Should the Government Invest In Technology Research?

The prospect of federal dollars going toward advanced research – including for hybrid and electric car development – has caught its fair share of criticism, but according to a recent twin panel discussion on Capitol Hill, American competitiveness also hangs in the balance.

Objections have included philosophical disagreement with the government “betting taxpayer money” and “picking winners and losers” but what happens when bets pay off?

According to a March 16 discussion sponsored by the American Association for the Advancement of Science (AAAS) and nine other professional societies, many federal bets have fundamentally improved life as we know it.

As companies like Fisker Automotive contend for a remaining balance of a low interest Energy Department loan – with critics saying it will be “the next Solyndra” – the briefings showed that sometimes the government can also pick winners.

For example, Google’s search engine algorithm was born from a $4.5 million National Science Foundation grant for a Stanford University digital library project. Similarly, federally funded research into lithium-ion batteries, liquid crystal displays, signal compression and magnetic storage devices was credited with the 2001 introduction of Apple’s iPod. And thus far $5.6 billion invested in the Human Genome Project over 13 years has netted an estimated $67 billion economic payoff.

The discussion, as reported by Lab Manager Magazine centered on whether federally backed research and development is worthwhile and concluded there is little question spending has paid off over the years.

Arguments leading to this included those by Fred Block, a research professor at the University of California, Davis, who cited a number of reasons, including a trend by large corporations to cut back on funding.

“The basic innovation system in the U.S. economy has changed very radically over the last 30 years,” Block said. The dominance by large companies has declined, and many scientists and engineers have “voted with their feet,” and have moved to companies with fewer than 500 employees.

The need for the government to get involved was further shown in that out of the 88 U.S. winners of the “R&D 100” awards by R&D Magazine, 77 had federal backing.

“The federal role has permeated the innovation economy,” Block said.

Of the overarching question about government technological investment, given that other nations are successfully doing so, the U.S. ought not to be left lagging behind, it was said.

Fears often cited that the U.S. economic downturn should yield greater fiscal conservatism – even in the area of tech R&D – were countered by acknowledgment of fruitful industrial investments in the Great Depression era.

The moderator for the briefings, Vijay Vaitheeswaran, a senior correspondent for The Economist said history suggests great countries, like great companies, invest during an economic downturn.

Vaitheeswaran has written a book titled, “Need, Speed and Greed,” and citing economic historian Alexander J. Field of Santa Clara University, Vaitheeswaran contended our present prosperity came from technological investments during one of its darkest hours.

The author said evidence shows it was not so much mobilization for World War II that planted seeds for postwar prosperity but rather technological progress achieved during the 1930s and the Great Depression.

“Lots of great companies founded then ultimately paid off,” Vaitheeswaran said.

Today we often hear about China investing heavily in electric vehicles, and a sense of inevitability in the U.S. declining as the “world’s largest auto market” continues on its inexorable rise.

Basing his optimism for the entire U.S. economy in his research, Vaitheeswaran said the U.S. does not have to wind up a loser if it plays its yet-considerable advantages wisely, and invests in technology now.

“It’s wrong to say that just because China goes up, the United States has to come down,” he said. “That’s too simplistic. That’s not how innovation works in an open world.”

The knowledgeable speakers shared a conditional optimism, while noting ironies as well.

Catherine T. (Katie) Hunt, R&D director for Innovation Sourcing & Sustainable Technologies at The Dow Chemical Company got laughs when she quoted genius inventor, and former EV advocate, Thomas Edison, who also foresaw solar energy’s potential 80 years ago.

“I’d put my money on the sun and solar energy,” Edison said in 1931, “What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

The speakers observed we’ve missed opportunities, while winning bets also, but said the bottom line is a quantifiable case for government investment has always existed.


  • perfectapproach

    I think it’s obvious that the government should be investing in technology research. As oversight committees and freedom-of-information zealots chip away at “black budgets,” the government is forced to reduce its spending on technology research, lest the public catch wind of how much Uncle Sam is ACTUALLY spending. In the old days (so cliche!), research was buried in classified projects, and the results of those projects are all around us. Not mentioned in the article are the classic examples of microwave ovens, velcro, and radar. Nuclear power is also a good example of federal dollars funding profitable research.

    The simple truth is that the free market CAN’T innovate as quickly as the federal government. The free market ties itself up in copyrights and lawsuits. Companies choose not to innovate for fear of infringing on someone else’s patent. Years ago, Microsoft and Apple were at each other’s throats for the idea of having a mouse cursor and rectangular “windows” on a computer screen. Apple is currently at odds with several other mobile-device manufacturers because of alleged patent infringements that is hampering development into new ways of using these devices. (Essentially, Apple is channeling Gene Simmons: “We invented everything. So you are all infringing on our copyrights. Lawsuit pending.)

    In the old days (that cliche again!), the public didn’t care if some technology didn’t pan out because they had no idea it was being researched. But today, the public will not allow the government as much discretion into what it chooses to throw money at. Of course, there will be failures like Solyndra. But look at the successes! They FAR outweigh the losses. And every loss is research in and of itself; as a nation, we’ve learned from Solyndra’s failure. It was an expensive lesson at $527 million dollars, but now at least we know what NOT to do. (We’ve learned that even with that much money, solar power just isn’t sustainable enough yet.)

    The federal government SHOULD continue to fund technology research. There will be failures, of course. Every investment has that risk. But it’s a risk that MUST be taken. The technological future of the United States depends on it.

  • Dan Ticson

    I do believe the Government should invest in technology research. They have the means to develop new ideas that industry can use to create jobs and to maintain our competitive edge. Government also needs to manage their projects and use taxpayer money efficiently.

    On this note, the Fisker automobile is an example of poor marketing. It is an extraordinary vehicle in every sense, but should have taken the form of a medium or compact size 4-door sedan, the type of vehicle so many of us drive to work every day. The Fisker’s cost and limited production will only serve to delay the need for an affordable, mass produced vehicle, and all the economic benefits derived from their introduction and use.

  • Joe

    The Government is deep debt and most people have the heads in the sand about it. I balance my checkbook and so should the Federal Government. The Government needs pay off debt then, maybe if we had excess funds, then we can invest in Technology!