Category Archives: S&T Policy

** 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.
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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)

Abstract
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

** Book Review: Falling Behind? Boom, Bust, and the Global Race for Scientific Talent

Mike Teitelbaum has the credentials to settle this question once and for all: is there a critical shortage of American scientists and engineers as big business contends when they try to import more foreigners? Or is there a glut as underemployed post-docs believe when they try to find a real job?

First his chops. He is a highly respected demographer, whose career started with a Rhodes Scholarship, went on to senior jobs in the Congress, as vice president of the Sloan Foundation, and now as a researcher at Harvard. His many books have been well-received, and most recently the top journal in science,called Science oddly enough, recognized him as the person of the year in the field of science careers, probably because of this book. Bio

On a more humble level, in January 1995 your reviewer took a job as a legislative assistant in a Texas congressman’s office. As I was unpacking my briefcase, I was visited by some lobbyists wearing shiny boots. They were from Texas Instruments, and pointed with alarm at an impending crisis in engineering manpower, unless Congress provided more foreign workers via the H1B visa program. I was puzzled by this since I personally knew that jobs in engineering were not so easy to get after the end of the Cold War. Indeed, I was soon visited by another lobbyist, in scuffed loafers, who had lost his job at IBM when it brought in cheaper foreign engineers, and was taking advantage of his ample free time to report this to Members of Congress. Disclosure: I have worked at TI myself, and in 1995 I was an IEEE Congressional Fellow. The IEEE position was that the first guys were wrong, and the second guy was right. But we didn’t have the evidence to prove this. Now we do, thanks to this book.

Actually, it’s simple. Economics 101 says that if there was a shortage in the U.S., pay and working conditions for engineers and scientists would improve to attract more. This is not happening now, but it was just the situation when I graduated during the Cold War in 1960; defense contractors flew me first class all over the country to try to recruit me into a private office, but I foolishly went to MIT on an all-expenses-paid fellowship instead. Now an engineer is lucky to get a cubicle, working as an independent contractor without benefits and with zero job security. And the pitiful science post-docs don’t even get a cubicle, they just borrow a couple of square feet of a library table for their (own) laptop to try to do enough research to get a job.

R. D. Shelton

Falling Behind?: Boom, Bust, and the Global Race for Scientific Talent Hardcover – March 30, 2014
by Michael S. Teitelbaum. available from amazon.com

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 www.sciencecoalition.org.”

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

Patently Absurd

An important science and technology policy development was drowned out last week in the cacophony of carnival barkers questioning the president’s birthplace.  The United States Patent and Trademark Office announced that it would be postponing the implementation of reforms aimed at improving the efficiency of the patent application approval process.  This unfortunate decision resulted from Congress’s decision to raid some 100 million of the USPTO’s self supported dollars.  It is all the more ironic that the announcement came just days before World Intellectual Property Day, a day meant to celebrate the protection of intellectual property worldwide.

      As pointed out in an article by the Milwaukee Journal Sentinel, the reforms would have included a pilot program for fast-tracking patent approval for an extra fee, opening a satellite office in Detroit, much needed upgrades to the USPTO’s computer, and hiring of personnel–necessary to simply keep up with the increasing pace of applications.  In a recent White House video blog, Austan Goolsbee, Chairman of the Council of Economic Advisers, explains how the average patent takes three years to be approved because of a patent office straining with insufficient resources.  The recently delayed reforms were designed to address these problems.         Patent protection is critical for businesses competing in industries of the future which are dependent upon technological innovation including biotechnology, nanotechnology, clean energy, and computing.  China is undertaking a concerted effort to compete with the US in these areas of innovation as indicated by a recent Thomson Reuters report on the state of innovation in China.  The report concluded that “if current trends continue, China is set to dominate the patent information landscape in the not-too-distant future.”

     China’s increasing efforts at securing patents should be kept in perspective, and may be a “case of the world’s second-largest economy playing catch up,”  However, it is clear that the US needs to implement reforms to our patent process in order to remain competitive and maintain leadership in science and technology related industries.

Lance Miller

News About US High-Tech Trade: Good, Not So Good, and Really Bad

High-technology trade is one bottom line indicator of the performance of a national S&T establishment, or “innovation ecosystem.”  The OECD has been gathering this data for many years for five kinds of products: pharmaceuticals, aerospace, electronics, computers, and instruments.  While OECD doesn’t tabulate totals, it’s easy to sum these up for overall indicators of imports, exports and trade balance in high-tech products.  Econobabble claims that international trade is always a win-win situation for all nations, but the latest direction of these indicators shows that all is not so rosy for the US and EU.

