Category Archives: R&D Funding

** What policies encourage high-technology manufacturing?

We presented this paper at the ISSI conference in Istanbul in June, 2015, and got out before the bombing started.

Causal Connections Between Scientometric Indicators:
Which Ones Best Explain High-Technology Manufacturing Outputs?

R. D. Shelton ,T. R. Fadel, P. Foland
WTEC, 1653 Lititz Pike #417, Lancaster, PA 17601 (USA)

Scientometric models can connect indicators via cross-country correlations, but these are not enough to assert causality. Sometimes a causal connection can be argued from the physical process. In other cases the causality or its direction is not clear, and the Granger test is often used to clarify the connection. Here it was shown that gross expenditures on R&D (GERD) Granger caused scientific papers in the U.S., EU, and some others, which has policy implications. Granger causality also reinforces earlier findings on why the EU passed the U.S. in papers in the mid-1990s. Downstream, it is difficult to prove the connection between research and gross domestic product (GDP), since the contributions of science are diluted by other factors. New data allows a focus on a sector that is more closely associated with science: high technology (HT) manufacturing outputs. This value-added data permits more accurate models for today’s international supply chains. Correlations show that business expenditures on R&D (BERD) and scientific indicators like patents are closely connected with HT manufacturing outputs. However for BERD, either direction of causality is plausible, and enough countries had significant results to show that causality can indeed be in either direction. The connections between papers and patents with HT manufacturing were also investigated; in several countries patents could be said to have Granger caused HT manufacturing.

Link to Paper Text

The Science Coalition Promotes American Leadership of Science

This coalition gets some ink by an annual award to someone, usually a Member of Congress, who supports their goals. The most recent (3/16/15) “Champion of Science” was Senator Dick Durban (D – Illinois).

“The Science Coalition (TSC) is a non-profit, nonpartisan organization of the nation’s leading public and private research universities. It is dedicated to sustaining strong federal funding of basic scientific research as a means to stimulate the economy, drive innovation and secure America’s global competitiveness. Learn more at”

The list of reports at their site tries to make the case that basic research is good for America, more research would be better, but what would it really take for America to be the best?  Well, that will take more motivation that recognizing one of the 535 Members once a year. I think that national security might be that motivation, now the missing item in their goals.

Still, I support what they are trying to do, of course. Too bad there is no way for individuals to participate in their organization.

R. D. Shelton

R&D + M = R&D&M

For decades the US has been investing in research and development, but neglecting manufacturing.  Since it is only the manufacturing of products that can repay investments in R&D, this strategy is really a loser–except for multinationals.  They can make money manufacturing abroad–no American workers are needed, except few sales clerks at $8 per hour.   

This is hardly rocket science, but many efforts to reap the benefits of American R&D in America have been ineffective.  But we have to keep trying.  The latest effort was announced by the Obama Administration on June 24–the Advanced Manufacturing Partnership.  This old EE might call it AMP, or R&D&M, adding manufacturing as an essential follow-on to R&D.

WTEC analyzes alternate universes abroad to seek policies that work.  Some countries (you know who you are) have made a spectacular success from the M part, sometimes without much of the R&D part, at least to start.  Learning from abroad is essential in finding strategies for zero-sum games–like seeking world market share of high-tech sales.  It’s silly to contemplate your own navel to see what has to be done; you have to learn from your successful competitors.  Let’s start by banishing the term, R&D alone, and always adding the manufacturing part: R&D&M.

I’ll discuss the Administration’s new AMP program in the next post in this context.

 R. D. Shelton

The President’s FY2011 Budget for S&T

Despite his call for cuts in discretionary spending, President Obama has proposed substantial increases in the research budgets of some S&T agencies.  These increases based on the regular FY2010 budget are:

NSF +8.2% to $6.02 billion

DOE Office of Science +4.4% to $5.12 billion

NIST +13.5% to $0.58 billion

DOD basic (6.1) +6.2% to $2.00 billion

DOD applied (6.2) research -11.6% to $4.48 billion

I got these bottom line figures from the FYI newsletter from the American Physical Society.

