|
|
<< Monitoring Rightwing Media | Main | More on Subcontractors >> May 03, 2004Losing Our Economic PowerWe are wasting hundreds of billions of dollars on a war in Iraq that is enflaming anti-American opinion and undermining our real security. Many on the anti-war left recognize that.
While federal money for research looks large, a majority is being diverted from basic research to military needs: this year more than $126 billion has been allocated to research. Moreover, American industry makes extensive use of federal research in producing its innovations and adds its own vast sums of money, the combination dwarfing that of any other nation or bloc.While many people would argue that military research often is spun off to domestic applications, the basic fallback in scientific output by the US compared to other countries doesn't support that argument. One of the big problems is that while US government spending on domestic basic research is falling behind, corporate spending on science is being completely slashed, since they would rather concentrate on marginal improvements in existing products: William Baumol, a professor at New York University, argues that big companies have been learning important lessons from the history of innovation. Consider, for example, that in general they have both cut back and re-directed their R&D spending in recent years. Gone are the droves of white-coated scientists surrounded by managers in suits anxiously awaiting the next cry of “eureka”.The reality is that innovations like the Internet were the product of decades of basic research funded by the federal government from the 1960s into the 1990s. New economic growth will just increasingly migrate to other countries if we do not continually renew the skills driving basic innovation in our country. Posted by Nathan at May 3, 2004 07:19 AM Related posts:
Trackback PingsTrackBack URL for this entry: CommentsAnother way to look at the issue that Nathan brings up is to consider the process of innovation as occurring in 2 parts: (1) Macro-invention - the "big idea," or the lightning bolt from the sky, as in some of the innovations on the chart in the Economist article (continuous casting in steel, the computer, etc.) (2) Micro-invention - the working out of the "big idea" through numerous small improvements over time. (This comes from Joel Mokyr's book The Lever of Riches, for those who may be interested) Now, (and possibly counter-intuitively) most productivity improvements come from the latter process, micro-invention, not macro-invention. The first cut of most innovations are almost always nowhere near as productive and useful as they will eventually turn out to be. Think of the 1940s computers that took up entire basements of buildings but had less computing power than does your current cell-phone. As the Economist article points out, most firms are now choosing to concentrate on the micro-invention part of the equation ("Innovation by big companies has become a matter of incremental improvements . . ."), since that's where the (immediate) payoff is. The problem is, without the macro-inventions that are the product of basic research, the processes of micro-invention eventually run into diminishing returns. There's only so much stuff you can fit on a computer chip, after all. For technological change to continue to power econonic growth, new macroinventions must continually be produced. Apparently, companies are no longer willing to fund this basic research to the extent that they used to. No wonder, since, as with the example of the computer mouse or the transistor, the firm that makes the macro-invention is often not the firm that ends up realizing the long-term payoff. So, the question is, if firms are not willing to make these risky investments in basic research that may or may not pay off anytime soon, who will? If nobody picks up the basic research ball, we are putting our technological lead in jeopardy Posted by: Tom Geraghty at May 3, 2004 10:52 PM Post a comment
|
Series-
Social Security
Past Series
Current Weblog
January 04, 2005 January 03, 2005 January 02, 2005 January 01, 2005 ... and Why That's a Good Thing - Judge Richard Posner is guest blogging at Leiter Reports and has a post on why morality has to influence politics... MORE... December 31, 2004 December 30, 2004 December 29, 2004 December 28, 2004 December 24, 2004 December 22, 2004 December 21, 2004 December 20, 2004 December 18, 2004 December 17, 2004 December 16, 2004
Referrers to site
|
But what many even on the left don't fully recognize is what economists call the "opportunity cost" of wasting our public money on war. One obvious area is the systematic