How to Lead Innovation in a Changed World

For a holistic twenty-first century science and technology policy, the United States must go beyond the Endless Frontier

In borrowing its title from the 1945 policy framework created by Vannevar Bush, the Endless Frontier Act currently before Congress seeks to increase federal government investment in science and technology to “combat China” and boost American innovation. Bush’s vision was successful in the post-World War II years, but the S&T  â€”both domestically and internationally—in the intervening 75 years. What is needed now is an entirely new framework fit for the unique social, technological, and security concerns of the twenty-first century. Bush’s original Endless Frontier may be best known for increasing federal funding and creating the science agencies we know today, but its true legacy is the way it analyzed the existing S&T system, created a new institutional landscape, and offered a global model for others.

For the United States to remain a leader in global science and technology, focusing on only one kind of input (federal investment) or on one other country (China) won’t be sufficient. In fact, a fundamentally new approach to S&T policy is required, one that can leverage and optimize the diverse and dynamic system that has evolved, manage new risks, and better deliver benefits to society.

Bush’s original Endless Frontier may be best known for increasing federal funding and creating the science agencies we know today, but its true legacy is the way it analyzed the existing S&T system, created a new institutional landscape, and offered a global model for others.

The Endless Frontier Act’s proposition that $100 billion in federal funding can transform American competitiveness occurs in the context of a system for science and technology that looks very different than it did in 1945. Framed by Bush’s original document, federal funding for science increased by a factor of 10 from the 1940s to the 1960s. In 1960, US research and development accounted for 69% of the world’s total. When Bush called on government to take the lead, industry and philanthropic spending were declining, but today the opposite is the case. As of 2018, the federal government funded only 22% of the nation’s R&D. Even in basic research, where the federal role is often thought most important, the government is no longer the largest funder. National Science Foundation data from 2015 show that for the first time in the postwar era, federal agencies provided less than half (44%) of the funding for basic research. Industry R&D now accounts for the largest portion (70% in 2018) of national spending. Even with an increase in federal government investment, it is unlikely that this would change.

Furthermore, in recent decades, the nature of industry R&D and its relationship with government has transformed in ways Bush wouldn’t recognize. The R&D spending of the major West Coast technology companies (Amazon, Google, Intel, Microsoft, and Apple) now far outstrips the spending of the major defense contractors (Boeing, Lockheed Martin, Raytheon, and Northrop Grumman) that traditionally worked closely with the federal government. The tech companies have created their own ecosystems of science collaboration, talent pipelines with universities, and innovation centers offshore. They now rely heavily on foreign-born talent, with roughly 60% of the PhD-qualified computer scientists and engineers in the US workforce being born overseas, most in India and China. And the companies have a powerful voice in policy and regulation, often at odds with governments around the world.

The globalized nature of the leading US technology companies highlights how the broader science and technology system has changed. Over just the past 20 years, global investment in S&T has tripled to over $2.2 trillion. The United States now accounts for just over 25% of the global total, with Chinese science having grown quickly to an almost equivalent size. But that leaves half of global science and technology made up by a diverse group of countries led by Japan, Germany, South Korea, India, France, and the United Kingdom.

This rapid expansion and diversification brings new challenges. A great deal of attention is now focused on the Chinese Communist Party’s efforts to drive advances in key fields of science and technology to modernize its military and support its authoritarian approach to governance. The corollary of the Endless Frontier Act, with its focus on increased government investment, is the Securing American Innovation Act, also before Congress, which would further tighten the rules for immigration and international engagement by US researchers, with a focus on China. The security threats of the new globalized S&T system are real. But to frame the challenge as a binary struggle for leadership between the United States and China is to miss a bigger point. No one nation is likely to assume a globally dominant role in the S&T system of the future. Leadership in this multipolar world will look very different.

No one nation is likely to assume a globally dominant role in the S&T system of the future. Leadership in this multipolar world will look very different.

The current focus on China has also created an unhelpful split between the national security community, which raises legitimate concerns about technology, security, and human rights, and economists, who point to the importance of international flows of people, technology, and capital. Both perspectives are important, and openness and security need not be mutually exclusive.

