Nature Podcast

This is a transcript of the 18th September Podcast Extra on innovation and technology in the US election. Audio files for the current Nature Podcast and archive episodes can be accessed from the index page (, which also contains details on how to subscribe to the Nature Podcast for FREE, and has troubleshooting top-tips. Send us your feedback to

David Goldstein: Welcome to the third in our series of special podcasts on the US presidential campaign. I'm David Goldstein. Today we are going to be talking about innovation policy. Both Senators Barack Obama and John McCain have said they want the US economy to remain competitive, but what specific steps are needed to accomplish that. We will be talking with our guests about research spending, education policy, tax and immigration among other matters. I have with me today Bill Bates of the Council on Competitiveness. Good morning Bill.

William Bates: Good morning.

David Goldstein: Stephen Ezell from the Information Technology and Innovation Foundation. Hi, Steve.

Stephen Ezell: Good Morning.

David Goldstein: And Toby Smith from the Association of American Universities which represents US research Universities. Good Morning Toby.

Tobin Smith: Good Morning.

David Goldstein: So, I wanted to start by asking each of you to talk about what the top two or three things the next president should do in January on innovation issues. Bill, why don't we start with you?

William Bates: Well, it's difficult to narrow it down to two or three but let me throw a couple of options out. The first would be to try and create an environment that drives investment in the United States and the second would be to try and overcome what I would see as an aversion to risk that has began to creep into both public and private sector investment in research.

David Goldstein: Steve.

Stephen Ezell: One of the best things candidates can do to elaborate on those points is to align tax incentives to the private sector to encourage innovation. Both campaigns have looked at tax credits for R&D experimentation. What the Information Technology and Innovation Foundation would like to see happen is the creation of a National Innovation Foundation that would be charged with fostering the commercialization of innovations to the private sector in the United States and the third thing that both candidates must make essential to their information and innovation and technology platforms is to drive visual transformation of government bring information technology solutions to healthcare to first responders to the transportation systems of the United States.

David Goldstein: Toby.

Tobin Smith: One of the most important things I think the president needs to do, given the role that Science and Technology are going to play in meeting some of the challenges he will face, is to appoint a science advisor very early on within the first 30 days of taking office. With that person then providing advise on other key personnel slots that he is going to have to fill, I would also say that investing in programs that help us to generate the workforce, we're going to need for the 21st century is critical and that goes from helping to strengthen K-12 education, coordination of federal programs across the different agencies that invest in these programs to supporting things like fellowships, traineeships at our universities.

David Goldstein: Great, thanks. We will get into each of those, all very concise. We will see if the next president's first speech is quite that targeted. Let's start with the innovation foundation and discuss that's sort of the most discrete concrete thing that came up perhaps and may be the newest. Can you talk Steve a little bit more about what that would do and how it would be set up.

Stephen Ezell: Sure. A National Innovation Foundation for the United States would take agencies, initiatives, and departments that are currently spread throughout the federal governments in areas like the National Science Foundation, Department of Commerce, National Institute for Standards and Technology, programs such as MEP, the Manufacturing Extension Program, TIP; Technology Innovation Partnerships, and bring these disparate programs that exist throughout the federal government under the roof of one agency that would be responsible for setting a National Innovation agenda for the United States and promoting the commercialization of technological innovation in US businesses. The specific duties or activities of a National Innovation Foundation would be to fund national level sector-based research initiatives, to fund regional TBED or Technology-Based Economic Development activities through partnerships with states and local communities to promote the diffusion of technology to small and medium enterprises in the United States to administer grants to help develop regional innovation clusters and even advocate for innovation throughout the federal government. One of the drivers for a National Innovation Foundation would be to create a holistic national innovation strategy for the United States. Almost all of the competitors in the US across the OECD and in Asia, countries like Taiwan, Japan, Singapore, China, Great Britain, Germany, all have nationally organized innovation strategies and at the Information Technology and Innovation Foundation we believed it's time for a national innovation strategy for the United States.

David Goldstein: I want to get back to some of the specifics on that. But first why don't we hear from our other guests about that. Bill is that a good approach, and if not what are some alternatives and even if it is what are other ways to get at that short of a new foundation?

