conversableeconomist

U.S. Science Needs to Look Beyond Our Borders

The U.S. has traditionally been the dominant world presence in science, although it of course needed to pay some attention to scientific efforts in western Europe, Japan and Canada as well. America is used to scientists and business people from other countries coming here to learn the latest breakthroughs. But the U.S. scientific edge is diminishing. As Caroline S. Wagner writes in \”The Shifting Landscape of Science\”,

in the Fall 2011 issue of Issues in Science and Technology: \”The days of overwhelming U.S. science dominance are over, but the country can actually benefit by learning to tap and build on the expanding wellspring of knowledge being generated in many countries.\” Here are some excerpts:

Here\’s Wagner with an overview of the past and what\’s coming: \”Since the middle of the 20th century, the United States has led the world rankings in scientific research in terms of quantity and quality. U.S. output accounted for more than 20% of the world’s papers in 2009. U.S. research institutions have topped most lists of quality research institutions since 1950. The United States vastly outproduces most other countries or regions in patents filed. … In 1990, six countries were responsible for 90% of R&D spending; by 2008, this number has grown to include 13 countries. According to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), since the beginning of the 21st century, global spending on R&D has nearly doubled to almost a trillion dollars, accounting for 2% of the global domestic product. Developing countries have more than doubled their R&D spending during the same period. …The UNESCO report documents that the global population of researchers has increased from 5.7 million in 2002 to 7.1 million in 2007. The distribution of talent is spread more widely, and the quality of contributions from new entrants has increased.\”

One common (if imperfect) measure of scientific output is the number of scientific papers published. By this metric, the European Union has taken the lead from the United States, and countries like China and Korea are rising rapidly.

Wagner\’s overall message is that in a world economy where science and technology are of increasing importance, and a world where a greater share of that research is happening elsewhere, and where pressures on government budgets mean that U.S. spending on R&D isn\’t likely to rise in a sustained and dramatic way–in that world, the U.S. scientific establishment needs to focus more on identifying excellent research happening around the world and in in keeping tabs on that research and finding ways to participate in it. Here\’s Wagner:

\”Although the U.S. research system remains the world’s largest and among the best, it is clear that a new era is rapidly emerging. With preparation and strategic policymaking, the United States can use these changes to its advantage. Because the U.S. research output is among the least internationalized in the world, it has enormous potential to expand its effectiveness and productivity through cooperation with scientists in other countries.

\”Only about 6% of U.S. federal R&D spending goes to international collaboration. This could be increased by pursuing a number of opportunities: from large planned and targeted research projects to small investigator-initiated efforts and from work in centralized locations such as the Large Hadron Collider in Geneva to virtual collaborations organized through the Internet. Most federal research support is aimed at work done by U.S. scientists at U.S. facilities under the assumption that this is the best way to ensure that the benefits of the research are reaped at home. But expanded participation in international efforts could make it possible for the United States to benefit from research funded and performed elsewhere.

\”U.S. policy currently lacks a strategy for encouraging and using global knowledge sourcing. Up until now, the size of the U.S. system has enabled it to thrive in relative isolation. Meanwhile, smaller scientifically advanced nations such as the Netherlands, Denmark, and Switzerland have been forced by budgetary realities to seek collaborative opportunities and to update policies. … An explicit U.S. strategy of global knowledge sourcing and collaboration would require restructuring of S&T policy to identify those areas where linking globally makes the most sense. The initial steps in that direction would include creating a government program to identify and track centers of research excellence around the globe, paying attention to science funding priorities in other countries so that U.S. spending avoids duplication and takes advantage of synergies, and supporting more research in which U.S. scientists work in collaboration with researchers in other countries.\”

\”One recent example of movement in the direction of global knowledge sourcing is the U.S. government participation with other governments in the Interdisciplinary Program on Application Software toward Exascale Computing for Global Scale Issues. After the 2008 Group of 8 meeting of research directors in Kyoto, an agreement was reached to initiate a pilot collaboration in multilateral research. The participating agencies are the U.S. National Science Foundation, the Canadian National Sciences and Engineering Research Council, the French Agence Nationale de la Recherche, the German Deutsche Forschungsgemeinschaft, the Japan Society for the Promotion of Science, the Russian Foundation for Basic Research, and the United Kingdom Research Councils. These agencies will support competitive grants for collaborative research projects that are composed of researchers from at least three of the partner countries, a model similar to the one used by the European Commission. …\”

\”Looking for the opportunity to collaborate with the best place in any field is prudent, since the expansion of research capacity around the globe seems likely to continue and it is extremely unlikely that the United States will dramatically increase its research funding and regain its dominance. Moreover, it may be that the marginal benefit of additional domestic research spending is not as great as the potential of tapping talent around the world. Thus, seeking and integrating knowledge from elsewhere is a very rational and efficient strategy, requiring global engagement and an accompanying shift in culture.\”

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The Vast, Automatic, Invisible Economy: W. Brian Arthur

W. Brian Arthur has written \”The Second Economy\” for the October 2011 issue of the McKinsey Quarterly. (Free registration is needed to access the article.) The subheading under the title is: \”Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution.\” As one expects from Arthur, this short essay is full of thought-provoking comments. Here are a few highlights:

What does an economic transformation look like?

 \”In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.

Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today? …

But I want to argue that something deep is going on with information technology, something that goes well beyond the use of computers, social media, and commerce on the Internet. Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.\” …

\”Now this second, digital economy isn’t producing anything tangible. It’s not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It’s helping architects design buildings, it’s tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. …\”

First an economic system with muscles, and now one with nerves

\”Think of it this way. With the coming of the Industrial Revolution—roughly from the 1760s, when Watt’s steam engine appeared, through around 1850 and beyond—the economy developed a muscular system in the form of machine power. Now it is developing a neural system. This may sound grandiose, but actually I think the metaphor is valid. Around 1990, computers started seriously to talk to each other, and all these connections started to happen. The individual machines—servers—are like neurons, and the axons and synapses are the communication pathways and linkages that enable them to be in conversation with each other and to take appropriate action.

Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. Now, I’m not interested in science fiction, or predicting the singularity, or talking about cyborgs. None of that interests me. What I am saying is that it would be easy to underestimate the degree to which this is going to make a difference.

I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground. For example, if I’m driving in Los Angeles in 15 years’ time, likely it’ll be a driverless car in a flow of traffic where my car’s in a conversation with the cars around it that are in conversation with general traffic and with my car. The second economy is creating for us—slowly, quietly, and steadily—a different world. …\”

Will this second economy change the nature of jobs and how economic production is distributed?

\”The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.

The system will adjust of course, though I can’t yet say exactly how. Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades. The problem is by no means insoluble. The good news is that if we do solve it we may at last have the freedom to invest our energies in creative acts.\”

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The Supply of Science Ph.D.\’s

One of the odd patterns in recent years is that there is virtually universal agreement that the future of the U.S. economy is closely tied up with technological leadership. But at the same time, those who get a Ph.D. in one of the hard sciences are finding a very unwelcoming job market. Nature takes an international perspective  on this issue in \”Education: The PhD factory: The world is producing more PhDs than ever before. Is it time to stop?\”

Setting the stage. \”The number of science doctorates earned each year grew by nearly 40% between 1998 and 2008, to some 34,000, in countries that are members of the Organisation for Economic Co-operation and Development (OECD). The growth shows no sign of slowing: most countries are building up their higher-education systems because they see educated workers as a key to economic growth … . But in much of the world, science PhD graduates may never get a chance to take full advantage of their qualifications.\”

In the United States: \”To Paula Stephan, an economist at Georgia State University in Atlanta who studies PhD trends, it is “scandalous” that US politicians continue to speak of a PhD shortage. The United States is second only to China in awarding science doctorates — it produced an estimated 19,733 in the life sciences and physical sciences in 2009 — and production is going up. But Stephan says that no one should applaud this trend, “unless Congress wants to put money into creating jobs for these people rather than just creating supply”. The proportion of people with science PhDs who get tenured academic positions in the sciences has been dropping steadily and industry has not fully absorbed the slack. The problem is most acute in the life sciences, in which the pace of PhD growth is biggest, yet pharmaceutical and biotechnology industries have been drastically downsizing in recent years.\”

In Japan: \”Of all the countries in which to graduate with a science PhD, Japan is arguably one of the worst. In the 1990s, the government set a policy to triple the number of postdocs to 10,000, and stepped up PhD recruitment to meet that goal. The policy was meant to bring Japan’s science capacity up to match that of the West — but is now much criticized because, although it quickly succeeded, it gave little thought to where all those postdocs were going to end up. Academia doesn’t want them: the number of 18-year-olds entering higher education has been dropping, so universities don’t need the staff. Neither does Japanese industry, which has traditionally preferred young, fresh bachelor’s graduates who can be trained on the job. The science and education ministry couldn’t even sell them off when, in 2009, it started offering companies around ¥4 million (US$47,000) each to take on some of the country’s 18,000 unemployed postdoctoral students …\”

In China: \”The number of PhD holders in China is going through the roof, with some 50,000 people graduating with doctorates across all disciplines in 2009 — and by some counts it now surpasses all other countries. The main problemis the low quality of many graduates.\”

In Germany:  \”Germany is Europe’s biggest producer of doctoral graduates, turning out some 7,000 science PhDs in 2005. After a major redesign of its doctoral education programmes over the past 20 years, the country is also well on its way to solving the oversupply problem. Traditionally, supervisors recruited PhD
students informally and trained them to follow in their academic footsteps, with little oversight from the university or research institution. But as in the rest of Europe, the number of academic positions available to graduates in Germany has remained stable or fallen. So these days, a PhD in Germany is often marketed
as advanced training not only for academia— a career path pursued by the best of the best — but also for the wider workforce.Universities now play a more formal role in student recruitment and development, and many students follow structured courses outside the lab, including classes in presenting, report writing and other transferable skills. Just under 6% of PhD graduates in science eventually go into full-time academic positions, and most will find research jobs in industry…\”

In India: \”In 2004, India produced around 5,900 science, technology and engineering PhDs, a figure
that has now grown to some 8,900 a year. This is still a fraction of the number from China and the United States, and the country wants many more, to match the explosive growth of its economy and population. … But there is little incentive to continue into a lengthy PhD programme, and only around 1% of undergraduates currently do so. Most are intent on securing jobs in industry, which require only an undergraduate
degree and are much more lucrative than the public-sector academic and research jobs that need postgraduate education.\”