Archive for February, 2013
Yet another study has highlighted the United States’ expanding investment deficit and our growing innovation disadvantage compared with our global competitors. Battelle’s 2013 Global R&D Funding Forecast indicates that, even before accounting for the looming sequester, total U.S. R&D investment in 2013 is expected to decline in real dollars, with growth of only 1.2 percent compared with an inflation rate of 1.3 percent. This continues a long period of U.S. underinvestment in R&D, which has been particularly acute in stagnating federal research investment. According to the National Science Foundation, federal R&D investment grew at just 1.3 percent annually from 1989 to 2009, while gross domestic product rose an average of 2.4 percent over that time. In fact, to restore federal support for research as a share of GDP to 1987 levels, Congress would have to increase federal research funding by almost $110 billion—per year.
Meanwhile, the world’s greatest growth in R&D investment in 2013 will come from China, which is expected to increase its R&D investment by $22.9 billion in 2013.Through its Innovation 2020 strategy, China plans to invest $1.5 trillion over the next seven years on seven “strategic emerging
The Electric Highway
The New York Times reporter John Broder recently published his account of an East Coast road trip he took with the Tesla Model S electric vehicle (EV). It marked an important development: Tesla has opened two new public “supercharging” stations some 200 miles apart in Delaware and Connecticut that can fully replenish the Model S battery in an hour and potentially provide consumers the ability to drive the well-traveled Interstate 95 corridor at near-zero carbon emissions. Unfortunately, Broder’s test results came up short, showing the limitations of existing EV technology, the need for more innovation, and the division of opinions on how the United States should decarbonize transportation.
The set-up was simple: Broder was to travel from Washington D.C. to Milford, Connecticut in the souped-up Model S. But according to Broder, he faced a host of inconveniences as the Model S fell short of its projected 300 mile range, resulting in the car losing charge mid-drive and the need to re-route to find additional charging stations. Since then, he and Tesla CEO Elon Musk have traded accusatory statements, (Musk, Broder, Musk,
Guest post by Jesse Jenkins, MIT graduate researcher and former Director of Energy and Climate Policy at the Breakthrough Institute.
ITIF recently unveiled an interesting new interactive budget tool based on data directly from the Energy Innovation Tracker entitled the Energy Innovation Budget Builder. Specifically, the Budget Builder allows users to allocate up to $50 billion across five innovation phases and see how their ideal budget compares to the actual federal FY2012 distribution.
Consistent with the recommendations in the October 2010 report, “Post-Partisan Power” co-authored by energy analysts at the Breakthrough Institute, Brookings Institution and American Enterprise Institute (including myself), I used the Budget Builder to craft a hypothetical budget that would devote U.S. clean energy innovation funds as follows:
- Double federal investments in basic energy sciences from about $1.5 billion today to $3 billion. Devote a considerable portion of this increased budget to more use-inspired basic science meant to remove basic science barriers to unlock breakthrough energy innovations, including roughly $300 million in annual funding to scale up the Energy Frontier Research Centers (EFRC) program over the coming years (EFRCs are currently funded
On the eve of their annual Energy Innovation Summit, the Advanced Research Projects Agency-Energy (ARPA-E) has announced funding for a new program focused on improving electric vehicle (EV) battery technologies. The new Robust Affordable Next Generation Energy Storage Systems (RANGE) program “seeks to improve EV range and reduce vehicle costs by re-envisioning the total EV battery system, rather than working to increase the energy density of individual battery cells,” as stated in the agency’s press release. The program’s establishment represents just the latest positive sign of the Energy Department’s commitment to foster battery innovation.
As MIT Technology Review reported last year, a $2.4 billion grant program under the 2009 Stimulus resulted in a substantial gap between domestic EV battery production capacity and actual battery demand. To be sure, while manufacturing capability is essential, demand for EVs and EV batteries by extension will only grow when battery technology can exceed expectations. And to accomplish that goal, ITIF has argued, policymakers need to emphasize battery innovation and “put the battery before the electric vehicle” – a need that has been underlined by the recent Broder-Tesla spat. Fortunately, the
Manufacturing has been the focus of much attention lately — a key theme of President Barack Obama’s Inauguration and State of the Union addresses and the subject of numerous recent books and articles. But why does manufacturing matter? Why should Washington in particular care? Most commentators miss the real reason.
And getting the answer right is imperative because many economists, like Nobel Laureate Gary Beckerand Columbia’s Jadish Bhagwati, persist in trying to convince policy makers that America can thrive without manufacturing, and in fact would be better off without it.
Here are some reasons that don’t really matter.
Manufacturing is inherently better than services.
The notion that making a widget is better and more ennobling than selling it or marketing it is simply wrong. Both produce income and output.