William Bates: I mean it's an interesting approach and that it's sort of a federal idea that has a regional or state based implementation. At the Council on Competitiveness, we have worked on this idea of regional innovation for a number of years and at the heart of that is really the idea of creating the right networks that will generate innovation. It's amazing to me the number of times that I have been at meetings among state governors, university presidents, community college leaders from the same area and they walk into a meeting and start introducing themselves because they've never met each other. Yet these are the folks that are supposed to be educating the future workers that are going to be employed by the company down the street and I think this National Innovation Foundation idea would encourage greater regionalization and greater interaction between those folks and that sort of gets at the heart of the idea that I put out in the first place, which is trying to create that environment that will drive investment in regions where there is coordination between the education systems, the workforce systems, the industry that's in the region and the local governments. So, I mean, I think the concept behind it is a terrific idea whether these specific set up of an innovation foundation at the federal level that pulls in different programs that Steve outlined, and, you know, I don't know whether that's exactly right but just the fact that we are having this discussion, I think is an important one because the concept is a great idea.

David Goldstein: Toby your members are in all those states, what do you think about this?

Tobin Smith: I have reservations about the technology foundation in part because there has been a lot of focus on trying to support the existing infrastructure and we have a very pluralistic system that support for Science and Technology in the United States that in some ways is good, although we found here recently even some of the calls for increased funding last year the congress passed the America Competes Bill which called for a number of new programs to get at some of these, these types of issues and they have yet to be funded, so one of the concerns is creating a whole new agency that would need funding. I think there is other lessons to be learned, you know we had a technology administration, Department of Commerce and we could never seem to support it and frankly it should have been doing a lot of these things and I think you could revive something like this and do it on the auspices of commerce and that may make sense. We need to find ways in this country to get over being so worried about supporting "industrial policy" and funding, kind of, that Valley of Death that exists between our universities the venture capitals. So, I think in that sense this is a very healthy discussion to have. I'm just not so sure I knew a new government entity to make it happen is the way to go. Let's support and work with what we have better coordinated at the, you know, OSTP level, the Office of Science and Technology, I think there is a lot that can be done in the executive branch to coordinate our innovation efforts so that they work across agencies well.

David Goldstein: Ok, let's move away from the organizational aspect of it for a moment and look more at some of the specifics what we would do, which Bill was talking about as well as Steve a little bit. First on the regional side, don't want to get to the federal, Bill I'll wind with what the problem is, but what are some of the concerns that the federal government ought to do to help states do what you would assume they have the incentive to do on their own. Steve.

Stephen Ezell: What you find so many times is that when the United States goes to compete in global industry is without a coordinated approach to supporting those companies, then US industry is behind. For example, out of McCain policy to put 300 billion dollars to support a prize for a new advanced battery package. Oh, it's nice to have a price out there, but then you compare that to what countries like Japan and Germany are doing. Japan has a 250 million dollar government program to directly support their companies in building advanced batteries. Germany, an 85 million dollar program. So instead of having a theoretical situation in which a prize is awarded at some point, here you have the countries that are working directly with their industries to define their research programs that will be needed to complete a plan and to get to the reality of an advanced lithium ion program. What we envision with these national level sector based research initiatives are programs that will be national in scope.

David Goldstein: In taking that example, I mean, we have ABC the American Battery Consortium, DOE does work with battery companies and so forth maybe not adequately but in terms of having a strategy in certain areas like energy, there's at least the skeleton of something like there. Are there areas where we need to expand that they were not doing things right now. Steve.

Stephen Ezell: Well, you know, I think that the structured approach as you have talked about through the Advanced Battery Consortium would be the right way to get out these national level sector based research initiatives. Energy broadly, not just with regard to car batteries but research programs to drive green energy programs will be one. Programs that support nanotechnology, advanced composite plastics, at the whole range of technology is there on the cutting edge of science are areas where a national oriented research program could be organized.

David Goldstein: Toby.

