More cash for the labs?
Tech leaders are optimistic about the American Competitiveness Initiative
by Cameron Crotty -- EDN, April 1, 2006
If the rest of the year plays out as well as it started, 2006 might become known as the year the electronics industry finally got traction in Washington, D.C. At his State of the Union address in January, President Bush announced his American Competitiveness Initiative (ACI). The ACI part of the presidential budget, proposes that—among other things—the U.S. government double its investment in basic research in the physical sciences over the next 10 years.
The president's announcement drew approval from every corner of the technology industry. For Brian Halla, chairman and CEO of National Semiconductor and chairman of the Semiconductor Industry Association (SIA), the president's announcement was vindication after years of beating the drums publicly about the potential loss of American competitiveness in advanced technology. It was also a call to action. "[The speech] was the first big thing," says Halla.
According to those leading the research advocacy movement in Washington, the next step will be to focus on the details of the actual spending bills as they appear in Congress. "There is widespread and bipartisan recognition of the problem," says Daryl Hatano, vice president of public policy for the SIA. But Hatano and others recognize that there's plenty of work to be done. "It remains a very tight budget year," says Hatano. "The president talked about the need to hold in discretionary spending, and Congress will have a lot of priorities as well."
Four key agencies channel most of the federal dollars dedicated to R&D: the National Science Foundation (NSF), the Department of Energy (DOE), the National Institute of Standards and Technology (NIST) and the Department of Defense (DoD) (see chart). Generally, these agencies award grants that support the sort of basic research that may not lead directly to salable product but that may result in discoveries that advance the industry as a whole. The concern in the U.S. electronics industry is that without that basic research, U.S. firms will slowly lose their technological edge to overseas firms.
The president's ACI calls for increasing research funding at the NSF, DOE and NIST over a period of 10 years and increases the budget for basic and applied research at the DoD by roughly 8 percent in 2007.
The president's budget proposal joins a broad movement to increase research spending in both houses of Congress. In the Senate, the National Innovation Act (S. 2109) would double research funding at the NSF over five years and proposes working with the private sector to increase R&D funding at NIST. Meanwhile, the three-bill Protecting America's Competitive Edge (PACE) legislative package would double the research budget at the NSF, DOE and DoD over seven years.
As of this writing, similar legislation had yet to be introduced in the House of Representatives.
Some industry watchers believe that the news is not all good. According to a preliminary analysis by the American Association for the Advancement of Science (AAAS), the overall funding for R&D proposed in the Bush administration 2007 budget will increase by only 1.9 percent over the 2006 budget, which won't even keep up with an anticipated 2.2 percent increase in inflation. According to the AAAS, much of the increases for the aforementioned agencies will come out of the research budgets of other federal agencies, such as the National Institutes for Health, and the Environmental Protection Agency.
"Our overall goal is in line with the administration's: to increase spending in the physical sciences," says Hatano. "We just have to catch the details and bring them to light."
But overall, the U.S. electronics industry should be encouraged. Beyond more cash for basic research, which will hopefully lead to breakthrough technologies, nearly all of the bills, proposals and budgets address other industry hot buttons such as the R&D tax credit and education programs. For instance, both Senate legislative packages, the House Democrats' agenda and the president's initiative would all make the current R&D tax credit permanent. All proposals also offer significant incentives to improve math and science education, especially at the grade school level.
At the very least, the profile of America's technological competitiveness has been raised. There is much work yet to be done, but as Hatano says, "It's nice to have the wind at your back."
