Building an innovation economy

About half the growth in our GDP since World War II is related to development and adoption of new technologies.  We spend less than 3 percent of our GDP on R&D, which offers an incredible return on investment, for the government and businesses alike. Unlike the recent boom and bust of the financial and real estate markets, technological advancements can provide long-term, sustainable economic growth.

The federal government plays a crucial role in getting the R&D engine running; about two-thirds of the nation’s basic research is supported by federal agencies, according to a report from the American Association for the Advancement of Science (AAAS) on federal R&D in the fiscal 2008 budget. Basic research gives us glimpses of the building blocks of our world, even if scientists don’t necessarily know what they will find when they start looking, or how we might apply the knowledge they gain.

A breakthrough in quantum mechanics contributed to the development of iPods — a valuable — and unexpected —development. Because of this lack of predictability, it doesn’t make sense for most businesses to invest valuable capital in basic research that may or may not yield results applicable to their field. Federal science agencies fill that gap.

Larry Page and Sergey Brin were funded by National Science Foundation (NSF) when they developed the method of ranking websites by links, which became —and remains — a cornerstone of Google.

With enactment of the America COMPETES Act, we set the basic research agencies — NSF, the Department of Energy (DOE) Office of Science, and National Institute of Standards and Technology (NIST) — on a path to doubling their research budgets.

Nearly two-thirds of papers cited in the U.S. patent applications were supported through federal funding, according to the AAAS report. However, applying the results of the research and getting the new technologies to the market is often the sticking point. This gap is often referred to as the “Valley of Death.”

In addition to programs, like the Technology Innovation Program at NIST, which helps small high-tech entrepreneurs bring new technologies to the market, one of the policy strategies is to create public-private partnerships. Government funding can mitigate some financial risk — which can lead to a faster pace of innovation — and the private sector can ensure that the new technologies can get over the Valley of Death and to the market.

There are opportunities all around us for these partnerships to blossom. The House recently passed Rep. Gary Peters’s (D-Mich.) Advanced Vehicle Technology Act, which provides the most comprehensive authorization to date for long-term sustained funding of public-private vehicle R&D and commercial application activities in the DOE Vehicle Technologies Program.  The list of endorsements was striking in its breadth —from GM, Ford and Chrysler, to the UAW, from the Chamber of Commerce and the National Association of Manufacturers to the NRDC and the Sierra Club. With that consensus behind the effort, it is no surprise that the bill passed with broad bipartisan support.

The U.S. has a vested interest in ensuring that we develop not only new technologies but also better ways to make existing products. Half the world’s workers make less than $2 per day. We cannot — and do not want to —compete on wages. We need to have faster, more efficient means of production to ensure that products are made here in the U.S. Changes in technology are the only source of permanent increases in productivity, according to a 2001 report by the National Bureau of Economic Research. The Manufacturing Extension Partnership at NIST is the only program of its kind to help keep small American manufacturers on the cutting edge by enhancing growth, improving productivity and expanding capacity.

Our innovation portfolio also needs high-risk, high-reward research to get radical breakthroughs, so we’re not just working in increments. The Advanced Research Projects Agency for Energy, (ARPA-E), which was modeled after the highly successful Defense Advanced Research Projects Agency, is on track to make its first round of awards in October. The first Funding Opportunity Announcement received an overwhelming response — 3,700 white papers — far exceeding anyone’s expectations. I see that as proof of a pent-up need for this type of transformational technology development that will result in green jobs here in the U.S.

Our committee will continue to look for policy solutions for industries in need of innovative bumps. The House recently passed Rep. Paul Tonko’s (D-N.Y.) bill to carry out a strategic R&D program to remove the barriers that are preventing more widespread adoption of wind energy.  We plan to move Rep.

Gabrielle Giffords’s (D-Ariz.) bill on solar R&D this fall. We’ll continue hearings on the programs in COMPETES as we move towards a reauthorization in 2010. We’ll continue our efforts to improve science, technology, engineering, and math education, because the U.S. will need a skilled workforce to develop and manage these new technologies.

We need not only to keep producing the world’s best scientists and engineers, but we need to ensure that all of our children are prepared to step into the technical, high-paying jobs of the next century. I’m encouraged that the White House had been engaged on this issue, with the president’s speech this week and the release of a white paper on a strategy for innovation.

When I graduated from college, I competed with graduates from my community for jobs. A few years later, graduates were in competition with jobseekers from all over the country. When my 8-year-old daughter graduates from college, she will compete with graduates from all over the world. The world is getting smaller, and that’s why it’s critical that the U.S. ensures its places as a leader in innovation for years to come.

Gordon chairs the House Science and Technology Committee.