Tobin Smith: Just picking up on that, I think in areas like energy one thing we really do need to do in the next administration is focus on coordinating amongst the agencies that already support research, support technology development, the activities that they are doing and so in energy we have significant amounts of money being invested by the Department of Defense for instance in new energy technologies, but the Department of Defense doesn't necessarily know what the Department of Energy is doing and we all know that a lot of this is going to be driven in our energy future, where we go to will be driven by peoples behaviour. So the National Science Foundation can add a lot in terms of the social sciences to this question and so we certainly think that better coordination kind of cross cutting inter-agency initiatives around challenges like energy are something we would like to see the next administration really focus on and try and coordinate those efforts. So we bring together all the different work that's going on across the federal government to solve these national challenges.

David Goldstein: Steve.

Stephen Ezell: Toby I think, no. I just would argue that that function should occur within the National Innovation Foundation, you would argue perhaps the home for that function or mandate would be better look it within the OSTP, the Office of Science and Technology Programs. Regardless, I think that must be an absolute priority for the next administration.

David Goldstein: So I want to get back to this coordination issue in terms of Toby's concern about a presidential science advisor, before we do that Toby referred earlier to Valley of Death, this gap between research and actually getting products successfully competing in the marketplace. A lot of the examples that we've talked about so far are really cases where the governments have helping industry investment fairly basic research. What kinds of things regardless of where it's housed should the government be doing, that isn't now or isn't doing sufficiently to help cross that Valley of Death, Bill.

William Bates: Sure, I mean I think Steve referenced the manufacturing extension partnerships and that's just one place where it supposed to be helping manufacturers move to sort of the next generation of manufacturing technology and I think where we really see this Valley of Death a lot of times is even a little farther along the chain closer to a commercial product. It's been able to demonstrate that you can replicate something, you can mass produce it that it has a market and that something that sort of could be a role that the federal government has not done a very good job with that may be that's something they could step into. It is a regional innovation issue like we were talking about before. Because it does take coordination between the universities, between businesses, between government; could be state government, could be federal government but I do think there is role for the federal government to play and sort of little farther along the value chain towards commercialization.

David Goldstein: Toby, is there a role that universities comply in that?

Tobin Smith: Yeah, I think our universities would say, well, we have the biggest problems, early stage venture capital funding and it's getting that that new idea you know out there and the larger companies now willing to take a risk can find the venture capital. So programs that support, there are lot of states moving in that direction trying to fill that void but it's not uniform across all the states.

David Goldstein: Steve you've actually been out there in the high tech sector, what kinds of things can the government do to help with the venture capital problem.

Stephen Ezell: On this topic of how government can support industry one salient feature of the state of technology in the early 21st Century is that the amount of science that is required to be understood and be researched before we get to technology at the present level, so whereas we used to have what's called Pasteur's Quadrant which was the understanding of how technology can be deployed before the basic science is understood used to be a former comment. The Pasteur's Quadrant referred to the fact that the process the technological process of Pasteurization was understood long before the science of microbiology was ever understood, but the opportunities to innovate on Pasteur's Quadrant are very limited now. So, substantial amounts of research into basic science must occur before we can ever reach technology and therefore government has a substantial role to play in being a funder of basic and applied research in the United States. When you look at a great number of US companies and industries, specific companies like Google, like (UNCLEAR 14:18), like Oracle, these were all companies that got their initial funding from basic government grants for research in Science and Technology. Extending and increasing the amount of government funding for research is one of the most important things the next administration can do.

David Goldstein: Bill, the council certainly has supported increases in basic research funding. What kinds of increases should the next president be proposing?

William Bates: Well, I think as I think was referenced earlier the America Competes Act was passed last year which authorized basically a doubling of funding in across the federal government for basic research. I think the next president just needs to embrace fully funding that act and that gets us on a glide path towards increasing basic research across several of the key federal agencies. It's not a solution to sort of pick and chose and say this agency is the right agency for basic research and that agency is not because so much of the research today is multidisciplinary. Advances we make in biotechnology have implications for computer science, advances we make in physics have implications for healthcare. So it really has to be done across the board and it has to be done at a steady increase over time. It can't be increased one year or decreased the next year. It's just not the way science works.

