mr. Womack. Thank you, Mr. Chairman, for holding this
hearing.
And thank you to the witnesses who are joining us today.
Our nation's strong innovation ecosystem has always been
driven by the pioneering spirit on which America was founded.
Throughout the centuries, we have leveraged research and
development to make unthinkable progress across industries and
drive the United States--indeed, the world--forward. This has
enabled our economic competitiveness in many of the country's
public missions: national security, healthcare, infectious
disease response, rural development, disaster preparedness and
response, and a whole lot more.
Thanks to R&D, advancements that could only once be
imagined are now possible. Whether it is developing the vaccine
for COVID-19, next-generation computers and phones, carbon
capture and storage, or the next stealth multirole combat
aircraft fighter, the delivery of these capabilities has been
rooted in the ability to unleash innovation, research, and
technology.
I saw an example of this firsthand this week as I visited a
company in my own district, NOWDiagnostics in Springdale,
Arkansas. They develop simple diagnostic tests which require
nothing more than a drop of blood and a few minutes to yield
results. Their products cover everything from a COVID-19
antibody test to screenings for Malaria and Ebola. Just one
example of the many American companies producing cutting-edge
technology and solutions.
So how do we continue to encourage these types of
breakthroughs? Washington should support private industry,
which has led a vast majority of investment, and promote
policies that encourage companies to continue to unleash
opportunity in this critical space. This supporting role of the
federal government should focus on resources for R&D in areas
such as early stage research and streamlining regulations.
As a Member of the Appropriations Committee, I've advocated
for federal research funding for critical NIH programs,
including Alzheimer's, ALS, diabetes, and pediatric cancer
research. We also can't overlook national-security priorities,
like the Biomedical Advanced Research and Development
Authority, BARDA, which helps us combat bioterrorism and other
emerging health threats.
It is for these programs that I will continue to voice my
concern for the true challenge that threatens all critical
federal programs, including R&D initiatives--that is, our out-
of-control deficit and debt. We're spiraling toward a fiscal
crisis, and once we get there, once it hits, there will be zero
money to fund these critical programs.
I've said over and over again, as an appropriator, one of
my chief concerns is that we continue to have major food fights
in Appropriations on the House floor about how we fund the
discretionary side of the budget. There won't be any money for
R&D if we don't tackle the real problems facing our country,
and that is on mandatory spending.
It has grown from 34 percent of the federal budget in 1965
to 70 percent today. It is projected to grow to 76 percent in
2030. Discretionary spending, which includes funding for health
research, space exploration, and the National Science
Foundation, has declined from 66 percent of the federal budget
in 1965 to just 30 percent today. It is literally being
squeezed away.
What this Committee should be focusing on is putting
together a budget that addresses out-of-control mandatory
spending, the driver of our unsustainable deficits and debt. If
policymakers want to prioritize R&D funding, they must first
tackle this threat.
It's not easy. It's going to require political courage.
Indeed, some Members will go home as a result. Congress must
get back to making the tough choices. It won't be an easy job,
but it has to be done. This is the only way critical federal
programs, both discretionary and mandatory, will continue to
exist for current and future generations.
I look forward to hearing from our witnesses today.
And I'll take just a quick moment of personal privilege to
say that, on the subject of R&D, my good friend Joe Steinmetz,
the chancellor at the University of Arkansas, has made research
an important cornerstone of his administration at the U of A in
Fayetteville, our land-grant university. I expect within the
next several days there will be a major announcement of a
funding source for a major research institute on our very own
campus in Fayetteville, Arkansas, and I look forward to sharing
that news with you at the appropriate time.
Mr. Chairman, as always, thank you for your leadership. I
yield back the balance of my time.
[The prepared statement of Steve Womack follows:]
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Chairman Yarmuth. Thank you, Mr. Womack, for your opening
statement.
In the interest of time, if any other Members have opening
statements, they may submit those statements electronically to
the clerk for the record.
Chairman Yarmuth. Once again, I want to thank our witnesses
for being here this morning.
The Committee has received your written testimony, and they
will be made part of the formal hearing record. Each of you
will have five minutes to present your oral remarks. As a
reminder, please unmute your microphone before speaking.
Dr. Parikh, please unmute your microphone and begin when
you are ready.
STATEMENTS OF SUDIP PARIKH, PH.D., CHIEF EXECUTIVE OFFICER,
AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE; PAUL
ROMER, PH.D., PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY; THE
HON. DEBORAH WINCE-SMITH, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, COUNCIL ON COMPETITIVENESS; AND WILLY SHIH, PH.D.,
PROFESSOR OF MANAGEMENT PRACTICE, HARVARD BUSINESS SCHOOL
STATEMENT OF SUDIP PARIKH, PH.D.
Dr. Parikh. Thank you. Good afternoon, Chairman Yarmuth,
Ranking Member Womack, and Members of the Committee. Thank you
so much for the opportunity to testify today.
I am Sudip Parikh, and I have the privilege of being the
chief executive officer of the American Association for the
Advancement of Science and also the publisher of the Science
family of journals. Our mission is to advance science,
engineering, and innovation for the benefit of all people, or,
to put it more simply, to advance science and serve society.
Today, I want to briefly discuss three reasons why I think
today's hearing is incredibly timely and then provide three
recommendations to the Committee--to the Budget Committee.
First, science and engineering are more important now than
ever in our national preparation and response to current
crises, including COVID-19 but also ongoing challenges such as
climate change and economic competitiveness.
In response to these crises, the federal government has a
vital leadership and coordination role that can be the
difference between success and failure. Successfully preparing
for and responding to COVID-19, climate change, and threats to
competitiveness will require the federal government to play the
role of a quarterback.
Second, science has a substantive role to play in advancing
shared opportunity and fair treatment for everyone by
addressing challenges in the scientific enterprise and
providing an evidence base for national policymaking. Science
and evidence must be integrated into the policymaking progress
to advance shared opportunity and fair treatment for all.
Science, especially social science, is key to unlocking our
path forward. The work of scientists is critical to better
understanding and interpreting data on government spending on
incarceration, officer-involved shootings, crime reduction,
health disparities, and other relevant topics.
To be able to address national policymaking issues, science
must also look inward to ensure that the scientific enterprise
is addressing our own biases. The core of our nation's
innovation ecosystem is more than just funding for research; it
is also the investment we make in people.
Third, it is time to increase our investments and update
our federal policy and investment framework to continue
harnessing the scientific research that builds the U.S. economy
and increases the safety and well-being of all Americans.
Right now, our nation is celebrating the 75th anniversary
of ``Science: The Endless Frontier,'' written by Vannevar Bush
in 1945. That provided a policy framework that envisioned a
national partnership between government, academia, and industry
to harness basic scientific knowledge for security and well-
being.
That framework has served as the basis for our investment
in advancing basic research and industrial innovation and
economic success, but, frankly, it is time for an update. The
scientific enterprise has evolved far beyond Bush's original
vision and now delivers scientific advances, medical cures,
innovative technology products, raised standards of living,
economic growth, and, frankly, awe-inspiring understanding of
the universe.
That scientific ecosystem is nourished by broad and varied
federal investment in research and development: universities
and nonprofits; institute-based scientists driving thought
leadership; innovative financial instruments to bring private-
sector risk capital; entrepreneurs who are driven to move
scientific advances from the lab to the consumer; industry
investment, particularly in development; and agile regulatory
agencies able to keep up with the progress of science and
technology and factor it into their decisionmaking. Each piece
of that ecosystem is important, but it all begins with the
federal role.
Our global competitors have seen our success and are paying
it the highest compliment; they are copying it. The ``2020
State of U.S. Science and Engineering'' report shows that,
although the U.S. spent more on R&D than any other country in
2017, other nations are catching up. And, since 2000, the
American share of global R&D has declined from 37 to 25
percent, as U.S. research intensity, or R&D as a share of GDP,
is well below its peak level and below the investment levels of
nine other countries.
How much should we invest? Well, as Chairman Yarmuth
pointed out, federal funding for research and development
peaked at 1.9 percent of GDP. We should be investing more than
we are right now in order to compete with other nations in
science, technology, and innovation. There are many ways to
look at this, and I provide additional details in my written
testimony.
And this takes us to my recommendations.
The U.S. should update the Bush framework for advancing
science and serving society, with an emphasis on full-spectrum
innovation, including fundamental science, mission-driven
technology, and useful knowledge programs that meet local,
national, and international needs, with the federal government
as a key partner.
The United States should increase total investment in R&D
as a percentage of GDP to 1.9 percent, which would require
increases of approximately 11 percent per year. This would
match the peak we achieved more than five decades ago and put
us firmly back into the top three countries for research
intensity globally by 2035.
And, last, scientific leaders must ensure that the
scientific enterprise is supporting opportunities for all by
addressing challenges within the scientific enterprise and
providing the evidence base to inform national policymaking.
This is just critical to ensuring a fairer scientific
enterprise and a fairer world.
Thank you for having me today, and I look forward to our
discussion.
[The prepared statement of Sudip Parikh follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. Thank you very much for your testimony.
I now recognize Dr. Romer for five minutes.
Please unmute your mic, Dr. Romer.
STATEMENT OF PAUL ROMER, PH.D.
Dr. Romer. Chairman Yarmuth, Ranking Member Womack, and
Members of the Committee, thank you for giving me this chance
to contribute to this discussion about how to fuel innovation
and recovery and to contribute by summarizing the lessons I
have learned from my analysis of long-run economic growth.
We share two ambitions: We want the United States to be the
leading nation in basic scientific research. We also want it to
be the leading nation in the delivery of the technological
progress that lifts the productivity of our work force and
raises standards of living for our citizens.
The main message I want to convey today is that it takes
different types of investment to achieve these two ambitions.
As a result, you, the Members of Congress, face a tradeoff.
When you contemplate additional investment in our future, you
can choose to invest in basic science or in technological
progress.
The secondary message that I want convey is that, in my
opinion, in recent decades, the nation has underinvested in
technological progress. In particular, we have allowed the
strengths that we built up prior to World War II to depreciate.
So, as a result, the investments you could make now that would
yield the highest payoffs would be investments in the kinds of
measures that delivered such remarkable technological progress
before World War II.
If I could ask for the first of my slides to be displayed.
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This two-by-two table suggests that nations can be either
leaders or followers in basic scientific achievement or in
technological progress and that a nation can be a leader in one
or the other or both.
If I could have the second slide.
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The narrative that is often told about the United States is
that we were in a position of leadership along both dimensions
after World War II but, because of changes in the environment,
changes in the economy, other changes, we are no longer as good
at delivering technological progress. In the language that
Deborah Wince-Smith will use, we generate ideas, but they don't
cross the valley of death into the realm where they deliver
practical benefit.
If I could have the next slide.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The story I want to tell of our history is slightly
different. We started out, as a nation, as a follower in both
science and in technology, but because of the Morrill Act and
our investment in the land-grant institutions, including the
institution that Ranking Member Womack mentioned in Arkansas--
because of our investment in the land-grant universities, we
moved into a position of technological dominance prior to World
War II.
Then, after World War II, we achieved a huge transformation
where we became the world's leading producer of basic
scientific research. But this was a new endeavor for us. We
were not a nation that produced Nobel Prize-quality research
before World War II. And, unfortunately, in this transition, we
lost the strengths, we didn't continue to invest in the
strengths of our system that existed before.
Now, the extent of the problem that this leaves us with,
whether you believe in the first narrative or the second one,
was brought home to me by a conversation with Kari Stefansson,
who is the founder of deCODE genetics, the company that is
doing population-scale genetics in Iceland and which was the
leader in its testing program to combat the pandemic.
Kari said to me, Paul, all of the insights, all of the
science that we rely on and every country in the world relies
on was developed in U.S. universities, but why is it that your
nation is not taking the same advantage of those developments?
This suggests that our problem with technology and transfer
of knowledge is not exclusively one that exists in the business
sector; we see it in the government sector as well. And we need
to invest in the mechanisms that once worked, that made us a
powerhouse in technological progression, and could do so again.
Thank you.
[The prepared statement of Paul Romer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. Thank you.
I would now recognize the Honorable Wince-Smith for five
minutes.
Please unmute your mic and proceed.
STATEMENT OF THE HON. DEBORAH WINCE-SMITH
Ms. Wince-Smith. Chairman Yarmuth, Ranking Member Womack,
and Members of the Committee, thank you for the opportunity to
appear before you today.
