Hillary Clinton's Innovation Agenda: Investing in Ideas and Creating High-Wage Jobs of the Future
At a time when workers are anxious about the challenges of globalization and there is growing concern that America is losing its competitive edge, Hillary Clinton offered her views on how innovation can be the key for creating new jobs, stimulating economic growth, and ensuring American leadership of 21st century industries. She detailed policy proposals to renew the nation's commitment to research; help create the premier science, engineering, technology, and mathematics workforce; and upgrade our innovation infrastructure. Hillary Clinton also rejected the Bush administration's mixture of science with politics, and pledged to restore integrity to federal science policy.
BACKGROUND: America is still an "innovation superpower." We have the world's best university system, an entrepreneurial culture, and the availability of risk capital. Also, we spend more than $300 billion a year on research and development (approximately 2.7% of GDP), more than any other nation. Our products and services are in demand the world over. Last year, Americans captured all of the Nobel Prizes in science.
THE CHALLENGES: Other nations are increasingly investing in their innovation infrastructure, positioning themselves to challenge our leadership. In the last 12 years, China has doubled the percentage of GDP dedicated to R&D, and over that same period GDP itself doubled. Also, our share of the world's scientists and engineers has declined, and too few American college students are preparing themselves for these careers. Fewer than 20% of American undergraduates are earning degrees in science or engineering, compared with more than 50% in China. And, we now rank 25th in broadband deployment.
THE SOLUTIONS: Hillary Clinton proposed a 9-point plan to renew the nation's commitment to research; help create the premier science, engineering, technology and mathematics workforce; and upgrade our innovation infrastructure:
1. Establish a $50-billion Strategic Energy Fund. The Fund would finance an energy research agency that gathers the best minds from academia, the private sector, and government to devise ways to make the United States energy independent and reduce the threat of global warming. Oil companies would have the choice of either investing in alternative energy or contributing a portion of their earnings into the Fund. The Fund would also provide tax incentives for homeowners and businesses to make their houses and offices more energy efficient; provide gas station owners a tax credit for installing E85 (ethanol) pumps; provide loan guarantees for the commercialization of cellulosic biofuels; and providing incentives for the development of new technologies that contribute to a cleaner environment.
2. Increase the basic research budgets 50% over 10 years at the National Science Foundation (NSF), the Department of Energy's Office of Science, and the Defense Department. The increased investment can be accomplished through a combination of new and reallocated funds. At present, federal expenditures on basic research total $28 billion, $13 billion of which is spent outside of the National Institutes of Health (NIH).
* Increase research focus on the physical sciences and engineering. Funding for research in the physical sciences and engineering have remained relatively flat for over a decade, while other nations have stepped up spending. Hillary Clinton proposes to direct the federal agencies to commit a large portion of their budget increases to research in these areas.
* Require that federal research agencies set aside at least 8% of their research budgets for discretionary funding of high-risk research. It is critical to support unconventional research that has the potential of producing break-through results. Under the Bush administration, agencies like the Defense Advance Research Projects Agency (DARPA) have reduced support for truly revolutionary research. This is a problem because DARPA has played a major role in maintaining America's economic and military leadership. DARPA backed such projects as the Internet, stealth technology, and the Global Positioning System.
* Ensure that e-science initiatives are adequately funded. E-science has transformative potential, and we must accelerate the pace of discovery and investment to ensure that America leads the emerging field. E-science is research that links Internet-based tools, global collaboration, supercomputers, high-speed networks, and software for simulation and visualization. The potential of e-science is great. For example, researchers could one day model climate change by constructing scale simulations of the Earth's systems. The NSF commits approximately 3% of its budget, or $200 million annually, to the support of e-science through its Office of Cyberinfrastructure.
* Boost support for multidisciplinary research in areas such as the intersection of bio, info, and nanotechnologies. This is an area of potentially unique competitive advantage for the United States. Few countries have the depth and breadth of our excellence across different scientific and technological fields.