The AAAS will track the R&D budget as it goes through a maze of Congressional actions.  The Congress has its own ideas, and along about October 1, 2010 when the budget is supposed to take effect, they will send a final budget bill to the President to sign (or veto).

R. D. Shelton

2010 Edition of NSF S&EI Shows US Decline

Every two years the NSF/SRS Division produces a wonderful collection of science and engineering indicators, mostly on the US, but with a lot of international comparisons.  Many analysts, including myself, use the data that they have compiled to draw additional conclusions.  I’ll post an example of this next.

For some years I have been pointing with alarm at the loss of US S&T leadership, based this data and other sources.  This year NSF is finally highlighting the same issue, after years of downplaying it.  The first sentence in their press release announcing the report says, “The state of the science and engineering (S&E) enterprise in America is strong, yet its lead is slipping…” which is attributed to Rolf Lehming.  In the next paragraph, Kei Kozumi of OSTP, says, “U.S. dominance has eroded significantly.”

The press release has links to the report and its data in .pdf  and .xls format.

R. D. Shelton

China’s US Portfolio: a CRS Report

Here’s one of those elusive reports from the Congressional Research Service, normally only available to the Congress.  This one tabulates how much the US owed in China in Feb., 2009: $1,200,000,000,000 [this is not a misprint].  Since this was five times the 2003 figure, it might be just a bit more than that now, probably a cool trillion and a half dollars.  The CRS report estimates that, counting China’s holdings of dollars themselves, the total was at least $1.5 trillion by June, 2009.  But, hey, that’s only about $5000 for every man, woman, and child in the US.

The authors, Wayne Morrison and Marc Labonte, also analyze the risks to the US in owing so much money to the People’s Republic of China, which is not exactly a friend of ours.  If they suddenly sold US bonds, it would cause their value, and the dollar, to plummet.  This would reduce the value of the remaining ones held by China, but it would have a catastrophic effect on the US economy.  It is already clear that a threat to do so gives China powerful leverage over US policies–just watch how US leaders behave in Beijing.  Have a nice day, and Merry Christmas; you’re free to celebrate it any way you wish in the West.

R. D. Shelton

ACS Calls for More DOD R&D To Maintain our Technological Edge

The American Chemical Society has 154,000 members, making it the world’s largest scientific society.  Many are international, but like the US arm of the largest engineering society, IEEE-USA, ACS provides a legislative agenda to represent its US members, and what it sees as the national interest, to the Federal Government.  Their policy statement on the FY2010 budget for the Department of Defense is quoted below, since I think it makes an excellent case for R&D investment to maintain our technological edge for national security, and reports on how DOD is not meeting that challenge.

We will soon see the final numbers for the DOD budget, and I doubt that it will be possible to meet the ACS goals within a budget that has to pay for two wars that have already lasted longer than any previous US wars. I don’t envy those who have to make allocations between the need to contain nasty, but limited, threats from Al Qaeda now, and likely much worse threats from emerging superpowers  later. The President’s speech last night touched on one aspect of this dilemma, not guns vs. butter, but guns now vs. investments in the economic strength to buy guns later.  The ACS says:

“The American Chemical Society (ACS) continues to call for increased investment in the Department of Defense (DOD) Science & Technology (S&T) portfolio. Specifically, we support a $400 million increase to peer-reviewed basic research for a total of $2.2 billion in FY 2010, an 18 percent increase over FY 2009.

Research sponsored by DOD is fundamental to protecting the lives of U.S. military men and women and maintaining our military’s technological edge. The basic research programs (6.1 account) underpin advances in applied research and advanced technology development, as well as progress in basic science and engineering research nationwide. Collectively, these programs advance scientific knowledge and enable new technologies and applications critical to the DOD mission, as well as being valuable in the civilian sector.

