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The U.S. is woefully behind in funding research at universities

It’s a trend that doesn’t bode well for the future of our innovation economy.

The U.S. is woefully behind in funding research at universities
[Source Image: udf/iStock]

The United States is falling behind in the race for future innovation. It ranks near the bottom quarter of developed countries when it comes to what percentage of GDP is contributed to research universities. The could mean the next generation of students may not be receiving the best tools to boost their learning curves. Some very interesting projects that might lead to new breakthroughs or companies also probably aren’t getting funded.

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America ranks 28 out of 39 countries in terms of what share of its GDP gets allocated to university research. In real numbers, that was about $33.3 billion in 2017 or .2% of the overall total. That’s a lot of money, but it’s offset by the cost of doing business in the country. When that GDP proportion is adjusted for economic impact or so-called “purchasing power parity,” the U.S. actually ranks 34th overall.

“Government funding of R&D has always been a pretty important enabler of innovation,” says Rob Atkinson, the president of the Information Technology and Innovation Foundation, an independent nonpartisan think tank, who coauthored a recent report on the trend. “It sort of creates the seed corn, if you will, that entrepreneurs can then take and build companies off of. Universities are a key area of that.” The other typical funder is corporate contributors, which combine to provide about one-tenth of what the government does and has followed a similar downward trend. “We’re doing poorly on both,” he says.

[Image: courtesy of Information Technology and Innovation Foundation]

And it gets worse: Based on ITIF’s report, not only is the United States investing less that other places, many of those places are giving more and more. The data comes from the Organisation for Economic Co-operation and Development and National Science Foundation. Since 2011, ITIF has found that the U.S. rate of spending has declined at a rate of about 2% per year while China is spending about 10% more annually. In fact, the top 12 countries are putting in at least double (and sometimes far more) than the U.S. is providing. The U.S. would have to spend $108 billion annually to match top-ranked Switzerland.

While America is obviously a global power with a booming tech sector for now, that should be viewed as an unsettling trend. “Part of the reason I think people aren’t as alarmed about this is because we had such a head start,” says Atkinson, who notes that the government spent more on university research and development in the mid-60s than the rest of the world did combined.

ITIF recommends that the U.S. increase its allotment by at least $45 billion annually to maintain a slot in the top seven largest financial contributors. Beyond that, it will take some serious order of magnitude increased to knock off the top spenders. It also recommends that Congress expand its energy-related research tax credit program from just businesses to include universities.

“We built up the greatest universities in the world by far, and we still have the top universities in the world,” Atkinson says. “It’s sort of like glacial melting of icebergs. . . . every year the Chinese universities are getting better compared to ours, British universities, European universities, they’re all, they’re all getting better compared to ours, and they’re getting better for the simple reason that they’re putting more money into it.”

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About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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