Individual companies measure sales, profits, and market share to monitor the health of their enterprise.  Nations can do something similar by monitoring imports, exports, and trade balance.  The high-technology product sector is particularly valuable as a measure of the success of a nation’s overall R&D investments.  After all, about the only way one can get any financial return whatsoever on their investments in research is to manufacture the resulting innovations, and sell them in domestic and foreign markets.

First the good news: imports of these products are growing rapidly in the US, EU, and PRC providing a cornucopia of snazzy new products like iGadgets for everyone to enjoy: Figure 1.  Figures Here  There is just that little dip in 2009, presumably because of a slowdown due to the Great Recession.  All these graphs are in current dollars.  

The Obama Administration has a goal of doubling exports, and Figure 2 shows that high-tech products are contributing mightily.  The not so good news is  that while US exports of these products are growing rapidly, China’s, and even Europe’s, are growing much more rapidly.

The really bad news is in Figure 3.  US and Japanese market share in this sector has dropped like a rock as they moved their manufacturing off-shore.  Also, like the market share of a company, the trade balance of a country (Figure 4) is an overall measure of its business strength in relation to its competitors.   Until the 1990s the US was a high-tech powerhouse; a trade surplus in this sector helped balance losses in sectors like automobiles.  Then China started manufacturing high-tech products in quantity and selling them at prices no one could compete with.  (Try finding a PC made anywhere else at Best Buy.)  Unfortunately this indicator is also a measure of the overall ROI on research investments.   Heretical thought: could it be that our herculean efforts to innovate our way out of our economic problems and build up our STEM workforce may actually be counterproductive, if our competitors reap ALL the benefits of making and selling the resulting products?!

 R. D. Shelton

Innovation in the State of the Union Address

For decades the US innovation community has been trying to get the attention of the White House and Congress for this issue, which has been way down on the list of Washington priorities.  This grassroots lobbying effort has been greatly handicapped by not having the money to buy access that some other lobbies have.  Still, some modest success was gained with the NIH doubling initiative, the American Competitiveness Initiative, and the America COMPETES Act.  Except for the NIH money and a small portion of the ARRA stimulus bill, this has been mostly talk and not much action.  At last we’ve got the attention of the White House, and maybe the Congress.  When a State of the Union address from the President to the Congress is focused almost entirely on this issue, we’ve got the best lobbyist in town on our side. 

WTEC has played a very small role in this movement though its pointing with alarm abroad.  With this new attention at the highest levels, we are positioned to do a lot more.  This President reaffirmed President Truman’s 1950 goal in the address,  “Maintaining our leadership in research and technology is crucial to America’s success.”  Logically, if one has a goal, it is necessary to measure progress toward that goal.  Measuring world leadership of S&T is our middle name: World Technology Evaluation Center, Inc.  And we have a 20-year record of doing more of this than anyone else by the on-site, peer review method that some believe is the most accurate method.

I think we are ideally positioned to take advantage of this new priority that our issue has in Washington.  As the country as a whole focuses on competing in innovation worldwide, WTEC and WTIP should focus on redoubling our efforts to do our part to help.  And as in the case of the country as a whole, we have a very tangible motivation for this: our prosperity depends on it.

The Made in Canada Challenge

Over Xmas and New Years, we went to Montreal.  Why north in the winter?  Well, when you get back, it really seems refreshingly balmy at home.  Think about it; the Canadian snowbirds have it backwards.  They should go to Greenland for winter vacations, instead of Florida.

 Since I couldn’t find any Made in the USA clothing in America, I tried to find some Made in Canada clothing in Canada.  I did find one item in the Montreal Walmart, a belt, which I bought.  In the 8-story Bay department store (BTW, this is where E-Bay comes from) I asked a clerk if there was any men’s clothing made in Canada; he said no with some regret.  I did find a cap, which I bought.

What has this got to do with S&T?  Well, manufacturing is the business end of the innovation cycle; that’s where the money is made to recoup R&D investments.  By ceding this phase to other nations, the US, and now Canada, is giving up on the opportunity to actually make money from S&T.  I don’t think that is a sustainable policy.

 R. D. Shelton

DOD Goals for World Class S&T

The Director of Defense Research and Engineering coordinates department-wide S&T, including supervision of DARPA and the R&D activities of the individual armed services. 

In July 2009, DDR&E introduced four Imperatives to focus the organization in support of the immediate and
future needs of the Department of Defense:

    Accelerate delivery of technical capabilities to win the current fight
    Prepare for an uncertain future
    Reduce the cost, acquisition time and risk of our major defense acquisition programs
    Develop world class science, technology, engineering, and mathematics capabilities for the DoD and the Nation

http://www.dod.mil/ddre/index.html

I think that to measure their progress against that last goal, they need to evaluate where the US stands relative to others.  The Congress seems to agree.  Here is the text of a law (10 C 2365) that establishes a Global Research Watch Program.