David Goldstein: So does that mean that President Bush has proposed the American competitiveness initiatives that talks about gradually doubling some of the agencies. Are you suggesting that that's not broad enough though we need something even more broad than that?

William Bates: Yes, I think you need to include NASA. I think you need the space agency. I think you need to include the National Institutes of Health, because again there's so much cross pollination between the research that gets done to increase one to the determent of another is short changes your overall goal.

David Goldstein: So, many people view the NIH doubling those in some ways, well at least not a complete success because of the way that both what you referred to went up and then down but also because it didn't solve some structural problems and in fact probably made some of them worse in terms of overbuilt infrastructure and so on. What can we do to avoid that?

William Bates: So, I think the first thing is not to ramp up as quickly as we did with NIH, of course the NIH budget was doubled over 5-year period that was probably too fast, too quick to absorb the increases that it was provided with. And also think strategically about where do those investments go. When you talk about the rest of the federal government, you're talking about really trying to increase several agencies at much you know smaller rate over a longer period of time.

David Goldstein: Steve, thoughts on that.

Stephen Ezell: You know, this is overall a serious issue of US international competitiveness. In 2006 of the 30 OECD countries the US slipped to 22nd and the percentage of its GDP that was allocated towards nondefence research and developments. So, we trail other OECD countries in terms of R&D intensity. We would have to invest 34 billion dollars to take it to the level of R&D intensity that Finland has achieved, so this must be a priority for the next administration.

David Goldstein: Have the candidates been discussing these matters enough for you, are there differences between them what's your sense of the extent to which this need for research that you see is being discussed in the presidential campaign, Bill?

William Bates: Well, they both talk about it. I think, Senator Obama has been very explicit in endorsing doubling of the research budget. Senator McCain speaks about the importance of research, but I think he has been a little more hesitant to embrace a specific doubling goal of the research agencies. They're certainly talking about it and that's a big step in the right direction.

David Goldstein: Are there things that you would like the candidates to be saying about the importance of research or about innovation in general, that they are not or they speaking about it, Bill you've pointed out that certainly is a larger feature than in past campaigns.

William Bates: Yeah, I think that they are saying the right things. We have been hearing in the research and science community the right things for a number of years from folks on the Hill and from the administration. It's really going to come down to, in a very tough budgetary environment which is what we are in and what the next president is heading toward. Are they able to maintain this investment and see it as an investment not as an expense.

David Goldstein: Toby, one of the things that Senator McCain has been explicit about is the possibility of a one year spending freeze which presumably affect these programs. Do you have the sense of how serious that would be in terms of the research budget?

Tobin Smith: Well, it would be, if it were apply to research, it would be a real problem because we are at a critical period where again then major calls for increases in funding in these areas; the National Academy had a major report rising about the Gathering Storm which got a lot of people's attention. So I think if that were applied to research, it would be a problem. The good news is it sounds like and in some of the recent statements that have been put out by senator McCain and he has said that he does support for funding for the America Competes Act. So we are hopeful that that is the case, you know, I think the challenge for these areas everybody recognize the importance of science. Everybody states it's important and investing here is important, but at the end of the day is it the thing that the President and the Congress are going to prioritize. I think there got to be some real leadership here to make it happen and no just say it's important.

David Goldstein: And presumably that's one of the reasons why you put a priority on getting a new Presidential Science Advisor

Tobin Smith: Absolutely.

David Goldstein: Head, of the office of Science and Technology policy early on, in administration Bill, is that something that the council supports as well.

William Bates: Absolutely and I think that sets the tone for the going forward in the area of science and where we have come down on the political spectrum, I think that the idea of putting science upfront of discussing the importance of its role towards our economy is something that a lot of folks are looking for in the next President, be it a Republican or a Democrat.

David Goldstein: And Toby are there specific things you would like to see the White House Science Office be doing that that it hasn't been doing in the recent years beyond just having the position filled early enough to affect other appointments.