3. Increase the NIH budget by 50% over 5 years and aim to double it over 10 years. Since 2003, the National Institute of Health (NIH) budget has been largely flat, and President Bush proposes reducing it by 1.1% in 2008. Declines in NIH expenditures could significantly affect the quantity and quality of university research, dissuade young people from pursuing careers in science, and impede biomedical advances. NIH-funded research has produced break-through treatments for heart disease, cancer, and AIDS. With funding lagging, there are fewer grants for researchers; there is increased uncertainty about whether funding will be sufficient to complete projects; there is less support for truly creative research; some labs are understaffed; and many construction projects have been scaled back or suspended. The multi-year commitment provides predictability, and the increased funding will help ensure that the next generation of scientists will be well trained.
* Increase investment in the non-health applications of biotechnology in order to fuel 21st century industry. The NIH dominates federal investments in biology and the life sciences, and there are only a few programs exploring non-health applications of biotech. And although biotechnology is a $50 billion industry, it is still in its infancy-and that is particularly true where the non-health applications are concerned. An example of non-health biotech is the creation of bacteria that can remove toxins from the environment, such as heavy metals or radioactive contaminants. Insights from biotechnology can accelerate growth in a large number of other fields-not unlike the way 20th century developments in the chemicals industry drove growth in oil and gas refining, pulp and paper, building materials, and pharmaceuticals. The NIH will have to work with other agencies to explore these non-health applications.
4. Direct the federal agencies to award prizes in order to accomplish specific innovation goals. The federal agencies should regularly use prizes to encourage innovation when there is a clearly defined goal and when there are multiple technological paths for achieving that goal. Prizes can attract non-traditional participants and stimulate the development of useful but under-funded technology. Hillary Clinton proposes to make prizes a part of the budgets at the research agencies.
5. Triple the number of NSF fellowships and increase the size of each award by 33 percent. At present, the NSF offers approximately 1,000 fellowships per year, similar to 1960s levels, although the number of college students graduating with science and engineering degrees has grown three fold. The NSF fellowship is the key financial resource for science and engineering graduate students. Hillary Clinton proposes increasing the number of fellowships to 3,000 per year. She also proposes increasing the size of each award from $30,000 to $40,000 per year (simultaneously, she proposes to increase the NSF award to each recipient's school from $10,500 per recipient to $14,000 per recipient to help cover educational costs). It is estimated that this would increase the annual cost of the program from $122 million to $500 million. [Richard Freeman, the Hamilton Project, "Investment in the Best and Brightest," December 2006]
6. Support initiatives to bring more women and minorities into the math, science, and engineering professions. Increasing the educational attainment of women and minorities, particularly in math, science and engineering, is critical to our future as an innovative nation. Women comprise 43% of the workforce but only 23% of scientists and engineers. Blacks and Hispanics represent 30% of the workforce, but only 7% of scientists and engineers. Unless women and underrepresented minorities develop strong math, science, and engineering skills, the average educational attainment of the American worker will decline. Hillary Clinton proposes that the federal agencies adopt criteria that take diversity into account when awarding education and research grants. She also proposes that the federal government provide financial support to college and university programs that encourage women and minorities to study math, science, and engineering.
7. Support initiatives to establish leadership in broadband. Under the Bush administration, the country that invented the Internet has slipped to 25th in the global rankings for broadband deployment. In order to accelerate the deployment of sophisticated networks, Hillary Clinton proposes that the federal government provide tax incentives to encourage broadband deployment in underserved areas. She also proposes financial support for state and local broadband initiatives. Various municipal broadband initiatives are underway around the country to accelerate the deployment of high speed networks. The initiatives are useful for education, commerce, technology development, and the efficient provision of municipal services.
8. Overhaul the R&E tax credit to make the U.S. a more attractive location for high-paying jobs. The 20% incremental tax credit should be made permanent. Since its introduction in 1981, the credit has been extended 12 times and allowed to lapse once. A permanent credit would make the U.S. a more attractive location for R&D facilities, increasing the likelihood that high-paying research jobs will be created here rather than abroad. Hillary Clinton proposes to make the tax credit permanent in order to eliminate uncertainty, and to make it easier for companies to plan their R&D budgets.
9. Restore integrity to science policy. It is important to reinvigorate the Office of Science and Technology Policy to ensure that the President receives objective, fact-based advice. Hillary Clinton will reverse the Bush administration's irresponsible politicization of science.