I have the privilege of representing the Council on
Competitiveness, a nonpartisan leadership organization of CEOs,
university presidents, labor leaders, and national laboratory
directors, all committed to advancing U.S. competitiveness in
the global economy and raising the standard of living for all
Americans through increases in productivity and economic
growth.
Since 1986, the Council has championed the federal role in
innovation and advocated for measures that could generate
greater returns to the nation from its public investments in
research and development, in people, and in infrastructure.
As we have heard, for 75 years, the federal government has
fulfilled the vision articulated in Vannevar Bush's seminal
report, ``Science: The Endless Frontier,'' sowing seeds for the
innovation-and technology-driven productivity gains that
propelled our country to global economic leadership, generated
unprecedented wealth for Americans, drove social progress, and
ensured our national security.
However, two decades into the 21st century, the global
environment for leveraging science and technology for inclusive
economic gain, social benefit, and national security has
fundamentally changed, and our nation needs a new game plan.
First, we compete in a multipolar science and technology
world. In 1960, the U.S. dominated technology due to the size
of our investment, 69 percent of global R&D. The U.S. share has
dropped to 28 percent, and China's has risen to 26 percent.
Second, great revolutions in science and technology, such
as biotech, AI, and nanotechnology, coupled to the new phase of
the digital revolution, are colliding and converging
simultaneously. These technologies are reshaping the global
economy, society, and all dimensions of our lives as we speak.
They will disrupt industries, markets, and jobs. And they pose
profound implications for our country's economic prowess and
national-security capabilities.
Third, China has set its sight on world leadership in these
technologies. It has launched a full-force, richly funded,
licit and illicit campaign to achieve this goal, pursuing
aggressive plans to dominate every single strategic critical
technology at the heart of President Xi's ``civil-military
fusion'' imperative.
In response, the Council on Competitiveness has convened a
multiyear national Commission on Innovation and Competitive
Frontiers, comprising more than 60 CEOs, university presidents,
labor leaders, and national laboratories, led by our
distinguished board of directors. Over the past few months,
this commission community has deliberated and identified nine
priorities that the commission will initially address, five of
which are directly linked to the federal role in research and
development.
One, our economic and military leadership depends on
securing capabilities in these strategic critical technologies.
This includes preserving and leveraging, in partnership with
industry, the world-class assets of our universities, our
national laboratories, and ensuring our entrepreneurial
emerging companies can move from startup to scale-up--all part
of this national innovation ecosystem. And we must also launch
a new era of strategic partnerships with trusted allies around
the globe.
The federal investment in R&D as a percentage of gross
domestic product has been on steady decline. And we have
already all spoken about this. So I ask you, Mr. Chairman and
Mr. Ranking Member, is this a new Sputnik moment?
Two, we must strengthen U.S. resiliency. The COVID-19
crisis and virus economy has exposed key weaknesses, such as
fragile supply chains that focus more on cost and efficiency
and not on resiliency and security. And we have a lack of
control over the production and distribution of items critical
to the health and security of our citizens. We must harness
advanced technologies, from digital systems to drones, to make
every level of our society and systems more resilient, more
adaptive, and more cyber-secure.
Three, the proverbial valley of death continues to be a
major bottleneck in the U.S. innovation system and a barrier to
accelerating the rate and scope of U.S. innovation, as it
prevents many innovations, as I have said, from startup to
scale-up. Many never reach the marketplace. They are vulnerable
to foreign acquisition and bankruptcy. China is shopping now,
with an unlimited checkbook, for valuable IP, know-how, and
people.
Four, we must amplify university and national lab
technology transfer, commercialization, and industrial
engagements and, to move beyond bureaucratic barriers, ensure
that missions and cultures align with this imperative.
And, five, too many citizens and communities are
disconnected from the nation's innovation enterprise, with just
10 states accounting for two-thirds of R&D spending, U.S. high-
tech hubs just on the coast. And we need to see a diversity of
venture capital funding, as well as ensuring that women and
minorities engage in this system.
I look forward, Mr. Chairman and Committee, for your
questions and to sharing the results of the first stage of our
innovation imperative when we release this in December this
year.
[The prepared statement of Deborah Wince-Smith follows:]
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Chairman Yarmuth. Thank you very much for your testimony.
I now recognize Dr. Shih for five minutes.
Please unmute your mic and proceed.
STATEMENT OF WILLY SHIH, PH.D.
Dr. Shih. Chairman Yarmuth, Ranking Member Womack, Members
of the Committee, thank you for the opportunity to address you
today.
Though I teach at the Harvard Business School, I am
actually a scientist by training, with two degrees from MIT and
a Ph.D. in chemistry from the University of California,
Berkeley.
I have been a beneficiary of our country's investments in
basic scientific research and engineering post-Sputnik, a time
when our heroes were scientists like Jonas Salk or Richard
Feynman. I still remember watching the first Telstar
transatlantic transmission and the Apollo launches.
And I tip my hat to Dr. Parikh. AAAS's Science magazine is
still one of my go-to sources.
Post-World-War-II was marked by great public faith in
science. After all, science had won the war, and it wasn't just
the atom bomb; it was penicillin, antibiotics, radar, digital
computer, the whole field of operations research, and many
more. And investments in basic science research led to
unquestioned American leadership for decades. And the
spillovers into industry and from industry were spectacular. We
remember Bell Labs, IBM Research, Fairchild Semiconductor, RCA
Sarnoff, Rockwell Science Center, a host of others.
Other countries followed America's lead and invested in
basic research because they, too, understood the linkage to
innovation, technological, and economic progress. Chinese
investments are particularly impressive, but they have been
part of a roadmap laid out in the mid-1980's to develop the
capabilities needed in a modern economy.
Funding for basic research, particularly at universities,
is all about building capabilities. It is about training future
generations of researchers. As these researchers flow into
industry, they bring those capabilities with them.
It is hard to quantify benefits attached to specific lines
of research or projects. Rather, it is the ability to recognize
future problems and opportunities. In the 1870's, Louis Pasteur
thought he was solving problems with fermentation in the French
wine industry, but along the way he invented the modern field
of bacteriology. GE Research was initially focused on improving
the filaments in lightbulbs but ended up pioneering high-vacuum
technology and inventing the vacuum tube, which led to the
groundwork for radio and television.
The pandemic has exposed the value of capabilities in our
country. The funding for the human genome program and
fundamental life sciences research have built unrivaled
capabilities in genomics and biotechnology. The U.S. scientific
community has led work on vaccines and therapies for COVID-19.
We do this better than any other country in the world, and it
is because we made those long-term investments in basic
sciences in the preceding decades.
But the pandemic has also expressed our nation's reliance
on other parts of the world. With this has come the realization
we have let our capabilities diffuse away in a wide range of
sectors, like semiconductors, electronics, machine tools, and
countless others.
So what should we do now? I would like to see more funding
for basic research.
I have talked to people on both sides of the aisle who I
think agree with that, but let me tell you another story. My
late father, when I was growing up, was an economist. And I
used to watch him come home from work frustrated, and I told
myself, ``I am never going to do that. I am going to go into
sciences and engineering,'' OK, which is of course what I did.
But you know what? I always ended up working on economic
problems because I found out, if you didn't get the economics
right, it didn't matter how great the science and engineering
were. You had to look at the whole picture.
Basic research needs stable funding that can have patience
for long-term results. Since the majority of Federal R&D
funding is discretionary spending, it is perennially at risk of
getting crowded out by mandatory spending on things like debt
service and entitlements.
When I was in high school and had my sights set on science
and engineering, the mandatory portion of the budget was 34
percent. It is closer to 70 percent now, as we have heard, and
we all know that is not going in the right direction.
So, for sure, more funding for basic research. At the same
time, I would love to see incentives to encourage firms to
conduct more research, especially applied and translational
research. I see great opportunities in manufacturing process
innovations as well, things like continuous flow reactors,
biomanufacturing, things that would enable American firms to
leapfrog competitors.
We could encourage and even fund precompetitive R&D
collaborations, where partners work together on a common
technology platform with which they intend to independently
develop differentiated products downstream. And I included that
in my written testimony.
Finally, I have been thinking a lot about another issue.
Most prescriptions for rebuilding American competitiveness
focus on the supply side, incenting firms to move production to
or back to the U.S. I think we need to focus, as well, on the
demand side, growing domestic demand in early markets for new
technologies as a way of incenting the growth of local supply.
We saw this in the 1960's with DoD and NASA, who bought 60
percent of all the ICs made, which really helped the American
semiconductor industry get started. We have seen this more
recently with NASA and DoD funding SpaceX, and that gives them
the cash-flow to really change the game.
Demand provides economic motivation to manufacturers, and
proximity to production is extremely valuable, OK? I think it
is also very important for people, because when you have demand
in a sector, then it drives students to go there for careers.
Basic science research is at the core of American global
leadership. It is why the best and the brightest want to come
here and work here. Let's ensure our continued leadership.
Thank you for giving me the opportunity to speak with you
today, and I am happy to take questions.
[The prepared statement of Willy Shih follows:]
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Chairman Yarmuth. Great. Thank you very much for your
testimony.
We will now begin our question-and-answer period.
As a reminder, Members may submit written questions to be
answered later in writing. Those questions and the witnesses'
answers will be made part of the formal hearing record. Any
Members wishing to submit questions for the record may do so by
sending them to the clerk electronically within seven days.
Chairman Yarmuth. Now we will begin questions and answers.
I will defer my questioning until the end.
I now recognize the gentleman from Massachusetts, the Vice
Chair of the Committee, Mr. Moulton, for five minutes.
Mr. Moulton. Good afternoon.
I want to thank all the witnesses for testifying but
especially the minority witness, Professor Willy Shih, who
spent a full semester asking me questions not that long ago in
business school. I only get five minutes, but what an honor it
is to have those five minutes indeed.
So thank you, Professor Shih, for being here.
And a special thanks to my friend and fellow veteran, the
Ranking Member, Steve Womack, for inviting Dr. Shih, for
talking about the
[inaudible] in your opening remarks, and for working to
come to bipartisan conclusions about the way forward.
And, Professor Shih, I will add, thank you for being such a
great professor in my first year of business school that I
asked you to advise our independent study in my second year.
We did a financial analysis of the California High-Speed
Rail Program. We came to two significant conclusions. One, the
project is going to cost a lot more than California says, a
conclusion that was borne out soon thereafter when the state
raised their cost estimates. And, two, despite the higher
costs, it still is a much better investment, at lower cost and
higher returns, than the alternative of expanding airports and
highways to meet the transportation demand of the next 50
years.
In other words, if you do a cost analysis, the project
looks expensive, but if you do a cost comparison, it presents a
very different conclusion. And if you do a cost-benefit
analysis, as we should be doing in government budgeting, it
becomes a no-brainer.
Professor Shih, you have often said that investing in rail
is smart because rail is so efficient. And we will get to
investing in 21st-century infrastructure versus 1950's
infrastructure in a minute, but, first, I want to amplify
Chairman Yarmuth's opening remarks with this graph, which
specifically shows than federally funded R&D as a share of the
U.S.'s GDP is declining.
Sam, please display the second slide in my deck, titled
``Federal R&D as a Share of GDP.''
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Here in Massachusetts, where Professor Shih and I both
live, we are quite proud of our biotech industry, the pioneers
in creating vaccines and treatments for COVID-19.
Professor Shih, is there any connection between the success
of a company like, say, Moderna and the graph that we see here?
Dr. Shih. Well, absolutely. I mean, I think Moderna is kind
of a textbook example, and not only Moderna but a lot of the
other U.S. companies that are actively working on this.
What we have seen is a pivot, and what it reflects is the
capabilities that have been built up by these very prescient
investments in the human genome program going back to the late
1980's, early 1990's and the development of this cluster around
Massachusetts and New England.
So it is directly a consequence of the capability
development in people, I should add, people who have been
trained as researchers. And then, when we had this crisis,
those people pivoted from whatever they were doing.
The most gratifying thing I have seen this in this COVID-19
crisis is scientists--anybody who is anywhere close to viral
infection and vaccines or pharmacology or, you know, any of the
life sciences, we have seen this tremendous pivot, everybody
working on an angle of this disease. And it is because we built
those capabilities.
And it is just like I was talking about with Louis Pasteur
and, you know, what kind of capabilities, so you can recognize,
when problems come up, different ways of responding to them. So
I think it is directly linked.
Mr. Moulton. Great.
Sam, if you could just switch the display back to me.
So, Professor Shih, the next thing I would like you to
comment on is whether or not it is a problem for America, a
competitive threat to our leadership, that China is investing
much more in government funding in biotech than we are here in
the United States.