Tobin Smith: So, the coordination role is one that I think they have not been doing as well. We have the National Science and Technology Council and they are to coordinate. It consists of the major cabinet officials. It really has not been functioning in those same way it should be, it is supposed to be kind of the equivalent of the National Security Council and to coordinate security across the agencies, well NSTC is supposed to coordinate science activities and it just has not been working on this; gets this similar I think, so the problems we have in terms of innovation and the fact that if we coordinate these efforts, we have been in a lot better shapes. So I think that's true. The other think I say about the Science Advisor is, I honestly think that that position should be a cabinet rank position and not cabinet level, not the member of the cabinet but sit with the cabinet and that would bring the Science Advisor up to the same level as our drugs are, who is cabinet rank and the administrator of the Environmental Protection Agency. I think given science has important to innovation to our international competitiveness to issues like National Defense and Homeland Security that person needs to be at that table and involve that the highest levels of the administration.

David Goldstein: Bill.

William Bates: The other thing that I would think would be great if the next Science Advisor could be focus on would be generating greater enthusiasm for science and math in the United States. I mean, the Science Advisor can be just a means to say it but a cheerleader for science and we have so much of our population that is not engaged in science and math pursuits, including young girls, minorities, that this is a real opportunity coming in with a wave of enthusiasm, a new administration, to really try and generate some excitement, some enthusiasm, emphasize the importance across careers and I am not saying that everybody has to become a mathematician or a scientist, but math and science forms the foundation for so many careers today. The next Science Advisor has an opportunity to be enthusiastic; talk about how important science is and really set a tone for the next administration that could infect a generation.

David Goldstein: That's a good segway to talk about one of the major issues that obviously any innovation agenda should include which Toby brought up at the beginning which is education. What specific steps ought, the next administration be taking on science and math education, why don't we start at the K-12 level and work the way up, Toby.

Tobin Smith: So that coordination role comes in again. There was a committee, a council that looked at some of the different programs across the government under this administration and found there were hundreds of programs at the K-12 level and many of which, you know, you didn't know really whether they were effective, they wanted evaluation tools in place. I think the next administration can really help to coordinate those activities to at least start by doing an inventory and then making sure that they are coordinated across the different agencies. Also defining the roles of the agencies; what's the role of the Department of Education versus the National Science Foundation in education? Clearly they both have roles. They are different but making sure they're not duplicating effort and that they are working together. Moreover the Emission agencies, the Department of Energy, the laboratories can bring up a lot to bear in helping to, you know, bring teachers in, give them real hands on science experiences that do exactly, what Bill was saying, get them excited about science, because one of our problems is our teachers, many of them, they didn't even get a degree in science. So if they're not excited about it, they are not going to excite kids and I think we can do a lot better at that coordination piece.

David Goldstein: Bill, one of the areas the federal government has started to put some money and is sort of helping to get new teachers into science and that's something that number of the reports including Gathering Storm we've talked about, are there specific things that the federal government might be doing in that area that either expanding the activities or starting new ones?

William Bates: The federal government's roll in K-12 is a real challenge, because most of K-12 is a local issue and I think one of the things that we found in our reports and the council works a lot with CEOs, Corporate America is that there is a lot of interest in the private sector to try and help out in this area and there's a lot of knowledge; there are a lot of retirees who work for large companies that would have an interest in getting in the classroom and trying to inspire kids to focus on math and science, so that's one of the areas that I think we see a real opportunity. If we can get folks into the classroom, not necessarily as full time teachers, just to get them in there as role models, mentors; one of the biggest problems we have in this country is high school drop outs and one of the top reasons kids give for why they dropout is they don't see the value in staying and if you can get folks into the classroom that inspire them that sort of show them, you stay in because here's where you can do and I will tell you it's fun and exciting, I love my job. That's going to make a big difference.

David Goldstein: Steve, additional things the government might do on K-12 education?

Stephen Ezell: Preceding this conversation I had occasion to peruse the platforms of both Barack Obama and John McCain on this very topic and I would describe their positions as well meaning, but completely with lack of any specifics. For McCain and Obama to add some of the specific elements that Toby and Bill have here discussed would take their platforms a serious step beyond wanting to improve K-12 education by putting some concrete steps behind how we might do that.

David Goldstein: Let's go on to higher education. Starting at the undergraduate level, are there specific things that the government ought to be doing that have been inadequate or neglected so far, Bill.