Manufacturing jobs pay more.
Sure, but manufacturing jobs pay just $2.50 more per hour than the average of $30.44 for all U.S. jobs. And despite the much-ballyhooed creation of some 500,000 manufacturing jobs over the past two years, many of the new jobs are on tiered wage scales and pay around $15 per hour. If we tie the
In his State of the Union Address president Obama proposed that Congress increase the minimum wage to $9.00 per hour.
Almost immediately a chorus of opposition based on neoclassical economics emerged, arguing that such a change would kill job creation. As former Bush Administration economist Greg Mankiw notes, “there is 79 percent agreement among his peers that a minimum wage increases unemployment among young and unskilled workers.” But let’s be clear, what Mankiw really means to say is a 79 percent agreement among neoclassical economists.
The neoclassical economic argument against the minimum wage is grounded in the view that if a worker and employer agree on a wage then this wage level must be welfare maximizing for both of them and by definition for society. The only thing a government regulated price for labor can do is distort labor markets and lead to less, not more economic welfare.
In fact, a higher minimum wage would spur economic growth, while also increasing economic fairness.
First, here’s why the President’s proposal won’t kill jobs. The argument among neoclassical economists on the minimum wage is too narrowly focused on microeconomics. In other words,
President Obama aggressively called for addressing climate change in his fifth State of the Union address, but ultimately came up short of outlining a clear and compelling vision with the necessary policy scope to address the significant technological challenges impacting clean energy.
Here are my five top take-aways:
1) Demanded Action to Address Climate Change
It is indicative of the sad state of the U.S. climate debate when a mere mention of support for addressing climate change elicits celebration. Nonetheless, the President deserves credit for calling on Congress to take action against climate change and using about 10 percent of his speech to discuss what he would like to see.
“But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods – all are now more frequent and more intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states
Ars Technica is the first blog to publish a point-by-point review of our report on America’s standing in the international broadband rankings, so we congratulate them on their timeliness if not their accuracy. This is to answer questions they raised about sources and to suggest a better way to analyze the broadband problem than the one they offer.
Our figures on the pricing of entry-level plans come from the survey conducted by the International Telecommunication Union (ITU,) “Measuring the Information Society 2011.” In 2008 and 2010, ITU collected responses from 165 nations that place the U. S. 2nd in 2008 and 4th in 2010 in low prices for entry-level broadband plans as a percentage of average income. This price point is important because it shows how low the barrier is for getting poor kids online (without exposing them to fast food.) We’re not the first to highlight America’s low prices for basic service; Yochai Benkler’s Berkman Center report “Next Generation Connectivity,” accepts that the U. S. has low prices for basic service as well. It’s not a controversial finding in the research community, even
This is the 5th and final post in a series analyzing and detailing federal investments in clean energy innovation. Part 1 defined “clean energy innovation.” Part 2 broke down the federal clean energy innovation budget. Part 3 took a look at federal investments in clean energy demonstration projects. Part 4 took a deeper dive into clean energy deployment policies.
In the first post of this series, I called attention to the eminent need for supporting a well-developed and funded clean energy manufacturing sector as part of a robust innovation ecosystem. The feedback loops between manufacturing and research is explicitly linked. Even with all the R&D, demonstration, and deployment of clean energy, the United States could lose its competitive advantage over production resulting in the industry (and future innovation) to move overseas without strong policy support for advanced manufacturing. But like many other parts of America’s energy innovation budget, support for advanced manufacturing is rapidly declining.
The figure below shows that investment in clean energy manufacturing has fallen from nearly $9 billion to only $700 million between FY2009 and FY2012, or a 92 percent decrease. Direct spending in FY2009 and FY2010
President Obama Calls for Creation of a National Network for Manufacturing Innovation in State of the Union Address
In his State of the Union address this evening, President Obama called on Congress to support creation of a network of at least fifteen manufacturing innovation institutes that would bring together industry, universities, community colleges, federal agencies, and states to accelerate innovation by investing in industrially relevant manufacturing technologies with broad applications. The first institute in this network, the National Additive Manufacturing Innovation Institute, launched in Youngstown, Ohio in August 2012 to pioneer additive manufacturing and 3D printing technologies and tonight the President announced the launch of three more of these manufacturing hubs “where businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs.
As ITIF explains in Why America Needs a National Network for Manufacturing Innovation, these institutes are poised to play a pivotal role in spurring U.S. industrial competitiveness and revitalizing American manufacturing by helping bridge the gap between basic research and product development, providing shared assets to help companies (including small- to medium-sized enterprises, or SMEs) access cutting-edge capabilities and equipment, and creating a compelling environment in which to educate and train