What is needed is a more sophisticated strategy that recognizes that US science is now highly internationalized, drawing in the world’s best talent and collaborating widely. US research universities provide a system unlike any other for staying connected to the cutting edge of global knowledge, and connecting that to the broader American system through government and industry. Rather than closing down the openness of American research, policy should instead focus on incentivizing movement and collaboration within the system, and making sure that there are effective institutions that can protect technologies that need to be secure. At the same time, this system should prioritize translating research into economic and social benefits for all Americans.

At a moment when the government’s vast national and defense laboratory system could be most useful—providing a bridge between the openness of the academic environment and the security necessary in key sectors—the labs have been sidelined. So instead of leveraging this unique network of national labs designed to create applied research to meet national needs, universities are being asked to do more applied work, and to simultaneously work within tighter security regulations—making both security and openness more difficult. A more productive approach would be to think about the S&T system as a whole, clarify what outcomes are desired, and then determine how US policy can respond systematically, letting each part of the system play to its strengths.

As the nation thinks more holistically about domestic R&D as a system, and seeks to maximize the effectiveness of its different components, a similar focus should be directed at the nation’s relationship with international partners. Focusing only on the domestic system or on China misses fully half of the global R&D now done outside the two largest powers. It is time to craft focused partnerships with close allies to allow faster, less burdensome co-creation of science, technology, and global standards and norms. America cannot adopt a one-size-fits-all approach because different countries have their own strengths, international connections, innovation cultures, and internal constraints. Using a more systematic method, the United States could better harness those capabilities, acknowledge the constraints, and bring like-minded partners into settings where they can help drive faster outcomes, all while protecting national security and advancing shared values.

America will be at its most competitive when it taps the broadest pool of global talent and ideas, and it will be increasingly important to find ways to maintain links even with countries with whom strategic relationships are difficult. Forcing a bifurcation or “de-coupling” of the global innovation system is likely to prove counterproductive, and deprive the United States of a large portion of global science and technology that will absolutely be leveraged by others. Even with a significant increase in federal investment in US science, the broader contours of this new global system won’t change.

America will be at its most competitive when it taps the broadest pool of global talent and ideas, and it will be increasingly important to find ways to maintain links even with countries with whom strategic relationships are difficult.

This highlights the ways in which the role of government has fundamentally changed in the new, globalized S&T system. Rather than dominating investment and controlling the participants in the system through federal policy, leadership is now more about seeing the entire system as a whole and leveraging it wisely. In defense R&D for example, the federal government may need to shift from being the major procurer and purchaser, to a broker of collaboration in open architectures that can deliver broader benefits across the whole system, including small and large companies with primary focus far beyond the defense industrial base.

American innovation works best when there is room for creativity and experimentation. No one person or agency will ever have all the answers, but someone needs to be responsible for thinking systematically, and this can be an area where the federal government can play a lead role—catalyzing a national response and facilitating connections to the right parts of the international system. Current debates about which particular fields of science and technology are the biggest priority, or about which federal agency should get the largest budget increase, are lacking a systematic framework for policy-making in today’s new world.

US S&T policy must now progress from its successful postwar framework to a new framework fit for the twenty-first century. Without this, future policy interventions run the risk of wasting scarce resources, or worse, reinforcing existing problems and inequalities. The nation needs more systematic analysis of all the different inputs for science and technology—funding, yes, but also human capital, infrastructure, and the policy and regulatory framework—and new approaches to optimizing these in what is a very different environment. It is time once again for creative system engineering on US science and technology. Leadership in the new multipolar world will look very different, but it is just as important as ever.

It is time once again for creative system engineering on US science and technology. Leadership in the new multipolar world will look very different, but it is just as important as ever.

The particular genius of Vannevar Bush was that he did not try to solve every problem laid at his feet in 1945. Instead, he stepped back, assessed the past and present situation, identified areas of significant change that required new approaches and offered new opportunities, placed the challenges of his time within that context of change, and identified a small number of interventions likely to have the most crosscutting effect on the overall system. Today, the nation faces a moment of great change, but the global context, current challenges, and existing capabilities are fundamentally different. It is time to do what Bush did, rather than focusing on continuing the solutions he proposed for the challenges of 1945.

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Cite this Article

Flagg, Melissa, and Paul Harris. “How to Lead Innovation in a Changed World.” Issues in Science and Technology (September 9, 2020).