0.15 The first obama months  (Page 6/8)

Restoring American leadership in fundamental research” is a key factor in promoting economic growth and quality jobs. The Administration’s strategy is presented as a three-tiered pyramid, the base of which is labeled “Invest in the Building Blocks of American Innovation.” Within this tier, in addition to fundamental research, are education and the creation of a world-class workforce, physical infrastructure, and the development of an advanced information technology ecosystem. The pyramid’s second tier, “Promote Competitive Markets that Spur Productive Entrepreneurship,” consists of export promotion, opening capital markets, encouragement of entrepreneurship, and improving public sector and community innovation. The third tier, “ Catalyze Breakthroughs for National Priorities,” includes clean energy, advanced vehicle technologies, health care technology, and an interesting range of grand challenges. American Institute of Physics Bulletin , op. cit . (Oct. 13, 2009).

The document expresses concern that the American economy has relied too heavily on unsustainable, bubble-driven growth in the technology, housing, and financial sectors, resulting in “a short-term focus [that]has neglected essential fundamental investments” in education, physical and technological infrastructure, and health care. “Furthermore,” the report continues, “we have compounded the problem by ignoring essential investments in high technology research that will drive future growth. Over the last four decades, Federal funding for the physical, mathematical, and engineering sciences has declined by half as a percent of GDP (from 0.25 percent to 0.13 percent) while other countries have substantially increased their research budgets.” The report also highlighted the administration’s approach to R&D funding:

The recent crisis illustrates that the free market itself does not promote the long-term benefit of society, and that certain fundamental investments and regulations are necessary to promote the social good. This is particularly true in the case of investments for research and development, where knowledge spillovers and other externalities ensure that the private sector will under-invest—especially in the most basic of research….

The true choice in innovation is not between government and no government, but about the right type of government involvement in support of innovation. A modern, practical approach recognizes both the need for fundamental support and the hazards of overzealous government intervention. The government should make sure individuals and businesses have the tools and support to take risks and innovate, but should not dictate what risks they take.

We propose to strike a balance by investing in the building blocks that only the government can provide, setting an open and competitive environment for businesses and individuals to experiment and grow, and by providing extra catalysts to jumpstart innovation in sectors of national importance. In this way, we will harness the inherent ingenuity of the American people and a dynamic private sector to generate innovations that help ensure the next expansion is more solid, broad-based, and beneficial than previous ones.