And, Sam, if you would just please display the third slide
in my deck, titled ``High-Speed Rail By Country.''
This same story that we are showing here about high-speed
rail could be told for broadband, green technology, or carbon-
free nuclear energy.
Sam, you can bring the display back to me.
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But, Professor Shih, it seems that we are falling behind
across the board.
And none of these issues should be partisan. I mean, our
conclusions on California high-speed rail were not geared
toward a Democratic position or Republican position; they were
just math. In fact, I never had any idea about your political
proclivities coming into this, Dr. Shih.
But could you talk about what future-focused investments in
infrastructure do to create a market for domestic
manufacturing?
Dr. Shih. Well, one of the things I have been thinking
about is, just as we saw NASA and DoD created demand for
integrated circuits in the 1960's, OK--and, frankly, that is
what got the whole integrated circuit industry firms like Texas
Instruments off the ground, right? Because there was the demand
for that. OK.
And I have seen this in China in many areas, where what
they do is they generate demand for a product, and, first of
all, what it does is, firms sense opportunity, so they go
invest. They go invest in plants and equipment, they invest in
R&D. By the way, they compete with each other, OK? But having
the demand, bright young people go into it because they see
career prospects, OK? So they go into it.
One of the things that my recent research on China has
really highlighted is, it is much less of a top-down command-
and-control-type model for innovation as well, OK? Because what
you see is--you know, Beijing may set some directions. I
mentioned they set this, you know, science and technology
leadership policy back in 1986. It was called the 863 Program
because it was established in March 1986. That is when they
laid out this roadmap for capability development. But then you
have regions and provinces and cities who say, ``OK, you know,
government says this. We are going to go invest in these
areas.'' And they compete with each other, OK?
So it has a much more market quality than a lot of people
would recognize, in terms of the results they produce. You get
a lot of waste, but we see the results in terms of what they
have done.
The high-speed rail investment in China is a really
interesting example. They have used it, as much because they
want it for transportation, to modernize transportation, it is
actually a tool for economic development, OK?
I happened to visit the world's most advanced flat-panel
factory in Hefei, China, two years ago, and I took the high-
speed rail over from Shanghai. And I asked them, I was like,
``Why is this factory here?'' OK. Now, that is a much longer
story. But the fact that you had high-speed rail meant the
engineers were commuting from Beijing or commuting from
Shanghai, right?
And so there is also an economic-development aspect of
this. So it is an interesting combination of things which has
led to their leadership, but it is very much driven by this
demand side.
Mr. Moulton. Great.
Thank you very much, Mr. Chairman.
Chairman Yarmuth. With that, the gentleman's time has
expired.
I now recognize the Ranking Member, the gentleman from
Arkansas, Mr. Womack, for 10 minutes.
Mr. Womack. And I thank the Chairman again for hosting this
all-important discussion about research and development,
particularly in the pandemic phenomenon of where we find
ourselves today.
Real quickly, Dr. Shih, you had mentioned in your remarks
and picked up on the fact that I gave a lot of attention in my
opening remarks to the fact that the deficits and the debt are
becoming a chronic problem in our country. And I spoke
specifically about the fact of what I call this ``big
squeeze,'' the fact that the mandatory side of our balance
sheet is continuously squeezing that discretionary side, where
most of this research and development funding, the lion's share
of it, comes from.
And so, if you just kind of project this thing out a few
more years and if indeed we don't find a solution for
throttling back the growth of the mandatory programs, this
situation is not going to get better. Indeed, it is going get a
lot worse. Would you agree?
Dr. Shih. Well, that is why I made that comment.
Now, this is not a political persuasion statement. This is
just kind of, like, how I grew up. Like, I don't like to borrow
money and stuff like that. OK. But set that aside.
When I was in business, I found that this problem is
essentially the fixed-cost/variable-cost part of your budgeting
process, OK? And what happens is, when times get tight,
everybody cuts all the variable costs because those are the
things they can do. OK. But, in essence, what you do is you
mortgage your future when you do that. All right?
So, you know, I understand the importance of the
mandatories. OK. But we look at where there is going, and, you
know, I am relying on our leaders, you know, you guys, to be
thoughtful about how do we manage this problem. Right? Because
we can project where it goes, and, you know, the money has to
come from somewhere.
Mr. Womack. So I want to go to Ms. Wince-Smith for just a
moment on the same subject.
It just is inescapable to me that, if you are not able--it
is one thing to defer the maintenance of a road. With increased
costs of asphalt, concrete, this sort of thing, labor, yes, if
you defer it, it is probably going to become more expensive.
But can you talk, from the area of the Council on
Competitiveness, delays or deferral of investing in key
research? It is not the same as just deferring maintenance on a
piece of infrastructure, is it not?
Ms. Wince-Smith. Absolutely not.
And let me just say that, in terms of where our investment
needs to be in research and development, the basic research has
been tremendously important. It will continue to be. It has
given us the seed core for the future. But we do have to ramp
up, in a major way, our investments in these platform critical
technologies that I talked about in my opening statement.
So let me give you an example. We can do a lot of basic
research in next-generation microelectronics as we reach the
end of Moore's Law, but if we don't have a capability to bring
together the industrial infrastructure, the suppliers, the
ecosystem, and to manufacture at scale here in the United
States, we will risk the underpinning for basically the future
economy to China. It is a huge issue.
We did this very strategically back when SEMATECH was
created. It had DoD investment matched with private-sector, and
it changed the game. But we also linked that investment to
enforcing our trade laws with Japan and having a regulatory
system that also unleashed private-sector capital.
So what I would like to say here is, we have to connect the
pieces we have. That is part of the new game plan. We can't
just rely on individual investigators and universities. We
can't just rely on missions in the national labs; startup
companies and big companies now who aren't investing. We have
to put all this together in a very strategic way. And the
federal government has a huge leadership role to play in
setting this strategy in partnership with the private sector.
So if I were asked, what is the one thing we could not
afford to lose going forward? It is the leadership in not just
the research but in the manufacturing at scale here in the
United States of the next-generation microelectronics.
Mr. Womack. So one other question for you, and that is:
what is the Council's idea or position or thought on the talent
demand?
I mean, if you are not investing in the kind of research
and development that we all know that we need to be doing, what
does that say to the future scientists and engineers that are
coming through that pipeline right now about their future
career choices?
Ms. Wince-Smith. We have to invest in the development of
the talent. We have to invest in it starting, you know, in the
K-12, all the way up to the highest end of the research
enterprise. And we also have to make this far more inclusive.
We need to use all of our people in a way that they can
contribute to this innovation ecosystem.
So it is very concerning--I mean, I am a woman, of course.
It is very concerning that, still, after many years and many
programs, we don't see women in the leadership roles in the
science and technology enterprise. And, of course, we have, you
know, racial issues, as well, in underrepresentation.
So that is a huge issue, and we have to invest. Our
departments and science agencies need to invest.
One place where I will say it is being done very, very well
is in the military. And I have the fortune to have two sons who
came out of the Naval Academy, and I witnessed firsthand how
they mentored and developed talent representing our
demographics and did it in a way that virtually all of the
midshipmen and--women graduate with full engineering degrees.
And they make sure that happens.
We have to do that throughout our country now, and it has
to be a very high priority. Because without the people, we
don't have anything to move forward with.
Mr. Womack. Yes. Thank you.
Dr. Shih, back to you for just a minute. It goes without
saying that research and development and manufacturing kind of
go hand-in-hand. And we've seen this in kind of an unfortunate
sort of way during the COVID-19 phenomenon with the ability to
produce ventilators, N95 masks, that whole broad range of PPE,
basic stuff that you should be prepared to have or be able to
create in an emergency that we have not been able to.
Why does a country with such vast resources, such great
talent, such amazing innovation struggle to keep the innovation
side and the manufacturing side on the same side?
Dr. Shih. I think it traces back to demand and, in
particular, for PPE and ventilators and things like that,
stable demand. OK? And what we ended up having is a lot of
commoditization pressure from low-cost suppliers in China in
particular. OK?
And I was just talking to an Indian pharmaceutical company,
because I am looking at the supply chain for pharmaceuticals,
because, you know, that was exposed during this pandemic as
well. And they said, ``Well, we used to be vertically
integrated, but then we had the emergence of all these Chinese
suppliers who had much lower costs. And if you don't buy your
active pharmaceutical ingredients from them, you are not
competitive.'' So they just kind of got squeezed out from that.
We see that, for example, in steel. I never understood why
steel could cost 60 percent as much to manufacture in China,
or, you know, the XFLB factory price for steel in China could
be 60 percent of what it is in the U.S., when you are buying
iron ore at world market prices and coking coal at world market
prices and energy at world market prices. OK. But some firms
have subsidies.
But then the consequence of that, for example, is, if you
want to buy a steel shipping container, there are only two
manufacturers left in the world, and they are both in China.
OK? And it is a consequence of those kind of platform things,
which, because they are cost-driven and people won't pay a
premium for assured supply, we don't have them in the U.S. OK?
So I would say, you know, we had PPE makers in the U.S. And
if we gave them stable demand contracts, that is fine, they
would still be around. OK. But, you know, we penalize companies
if they have underutilized capacity or they are higher-cost.
Right? So it is very hard from a business standpoint to stay in
those businesses.
Mr. Womack. Yes. Chairman, again, thank you for bringing
such an interesting panel, a very qualified panel, to our
Budget Committee today. And I am going to yield back the
balance of my time and head pretty soon to a Defense markup.
Thank you so much.
Chairman Yarmuth. All right. I thank the Ranking Member.
His time has expired.
And I now recognize the gentleman from Pennsylvania, Mr.
Boyle, for five minutes.
Mr. Boyle. Thank you, Mr. Chairman.
I also want to thank all the witnesses. I enjoyed listening
as well as, before this, reading your written testimony.
Just a quick plug. Two speakers before talked about the
investments in high-speed rail. Given that I represent
Philadelphia that sits smack-dab in the middle of the Northeast
Corridor and am a frequent user of Amtrak myself, I want to
echo, any investments that we could make in the United States
to go toward high-speed rail and finally join our competitors
in Europe and Asia in an area where we greatly lack.
I can tell you how important it is here, locally, to our
economy, so much so that, during my time in Congress, it was
always an issue that brought together Members of Congress from
both the city as well as the suburbs, Democratic and Republican
colleagues.
But what I wanted to focus on was manufacturing.
And one of the misperceptions about our economy and
manufacturing is the notion that caught on in recent decades
that America doesn't make anything anymore and that we had to
choose, essentially, this false dichotomy between continuing to
be a high-GDP country on the one hand and making things on the
other. Germany completely proves that fallacy. Manufacturing
makes up a relatively high percentage of that nation's GDP and
much higher, indeed, than ours.
I also personally just can't stand the notion that some
people have about manufacturing when they seem to picture a
19th-century or early-20th-century factory floor. Anytime I am
touring a company locally that is involved in manufacturing, I
am always blown away by the technology that is often used in
what is considered, quote/unquote, ``blue-collar'' work.
So it is pretty clear to me, self-evident just even through
those tours, the link between research and development and
innovation on the one hand and the present as well as the
future of manufacturing.
So for Ms. Wince-Smith or Professor Shih, I was wondering
if you could speak to that, about the link between the
investments that we make in R&D and how we can see that product
in terms of manufacturing here in the United States
domestically.
Ms. Wince-Smith. Thank you, Congressman.
Let me just start by saying that, in my career, some 25
years ago, I worked on the whole imperative for U.S. leadership
and manufacturing. And this is when the Japanese were basically
in a fierce trade war with the U.S. on many high-tech----
Mr. Boyle. Right.
Ms. Wince-Smith. And I remember one of the Japanese leaders
from MITI coming and saying, ``You know, we are worried about
manufacturing. It is not dirty, dumb, dangerous, and
disappearing.''
Twenty-five years later, the Council on Competitiveness has
articulated in much work that manufacturing is smart, safe,
sustainable, and it is surging. And if we don't link the
innovation with the manufacturing, we will lose the next
generation of innovation.
So I have to share the example of flat-panel displays.
Professor Shih mentioned that factory in China. When I was
Assistant Secretary at Commerce, we had invented in the United
States, including a path from Kodak, every single flat-panel
display technology, from liquid crystals, planar, field
emitters, the whole thing. We had a plethora of startup
companies, and none of them were able to manufacture once they
had to buildup a factory at scale because of our capital cost
structure.
And this is why we have to bring these issues into this
discussion. We have to have long-term, patient capital that is
going to go into scale-up of manufacturing.
