Investing in the Infrastructure of Ideas

November 28, 2018

President Janet Napolitano gave the keynote speech at the "Investing in the Infrastructure of Ideas”
National Competitiveness Forum in Wqshington, DC on November 28, 2018. 
Here are her remarks as prepared for delivery:

Good afternoon, and thank you! It’s a pleasure to be here today to address this distinguished group about preserving our nation’s strength and prosperity.
Alongside the serious crises of the day—and there are many—an important question for the United States of America is how we will maintain our trajectory of economic growth and technological prowess in the face of rapid change and innovation in the rest of the world.
In some ways, living in the United States, it’s easy to assume that we are at the forefront of unprecedented innovation in every sector. While there is no doubt that our lives have been transformed by American inventiveness, there are worrisome indicators that show America faces serious innovation challenges. I’ll share just a handful of statistics from the 2018 National Science Board report:

  • The U.S. share of global research and development dropped from 37 to 26 percent between 2000 and 2015.
  • After the Great Recession, the share of U.S. R&D funded by the federal government declined from a little more than 30 percent to around 25 percent.
  • The U.S. share of patents granted by the U.S. Patent and Trademark Office declined to less than half of all patients by 2008, amid growth in patents granted to inventors in other parts of the world.
  • And, according to the World Economic Forum, China produced 4.7 million graduates in the science, technology, engineering, and mathematics fields in 2016 – more than eight times the number of STEM graduates in the U.S.
At the same time, we’re seeing more talented researchers competing for fewer research dollars, and this bottleneck has a direct impact on innovation. For example, in 2000, 32 percent of grant applications to the National Institutes of Health were successful. By 2017, that share had dropped to 18 percent. And the average age at which a researcher receives his or her first grant has gone up in recent years, too. That means many promising ideas are left to languish while researchers – especially younger ones – struggle to secure funding when they should be spending time in the lab or out in the field.
These numbers should give us all pause. They show that while America remains a stronghold of innovation, we have work to do to maintain our global competitiveness – or risk losing our edge.
Economist Tyler Cowen, a professor at George Mason University, put it rather bluntly in his 2017 book, The Complacent Class: He argues that, apart from the tech sector, American innovation has underperformed since the early 1970s. Professor Cowen points to the fact that Americans are staying in their jobs longer, creating start-ups at lower rates, and moving less frequently as signs that we have lost much of the boldness that has historically defined America and led to innovation. He argues that our diminishing boldness dampens the nation’s capacity to innovate.
Whether you buy into that outlook on American ingenuity, or you see a rosier picture, we must pay attention to the indicators that show we are losing ground when it comes to innovation, and look for solutions.
Thankfully, there is a tried-and-true element that has historically led to American innovation and boosted our ability to compete: basic and applied research undertaken at America’s public research university campuses.
The search for knowledge and the drive to create solutions require ambition and the courage to take intellectual risks, defy existing paradigms, and set out into the wilderness of the unknown. And they require us to acknowledge with humility what we don’t know, and be open to working together – across sectors, and across borders – to find answers.
All of this is happening at American public research universities. From the birth of the Internet to the origin of biotechnology, to countless medical breakthroughs, our research universities and the national laboratories they manage have served as fertile grounds for creative ideas and groundbreaking technology.
As President of the University of California, I have witnessed firsthand how our universities power innovation – locally and globally. UC generates an average of five inventions per day and holds more patents than any other university in the country. Last year alone, UC research sparked 96 new startups — that’s about eight new companies every month.
UC research has led to innovation that dazzles the imagination – whether it’s recyclable clothes made of engineered spider silk or 3D printers that create complex biological tissue, or next-generation exoskeletons that help the paralyzed walk.
This innovation is firmly rooted in UC’s research enterprise. And this research prowess is fueled by a strong investment from the federal government. Federal funds are UC’s single most important source of support for research, accounting for approximately $2.9 billion – nearly half of our research funding. While federal funding is the largest single source of this support, UC research also relies on corporations, nonprofit organizations, and other private sponsors for research support.
In other words: if we’re determined to feed American innovation and grow our ability to compete, there is no better tactic than investing in the infrastructure of ideas at our public research universities.
Our institutions of public higher education represent the lodestars in the universe of American inventiveness:
They are home to brilliant minds, determined to make headway in addressing our greatest global challenges.