William Bates: I think the challenge, well a couple of challenges, in undergrad education, one is that so much of that work the careers he says are interdisciplinary careers and so much of the university system are the education system is set up in silos. You go and you get a degree in this specific discipline and you, in theory go work in that discipline, but those lines are blurring now. So there have been proposals to create programs that combine two separate paths, for example of Georgia Tech has a program in computer science, you no longer can get a computer science degree. You have to get a computer science and communications degree or computer science and business degree. And I think that's the idea of recognition of the sort of program that the federal government can encourage, can support for loans through graduate student fellowships and things like that nature and that's true at the undergraduate and graduate level.

Tobin Smith: One of the things is to try and get undergraduates involved in, to an extent we can get the involved in research, that's what has made our graduate program so successful is the fact that research funding goes to universities in the form of grants and then does double duty and not only supports the research but it supports the students. If we can find more ways to get undergraduates involved in those early research experiences, so that they understand they aren't sitting in the big lecture room of 300 students wondering 'why am I here' because they are actually working with graduate students and top-notch faculty. On the research, they understand it and it helps them to get through those tougher times early on in their undergraduate experience because they know why they are doing it.

David Goldstein: Steve, do you have anything to add on that?

Stephen Ezell: This should also bee seen as a challenge through the entire pipeline starting from K-12 and going through undergraduate to graduate education; it is incredible opportunity for the next President to be a role model for Science and Technology across America. It's astounding that over the past 8 years the numbers of computer science graduates in the United States have decreased by 50%, at a time when computer science becomes one of the most high growth job industries in the country. Another role for federal policy to play in this area is to make it easier for the most honoured students in the world to come to United States and get educated in a number of reckoned schools at a time when the US has become increasingly dependent on a foreign-born workforce in the Science and Technology community is the time at which the United States has chosen to make it more difficult for the most talented students in the world, who want to study Science and Technology to come to our country and this is an area that the next administration can certainly look at addressing.

David Goldstein: Before turning to grad students, let's focus on that for a minute, Bill. Council and competitiveness looked at immigration policy from time to time, are there specific kinds of changes that are necessary related to innovation.

William Bates: Well, I think that what Steve just brought up is the key if we have top-notch foreign students come in and studying in our universities, we should try to encourage them to stay and you know what it's not a guarantee that even if we encourage them to stay, they're going to stay, the countries that they come from, from around the world are making investments in their education systems, they're creating opportunities for their students who come and study in the United States, to come back through things such as stock options, research parks, they have opportunities in their home countries they never had before, so it is truly a competition for the best and brightest right now and we need to do that we can if it means stapling a green card to the diploma for people who have a degree in science that we think is valuable then we should be looking to do it now.

David Goldstein: Steve you mentioned the drop in computer science majors and I think we are also seeing that at the graduate level (UNCLEAR 29:49). Are there problems in the way that the market is signalling needs for these things or are there problems of salaries why if there is such a need or students not going into these fields.

Stephen Ezell: I think there are problems all throughout the pipeline, it can even go so far back as to the earliest stages of the kids education. We were at program put on recently and the story was told of guidance counsellors in San Diego who were telling their high school students that the computer science or computer research was not a growth industry; this is not something you should be focused on, you should go into law or medicine. So the problems could even stretch back as a result on earlier to how teachers, how guidance counsellors understand the value of these new and emerging fields of industry and Science and Technology and business. As far as the market signalling has the need for computer science majors, what we see so often is when you look at job retraining and adult education training that so much of it is around computer science, well that's a nice case for the market is picking up a gap and fulfilling a need. However, there will be much more efficient productive for those individuals and for a country as a whole if they came out of our high schools and our colleges with that skill set. One thing we haven't talked about is the overall philosophies of the McCain and Obama campaigns towards technology and innovation policy and I might talk about that for a second. The Obama campaign is much more aggressive towards technology and innovation policy and much more explicit. His platform was released as early as October 2007. Whereas McCain has only in recent weeks only fully began to flush out the elements of his innovation and technology policy. I think the salient feature of Obama's platform would be substantial increases in investment. Bill talked about how he would double over the next 10 years, research and development funding, but he also has specific programs 150 billion dollars over 10 years for clean energy, 10 billion dollars over 5 years for health information, electronic health records and IT, 10 billion dollars for early programs for childhood development and education; so a lot of money being thrown at these issues by the Obama campaign. The McCain campaign on the other side tends to come out from a more traditional conservative philosophy, they would much rather use tax policies through the R&D tax credit and reducing corporate taxes that's how they would like to benefit industry without necessarily increasing R&D and giving them specific money, so it is the real difference in approach between these two camps.