A123 batteries is a perfect example. Lots of federal
investment, major research. Ended up in bankruptcy. And for
just a few-million-dollars' bid, over Johnson Controls, China
got all the intellectual property, the people, everything.
Lock, stock, and barrel, it is in China.
So one thing I do want to suggest as a potential major
initiative for the country--I am sure it will be part of the
Council's national innovation strategy--we do need a national
infrastructure bank. We do need to have a different financing
path going forward. Today, a venture capitalist firm would
never invest in Intel. They won't invest in the deep science
manufacturing of the future.
And so this is an issue where we have to work on financing,
we have to work on tax incentives.
Just one last little factoid. We have trillions of dollars
sitting in hedge funds in Greenwich, Connecticut. They are not
investing in any of the things we are talking about here. But
we could create incentives, new capital gains, holdings, all
sorts of things, to unleash that capital to invest in all the
things that we are talking about in this hearing. And if we
don't, I think we are giving away, you know, our future and
standard of living to our next generation.
Mr. Boyle. Thank you.
Chairman Yarmuth. OK. The gentleman's time has expired.
I now recognize the gentleman from Georgia, Mr. Woodall,
for five minutes.
Mr. Woodall. Thank you, Mr. Chairman, and thank you for
holding the hearing. We could do an entire hearing just on what
Deborah Wince-Smith raised regarding the vulnerability of IP to
foreign acquisition. So much to unpack in here, and I am
grateful to you for doing it.
First, Mr. Shih, I want thank you for the years of
investment you put into Mr. Moulton. We are all the
beneficiaries of your toiling in that vineyard. And I thank you
for doing the best you could with what you had to work with in
that environment. America thanks you for that.
Dr. Romer, I wanted to go first to your chart about basic
science versus technological progress. It is not lost on me
that almost every quote in your various testimoneys today on
what percent of GDP was going to R&D was different. We
categorize these things in different ways. But you clearly are
expressing a need to see us move from basic science preeminence
back into technological progress preeminence as well.
Does that involve simply additional dollars, as everyone
has talked about, or does that also involve reprioritizing the
dollars that are going out the door from the federal government
today?
Dr. Romer. So I think a good place to start here is to look
back at what worked in the past. So what made us a worldwide
power in petrochemicals? It was universities, who created
chemical engineering as an entirely new field of study, new
schools, a new type of graduate degree. And it was the people
produced by universities who then went out and made us a
powerhouse.
So I am echoing something that Dr. Shih said, which is that
what really matters here are people. And we have forgotten
this. We tend to think of the government's role as to fund
papers or patents, and that is what universities produce. But,
in the past, where universities were singularly effective in
contributing to technological progress was when we rewarded
them for producing people who could then go out and raise
standards of living, be more productive workers.
One way to recover this would be to go back to what worked
in the National Defense Education Act and have funds that are
directly allocated to students to pursue courses of graduate
education and to go one step further and to say the students
are the ones who decide what course of study they will pursue.
Unfortunately, the money that we have has been basically
captured by professors doing basic research, so all the support
for graduate students goes to professors, who hire research
assistants and support graduate students through their grants
but to work on the things the professors want to work on. And
it means that our system doesn't respond when a bunch of young
people see an opportunity that they would like to get trained
in and like to go work on.
So I think it is not just more money, but it is spending it
in different ways and, in particular, betting on and counting
on students, and also not relying on the same degree of
centralization at the federal level. Go back to what worked
before, which was to count on the competition between 50
universities in 50 states that were all competing to do a
better job.
Mr. Woodall. Well, let's talk about that for a second. Dr.
Parikh has a chart, a graph, in his presentation that looks at
investment in basic science. And while the government
investment over the last 40 years has fallen in half, industry
investment has doubled. And so, as a percent of GDP across our
nation, unlike a centralized economy like China, we are still
expanding. We are just expanding in different ways.
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Dr. Parikh, when you included that chart, are those things
created equal? Do we get more of the focus that Dr. Romer was
talking about on people and applied sciences when the industry
is making those investments? Help me to understand whether that
is good news or bad news as you laid it out.
Dr. Parikh. Yes. It is good news and bad news.
The good news is that industry is very good at development,
and when it sees an opportunity to go from a discovery to a
product, it does a very good job of finding capital and getting
there.
The challenge becomes that people part. There is not as
much development of people whenever the development funding is
coming from industry. Those people are created in academia;
they are created in these graduate programs. And they are the
biggest asset.
It is going to take people from everywhere to get cures for
COVID, to get cures for cancers. And when we are limited to
just development, it breeds just a certain type of person,
whether it is the engineer in that one lane or it is the
molecular biologist who knows just that one area. It doesn't
give us the breadth of backgrounds that really create the
innovation and the amazing advances that we see.
Mr. Woodall. All right.
OK. Mr. Chairman, thank you for the hearing. I yield back.
Chairman Yarmuth. I appreciate that.
The gentleman's time has expired.
I now recognize the gentleman from North Carolina, Mr.
Price, for five minutes.
Mr. Price. Thank you, Mr. Chairman.
And thanks to all of our witnesses for a very interesting
and productive hearing.
I want to maybe start with Dr. Parikh but ask any of you to
chime in who wish to. My broad topic, probably what I would
have asked before this week, would still involve questions of
personnel, the flow of students and post-docs and research
fellows from all over the world, the intersection of
immigration policy and the research enterprise in this country.
But because it is occurring when it does, this has the feel
of another national crisis and certainly a political
controversy. I know I have heard from every institution of
higher education in my district, research institutions, who are
in a near-panic over this: apparently, the intention of the
Trump Administration to not let the immigrant students and
researchers stay here whose universities, this fall, go to
completely--or have to stick completely with online education,
which, of course, is a big unknown and certainly throws a lot
of questions into how they are going to be able to operate, and
not just what the fate of the students is, but what also the
universities are to do about this.
So I want to ask you about that incident, this problem in
particular. And, of course, it is in the context of a larger
question about how immigration policy and the research
enterprise, the vitality of the research enterprise in this
country, intersect.
I come, as some of you may know, from a very research-rich
environment in North Carolina, the Research Triangle area.
Higher education and research are our stock in trade. And along
with that we have a very diverse and impressive immigrant
population, people who come in for training and research
efforts and then many of whom stay. And so this announcement
has sent waves of apprehension and, as I said, near-panic
through the higher-education community.
It seems to me that the decision about opening this fall,
this is a very, very difficult decision. I think it is going to
be. And as the cases spike, it looks worse. I can't imagine
that we are helped by adding this element to the decision, to
make it more complex by adding in the element of what the
effect on international students is, and with the effect on
international students, the effect of the projects and the
enterprises that they are a part of in the university.
So I would appreciate your comments on this, the effects
that the administration policy would possibly have. I am sure
you are in touch with institutions; you are hearing, just like
I am, what the effects might be. And then any broader
reflections on the intersection of immigration policy and the
research enterprise I would be interested in as well.
Dr. Parikh, I would like to start with you, but I would be
happy to hear from all of our witnesses.
Dr. Parikh. Thank you, Congressman.
So just to start specifically with the ICE policy announced
yesterday, we are very concerned--I am very concerned. Graduate
students from around the world populate our laboratories, and,
frankly, even though they are students, they are conducting a
lot of our research and a lot of our basic research. And so the
fact that we are implementing a policy where we might not have
them in the laboratory or participating in the research is
just--it is bad for America.
Second, it is cruel to the students. These are students who
might be here already who might have to go back. It is cruel,
and it is just not the right thing to do.
To reflect on immigration policy, I am a second-generation
American, and I have the privilege of leading the AAAS. My
parents came from India to rural North Carolina, Hickory, North
Carolina, you know, in 1968. And that is a story that you will
hear from thousands of scientists around this country. And, you
know, as Ronald Reagan said, you know, the United states is the
one place where you can come from all over and you can be an
American. And scientists have proven that.
And 38 percent of the Nobel Prizes awarded to Americans
since 2000 have gone to immigrants. You know, the population of
post-docs in America, that population who are working in
artificial intelligence, who are working on biomedical, who are
working on physics, that population is one-third immigrants.
It is self-defeating to create a policy that doesn't
continue the fact that America is a crossroads of science.
Dr. Romer. If I could just comment on this----
Chairman Yarmuth. OK. Go ahead. Briefly, if you can.
Dr. Romer. Yep.
So we are dependent on foreign talent to make our
university research system run. So if you cutoff the supply
when you are dependent on a foreign source, you are going to
have trouble.
But we should step back and ask, why is it that it is not
our goal to be fully self-sufficient in talent, if need be? We
benefit a lot from flows of people across borders, but why are
we so short on American talent in our graduate programs?
And I think the reality is that we have not made it
attractive enough for bright people from the United States to
go on in graduate education. And the right kind of fellowship
program that puts students in charge in designing and pursuing
a graduate career could substantially increase the number of
bright U.S. citizens who want to be part of this system.
Chairman Yarmuth. Thank you.
Mr. Price. Thank you very much.
Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Ohio, Mr. Johnson, for
five minutes.
Mr. Johnson. Well, thank you, Mr. Chairman, and I
appreciate you having this hearing today. It is an important
topic.
You know, as a former chief information officer, I
understand the importance of research and development and the
critical role that the federal government and the private
sector play when it comes to fueling American innovation and
economic growth.
Thanks to various sectors funding and performing R&D,
including the federal government, businesses, state
governments, higher-education institutions, and nonprofit
organizations, the United States has been for a long time a
leader, a global leader, in R&D efforts for decades.
And we continue to fund the majority of annual global R&D
efforts. In fact, in 2018, the United States spent about $580
billion on R&D, more than any other in the Organization for
Economic Cooperation and Development, including China. Two
sectors, businesses and the federal government, have, together,
accounted for more than 90 percent of U.S. R&D funding since
1953.
And as we recognize the importance of federal investments
in R&D, Congress must do more to remove any barriers that may
discourage the private sector from taking the lead on product
development.
And this, you know, COVID-19 pandemic has exposed our
nation's reliance on other countries to supply the production
of critical supplies like PPE and other things, and it has
highlighted the importance of creating products, supply chains,
and intellectual capital right here at home.
It is time to fully unleash Americans' spirit of
innovation, which is why I recently introduced the Advancing
Tech Startups Act to promote a national strategy for
encouraging more tech-focused startups and small businesses in
all parts of the United States, not just out west in Silicon
Valley. This legislation would direct the Commerce Department
to identify any federal rules or regulations acting as barriers
to creation, development, and growth of technology startup
companies.
You know, America's innovation base starts with R&D, and
Congress should continue supporting federal investments in
basic research and early stage applied research while
simultaneously removing any barriers that may hinder the
private sector's role in product development.
So, Dr. Shih, according to the Congressional Budget Office,
the private sector has been the primary source of funds for R&D
in the United States since 1980. Given that the private sector
has taken over a growing number of our nation's R&D needs over
time, what is the proper role of the federal government, in
your view, in research and development?
Dr. Shih. I think the proper role of the federal government
is to fund risky, frontier research which is beyond the
capabilities of private firms to necessarily recognize a
return. OK? And, historically, that is why you think of that
kind of basic science, basic research as a public good, right?
And the country has done this. We have done this in terms
of audacious bets. I point to DARPA as a great example of
funding audacious bets. You know, today, we see the private
sector investing a lot in autonomous driving. Well, that was
because DARPA did the proof of concept, the risky first steps,
back in the early 2000's, 10 years before it really became as
popular as it is now.
So I see the role of the federal government is really that
frontier, risky stuff where you don't have the guaranteed
results.
Mr. Johnson. OK.
Well, let's flip the coin in the other direction then. In
your opinion, are there any federal barriers that have hindered
or could hinder future R&D efforts? In other words, are there
places where it would be better if the federal government
stepped aside rather than getting into the mix?
Dr. Shih. Well, you know, I think, you know, for me--and a
number of other speakers have talked about this--the importance
of developing capabilities in people, OK, and that talent
pipeline, right? We see the federal government now really
impacting that talent pipeline.
I am a student of history, and I go back to, you know, in
the 1910's, if you wanted a graduate education, you had to go
to Germany, OK? Even the early 1920's, if you wanted a graduate
education, you would complete your work at one of the great
land-grant--I am a great fan of the Morrill Act and the land-
grant colleges. OK. But if you wanted a graduate education, you
went to Germany.
OK. But what happened in the 1930's? The government there
destroyed what they had. OK. And we had the presence of mind to
go scoop up a lot of those people, right?
