How the U.S. became a science superpower
steveblank.com470 points by groseje 4 days ago
470 points by groseje 4 days ago
Worth reading in its entirety. The following four paragraphs, about post-WWII funding of science in Britain versus the US, are spot-on, in my view:
> Britain’s focused, centralized model using government research labs was created in a struggle for short-term survival. They achieved brilliant breakthroughs but lacked the scale, integration and capital needed to dominate in the post-war world.
> The U.S. built a decentralized, collaborative ecosystem, one that tightly integrated massive government funding of universities for research and prototypes while private industry built the solutions in volume.
> A key component of this U.S. research ecosystem was the genius of the indirect cost reimbursement system. Not only did the U.S. fund researchers in universities by paying the cost of their salaries, the U.S. gave universities money for the researchers facilities and administration. This was the secret sauce that allowed U.S. universities to build world-class labs for cutting-edge research that were the envy of the world. Scientists flocked to the U.S. causing other countries to complain of a “brain drain.”
> Today, U.S. universities license 3,000 patents, 3,200 copyrights and 1,600 other licenses to technology startups and existing companies. Collectively, they spin out over 1,100 science-based startups each year, which lead to countless products and tens of thousands of new jobs. This university/government ecosystem became the blueprint for modern innovation ecosystems for other countries.
The author's most important point is at the very end of the OP:
> In 2025, with the abandonment of U.S. government support for university research, the long run of U.S. dominance in science may be over.
> In 2025, with the abandonment of U.S. government support for university research, the long run of U.S. dominance in science may be over.
I find it amazing that this is the conclusion when earlier in the article it was stated that "[Britain] was teetering on bankruptcy. It couldn’t afford the broad and deep investments that the U.S. made." The US debt is starting to become an existential problem. Last year the second largest outlay behind social security was the interest payment at a trillion dollars. This is a trillion dollars that cannot be used to provide government services. Over the next 30 years the primary driver of debt will be medicare and interest payments, the former due to demographic shifts and the US being pretty unhealthy overall. Our deficit is (last I checked) projected to be 7.3% of GDP this year. That means that if congress voted to defund the entire military and the entire federal government (park services, FBI, law clerks, congressional salaries, everything) we would still have to borrow. Those two things combined are only ~25% of federal outlays.
I also reject the idea that this government-university partnership is somehow perfect. Over time bureaucracy tends to increase which increases overhead. This happens in private industry, government, universities, everywhere. However, there is no failure mechanism when it comes to government-university partnerships. At least in the free market inefficient companies will eventually go defunct which frees those resources for more economically useful output. Universities will continue to become more bureaucratic so long as the government keeps sending them more money. All of these economic effects must be viewed over very long periods of time. It's not enough to setup a system, see that it produced positive results, and assume it will continue to do so 80 years later.
Really this reads like a pleas from special interest groups who receive federal funding. Every special interest group will be doing this. That's the issue though. A lot of special interest groups who have a financial incentive to keep the money flowing despite the looming consequences to the USD.
The idea that the free market will self-correct and optimize outcomes is a well-documented fantasy. Markets don’t account for externalities, they concentrate wealth (and therefore political power), and they routinely underprovide merit goods like education, healthcare, and basic research (things that benefit society broadly but aren’t immediately profitable).
As for how to address budget issues, the solution is simple: tax the rich.
Im afraid you'd need to be pretty liberal with your definition of rich at this point to dig us out of this hole through taxes alone.
Tax wealth somehow, not just income. It's clear the accumulation has become a generational problem. Your great grandkids could cure cancer and bezo's could do nothing and yours would never have a fraction of the wealth his have.
Even with their preposterous salaries, NBA stars would have to work for millenia without spending anything before getting Bezos-level wealth.
> Your great grandkids could cure cancer and bezo's could do nothing and yours would never have a fraction of the wealth his have.
This isn't a problem.
The fact that people hold this opinion is part of the problem. Nobody can see beyond how a problem effects them, especially when it comes to wealth.
Also that this wealth is dependent on value. It's not like having cash. It's shares, whose value will go down if the company stops providing value.
Yes, in this theoretical world where stocks trend down over extended periods of time, I could see this being an issue.
In the fairy farts world of the US stock markets, we don't often see mega corps trend down. That's why every American pension is piled into SP500... Which is really driven by the growth of like 10 companies, tops.