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Dr. Colwell's Remarks


What Is NSF Doing for Industry?

Dr. Rita R. Colwell
National Science Foundation
Remarks to the
International Council on Management of
Innovation and Technology
The Conference Board
Washington, D.C.

October 4, 2000

Thank you so much for inviting me to speak with you this evening.

I know you've had a very interesting day touring the Postal Service Engineering Center. So I thought I'd begin by telling you a story that links the National Science Foundation and the Postal Service.

As early as the 1970s NSF funded bar-code research, which helped to perfect the accuracy of the scanners that read bar codes.

Then, in the early 1990s, NSF supported research in computer vision conducted at the State University of New York-Stony Brook, that led to major advances in the algorithms for bar-code readers. With these algorithms in hand, private industry developed a new commercial product line of bar-code readers that has been described by many as a revolutionary advance.

Today these scanners are used everywhere. And here is the link that joins NSF with the Postal Service. These scanners are used in post offices from coast to coast and around the world to help make operations more efficient.

Of course, they are also used in millions of retail stores and in hospitals and other service organizations. They have even come full circle and are now being used as tools by researchers in the field.

For instance, scientists researching the migration patterns of Adelie penguins, have tagged them with bar codes. Which helps make data gathering faster and more precise.

This is just one story among hundreds that I could tell you. It illustrates how the National Science Foundation, university researchers, and industry all interact to produce wide-ranging innovations that transform our lives.

I know that my topic tonight is supposed to be: "What is NSF doing for Industry?"

But I think it should really be: "What are NSF and industry - together with our many university partners - doing together to promote the kind of innovation that leads to economic prosperity and social well-being?

My story about bar codes is an example of how the process of innovation is increasingly a matter of cooperation among many partners. It's one feature that has helped make the American science and technology enterprise the most productive - and the most envied - in the world. It has rapidly become the new paradigm for innovation around the globe.

I'm sure many of you are familiar with a very famous quote that popped up once again, just a few weeks ago, in the Economist Magazine. Recommending that his office be abolished, the Commissioner of the U.S. Office of Patents in 1899 said: "Everything that can be invented has been invented."

He was speaking at the very end of the 19th Century, a period not unlike our own in some ways. There had been a tremendous flowering of innovation, and an economic expansion that has been matched only by the one we are enjoying in America right now.

I'd like to think we are wiser than the Commissioner - though, to be fair, his remarks were taken out of context. We are wiser, in part, because the links between innovation and economic growth are now much clearer to us.

Even though the breathtaking pace of innovation and the change it engenders can be unnerving, we view it with great optimism and hope. It holds the promise of delivering greater economic benefits and a better quality of life for all.

Of course, the Patent Office is alive and well. In fact, it is patent data that tells us something very important about what drives innovation.

You may be familiar with recent studies that indicate a strong and growing linkage between patents granted in the U.S. system and frontier research published in archival journals. Nearly two-thirds of the patents granted cited research supported primarily by public funding. That is powerful evidence of the catalytic effect new knowledge has on innovation.

Even more dramatic is the rate at which this dependence is increasing. Over 100,000 of the patents granted in the U.S. in 1998 cited scientific and technical articles. That's a ten-fold increase since 1988 and a doubling in just the two years 1997 and 1998.

In this new, knowledge-based economy, science and engineering are sharing center stage with industry. In the words of Federal Reserve Chairman Alan Greenspan,

"Something special has happened to the American economy in recent years...a remarkable run of economic growth that appears to have its roots in ongoing advances in technology."

Economists generally agree that advances in knowledge have driven one-half of the growth in the U.S. economy since the close of World War II. It's now clear that the ability to create and use knowledge is a principal source of competitive advantage in global markets, of wealth creation, and of high-wage jobs.

This is most evident in the industries that have grown directly out of cutting-edge advances in science and engineering - biotechnology, and the information and communications sectors. But the exploitation of fundamental knowledge and technology is a characteristic of American business and institutions from the Postal Service to the trucking industry.

Lewis Branscomb, one of the deans of American science policy, put it this way: "High-tech was once a description of research-intensive industries... Today, high-tech is a style of work applicable to every business, however simple its products or services may appear."

This brings me back to the National Science Foundation, where our principal business is investing in the fundamental knowledge that is helping to drive the current explosion in innovation.

Our vision is clear and simple: enabling the nation's future through discovery, learning and innovation.

As this vision indicates, supporting the discoveries that will fuel innovation, and even generate the new industries of tomorrow, is only part - though a very important part - of the picture of what NSF does. Our aim is much broader and more complex.

I'd like to talk tonight about the last two of these themes - learning and innovation. Though they can't be separated from discovery, they are the aspects of NSF's work that are the least known and appreciated.

So let me turn to my first theme, learning and tell about some of the new initiatives NSF is undertaking.

The workforce is a key focus of NSF's work this year. U.S. leadership in the innovation-led global economy of this century will require a new kind of workforce - one that is educated to unprecedented levels of scientific, mathematical, engineering, and technological expertise.

We are developing an initiative called "The 21st Century Workforce." Our goal is to generate a 21st Century workforce that is second to none, and to bring increased understanding of science, mathematics and technology to citizens of all ages.

NSF's strategy is to approach the workforce problem from a variety of perspectives - from critical research that will help us understand the process of learning to programs that address the need to broaden participation in the science and engineering workforce.

The current situation is dismal - and one we must improve.