(a) Program.— The Director of Defense Research and Engineering shall carry out a Global Research Watch program in accordance with this section.

(b) Program Goals.— The goals of the program are as follows:

(1) To monitor and analyze the basic and applied research activities and capabilities of foreign nations in areas of military interest, including allies and competitors.

(2) To provide standards for comparison and comparative analysis of research capabilities of foreign nations in relation to the research capabilities of the United States.

(3) To assist Congress and Department of Defense officials in making investment decisions for research in technical areas where the United States may not be the global leader.

(4) To identify areas where significant opportunities for cooperative research may exist.

(5) To coordinate and promote the international cooperative research and analysis activities of each of the armed forces and Defense Agencies.

(6) To establish and maintain an electronic database on international research capabilities, comparative assessments of capabilities, cooperative research opportunities, and ongoing cooperative programs.

(c) Focus of Program.— The program shall be focused on research and technologies at a technical maturity level equivalent to Department of Defense basic and applied research programs.

(d) Coordination.—

(1) The Director shall coordinate the program with the international cooperation and analysis activities of the military departments and Defense Agencies.

(2) The Secretaries of the military departments and the directors of the Defense Agencies shall provide the Director of Defense Research and Engineering such assistance as the Director may require for purposes of the program.

(e) Classification of Database Information.— Information in electronic databases of the Global Research Watch program shall be maintained in unclassified form and, as determined necessary by the Director, in classified form in such databases.

(f) Termination.— The requirement to carry out the program under this section shall terminate on September 30, 2011.

R. D. Shelton

India and China: An Advanced Technology Race and How the US Should Respond, by Ernest Preeg

I’m shocked that I am the first person to post a review for this book, which has a most alarming message. Americans really ought to read this book, and try to do something about the problems it uncovers.

Ambassador Preeg makes a convincing case that China will soon become an economic, technological, and military superpower, ending the brief period since 1991 when the US enjoyed that status alone. (India is also coming up strong, but it will be many years until it achieves superpower status.) Moreover, many of the stunning gains made by China, such as world market share of high technology products, come at the expense of the US, so that they represent a double whammy. He identifies the distorted exchange rate between the US dollar and the Chinese yuan, artificially supported by purchases of up to a half trillion in dollars per year by the PRC central bank, as being the single most important cause of much of the gains of China.

The author also lays out a long list of international and domestic actions that the US could take to better compete with China, whose merchantilistic trade policies are in no way consistent with free trade. The Obama Administration seems to be somewhat more likely to take action than the Bush Administration was, but there is a long way to go, and the US public seems to be oblivious to the danger it faces. Also important vested interests in the US have a stake in China’s continued advance at our expense. Preeg believes our actions will be aided by China being soon be forced to revalue its currency, and that they will also soon introduce the promised (one party) “democracy.” I hope so, but I’m more skeptical. I do have one more remedy to add: Americans might decide that cheap Chinese products are a danger to their economic and military security, as well as to their health.

Science The Endless Frontier

Talk about ancient history! This influential report was written by Vannevar Bush in 1945.  This more constructive Bush had coordinated R&D during WWII with great success, including the Manhattan Project, military applications of radar, sonar, the proximity fuse, the Norden bomb sight, and many others that had helped the Allies win the war.  Near the end of the war, he was asked by President Franklin Roosevelt to study how R&D could be organized after the war for peacetime benefits.  One recommendation led to the National Science Foundation, but there is much more in the report.  Today when we seem to be at a loss for justifying investments in R&D, the report’s eloquence on the benefits of R&D, particularly basic research, to the nation in economic prosperity and national security can be an inspiration.

Bush’s letter of transmittal closes with, “Science offers a largely unexplored hinterland for the pioneer who has the tools for his task. The rewards of such exploration both for the Nation and the individual are great. Scientific progress is one essential key to our security as a nation, to our better health, to more jobs, to a higher standard of living, and to our cultural progress.”

Another snippet from later in the report:

“Progress in the war against disease depends upon a flow of new scientific knowledge. New products, new industries, and more jobs require continuous additions to knowledge of the laws of nature, and the application of that knowledge to practical purposes. Similarly, our defense against aggression demands new knowledge so that we can develop new and improved weapons. This essential, new knowledge can be obtained only through basic scientific research.”

The report is at:

http://www.nsf.gov/about/history/vbush1945.htm

Here’s Bush’s Wikipedia biography.

http://en.wikipedia.org/wiki/Vannevar_Bush

R. D. Shelton