Wes Bush, CEO of Northrop Grumman and chairman of AIA's board, warns of a slip in the US technological superiority. (Dan Stohr/Aerospace Industries Association)
WASHINGTON — Concern about the sequester’s impact is hardly new, but a broad coalition has joined to highlight one area that could have long-term consequences: research and development (R&D).
Representatives from the Association of American Universities (AAU), Aerospace Industries Association (AIA) and the National Association of Manufacturers joined others in a Monday press conference in Washington to voice concern that the first round of sequester cuts has already harmed US R&D, and that the second round of the automatic cuts that are part of the 2014 budget cycle could be even worse.
“Many assume that America’s lead in technology and therefore our technological superiority in national security is somehow guaranteed,” said Wes Bush, CEO of Northrop Grumman and chairman of AIA’s board. “It is not, it is not at all. The pace of technology advancement around the world is accelerating and it’s accelerating at a time when we’re reducing investment.”
In particular, the panel focused on the impact the sequester is having on R&D spending and by extension, talent development and retention. Reducing R&D creates what Bush called a new “talent risk” as capable potential workers avoid career fields in favor of more innovative areas.
Although that has been a concern at the corporate level for some time, the cuts have made their way down to universities, where 2012 marked the first time that R&D spending had declined since 1974, according to a recent National Science Foundation report, said Hunter Rawlings, president of AAU.
“We are facing an innovation deficit as research and higher education investment declines while those of our foreign competitors dramatically increase,” he said. “This research carried out in our nation’s universities is the lifeblood of innovation, and innovation is the lifeblood of our economy.”
Rawlings pulled his Apple iPhone out of his pocket to emphasize the role government-sponsored R&D plays in the broader economy.
“This is a great Apple product, a great product,” he said. “But none of the technological inventions that made this product possible were created by Apple. All of them came out of government-sponsored research and development.”
The cuts to university research spending by the government have been across disciplines, from national security to healthcare, and have reduced slots for graduate students. To help make up for the decline, universities increased their own contributions in 2012, but Rawlings said that was an unsustainable trend, especially for schools that have lesser endowments.
But while the panel called for greater investment in R&D, a plan for finding the extra money wasn’t at the ready. Most agreed that some combination of revenue increases and entitlement cuts would be needed as part of a broader budget landscape.
The first round of sequester cuts for the Defense Department was an automatic percentage reduction, just as the second round for 2014 will be. But the Budget Control Act, the law that created the sequester, doesn’t require that future years have the same automatic cuts provided DoD and Congress generate budgets below certain caps. That could allow for some movement in future years, if the two coordinate, which could shift budget dollars toward R&D.
Asked whether he would be willing to accept cuts to current programs and products in exchange for greater investment in R&D, Bush said, “Every time I’ve seen one of those tradeoffs, it’s not very attractive. Essentially what we’re trading is near-term security for long-term jeopardy. I don’t find that to be an attractive trade.”
Coinciding with the press conference, AIA sent copies of a letter to congressional leaders and the president outlining their concerns. The letter was signed by over 100 of AIA’s member companies.
“Investment in the defense industrial base is not a spigot that can be turned on and off without consequence,” it said. “Research can take years to yield results and key skills can take a lifetime to develop. While facilities and equipment can be built and replaced relatively quickly, people and their skills cannot.”