I don't have to tell this group how urgent this goal is. U.S. students have been turning away from science and engineering majors and advanced degrees, raising concerns about the ability of the nation to lead the world in innovation.

Let me illustrate this point. For years, the proportion of 24-year-olds in the US that hold degrees in the natural sciences or engineering has remained steady at about five percent.

In contrast, proportions have increased rapidly in other countries, notably in Asia. The figure for South Korea is now nine percent, and for Taiwan it is seven percent, and growing. In Europe, the UK with more than nine percent and Germany with eight percent far surpass the U.S.

In the past decade, growth in the number of Asian and European students earning degrees in the natural sciences and engineering has gone up on average by four percent per year. During the same time, the rate for U.S. students declined on average by nearly one percent each year.

NSF's plays a key role in funding the training of the nation's young researchers in university laboratories. Twenty thousand graduate students and nearly 30,000 undergraduates are directly involved in NSF programs and activities every year.

In fact, NSF supports nearly 200,000 people each year - including teachers, students, researchers, postdocs, and many others.

I believe that one of the best links between leading edge scientific and engineering thinking and solutions to real world problems occurs when a business hires a college graduate who has had a chance to work on an NSF funded research project.

Here's an example. We've conducted a number of surveys of companies that partner with NSF-funded Engineering Research Centers. We ask them about the benefits they have received. Not surprisingly, a strong majority of firms cite the new ideas, know-how, and technical assistance they receive. Fifty percent also cite the benefits of interacting with other firms participating in the Center.

But here's the most interesting finding. Forty percent of the firms say one of the most significant benefits was hiring students who gained experience at the Center. That's real tech transfer - the kind that walks on two legs.

Clearly, we need to be investing more in developing the nation's science and engineering talent.

Of course, learning doesn't begin in college. We also need to ensure that today's youngsters are getting the science and math education at the K-12 level that will prepare them for the demands of tomorrow's workforce.

Just this September, NSF made major awards to thirteen U.S. cities to improve K-12 urban math and science teaching. This is part of an ongoing NSF effort to stimulate system-wide reforms in school districts. Urban schools are accomplishing this through strengthening curricula, providing improved education for teachers, and putting programs in place to increase the skilled workers entering the technological workforce.

Most importantly, they are innovating - finding new ways to deliver the skills these children need.

Let me add that industry is doing a great deal to help improve K-12 education - reaching out to local schools and funding creative programs.

Now, on to my second theme, innovation. This brings me back once again to the lesson that the story of bar codes illustrates.

The National Science Foundation has developed a strong record in promoting partnerships - making marriages among some unlikely partners - to move us toward our science and technology objectives for the coming decades.

During the past 30 years, NSF has stimulated and participated in partnerships with academe, industry, other federal agencies, state and local governments and other sectors.

It's an alphabet soup of acronyms.

Some may be familiar to you, like the Small Business Innovation Research (SBIR) Program, which NSF started in the late 1970s. Some are relatively new - like our networking infrastructure activities, and our program in Innovation and Organizational Change. All are, more or less, drivers of innovation.

That is also what NSF's new program: "Partnerships for Innovation" is intended to accomplish.

But this program takes us in a new direction. The program aims to foster creative partnerships designed to stimulate local and regional economic development through innovation.

When we developed our request for proposals, we didn't give detailed guidance about how to accomplish this. We wanted to get the best ideas from the community, and test them to see what works best.

The response we received to this initiative really exceeded our highest expectations. The partnerships involve strategic alliances among and between universities and colleges, state and regional organizations, state governments and the private sector.

The institutions that responded ranged from a two-year college in Barrow, Alaska to Cal Tech, one of the country's great research universities. Industry participation included small start-ups as well as giants such as GE, AT&T and Eli Lily.

Some of the projects focus on innovation in specific areas, for example, advanced composite materials for highways, for aquaculture, and for deep space flight engines. Others are designed to assist communities in developing the educational, cultural and physical infrastructure necessary to take advantage of science and engineering research.

The aim of all of them is to build on fundamental knowledge to create economic and social benefits. We will need this kind of broad participation in innovation, in many communities, in order to compete in the global economy.

Altogether, NSF awarded grants to projects in 20 states and Puerto Rico. Our current investment in this program is relatively small - just $14 million dollars. This is a program that we hope to grow substantially in the years ahead. This depends, of course, on the resources available to do so.

And this brings me to my final point before I conclude. U.S. investment in fundamental research has not kept pace with worthwhile opportunities or with the pace of America's global competitors.

Total national R&D funding has never been higher. It now amounts to about $250 billion dollars. For some years now government funding has remained nearly flat, and the upward trend is due almost entirely to increased Industry spending.

In 1980, industry surpassed the Federal Government as the leading supplier of R&D dollars. Since then, industry's share of the national R&D performance has been rising steadily.

That means the Federal share is down, and down quite substantially - in 1999 the federal government provided only 27 percent of all R&D funds in the US.

That's the lowest level since we started collecting the data! A decade ago, the federal share was 46 percent. Three decades ago, the federal share was 60 percent.

That presents something of a conundrum: while federal investment in research wanes, industry is increasingly dependent on academic research and other publicly supported research at the frontier.

In this context, needless to say, we are still hoping to see most of the FY 2001 budget request for NSF funded. Realistically, it will only be a step in the right direction. The long term erosion of the Nation's basic research investment will take at least several years to fix. And fix it we must. Thank you.



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