Three Reasons Congress Should Close the Innovation Deficit

Tuesday, Apr 29, 2014, 3:00pm

by Semiconductor Industry Association

The Senate Appropriations Committee held a hearing today about the need to close America’s innovation deficit – the gap between needed and actual federal investments in research and higher education. SIA joined a broad coalition in submitting written testimony urging Congress to close the innovation deficit.

It’s no secret that investments in basic scientific research spur the discoveries that fuel the semiconductor industry and the overall economy. But federal research dollars have a beneficial ripple effect that goes far beyond laboratories and clean rooms. Here are three underappreciated reasons that Congress should act swiftly to boost investments in research and close the innovation deficit:

1)  As federal investments in research increase, R&D investments from private industry often increase as well. The semiconductor industry, in particular, has been a reliable partner in investing in R&D through effective government-industry-university partnerships such as the Nanoelectronics Research Initiative (NRI) and the Semiconductor Technology Advanced Research Network (STARnet). Last year, our industry invested $32 billion in R&D – one of the highest percentages of revenue of any industry – thanks in part to these partnerships.

2) Federal research dollars create new opportunities and incentives for young people to pursue degrees and careers in science, technology, engineering, and mathematics STEM fields. America’s need for talented, educated scientists and engineers has never been greater, but demand for talent has far outpaced supply. For example, only 16 percent of American high school seniors are proficient in mathematics and interested in a STEM career. Every dollar spent on research is a dollar spent inspiring the next generation of America’s technology leaders.

3) Investments in research and higher education demonstrate a commitment to maintaining America’s global competitiveness and technology leadership. Over the last 10 years, R&D expenditures as a share of economic output have remained nearly constant in the U.S., but have increased by nearly 50 percent in South Korea and nearly 90 percent in China. By closing the innovation deficit, we can help ensure that the U.S. does not fall behind other countries when it comes to investments in research and higher education.

Together with other leaders in the high-tech community and academia, SIA will continue to urge the federal government to recommit to robust and sustained investments in basic research and higher education.