So that would be one area where I have a lot of concerns,
actually, because talent is what this is all about.
Mr. Johnson. OK. Well, thanks.
We could talk about this all day. I have got a lot of
additional thoughts, but my time has expired.
Mr. Chairman, I yield back.
Chairman Yarmuth. Thanks.
The gentleman's time has expired.
I now recognize the gentlewoman from Illinois, Ms.
Schakowsky, for five minutes.
Ms. Schakowsky. Thank you very much, Mr. Chairman.
I first just want to associate myself with the remarks of
David Price, talking about--I have universities in my district.
I have a very diverse district. And the fact that these
students, who are here contributing to the kind of R&D that we
need, are in danger now of having to leave our country, I think
it will be a tremendous loss to innovation if they are
expelled. I hope we change that.
I am absolutely a firm believer in the importance of
federal investment into research and development. Alongside
almost all of my colleagues, we voted for three COVID-19 relief
packages in March that provided approximately $7.5 billion for
the ``development of necessary countermeasures and vaccines.''
So we have put in a lot of money. And I wanted to make the
point of who put the money in. Taxpayers have invested heavily
in research and development in this fight against COVID-19. And
yet, despite this substantial investment of billions of
taxpayer dollars into COVID-19 vaccines, still we do not have
any commitment that they will be affordable and accessible and
available to all who need them.
And we are already seeing that there is that kind of
divide, the kind of price-gouging, I would say, when we have
Gilead, who produces Remdesivir, which is not even a cure--it
helps alleviate some of the symptoms--charging per system of--
it is, like, five, I don't know, it is five parts of a
treatment--$3,100-plus per treatment. Now, who is going to be
able to afford that? It is just, I think, unconscionable.
And then we saw the government give $1.6 billion to a
company who has never actually--Novavax--produced a drug, and
they now have the ability to get $1.6 billion.
So my view of this COVID issue is that, if we don't make
this available to everyone, it is like making it available to
no one. Because if it is not available here in this country and
to the rest of the world, we are all at risk of continuing,
forever, this virus. We have to make it absolutely accessible.
And I have introduced legislation called the MAP Act, H.R.
7296, that would actually fix that, along with Representatives
Doggett and DeLauro and DeFazio and Rooney--bipartisan. And
that bill would prevent price-gouging. It would prohibit
monopolies. It would ensure transparency on taxpayer-funded
drugs.
So I want to ask Dr. Parikh, given the necessity of us
finding a cure somewhere in the world, I want to ask you, do
you believe that we can and should ensure that the benefits of
the Federal R&D, like lifesaving drugs, aren't priced out of
reach?
Dr. Parikh. Thank you for the question.
I will start by saying I am a biochemist, not an economist.
But at the AAAS, the American Association for the Advancement
of Science, part of our mission is to advance science and serve
society. And so the scalability and accessibility of
developments in science is certainly important to us, and we
would want to see the public health of the nation, of all
people, benefit from our research investment.
Ms. Schakowsky. And isn't there some danger, if everybody
doesn't have it accessible, that we could all be still
susceptible to the virus?
Dr. Parikh. You certainly would like a vaccine to be as
broadly available as possible.
Ms. Schakowsky. I have two seconds, one second, I am out of
time, and I yield back.
Chairman Yarmuth. The gentlewoman yields back.
I now recognize the gentleman from Texas, Mr. Flores, for
five minutes.
Mr. Flores?
Is he here?
Make sure you are unmuted, Mr. Flores, if you are still on.
Well, in that case, if he is on, we will come back to him,
and I will yield five minutes to the gentleman from Tennessee,
Mr. Burchett.
Mr. Burchett. All right. Can you hear me, Mr. Chairman?
Chairman Yarmuth. I hear you, sir.
Mr. Burchett. Right on. Thank you, brother. Thank you for
allowing me to be here.
Is he back on?
Chairman Yarmuth. Mr. Flores, are you on?
Well, we will come back and get him if he is. Go ahead, Mr.
Burchett.
Mr. Burchett. If we need to, that is cool, Mr. Chairman. I
understand. I am the 435th most powerful person in Congress, so
I understand my role as a freshman. Thank you, brother.
Everybody knows east Tennessee is home to Oak Ridge
National Laboratory, and it is the largest of the Department of
Energy's 17 national laboratories. Over 2,900 ORNL employees
reside in my district that I represent. Of course, they
contribute very much to the rich tapestry of our area.
And I am concerned, I guess, more than anything else--and
maybe Dr. Parikh or Ms. Wince-Smith could answer this. Has the
overall federal response to COVID-19 adequately employed the
expertise and tools we have at our national laboratories?
Dr. Parikh. Thank you for the question----
Ms. Wince-Smith. on that----
Dr. Parikh. Oh, go ahead, Deborah.
Ms. Wince-Smith. I will jump on that, because--first of
all, thank you for everything you do to support Oak Ridge
National Laboratory and the whole ecosystem of universities and
companies that are there. It really is one of our national
treasures.
I had the opportunity to be there for the dedication of the
carbon composite manufacturing facility that is very, very
important in our manufacturing infrastructure.
I do think that one area where the national labs are
playing a huge role--and let's not forget that the whole
research that led to the Human Genome Project came out of work
at Los Alamos years ago.
But one area where they are really leading the way is
bringing together their huge, state-of-the-art, world-class
assets in high-performance computing, exoscale computing,
artificial intelligence, in both, you know, working with the
private sector in a new consortium to both understand
mitigation, transmutation, all the things that are happening to
the virus itself using these computational capabilities.
And also, of course, linking that to their tremendous
capabilities in materials research. And another lab that is
very much involved in this in the biopharmaceutical space is
Argonne National Lab.
So these laboratories have these very powerful user
facilities that universities and companies can come and use.
And no one, quite frankly, in the world has them on the scale
that we do.
Mr. Burchett. But are we utilizing--I appreciate all that.
I don't want to run out of time, and I want Dr. Parikh to be
able to answer that. Do you think we are utilizing that,
though?
Ms. Wince-Smith. I think we can use them more.
Mr. Burchett. OK. OK. I agree with you, ma'am.
And I appreciate Oak Ridge National Laboratory. If you go
there, you really should go by Big Ed's Pizza. I just want to
leave it at that. Make sure you go there.
Doc, thank you so much. We have a huge Indian community
here in Knoxville, in my area, and they are great folks. The
longest withstanding democracy in the world, and they make
Enfield motorcycles, so I am a big fan of India. And a lot of
their folks--you know, we laugh about it, but I have a big time
when they have the IndiaFest.
But go ahead. I wanted to hear what you had to say too,
brother.
Dr. Parikh. Yes.
Look, Oak Ridge National Lab is a national treasure. We
could be doing more. Even the materials science work going on,
in terms of making PPE in slightly different ways and making it
more quickly, is just fantastic work.
What it speaks to, though, is that the sciences, they all
cross-pollinate. Just because you are working in physics or you
are working in materials science doesn't mean that you are not
involved in healthcare and vice versa and the computing as
well.
So this really speaks to the fact that, you know, this
linear model of Vannevar Bush, it is outdated, because all
these things mesh together. And they mesh together in a
coordinated way, like with COVID, where we have basically
looked at this entire virus over the course of three months and
know everything about it at the atomic level.
All that has changed over the last 20 years, and we have to
update how we use the national labs and how we use basic
research.
Mr. Burchett. Well, what barriers do you all think that we
could eliminate at our laboratories so we can better get to the
answers?
Ms. Wince-Smith.
[Inaudible.]
Dr. Parikh. I think you are on mute, Deborah.
Ms. Wince-Smith. I was trying to say, the mission really
needs to include economic competitiveness and enhanced
collaboration with industry, in addition to the core national-
security and energy missions.
Dr. Parikh. And, just quickly, getting intellectual
property out of the laboratories should be as easy as possible,
particularly for things that aren't related to security and
national defense.
Mr. Burchett. OK. Thank you all so much.
Thank you, Mr. Chairman. And I see that I woke up Dan
Crenshaw, and I will anxiously wait for his rebuttal to
everything I have said today. But thanks. I really miss seeing
you guys in real life. I wish this thing would get over before
too long. But I really dig our relationship and our friendship,
so thank you all.
Chairman Yarmuth. I think we all do that. I thank the
gentleman.
His time has expired.
I now recognize the gentleman from Michigan, Mr. Kildee,
for five minutes.
Mr. Kildee. Well, thank you, Mr. Chairman, for holding this
really important hearing.
It comes at an important time. Obviously, we are in a
pretty unprecedented moment right now. And it does give us an
opportunity and I think the necessity to think through the
basic elements of our economy and what the future is going to
look like. We have the time and I think the real necessity to
think that through.
In Michigan, you know, we are the center of the automotive
industry. I am from Flint, which is the birthplace of General
Motors. I might have mentioned that I am from Flint a time or
two.
But the auto industry is in a transitional phase. And, in
fact, there is a movement toward electrification. The market is
heading in that direction. And we will benefit from that. We
will benefit in terms of the environmental impact of autos, but
we will also benefit in terms of safety and ultimately in terms
of savings for consumers.
Right now, China is the number-one manufacturer of electric
vehicles in the world, so we have to do more, I believe, to get
in front of our competition.
I am a hockey player. I like to go where the puck is going,
not chasing it all the time. And I think the market is taking
us there. And we need to think about the incentives that we
need to put in place in order to win the future when it comes
to vehicles, particularly around electric vehicles.
My act, the Driving America Forward Act, would expand the
electric vehicle tax credit. That is one way to incentivize
investment in electric vehicles, and I think it is an important
way on the demand side to create some incentives. But it is not
all we need to do. The movement toward this technology will
require significant new research and development.
And I am particularly concerned that some of the auto
manufacturers, the OEMs, are burning a lot of their cash that
normally would be devoted to R&D right now just to maintain
operations. They are burning their reserves. That is a problem.
But I am wondering, perhaps, Ms. Wince-Smith, if you might
comment on how we can continue to make the investments, given
the fact, as you reference, that China is significantly ramping
up, catching us, will pass us, in terms of their investment in
R&D.
How can we continue to lean in, be competitive, invest,
given the fact that we respect openness, we respect and embrace
collaboration and the synergy that comes from that, given the
fact that China engages in all of these practices that we know
are destructive and actually, you know, counter-competitive,
you know, their acquisition of trade secrets, all the things
that they do?
We live in a world of openness. We live in a world where we
like to see that synergy. Can you talk a little bit about how
we can continue to advance ourselves in terms of the R&D we do
in this space, given the fact that, culturally, we have a
different approach?
Ms. Wince-Smith. One thing I think we need to consider in
this new game plan for the future is to look at some of the
legislation that was very timely when it was passed but it
needs updating.
So one, of course, is the research and development tax
credits, but also the Cooperative Research and Development Act,
which gave some limited relief from collaboration with fear of
treble damages and antitrust. And we really need to have more
clarity on how, for instance, the U.S. automakers could come
together without fear of antitrust actions coming to them to
work collaboratively and pool their resources around the next-
generation advanced battery technology. Because that is really
a holy grail for all of this.
So that is one thing that I would highly recommend, but
also, you know, looking at the tax credit on the research and
development. But instead of everybody competing on the battery
side--and there is the Advanced Battery Consortium that Argonne
Lab and the universities participate in, and some of the
companies, but I think that needs to be accelerated in a big
way.
The second thing is really the state regulations and
certainly the energy regulatory commissions state-by-state that
set a patchwork of regulation, and the extent to which there
could be some national imperative to look at the
electrification as a national goal and need, back to Dr. Shih's
comments about demand. Because, right now, we have a patchwork
of state-by-state regulation that acts as a barrier.
One thing that is an example from COVID is that we were
able to bust through a lot of the regulatory impediments that
have inhibited telemedicine. You know, state-by-state was
regulating it, and there was preemption because of the need to
have telemedicine.
So I think there is a lot could be done on the tax, fiscal,
regulatory environment, but to enable the pooling together of
assets among these companies. And another area would be in the
critical materials, too, that they need.
Mr. Kildee. Thank you.
My time has expired. I really appreciate the testimony of
the witnesses.
Mr. Chairman, I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Crenshaw, for
five minutes.
Mr. Crenshaw. Thank you, Mr. Chairman. Thank you for
holding this hearing.
America really is the greatest nation in the world, best
equipped to answer the world's challenges. We have the finest
institutions, the brightest thinkers, and the structure of our
country is set up so private citizens are able to change the
world with their innovations.
