Witnesses Warn Congress that Innovation Must Become a National Priority or U.S. will Cede its Position as Global Leader

WASHINGTON D.C. – Top executives from IBM and Cisco, and the President of Johns Hopkins University testified today that the changing dynamics of the global economy is threatening America’s economic position and they said that innovation is crucial to the nation’s future economic growth.

The witnesses, who delivered testimony before the House Science Committee, were: Mr. Nicholas Donofrio, Executive Vice President for Innovation and Technology at IBM; Mr. John Morgridge, Chairman of the Board at Cisco Systems; and Dr. William Brody, President of The Johns Hopkins University.

In their testimony, the witnesses told Congress the nation’s position as the global economic leader is being aggressively challenged by other nations.  To strengthen the nation’s economic position, they said that innovation must receive greater attention as a national priority and they urged a greater focus on education and robust investments in research and development (R&D).  Brody and Morgridge also called for increased funding for the National Science Foundation (NSF).

“The reason for this hearing should be clear; we want to send a message; if we don’t invest today in science, technology, and education then our economy simply will not continue to thrive,” said Science Committee Chairman Sherwood Boehlert (R-NY).  “Happily, we have some key allies in Congress in promoting this message such as Chairman Frank Wolf (R-VA) and his fellow appropriator John Culberson (R-TX).  But we have more work to do to ensure that all of Washington understands what’s at stake.”

Environment, Technology, and Standards Subcommittee Chairman Vernon Ehlers (R-MI) said, “The United States is on the cutting edge of global competition because of our past investments in science and technology. Whether we remain in that position depends on how well we understand the drivers of innovation and how we choose to respond.”

Boehlert noted that he, Chairman Wolf and Chairman Ehlers are organizing an Innovation Summit to be held this fall that will bring together leaders in business and academia to discuss the nation’s innovation challenges and help chart a course for the future.

“We believe that the drivers of growth are very different today and will remain so for the foreseeable future,” Donofrio testified.  “Enterprises around the world are innovating through the transformation of their businesses because they recognize that new and integrated processes result in genuine competitive advantage.”  He told the Committee that recent economic growth is attributed to increased productivity resulting from the application of information technology to business, adding, “The rewards of that growth will not be shared equally; they will, as in the past, flow to those enterprises and nations that can innovate and turn disruptive shifts to their advantage.” 

Explaining what he terms “the calculus of innovation,” Brody said, “Knowledge drives innovation, innovation drives productivity, and productivity drives our economic growth.”  Brody, who was also testifying in his capacity as a member of the Council on Competitiveness, warned the Committee that the U.S. position as the global economic leader is in danger of being ceded to other nations.  “If current trends continue, many of us on the Council believe there is a good chance that U.S. competitiveness in vitally important high-tech areas will fall behind that of China, India, and even a resurgent Western Europe.” 

Brody said that the U.S. is losing a global “skills race” because we are not graduating enough students in the fields of science and technology to meet the nation’s workforce needs.  “About one-third of all jobs in the United States require science or technology competency, but currently only 17 percent of Americans graduate with science or technology majors.  By contrast, the National Science Foundation’s 2004 Science and Engineering Indicators report shows that the world average is 27 percent, Korea’s average is twice ours, and in China, fully 52 percent of college degrees awarded are in science and technology.” 

Brody added that visa policy changes since 2001 have made it more difficult for foreign students and researchers to come to the U.S. and to remain here following completion of studies.  Explaining the significance of the problem, he told the Committee that 35 percent of physical science Ph.D.s and 58 percent of engineering Ph.D.s currently go to international students.

“It is becoming very clear that the United States can no longer take for granted our place as the global economic, technology, and innovation leader,” Morgridge stated.  “There is much that government and industry can do to address this challenge, but we cannot be complacent in our response.  We must recognize the challenge and take it head on if we hope to be successful.”  Like the other witnesses, he urged a renewed focus on education “so that it is the United States producing the innovative technologies and the job centers of tomorrow, rather than our counterparts in Europe or Asia.”  Morgridge also cited the need for robust investments in R&D at government, university and private labs and advocated greater funding for NSF.

IBM, Cisco and the Johns Hopkins University are partners in the National Innovation Initiative (NII), a comprehensive undertaking by industry and university leaders to identify the origins of America’s innovation challenges and prepare a call to action for U.S. companies to “innovate or abdicate.”  NII recently issued a report, Innovate America: Thriving in a World of Challenge and Change, that intends to serve as a road map for policymakers, industry leaders, and others working to help America remain competitive in the world economy.  Brody, who serves as co-chair of NII, said that the report urges an expansion of tech talent among U.S. students, greater access to foreign-born students with technology backgrounds, and an increase in public and private R&D funding.

* “Innovate or abdicate” was taken from Innovate America: Thriving in a World of Challenge and Change