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June 2005 Global Talent Pool Conference

Session #4: National Strategies for Education and Innovation: Comparative Perspectives

Speakers:

David Hart, Associate Professor, George Mason University
Ge Songxue, Counselor for Science and Technology, Permanent Mission of the People’s Republic of China to the UN
Devesh Kapur, Associate Professor, Harvard University
Riel Miller, Founder Xperiodo X, Futures Consulting

Moderator: Adam Segal, Senior Fellow for China Studies, Council on Foreign Relations

Presentation of David Hart:
National strategy in the American context is an oxymoron. Like military intelligence or congressional ethics or corporate philanthropy - pick your favorite - we don't have a national strategy in the US. The balance between public and private is lopsided in the education and innovation area. Our system is weighted towards the private sector, which gives any kind of state-led, top-down strategy modest leverage at best. And the state itself is highly decentralized.

We rely heavily on the market, even in areas of innovation and education, and that has great significance for international economic competitiveness.

Higher education is a highly competitive sector. It competes for students. It competes for faculty. Even though its funding is mixed, it has heavy governmental funding. In a subtle way, if you look at schools K-12, most education is a public function, however it’s highly affected by the real estate market, because of the decentralization of our system. So even if there is a big push, any strategy that tries to be top-down is going to ultimately affected by the whims of the real estate market, which is volatile, to say the least.

Remember, we have a division of labor among the levels of government. Our Constitution reserves all powers that are not specifically allocated to the federal government to the states. So the presumption in our system is one of decentralization.

A current example of this in action is the stem cell debate. President Bush’s gave a nationally televised speech to lay down a national strategy for stem cell research. Agree or disagree with it, it was an effort to lay down a strategy in an important area of science. And yet, this has now been contradicted at the state level, especially in California.

What we’re seeing is a competition among the states to get involved in stem cell research. That’s an example of vertical decentralization.

But we also have horizontal decentralization. We have the usual challenges of managing bureaucracies, principals and agents. But we also have in this country, the separation of powers, where the executive and legislative branches can and often do go their separate ways, even when they’re controlled by one party as they are now. You also have the courts weighing in on some of these issues. So I would take competitiveness, in terms of the United States, to be the combined effects of all these actors acting in a decentralized fashion.

Since having a strategy is highly contingent on the interactions among these various players, it’s difficult. So we don’t really have a strategy. We can’t have one and we won’t have one, like it or not. That’s the nature of the game.

Policy, however, can have an effect on the margins. Competition and innovation are creeping back up on the national agenda. They were prominent in the 1980’s and were pushed to the sidelines by the technology boom when we had a kind of triumphalism come into our thinking about technology and innovation. And then we had 9/11 and all that followed that. And that is still what sets the context for policy in the US.

So where are the pushes? Look at the federal R&D budget. What we see is mostly stagnation, if not retrenchment. The big growth area is homeland security R&D. The relevance of that to innovation and competitiveness is marginal and indirect at best. The bigger effect is that it has been a discouraging message to foreign visitors and students.

Then, apparently we are going to try to go to Mars by the moon. This is mostly a symbolic policy, wasteful in my opinion.

If you look at the core areas that could feed into competitiveness and innovation, things like civilian and academic R&D, including the NIH, these are likely to be facing a period of slow growth, if not decline, according to the AAAS, for the upcoming fiscal year.

The United States is still by far the largest spender on R&D in the world. It spends disproportionately more in the biomedical area relative to other countries.

Beyond R&D, the biggest factor on the horizon is how imbalances in our macroeconomic environment are going to be resolved, things like trade and fiscal deficits and low interest rates. These are the kinds of things that have been the precipitant of many of the major policy changes in American history.

So what should we be worrying about? The first thing we have to accept is that other countries are at, or reaching parity in science and technology, and that is a good thing. We should want the rest of the world to get rich to improve their quality of life and so on. If South Korean doctors make breakthroughs in stem cells, that’s good.

We need to think about the US capacity to absorb knowledge that’s created elsewhere. The goal of being number one in everything was never really sensible or even ethical. Now it’s not even realistic. We’ve got to adjust our mindset. And that’s a big adjustment.

Big profits will be made outside the US when discoveries are made elsewhere and commercialized there as well. Perhaps some of those profits will be repatriated to the country of origin. So it’s important the US remain one of those countries of origin. We have to think about what we need to do to remain a country of origin.

This is a long running issue and leads me to believe that we have to sustain and expand public investments in R&D, in education and in infrastructure. That would include capital investments like buildings and laboratories as well as current expenditures.