With more than the usual fanfare, a group of Senators recently unveiled a major piece of proposed legislation—The Endless Frontier Act (EFA)—designed to accelerate U.S. research and development (R&D) activities to increase our nation’s international competitiveness, especially to counter China.
If enacted, the law would both create new organizations within existing government agencies and provide substantial funding for them, in excess of $100 billion over five years, to increase federal R&D investment.
The EFA might prove to be productive. But is this the best the U.S. can do to achieve the stated objective? More to the point: Is it what the U.S. should be doing in this regard? Nope. Far from it.
There is little question that more federal resources are needed to raise the nation’s game in R&D. Indeed, far more than the EFA envisions. But because the bill does not deal squarely with both the need for fundamental institutional restructuring and the integration of certain aspects of the U.S. R&D enterprise as well as establishing systematic mechanisms for comprehensive collaboration in R&D activities with other advanced democracies, its impact is more than likely going to be only marginal.
If so, that would only undercut support for the type of more ambitious reforms and spending that are really needed.
Why is the EFA garnering so much attention? For starters, the effort is bipartisan—a truly endangered species in Washington, a town that is the most divisive any living American can recall.
Even more significant it is the first time such a group of the nation’s top political leaders is explicitly acknowledging the U.S. is no longer the globe’s leader in science and technology (S&T), a position the country has held for much of the past century.
In the late 1980s, there was recognition by the Congress of the risks of such an outcome—when it was Japan that was the source of concern.
At the time, I was fortunate to have been a U.S. Senate Committee Senior Professional Staff Member, spearheading both a series of committee hearings and drafting ambitious legislation for the then-Committee Chair, Senator John Glenn.
The committee—the Senate Committee on Governmental Affairs (now called the Homeland Security and Governmental Affairs Committee)—reported out legislation for full Senate consideration entitled “The Trade and Technology Promotion Act” (S.1978). It was to create a new executive Cabinet-level Department of Industry and Technology (DIT) as part of the then-forthcoming Omnibus Trade Act of 1988.
Perhaps most important, the law would have created within the new department the Advanced Civilian Technology Agency (ACTA). ACTA was modelled to be the non-military analog of the Defense Advanced Research Program Agency (DARPA), housed within the Pentagon.
DARPA, is a world renowned, fleet-footed entity concentrated on developing emerging technologies for use by the military. But the spillovers from its work have been transformative in non-defense applications. Since its founding in 1958, it has been the critical incubator for applied advances in technologies related to robotics, electronics, and communications. Indeed, its best-known invention was the development of the internet.
As is the want of the U.S. Senate and the House of Representatives, fights over committee jurisdiction got in the way of substance. The result? A far less ambitious – indeed as time has proven, as Senator Glenn and I had argued it would be – insufficiently thought-through proposal pushed by a rival Senate committee was enacted, as part of the 1988 trade law. It renamed the 1901-founded National Bureau of Standards within the U.S. Department of Commerce (which was already an amalgam of more than 10 agencies) as the National Institute of Standards and Technology (NIST) and enlarged its budget.
The “Japanese technological threat” receded in the 1990s—more because of economic problems Tokyo faced than fundamental steps undertaken proactively by Washington. Many of us working on these issues, however, warned that not only would complacency be ill-advised but that the changes in the U.S. R&D enterprise made in 1988 law were marginal, at best.
Fast forward to today. Washington is now of the view that not only have those risks heightened, but some of them have been realized.
Moreover, the concern is no longer rivalry by a democratic ally, but China—a Communist country with the world’s second largest economy; in fact, one whose dominant enterprises and banks are state-owned and –controlled.
The Congress is now placing its bets on EFA as the key initiative to enhance the international competitiveness of the U.S. to compete with—and overtake—China’s technological prowess.
Unfortunately, as heroic an effort EFA is advertised to be, it would fail to bring about the needed fundamental structural reforms. What the U.S. requires is an innovative integrated “whole of U.S. government” approach to accelerate both basic and applied R&D, especially one grounded in systematic public-private partnerships with the nation’s businesses, investment community and universities.
The centerpiece of the EFA—beyond providing for enlarged federal R&D funding—is the proposal for the creation of a new Directorate for Technology and Innovation (DTI) within the National Science Foundation (NSF), an independent agency.
To be sure, the NSF is a top-flight organization, but its emphasis has been more on funding basic rather than applied R&D. Moreover, it is far from having the budget, status and the authority of a Cabinet-level department, key ingredients needed today if Washington is serious about mobilizing an integrated, interagency laser-like-focused approach to compete head on with China.
Rather, the EFA would provide the new arm of the NSF to have “the ability” to partner with other federal agencies, such as the Department of Commerce’s NIST, the Department of Energy and the national to carry out its functions.