David Goldstein: On the tax policy side, R&D tax credit you said McCain has more details than Obama, is the tax credit that he has outlined sufficient? To your mind how does it compare to what's on the books now.

Stephen Ezell: Well from the ITIF point of view, we think that the spirit of the McCain camp to be thinking about the R&D tax credit is appropriate however we think it should be far more substantial. McCain, as I said, would want tax credit equal to 10% of the wages that a company spends on R&D. We at the ITIF think that the tax credit should be up to 40% of a company's overall aggregate investments in research and development, 20% is probably closer to the OACD norm and you find countries like Canada, Israel, Australia who are being far more proactive with their R&D tax cut regimes getting up to 60%, 70 and 80%. So we would like to see it at least 40%. McCain starting it up at 10% is a good start, but we would like to see it go higher.

David Goldstein: We will close with the question just on, sort of, the state of play on all these. There's has been a little bit of debate about how good or bad the US situation is in an innovation. If you're advising the next President, how would you characterize the innovation situation? How significant are the threats? How higher priority should this be? Bill.

William Bates: I would characterize that this way. The United States is still, you know to coin the phrase, number one in our economics strength. But everybody else has noticed what worked so well for the United States and they are catching up and they are making tremendous investments and in countries like China and India they've got a population that dwarfs ours. So everything is amplified. We can't assume anything. We can't assume what has worked in the past is going to work in the future. So we've got to run a little bit faster. We have to make the investments too. We have to make sure our kids are getting the education they need. They have to have a strong foundation in math and science because that's where the future careers are going to be. And as I said at the start, we have to really focus on creating an environment that drives investment nationally which is going to allow us to compete better globally.

David Goldstein: Steve.

Stephen Ezell: I would amplify Bill's comments. One of the things I would like to see the candidates understand, I think Obama gets at intuitively and McCain may be on coming around to it is that technology and innovation drives long-term economic growth, not allocative efficiency that technology and innovation programs that the government can put forward to support innovation, economics, technology and innovation are the key. Real national leadership on these issues on a consistent and ongoing basis would be what I want to see from the next administration.

David Goldstein: Toby, the university sectors view this as one of the healthier aspects of US competitiveness, but what would you say about competitiveness overall and even whatever challenges the universities do face.

Tobin Smith: I think Bill put his finger on it is that other countries have noticed what has made us successful, our university in the partnership between the universities and the government that grew out of World War II, which really said that the government was going to rely on universities to do their research for them and they would do that competitively through competitive grants awarded based upon merit not just farmed out geographically to the universities that has made our system tremendously successful. I think sometimes we don't recognize and value that system. Other countries have noticed that. China is building up their universities. The recent NSF report came out said that Chinese Universities are one of the major feeder schools for our graduate programs. So it's not only an issue of students not staying here, which we often talk about that students are coming and then they're going back. The reality is that they don't need to come here anymore because there are universities in other countries that will gladly take them and we need to figure out what the next step is to stay ahead of the game.

David Goldstein: Seems like a good challenging note to end on. It sounds like everyone agrees that innovation will have to be a priority in the next administration which will involve coming up with specifics on research spending, education policy, tax policy, immigration and ways to improve coordination at the very least, definitely a full agenda. So with that I would like to thank Bill and Steve and Toby for joining me this morning. Thanks.

William Bates: Thanks.

Stephen Ezell: Thanks.

Tobin Smith: Thank you.


You have been listening to a US election Podcast Extra. Look out for the election special issue, September 25, 2008, available from

End advertisement