In fact, it is in one of our duties in the Constitution,
Article I, Section 8, Clause 8 of the Constitution, ``to
promote the progress of science and useful arts, by securing
for limited times to authors and inventors the exclusive right
to their respective writings and discoveries.'' Such an
important line. Patent protection, personal property rights,
the ability to sell your invention.
And it is because of these protections of personal property
rights and private property and our willingness to invest in
the big problems and a governing system that allows the testing
and marketing of new products that have brought millions of
people out of poverty and allowed for higher standards of
living, not just in the U.S. but around those globe.
A lot of those innovators are here in Houston, solving
problems of zero-emissions electricity through natural gas at
NET Power, which I have talked about a lot; curing childhood
cancer at the Texas Medical Center; and, of course, our very
own Rice University, which is really a standalone powerhouse in
innovation.
I think we can all agree, American dominance in finding a
cure for coronavirus is important. And the fact that we are
dominating that search reminds us that we still are No. 1. We
have 321 companies researching a novel vaccine or treatment for
the virus. This is in contrast to the next-closest country,
China, which has only 39. The whole of Europe has just under
100.
This hearing is important because we should be looking
forward at the next set of challenges, and we should be
working--as we work toward this. And I know there is a
narrative out there that we are falling very far behind, but
the U.N. has us ranked No. 3 in the Innovation Index, behind
Switzerland and Sweden.
The same report by the U.N. highlights something really
important: that we need to push resources and global R&D toward
biomedical innovation. Alzheimer's, ALS, cancer, diabetes--all
of these are listed as crucial needs for innovation, according
to this Innovation Index by the U.N.
Well, let's remember, it is not just R&D spending that
matters. That doesn't mean you are going to create the next big
thing. There also has to be a free market, demand for it, and
patent protection. Otherwise, we never get that next cure.
Take, for example, Taiwan. It has very high R&D investment,
No. 8 in the world actually, but their biotech market is
extremely small. They produce very few new drugs, if any. Why?
Price controls. So it is not a surprise that no one will take
on risky investments if there is no payoff. Why would any life
sciences company want to operate in Taiwan and sell to Taiwan
when they have to deal with burdensome price-control
regulations?
OK. So my first question for Dr. Shih.
With that in mind, what would be the impact on American
medical innovation if we reverted to a Taiwanese model of drug
pricing?
Dr. Shih. Well, Taiwan has been more successful in, you
know, other sectors than bio-med. I have looked at some of the
bio-med things. I think the ability to recoup a return on
investment to fund further R&D is important, right, and that is
why patent protection is very important.
Now, when we talk about the pandemic, OK, we also have
instances, for example, where you really have a global health
problem, right, which I think was pointed out earlier, right.
And those call for maybe--you know, you almost have a market
failure, because the companies aren't incented to work on low-
cost vaccines, for example, for poor regions, where, in fact,
the poor regions, if you don't get the infection under control
there, it is going to come back to us.
But I do believe it is important to provide incentives.
And, by the way, part of the patent bargain which is disclosed
in the Constitution is, it only gives it to you for a limited
period of time, right, which is, in exchange for making that
R&D investment, then, you know, you get to reap the returns for
some period. So I think it is important.
Mr. Crenshaw. Absolutely. And we don't want to lose that.
And I think that is the point of maintaining American
innovation. Because if we weren't a biomedical powerhouse, what
country do you think would be next in line to provide the world
with that next ALS cure, the next Alzheimer's cure, et cetera?
Dr. Shih. It would probably be the Europeans, right, who
are investing very heavily in Germany, in Denmark, you know,
in--for example, I went to one company in Denmark that provides
70 percent of the world's allergy immunotherapies, OK, and I
visited the factory there that provides 50 percent of the
world's insulin, OK.
And so the Europeans are taking these long-term views. They
are also, to the point that was raised earlier, funding
collaborative, precompetitive research in many areas. You see
this in batteries most recently, OK, and you see it in
electrification and things like that.
Mr. Crenshaw. Well, I am out of time. That went fast. Thank
you.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from California, Mr. Panetta,
for five minutes.
Mr. Panetta. Thank you, Mr. Chairman.
And thank you, Ranking Member Womack. Good to hear about
the investment at the University of Arkansas, not just in the
new football coach but in the research that is going on there.
Pig Sooie.
Let me also just comment, if I can, and echo the sentiments
by Dr. Parikh and Professor Price, Congressmember Price, in
regards to the new policy that has been put out about removing
visas for students who are legally here, studying at colleges
that have chosen to go remote-only.
Basically, making that decision to protect the health and
safety of their students unfortunately has led to a senseless
decision by this Administration to remove those students that
contribute so much not just to our educational systems but
ultimately to our economy and to the research and diversity of
this great nation. So I appreciate those comments.
And that is exactly why I am leading a letter to the
Honorable Chad Wolf, Acting Secretary of the Department of
Homeland Security, asking Secretary Wolf to revisit this
decision and hopefully answer some significant questions as to
why they would implement, or try to implement, such a divisive
policy, especially now during this pandemic. So I hope other
Members take a look at that letter and sign on, if interested.
Obviously, being from the central coast of California,
immigration is very important to us for a number of reasons. It
contributes to our economy, our communities, and ultimately our
culture. I wholeheartedly believe in that.
As my good friend Dan Kildee knows well, I come from the
``salad bowl of the world,'' so we have a lot of agriculture
here. We have a lot of specialty crops here. And we also know
that, in order to sustain those types of crops, the most
important thing--immigration is a big issue, but it is also
research into those types of crops.
And we are lucky to have the universities that we do here,
that do invest in that type of research. We also have a USDA
agricultural research station that makes those sort of
investments. But, ultimately, what it comes down to is, we need
more federal funding for that.
Now, I think, historically, the United States has been on
the forefront of agricultural research and innovation, but we
are being outspent by our competitors. And now we are seeing a
40-percent return on investment. Despite that, the U.S. public-
sector funding for agriculture research is declining. And,
obviously, I am concerned about those types of implications,
those types of trends, when it comes to our food security as
well as our food sustainability.
Now, in Congress, I am trying to do my part in more ways
than one, than to just talk about the ``salad bowl of the
world,'' but making sure that we actually get other Members
involved. And Rodney Davis, a Republican, and myself have
started the Ag Research Caucus to highlight the importance of
federal investments in agriculture research.
But if I can direct a couple questions to Dr. Parikh and
Dr. Romer.
Can you comment on the decline in U.S. investments in Ag
research and the potential implications of this trend in both
our domestic and global food security, as well as any sort of
solutions, especially when it comes to partnering with private
companies as well?
Dr. Parikh. Thank you.
Yes, you know, the decrease over time is probably a result
of the success of the programs. The U.S. has become the--you
know, it is the bread basket of the world, and our farmers have
done a wonderful job of feeding the world. And a lot of that
has come because of the work of the ARS and the USDA in
transmitting the best information about how to make yields
better, how to make crops better, and how to supply a product
that the market wants.
In terms of--you know, I actually think this is a perfect
example of what Dr. Romer talked about--so I will stop talking
and let him talk, because he is the expert in this--of this
move to, you know, useful, useful research at a grand scale
locally.
Dr. Romer?
Dr. Romer. Yes. Agriculture research was one of the real
successes in the pre-World War II systems in the United States.
And it was research that was spread throughout the country that
was focused on practical benefits. It is very important to the
future of the world, because we have to keep raising
productivity to keep up with growing population and growing
demand for meat.
And it is the kind of thing which, frankly, has been
squeezed out because professors in the top universities want to
work on the cutting-edge issues, like genomics, which was very
important basic science, but the bread and butter of
agricultural research is being neglected.
And so, when I called for a return to what worked before
World War II, it is not to take away from the new things in
basic research we do, but to go back to supporting those
things.
Let me just say, there are also potential funding
mechanisms that could guarantee this. The commodity producers
can levy a tax on themselves to, for example, pay for ads. If
you remember the dancing raisins and so forth. I think we
should be looking for ways for agricultural groups to tax
themselves so that they are the ones who are actually
allocating the research dollars.
And they can use those dollars both to get practical
research done in universities throughout the country but also
to encourage students to get trained in the kinds of skills and
habits of mind that will lead to productivity increase in
agriculture.
Mr. Panetta. Great. Thank you for those answers.
I am out of time. I yield back. Thank you, Mr. Chairman,
again.
Chairman Yarmuth. Absolutely.
The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Flores, for
five minutes.
Unmute your mic.
Mr. Flores. That is two times today I have done that. Sorry
about that.
I appreciate the testimony that we have had today, and I
appreciate the value of the hearing.
I have always referred to basic research as the seed corn
for future economic growth and human opportunity. And, in this
regard, I appreciated Dr. Shih's opening comments, where he
said that government support of basic and applied research can
fertilize the soil, but it takes private companies willing to
make a long-term investment in risky R&D to build that, and
that the role of the federal government should be to enable and
support, not hinder, the private sector to lead the way in
restoring U.S. manufacturing capabilities and competitiveness.
I represent two of the largest Tier 1 public research
universities in the country. One of them, my alma mater, is the
largest land-grant university in the United States, and it
educates nearly 70,000 students annually, preparing them for
cutting-edge jobs in Texas, the U.S., and, actually, all over
the world. And with almost $340 million in annual research
expenditures, Texas A&M University provides solutions to
challenging national problems ranging from hypersonics to
vaccine development to vaccine manufacturing. And this research
serves as a cornerstone to the regional economy, and it is
critical to the future economic growth of this country.
Like many sectors of the economy, research universities
like Texas A&M have been hit hard by the impacts of COVID-19.
And, during the past few weeks, only essential research has
continued on campus, and, as a result of that, the university
has experienced over $30 million in research losses. And worse
than that, the cumulative impact of the delayed research is
going to have a huge economic impact for the country. And so
those numbers continue to grow.
So, given the importance of research for our present and
future competitiveness, I support the bipartisan RISE Act,
which includes additional resources to help offset those losses
that are being experienced by the research institutions. I
would urge my colleagues to support the inclusion of these RISE
Act provisions in the next relief package.
Ms. Wince-Smith, a couple of questions for you, if you
don't mind.
The first one is, during the COVID-19 pandemic, what do you
think are the most effective ways to assist universities with
their vital research efforts? Do you think funding research
shortfalls created by lab shutdowns, like we envision in the
RISE Act, is a wise public investment?
Ms. Wince-Smith. Thank you, Congressman. Well, first of
all, congratulations on the leadership and contribution of
Texas A&M University. They are a very active member of the
Council on Competitiveness. Tremendous engineering and ag
capability. They really are a star in our firmament of
universities in the United States.
I do think the RISE Act really is very important at this
time, because if we allow the atrophying of a lot of these
ongoing research activities, we will potentially lose the
people. It is back to the people issue.
And, of course, it also links to the immigration challenge
that we are facing right now that others have mentioned, in
terms of ensuring the continuity of research. Because the speed
and scope of what we need to do across the board really cannot
be interrupted without damaging, you know, that infrastructure.
So the RISE Act, I think, is a very important initiative
for Congress to consider in the next phase of COVID relief.
Having said that, I do think we are seeing tremendous
innovation now coming out of universities in looking at their
business models. And many universities are really still
structured sort of on a 19th-century model, and we have seen
others that have moved very quickly to embrace lots of
innovations in how they are delivering education, involving
young people and designing programs and things.
Mr. Flores. Yes.
Ms. Wince-Smith. So I would project that in the years ahead
our university system is going to look very different than it
does right now.
Mr. Flores. Yes.
Ms. Wince-Smith. Having said that, we can't disrupt our
research, and we need to make sure we have the talented people
to keep that going.
Mr. Flores. OK. If I can get one more----
Dr. Romer. If I could just weigh in here, there is a very
important issue here. The way to get research going again in
universities is to do what Stanford Medical Center did, which
was test every person in the medical center who is patient-
facing and to test patients as they come back in. So they have
reopened Stanford Medical Center, and it is operating just the
way it did before.
We could do this in every university if we used the testing
resources that universities have available to them to test
everybody, and test everybody frequently, but to get back to
the work on university campuses. And the bottleneck here is the
CDC and the FDA, who are impeding our ability to do this kind
of testing.
Mr. Flores. OK. Thank you.
Chairman Yarmuth, I have one more question, but you will
probably shut me down, so I will submit it for the record.
Chairman Yarmuth. No, go ahead. Since Dr. Romer wanted to
add to that. Go right ahead.
Mr. Flores. OK. Thank you for your forbearance.
This question is also for Ms. Wince-Smith.