Missing from the proposed law is the articulation of provisions that would proactively facilitate the NSF to integrate and coordinate these new activities with the other arms of the federal R&D apparatus.
But the NSF should not be precluded from doing so with other elements of the nation’s R&D apparatus than those specific agencies called out in the EFA. To this end, the wording of the EFA smacks of the legislative branch pushing a solution looking for a problem. This is not the first time this has happened in the R&D space. Think the NIST story from the 1980s.
This is important because NSF officials are becoming more oriented toward expanding their funding toward applied R&D with potential industrial applications. Yet they should do so in a way that does not diminish their excellence in supporting basic research.
EFA is also relatively silent about NSF’s important function in support of R&D at our preeminent research universities. If anything, such funding should be bolstered.
What is also needed is a fulsome think-through and debate about the extent to which such federal support to these universities should take on more of an applied R&D nature.
There are pros and cons of doing so, to be sure. The extent of public funding of university R&D by a number of our foreign allies geared toward industrial applications is far greater than is U.S. In the past, while such practices may have been anathema to the culture of education in the U.S., in today’s global economic race, it may be seen in a more favorable light.
Then there is the element of EFA that the new entity to be created within NSF is to be given “DARPA-like authorities.” If only it were so easy to instill a wholly new mission culture in an organization that not only dates to the 1950s but is fundamentally oriented toward basic R&D.
One is tempted to conclude that the Endless Frontier Act is tantamount to old wine in new bottles.
There is, however, one element of EFA that has some real promise. The proposed law would establish a Supply Chain Resiliency and Crisis Response Program within the Department of Commerce to “monitor supply chain vulnerabilities and provide investments to diversify supply chains in critical products to the nation’s security.” This is sistered with a $2.4 billion program to beef-up the Manufacturing USA network.
Along with the work currently underway in the White House on supply chains in the wake of President Biden’s Executive Order on the issue, this could be an important initiative.
Critical to its success, however, is to delineate the roles of the private sector and the government on questions regarding global supply chain management. The line to be drawn is one where the commercial imperatives are insufficient in foreseeing and preventing supply chain vulnerabilities that run counter to the public interest. Think the current global supply-demand mismatch for semiconducters across various sectors owing to Covid19, where sales for computers soared while those for autos dwindled.
However, beyond the EFA, the Congress has given no thought as how to reorient the activities of today’s U.S. R&D enterprise to magnify and leverage internationally their potency and achieve its aim to counter China in a complex globalized economy.
Indeed, our legislators are focusing only on what the U.S. might do in and of itself. Yet if there is one lesson from the Trumpian policy record on international commerce, it is seeing our economic future through a unilateral lens flies in the face of the real challenges and opportunities before us in a globalized marketplace.
Washington needs to understand the power of collaborating through the establishment of institutions for collective action in R&D with our G7 partners and other like-minded economically advanced democratic countries.
Over many decades, we and our allies have created an impactful network of international trade and investment agreements, including the development of mechanisms for the participation of each country’s domestic stakeholders to help steer the direction of policy positions.
However, in the area of international agreements in science and technology (S&T) amongst us, the content, and the underlying processes for negotiating them are antiquated and toothless. Few of them are plurilateral, and the participation by national actors in R&D activity is too often ceremonial. That the objective of international S&T agreements is to pursue “science diplomacy” says it all.
There always has been heterogeneity among the G7—in terms of policies, market structures, cultures and norms. In recent years, however, some of these differences, especially the character and functioning of each nation-state’s R&D enterprise, as well as the mechanisms for commercialization of innovations, have become not only more evident, but are also exposing these states to risks of being unable to compete effectively in the global economy and of eroding their national security.
This turn of events stems from the fact that, like much of the rest of the world, the economic fortunes of the G7 increasingly have become tethered to China, the most populous nation and one that is neither democratic nor operating according to market principles and the globe’s rules-based institutions. Indeed, the Chinese are exploiting the differences among the G7 in their R&D architecture.
Much is at stake for the G7 to take steps to mitigate these risks. As I have proposed elsewhere, this year’s G7 Summit in June, chaired by the United Kingdom and taking place in Cornwall, presents the opportunity to do just that. A critical item on the summit’s agenda should be the establishment of a standing G7 working group—the “R&D7”—similar to other G7 working groups focused on other important issues.
The charge of the R&D7 should be to reform the structure underlying the negotiation and execution of international S&T agreements among the G7 and to form a stand-alone body whose charge is to ensure these agreements intensify and recalibrate intra-G7 R&D collaboration. There is no reason why these elements cannot be operational before the end of 2021, with an inaugural progress report delivered to the full G7 within that timeframe.