ACS supports the goal of reserving three percent of the DOD budget for S&T as called for by the Defense Sciences Board. This is consistent with funding levels necessary to replenish the pipeline for future war fighting advances and recommendations put forth by the National Academies’ report, Rising Above the Gathering Storm. Through declining budget requests, DOD has steadily shifted away from fundamental, long-term research. The president’s specific request for a decline in funding continues this trend and is now less than 60 percent of the goal for basic research set by the Defense Science Board.”

There’s more at the link below, but you get the idea. 

R. D. Shelton

Key US Decision Makers in S&T Policy: A Series

As you may have gathered from earlier posts, I believe that American S&T is in more trouble than ever before, despite encouraging signs from the Obama Administration and the Congress.   Even if the Federal Government did everything right, it is quite unlikely that the private sector would cooperate as much as needed; we only have to look at the EU experience of the last decade.  I had a chance to buttonhole a VP of a major US (actually global) corporation recently, and asked him what it would take for his company to locate their next R&D lab in the US. He laughed.

To remedy the problem that I and those of the US innovation movement see, we need to focus on key decision makers in the US.  I know the government officials better than corporation types, so this series will introduce them first. 

I have to hew to a fine line here.  My non-profit scientific research companies are basically not allowed to lobby.  They can provide information on government policy to you.  As individuals, you and I are indeed allowed to lobby the government for remedies to national problems, as long as we don’t do anything improper that would have to be reported on the certs we have to send in with every proposal.  Research!America has played this game with wild success, so far, in doubling the NIH budget, and other initiatives, so it can be done.

Every Member of Congress has to raise huge sums of money for campaigns to keep their jobs and thus need all the friends they can get.  If you become their friend, they are a lot more likely to pay attention to you.  That’s the way the world works, and it’s entirely legal, as long as you know the rules and follow them.

R. D. Shelton

AAAS Data on NSF FY2010 Budget

As reviewed in the previous post, we can now predict what the NSF budget will be for this fiscal year: Oct. 1, 2009 to Sept. 30, 2010, called FY2010.  There are very small differences between the House and Senate versions to be reconciled, and they usually just split the differences.  The President will almost certainly sign the bill, so forecasting this future doesn’t require a crystal ball.

For example the total budget in FY2009 was $6.5 billion, not counting the one-off ARRA $3 billion NSF got this year.  The House bill increases this by 6.9% and the Senate one by 6.6%, so let’s guess 6.75%, bringing the overall NSF budget to a little more than $6.9 billion.

The component for research was $4.8 billion in FY2009, and is likely to increase by about 7.6%.  Drilling down to the Engineering Directorate, the FY2009 budget was $693 million, and the likely increase is 8.25%, or an increase of $57 million, a tidy sum.

Enough,  I have to take the kids to school.  You can do this as easily as I can for other parts of the budget.  BTW, the giant DOD budget has also passed both House and Senate.

R. D. Shelton

AAAS Analysis: R&D Budget Nears Completion

The American Association for the Advancement of Science has an S&T policy program that performs a very useful service in tracking the budget development for R&D in the Federal agencies.  A concise summary is in their table of the 12 bills that make up the overall budget of the U.S. Government.

At this writing, only four of the bills have completely made their way out of this maze and been signed by the President.  Since the fiscal year (FY2010) started on October 1, most of the Government is operating under a continuing resolution until the others are completed.

Unlike the waning years of the last administration, when President Bush could and did veto appropriations bills passed by a Congress controlled by his opposition , there is little prospect that President Obama will overturn the remaining bills.

One bill that has now passed both House and Senate, the “CJS” bill for Commerce, Justice, and Science, funds the NSF, NIST, and NASA, which have a big piece of the R&D pie.  While there are still some small differences between the two versions that have to be reconciled in conference, we can now predict some numbers for these agencies.  A separate post will summarize the situation for NSF, as an example.

R. D. Shelton