You know, you brought up the people resources, which are,
of course, our most important resource. As the pandemic
continues, universities like A&M have made a commitment to
continue paying those researchers, including graduate students
and principal investigators. And I applaud the effort that the
universities are making to ensure that our research work force
pipeline continues.
How can the federal government support the training and
education of this future work force during this challenging
time?
Ms. Wince-Smith. A very, very important question. I would
like to expand it, if I may, a little bit to look at parts of
the country where we have, you know, tremendous unemployment,
we have tremendous hardship underway, including lots of social
issues. And the extent to which the universities can link--the
big research universities--with community colleges and some of
the other work force boards to train and pool their resources
to ensure that we can continue the upskilling of our work
force.
I know there are controversial issues around the H-1B visas
and, you know, the numbers of these and how this impacts U.S.
jobs, et cetera. But, at the same time--and I think my
colleagues have said this as well--we need to have a balance
between attracting, keeping, retaining the best and brightest
around the world in this research enterprise but double down on
educating and training our own citizens, particularly women,
minorities, underrepresented racial groups. And that is part of
the equity of our democracy. And this is an opportunity to
really focus on that right now.
Mr. Flores. I agree.
Thank you, Mr. Chairman, for the forbearance.
And, Jimmy Panetta, I would like to join your Ag Research
Caucus, if that is OK.
I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from New York, Mr. Morelle,
for five minutes.
Mr. Morelle. Good afternoon. Thank you first, Mr. Chairman,
for holding this what I think is a critically important
hearing.
And when I was--I just finished 26, 28 years in the state
legislature in New York representing Rochester, New York,
which, you know, we spent a lot of time on innovation and
technology as a way to revitalize our old, industrial cities.
And I know, Dr. Romer, we miss you at the University of
Rochester. I know you spent part of your career there, so we
claim you as part of our own, but you know well the challenge
that we face.
In fact, I was just looking at--I have been reading ``Jump-
Starting America,'' which you may be familiar with, all the
panelists, written by John Gruber and Simon Johnson, who I had
a chance to spend some time with both on the phone and at
dinner recently. It actually talks about innovation as federal
investment and why it is important. It also just happens to
rank Rochester, New York, as No. 1 in the country if we make
major investments. So we are very proud of that.
But all of this is really premised on the notion that more
than 85 percent, I believe, of our nation's economic growth
since World War II--so we are now approaching, you know, 75
years where all of our success, or a substantial part of our
success, has been attributed to scientific/technological
research, innovation, and progress. It is alarming to me when
we talk about reducing that investment and reducing federal
investment in those activities.
I just want to--since I bragged on about Rochester, I am
going to brag a little more, if I can, and just use this as a
case in point. Our district is lucky. At the University of
Rochester's Medical Center, we are part of the New York
Influenza Center of Excellence, one of the five international
centers in the centers of excellence in influenza research and
surveillance network. And we are one of only nine of the
National Institutes of Health vaccine and treatment evaluation
units--particularly appropriate given where we are with the
pandemic.
But this has been made possible for the past five years
because the U of R has attracted more than $1.93 billion in
sponsored research funding to the region and is a national
leader in translating discoveries into new technology. We have
a brand-new clinical translational sciences cluster that we
have created.
We are doing this around technologies, applications,
companies that treat and cure disease, improve national
security, help our nation move toward sustainable, clean
energy.
If we as a Congress continue to invest in federal research,
institutions across our country, just like the University of
Rochester, probably like Texas A&M, and all of the amazing
universities we have in the United States, we can do so much
more to harness innovation and discoveries into commercially
viable technologies and companies.
So I am proud to say that many of our U of R scientists are
working right now on conducting clinical trials of vaccines,
treatments, and diagnostics for COVID-19.
But I do want to--and I apologize for the long intro, but I
did want to ask Dr. Romer, what specific policies or general
thoughts do you have about approaches that we should consider
to help ensure that the immense scientific understanding and
capacity of the United States is actually transitioned into use
into the broader economy and into society at large? How do we
make that transition? What should we be doing as a Congress and
as a country to help that transition?
Dr. Romer. I think there are two things.
One is invest in people and then try and be the place where
people want to stay and work. That means we can keep attracting
well-trained people from the rest of the world, but we are
really underinvesting in our own U.S. talent. And this is why I
think fellowship programs and an attempt to redo what we did
with, like, electrical engineering, chemical engineering could
be so important now. So invest in people, and use all of our
universities to carry out that mission.
The second is, you know, I talked about having agricultural
producers influence what happens on university campuses. I
think in Rochester you see a good example of this in optics,
where Kodak and then Bausch & Lomb encouraged work on
particular questions and then encouraged training of students
on questions related to optics, which turned out to be very
important for lasers and a number of other kinds of
applications.
Mr. Morelle. I couldn't agree more.
I will say this, that we in the state and the federal
government have both created a big optics and imaging
manufacturing institute. The United States invested; the state
of New York has invested. I think we invested $250 million on
optics and photonics, exactly what you are saying, to make that
investment in photonics. You know, photons move faster than
electrons.
Dr. Romer. Yes. And I guess the way to say what I am saying
is that professors are a huge asset, a huge resource, but we
need some other voices that are contributing to the decisions
about where universities go. And if we gave fellowships, we
could empower students to have a little bit more say. And if we
put industry groups in a position to spend their own money on
either research or training, that would bring their voices to
the table too.
Mr. Morelle. Very good. Thank you, Doctor.
Thank you, Mr. Chairman, for another great hearing.
Appreciate it.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Virginia, Mr. Scott, for
five minutes.
Mr. Scott. Thank you. Thank you, Mr. Chairman. This has
been a very interesting hearing.
I want to thank our witnesses for being with us today.
I would like to ask a question to Dr. Parikh.
You mentioned the value in getting and a need for data in
order to make informed decisions in the criminal justice area.
The Death in Custody Reporting Act requires the Department of
Justice to collect data on deaths that occur in jails, prisons,
and in the process of arrest, but the Administration has not
followed the law and hasn't collected the data.
If they had followed the law or would begin to follow the
law, the information that would be collected would be
demographic information and a brief narrative of what happened.
If you collected that on deaths in custody all over the
country, how could you use that data to make informed decisions
in the criminal justice area?
Dr. Parikh. Thank you for the question, Mr. Scott.
You know, it is challenging. We have social scientists who
are very interested in looking at this data, analyzing this
data, and providing prescriptions. Sometimes you don't know
what those prescriptions are going to be until you have seen
the data and are able to analyze it. So I don't want to--I
wouldn't want to presuppose. And I am a biochemist, so I want
to represent my social scientists well.
But what I will say is that they feel very strongly that,
with access to data, they can provide prescriptions for
national policy, at least inform policy. And transparency leads
to that ability to analyze the data.
And so they would argue very strongly that we need to have
transparency of demographics, of data related to violence, of
data related to incarceration. These are all points of question
that my social scientist stakeholders within the AAAS would say
are very important and, frankly, could do a great deal toward
working to make the world a fairer place.
Mr. Scott. Thank you.
I have one other question I just would pose to all of the
witnesses. Dr. Shih had mentioned that the basic research is
done by government, and then when you get to proof of concept,
the corporations come and do the--when profit is around the
corner, they can be counted on doing the rest of the research.
The way we fund research is a number of different ways: R&D
tax credits, where the corporations get to decide what they
want to do; direct cash, if you have something you want to
research; or direct investments in NASA, Energy labs, NIH, and
things like that.
How could you get better coordination--wouldn't you get
better coordination with the investments in NASA, NIH, and the
Energy labs and wouldn't it be better coordination and more
bang for the buck if that is where you put your federal dollars
on research, rather than let corporations go wherever they want
to go and they probably would have done it anyway?
Dr. Shih. Well, let me suggest something. I think it is a
very interesting question. I think we are actually at the
threshold of an opportunity, OK, because I think it has
historically been the federal government's role to fund basic
R&D, but the government can also, especially in this pandemic
recovery phase, when we are going to spending a lot on
infrastructure, I think we can also create demand, right? So
there will be push on the supply and pull from the demand,
which would cause people to invest in particular areas, right?
So, I mean, we are seeing a microcosm of that right now
with vaccines and therapies for COVID-19. OK. But I think there
are other areas, for example, where, if we want to spend on
infrastructure--I am a big fan of grid modernization, right?
Especially if you are from California, you know how obsolete
our grid is, how vulnerable it is to disruption. OK.
But if there were investments, infrastructure investments,
on grid modernization, it would drive a whole bunch of R&D, for
example, in silicon-carbide power devices, right, energy
storage technologies, group III-V semiconductors, and a whole
bunch of other areas, right?
So I think taking a more holistic and, I would say,
strategic view on that, we really have an opportunity coming
out of this crisis to do that.
Mr. Scott. Can I get Dr. Romer to comment very briefly on
that question?
Dr. Romer. I think it is important to remember that we get
huge benefits from a decentralized system that can focus on
different issues.
For example, at the University of Minnesota, they developed
a technology for pelletizing iron ore which was crucial for
exploiting its iron ore reserves, and it has turned out to be
very important in many other areas. A nationally controlled,
centralized system might not have focused on pelletization, but
the local forces in Minnesota encouraged that kind of research.
So I think----
Mr. Scott. That was federal funding, I would imagine,
federal or state funding, not corporate----
Dr. Romer. Well, no, it was really the federal government's
support for the land-grant institutions. So the federal
government provided the background resources, but the actual
decisions about the spending and the research to pursue were
made locally.
So I think we should be open to a system that allows a lot
more decentralized decisionmaking on the specific research
projects that are pursued.
Mr. Scott. Thank you, Mr. Chairman. The point I was making,
if you spend a lot of money on R&D, the corporations get to do
it. If you do things like fund the research at universities,
fund NASA, fund Energy labs, fund NIH, it gets decentralized,
but I think you get a much better bang for your buck. By the
time the corporations get around, the basic research is done,
profits are around the corner, and they probably would have
done most of that anyway.
So thank you. I appreciate your indulgence.
Chairman Yarmuth. You have a man with the gavel on the
Committee. No problem.
The gentleman's time has expired.
I now recognize the gentlewoman from Texas, Ms. Jackson
Lee, for five minutes.
Ms. Jackson Lee. Thank you very much, Mr. Chairman. Can I
be heard?
Chairman Yarmuth. Yes.
Ms. Jackson Lee. Thank you very much.
Thank you to all the witnesses as well.
I am glad to join this Budget Committee that is focusing on
the necessity of research so we can save lives.
Let me read into the record, first of all, the number of
confirmed cases of COVID-19 in the United States, which is now
a little bit over 3 million cases. Confirmed cases in Harris
County, 39,311; deaths, 395; confirmed cases in Houston,
55,122; deaths at 581.
Those numbers have gone up from the moment that the state
decided, as of May 1, to end the stay-at-home order and, of
course, to begin to open up the state.
Business and the economy are very important, but it is
extremely important to remember that R&D is a preventative
measure that provides the opportunity to be prepared. And one
of the issues in fighting COVID-19 is a question of
preparation.
So I would like to ask Dr. Parikh, specifically, R&D as it
relates to where we are today. The idea of working with huge
pharmaceuticals, which obviously exist--AstraZeneca received $1
billion to engage in vaccine research. A small company like
Greffex, G-r-e-f-f-e-x, Incorporated, in some of the clinical
trials that are going on here in Houston have had to struggle
to get the attention of the federal government.
What would have been the results of a proactive research
R&D protocol for the United States where we would engage with
research dealing with infectious diseases or the potential of
diseases that, really, we have seen around the world?
Dr. Parikh?
Dr. Parikh. Thank you.
I think what we are seeing is sort of a reflection of the
investments that we have made over time. We have made a lot of
investment in the basic research and in biomedical research.
And so, when the virus was isolated, the fact that within three
months we had characterized the atomic structure of the coat
protein and we had all of the necessary information for
starting vaccine trials is amazing. It is absolutely
breathtaking. And that is the result of all the research and
investment that has been made over the last 20 years in that
infrastructure.
But then you also see the lack of investment in public
health. You see the atrophy that has taken place in our public
health departments around the country. You see some of the
atrophy that has taken place at CDC. And so what you didn't get
was the immediate public health response and the powerful
public health response that could have helped us in the initial
stages of the pandemic.
You know, I think we should be very careful in terms of how
we are guiding the science. There is this research project that
was looking at bat coronaviruses that had some fieldwork in
China, but that work was canceled by the Administration.
And, you know, one of the things that I really worry about
is scientific integrity. There are lots of reasons, and
administrations are within their rights to cancel research
projects. But they shouldn't make the scientists the instrument
of that cancellation----
Ms. Jackson Lee. Thank you. Thank you very much.
Dr. Parikh. Thank you.
Ms. Jackson Lee. Thank you very much. My time is short.
Let me proceed--and thank you very much for your answer--to
Deborah Wince-Smith, the Honorable Deborah Wince-Smith, on my
specific point about the value of competitiveness in the United
States and the importance of building a body politic of small
researchers to be able to engage in competitiveness.
And, as I indicated, there are clinical trials going on
here in Houston, Texas, dealing with COVID-19 that are not able
to pierce the structure in the federal government, and,
therefore, their research is languishing.
I think the comments of Dr. Parikh were important about the
infrastructure of health, public health, but it also is
important that we do follow the science but that we also have
the R&D structure, the funding for R&D, that we promote all of
this research that is going on in the United States that may
not be the size of AstraZeneca.
Would you respond?
Ms. Wince-Smith. Well, one thing I think is a very
interesting model is how some states--and this is a leadership
issue, but some of the leading universities are coming together
and forming their own consortiums to identify, within their own
respective research environments, potential innovation and
pooling their assets together to both identify and help that.
So we know, you know, universities have special funds for
startups. Some of them have actually venture capability. But
doing that at a state level more collaboratively and also
leveraging with state resources the SBIR grants, Phase I and
II, to get a critical mass is one path. Because I think you are
completely right. I mean, I hear every day about, oh, somebody
has the answer to testing; how do we get to the FDA, you know,
for approval?
And so I do think that, yes, there is the federal level.
The White House Science Office really should be playing a role
in coordinating some of this. But it would be very exciting to
see how some of the states themselves and the universities
within the states could pool their resources to help on
identifying and promoting these startup capabilities coming out
of their assets.
And the other thing I think I will mention is, you know, we
have talked a lot about demand and the mission focus, but
certainly, you know, this is now a national mission to ensure
that we have the preparedness, we have the anticipatory R&D
investment, so the next time we have a pandemic--and there will
be one--we can respond in a resilient, adaptive way and not be
scurrying around the way we have had to do this time, really
for a lack of organization, I think, not capability.
Ms. Jackson Lee. No doubt, we shouldn't leave out the small
competitors who have possibly a potential for vaccine, for a
cure, for good research.
Ms. Wince-Smith. We should make sure they are part of the
solution. Absolutely.
Ms. Jackson Lee. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman Yarmuth. Absolutely.
The gentlewoman's time has expired.
I now yield myself 10 minutes.
Let me, at the outset, thank all of the witnesses for your
responses, your testimony, and your candor. It has been an
honor to have you as part of the hearing.
You know, when I became Chairman of the Committee, one of
the things that I decided we--in a way we could reimagine the
Committee, was to talk about different subjects and how they
will impact the budget either presently or going forward. So we
have had hearings on immigration policy and climate change,
and, Ms. Wince-Smith, I know you talked about artificial
intelligence. We are going to have a hearing on artificial
intelligence and how that might impact the budget.
So the focus has always been these--there are other
committees of jurisdiction for these subjects, these issues,
but they all have budgetary implications. And that is what we
are doing today.
So I think where I would like to start is, in talking about
R&D, we talk about its impact on so many things, but what is
the potential impact on the budget going forward, whether it is
through employment, whether it is through developing new
industries and so forth? And what would be the budgetary
implications of a reduced or even more of a maintenance level
of investment in R&D?
And I will start with our Nobel Prize-winning economist,
Dr. Romer.
Dr. Romer. So I think the investments the United States has
made in its university system and its primary and secondary
education system from the very beginning, those investments in
institutions that raise our skill, that produce human capital,
these have been the highest-return investments that we have
ever made.
And I think, if we continue to make those, we could have
more growth in the future, and we would have more income, more
tax revenue, and we would get the benefits of a self-
fulfilling, reinforcing cycle. So I think we can't
underestimate the importance of investing in people.
Research is one of the ways to invest in people, but it is
not the only way. And I think we should really look very
carefully at the National Defense Education Act from the 1950's
and the kind of indirect support the feds provided for
education throughout the nation.
And, in closing, let me just reinforce this point that it
is wonderful to be able to draw on talent from all over the
world, it is wonderful to encourage the flows of ideas
throughout the world, but there is something wrong that we can
persuade so few of our citizens, when they are in school, to
continue on in graduate school.
And we can fix that. I think by giving the students more
control, not making them like serfs working for professors, but
empowering them to pursue a career that is exciting to them, we
will actually have--we can supplement the international supply
of talent with a much deeper, much better educated U.S. body of
talent.
Chairman Yarmuth. Ms. Wince-Smith, this is one of the, I
guess, the emphases of the Council on Competitiveness. How
would you respond to that question? What is our potential
downfall if we don't do enough, and what is the potential
upside?
Ms. Wince-Smith. Well, I very much agree with what Dr.
Romer said. So I will give a little different answer, in that
we really are living right now in a very low-productivity era.
And in order to jump-start our productivity, which really is
essential in order to increase the standard of living for all
our citizens, we have to really invest in what are going to be
the drivers of next-generation productivity. And it really is
going to come from not just the research and development
investments at universities and labs but how we commercialize
at scale all of these capabilities to drive the new industries,
products, and services of the future that create value and
jobs, you know, that are high-paying for all of our citizens.
So, if we don't invest in the people and we don't invest in
these big platform opportunities--and we know they are there; I
mean, we don't have to identify them--we will be left behind
economically, we will lose global influence, we will not be
able to invest and contribute to global challenges in food,
energy, water, climate.
And our national security will be very, very weakened. And
I think, today, the two come together. You can no longer divide
the impact of our economic success from our national security
needs as well.
So we have to invest in the people, the platform
capabilities, and the infrastructure to deliver it.
Chairman Yarmuth. OK.
Dr. Parikh, I would like you to address that also, but let
me add one question to you. In your testimony, when you were
talking about the model needing to be adjusted, the Vannevar
Bush model needing to be adjusted, you mentioned that the
federal government should assume a quarterback's role. If you
could explain what that means.
Dr. Parikh. Yes. Yes. It is not a perfect analogy, but, you
know, the federal government is the largest single contributor
to that ecosystem. And the federal government can contribute in
ways that Vannevar Bush never even imagined, right?
Because there are many models for funding. Dr. Romer has
talked about, you know, the need to make sure that our land-
grant universities are strong. There are so many different
ways. You can fund investigators directly. You can fund ideas.
You can fund students. We have to have that approach of
creating an ecosystem, many different paths to success. Because
those paths are now what is driving everything.
You know, he never imagined that we would be collaborating
with--that the pharmaceutical industry would be a global
industry, where research that is happening here was going to be
complementary with what is happening in Europe. We have to make
sure that this new model takes all of that into account and
then is really a broad-spectrum support by the federal
government.
But then, similarly, the platforms that we spoke about
earlier, the federal government can identify those and point us
in those directions. That is not to the--not so that there is
nothing outside of that, but, certainly, coordinating roles for
infectious disease, coordinating roles for artificial
intelligence. We know that these are going to be important
platforms. We have to make sure that we are investing in them.
Chairman Yarmuth. Dr. Shih, do you want to respond to that
question as well?
Dr. Shih. Well, so let me respond to your original
question.
Chairman Yarmuth. That's what I meant, the original
question.
Dr. Shih. Yes. I agree with what Dr. Romer and others have
said so far.
OK. One of the other things I want to highlight is that,
you know, our investments have been made over many decades, you
know, and they have been substantial, right? And they will
carry us for some time if we fail to invest enough, but it will
decline. We have already seen that in some industries. OK. And
it has a long tail. OK. And then rebuilding that is going to be
much more expensive.
So we just have to recognize that time lag as well. We are
already in the decline in many areas where we can't do those
things in the U.S. anymore. All you have to do is look at the
source of publications in many fields, and you see it has
already shifted to Asia. OK.
So it is a long-term investment. OK. It is beyond one
election cycle for sure. All right? But, you know, we need to
think in terms of decade-type goals, right?
I mean, when I was growing up, I used to make fun of
China's Five-Year Plans, right? Because, you know, Mao Zedong,
``Well, we're going to do deep tilling,'' and he causes a
famine in China. OK? But one thing the Chinese have done well
is this kind of long-term planning, OK? And they learn from
their mistakes as well, right?
And so I have become less critical of that, as, like, it
would be nice to have kind of that longer-term vision,
especially when it comes to our capability building and people
development.
And I come back to, the capabilities are embodied in
people. The people are everything. Right? And so our university
system has been tremendous in feeding that pipeline.
And, you know, one other thing I will add. It is like, you
don't think anybody in China who has, you know, seen what is in
the U.S. and seen the opportunities that are available wouldn't
rather live here if they had the chance? OK. And so we continue
to be the place that is the most attractive destination in the
world. Let's not screw that up.
Chairman Yarmuth. I appreciate that.
And getting to the issue of personnel and talent and so
forth, this really is a long-term project, because we need to
start figuring out how to get young people attracted to the
field. Because you can't just say to somebody who is a senior
in high school or a junior in college, ``OK, go into
research.'' So it has to start much younger than that.
And one of the things that--I am going to go over my own
time, but, again, I have the gavel--is that I think about what
we saw in the movie ``Hidden Figures'' and the Black women who
had done extraordinary things but who nobody in the country
knew anything about, and I am sure young Black children didn't
know anything about that.
Years ago, when I was writing columns, I was doing a Black-
history column, and I was doing some research, and I found
that--I am an avid golfer--I found out that the golf tee was
invented by a Black dentist, G.F. Grant. Who would have ever
thought that? And then if you think about George Washington
Carver and so many instances--Lewis Latimer, who invented the
filament.
And so a lot of it is exposing young people to role models,
I would think, as to what their potential is as well. Does
anybody want to comment on that briefly?
Dr. Parikh. Yes, Chairman Yarmuth, if I could.
You know, the AAAS is a gatekeeper organization, right? If
you published in Science magazine, you are on your way to an
academic career and a research career. You are well on your
way. If you get a fellowship from us, you are well on your way.
And one of the things that we noticed is representation
matters, right? So, in our fellowship process, there is a very
good demographic diversity in the selection committee. And, lo
and behold, the awardees are diverse. When you look at our
editors of our journals, it is not as diverse, and you see that
the publications are not as diverse.
There is something very important about representation and
mentorship that we have to make sure that we are not letting
this moment hurt.
And I will just speak to this moment for a second. You
know, with COVID-19, the disruptions to research, with these
immigration policies, and then challenges to our K-12
educational system, we are in danger of losing a generation of
talent in the sciences. And that would be tragic. These are
lagging indicators. We are living on the investments that were
made in people 10 years ago, 20 years ago.
Chairman Yarmuth. Well----
Dr. Romer. If I could just echo something that Deborah
Wince-Smith said, you know, she pointed to the military
academies. The U.S. Government, through the military, has done
a very good job on many issues about inclusion and diversity.
And they show that if you commit to the principle that
everybody can participate and contribute and you live by that
standard, you can make that happen.
So I think they should be a model for how the government
requires all of our other institutions to do as well as we have
done in the military.
Chairman Yarmuth. All right. Thank you for that.
Ms. Wince-Smith. Could I add one thing?
Chairman Yarmuth. Go right ahead.
Ms. Wince-Smith. One example of a university that has done
an incredible job in bringing women and underrepresented
minorities into STEM, from the graduate level all the way up
through being graduate students, and that is the University of
California at Santa Barbara.
They have a completely different model. The moment these
young people are freshmen, they are linked with advanced
researchers doing Ph.D. work, and they get inspired. And they
are mentored all the way through. It is not the traditional
thing of, oh, you come into a big chemistry class and by the
end of the year three-fourths of you are weeded out.
We have to expand the pool of innovators in the United
States. And, again, that doesn't mean that we don't bring
others in, and the Council was the first organization that
said, staple a green card, you know, for the graduates in our
science and engineering enterprise. But we have to bring in our
own citizens as part of the enterprise.
Chairman Yarmuth. Well, I will let that be the last word.
Once again, thank you all for your time and wisdom, and we
appreciate it very much. I think we have made quite a record
here in this hearing.
So thank you, Mr. Flores. I guess you are sitting in as
Ranking Member here at the end. I appreciate you being with us.
And, with that, if there is no further business, this
hearing is adjourned. Thank you all very much.
[Whereupon, at 3:32 p.m., the Committee was adjourned.]
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