They foster creativity and value experimentation.
They allow space for failure, recognizing that we don’t always know when, where, or how the next breakthrough will emerge.
And they educate the next generation of scholars and innovators. After all, 70 percent of freshmen entering four-year colleges in the United States attend public institutions.
Today, I’d like to share with you a few examples that demonstrate how the institution I lead, the University of California, has created the ideal conditions for innovative ideas to thrive. At UC, we combine unparalleled academic expertise with a willingness to approach old problems with new perspectives, a culture that encourages collaboration, and a knack for attracting and leveraging federal and private research funding. This winning formula has led to countless discoveries and solutions that benefit the state we serve, our nation, and, indeed, the world.
At UC San Francisco, for example, bioengineer Shuvo Roy’s work on a vexing problem – kidney disease – led him to a solution that could help not only those suffering from renal disease but also those living with diabetes. The potential impact of his research—which was funded by the National Institute of Health—is staggering: globally, two million people suffer from end-stage renal disease, and 422 million people live with diabetes.
For the past decade, Professor Roy has worked with colleagues nationwide on the world’s first implantable bioartificial kidney. This surgically-implanted device uses a silicon nanotechnology-based filter with microscopic holes, combined with engineered kidney cells, to perform the functions of a natural kidney. Such a development could dramatically change the lives of patients with end-stage kidney disease.
It was during trials of the device that Professor Roy’s invention showed promise beyond helping kidney disease patients. A colleague suggested that the technology used in the bioartificial kidney could also be used to create a bioartificial pancreas, exponentially expanding the reach of this research to diabetes patients around the globe.
So, Professor Roy is working on doing just that – in concert with UC San Francisco experts on diabetes and the biology of the cells that produce insulin, bioengineers, and surgeons. He stresses the role that the university environment – with its culture of collegiality and collaboration – played in making these discoveries possible.
Indeed, there is much we can learn from the relentless pursuit of knowledge through collaboration – not just with our friends, but also with our critics.
This is the case with Daniel Kahneman, a groundbreaking Israeli psychologist, and later, a professor at UC Berkeley. His most influential work resulted from a close collaboration with a fellow Israeli psychologist, Amos Tversky. Their joint research created the field of behavioral economics. They illuminated the role that cognitive bias plays in decision-making, ushering in a new era of data-driven analysis in a vast swath of our economy and society – from professional baseball to supply chain management to public health. Kahneman would go on to win the Nobel Prize in economics – as a psychologist – in 2002.
The footnote in Kahneman’s legacy that I find truly remarkable is his embrace of the concept of adversarial collaboration—the ultimate act of intellectual humility. He deliberately sought out a peer in the field of psychology who disagreed with him about one of his views, and they spent half a decade trying to hash out who was right. They ultimately wrote a paper together entitled, “A Failure to Disagree.”
Universities have a strong track record of collaborations like these leading to world-changing innovation. That’s because every theory and thesis must survive a university environment that encourages critique, demands peer review, and expects researchers to defend their arguments with verified data.
So, in addition to investing in our research universities, we must work to encourage and expand these collaborations. To innovate and meet global challenges, we will need to join forces with the best minds across borders – geographic and intellectual. At UC, we are proud of the open environment that allows for the free exchange of ideas among scholars across the globe, undergirded by a fierce commitment to academic freedom.
The American economist Paul Romer made this very point last month shortly after winning the 2018 Nobel Prize in Economics. Romer, a professor at NYU, has long promoted the idea that nations can stimulate innovation by investing in research. His work focuses on measuring the extent to which knowledge feeds long-term economic growth. He shared the Nobel Prize with another American economist and professor, William Nordhaus, who has advocated for governments to tackle climate change.
As Professor Romer told The New York Times after winning the award, “Probably the most important part of globalization is the sharing of knowledge that billions of people can all pursue in parallel.”
Nowhere is that powerful knowledge-sharing more important than in the global quest to reverse the course of climate change. Beyond the clear environmental and social repercussions, climate change has a steep economic cost. New research from UC San Diego shows that it already costs the U.S. economy about $250 billion per year. And the potential impacts of climate change on famine and drought, the frequency of natural disasters, and changing migration patterns could have further devastating implications for the U.S. and global economy.
We cannot ignore this costly problem, and we certainly cannot wall ourselves off from these massive threats. But we can work together with global partners to address climate change and reduce our carbon footprint.
At UC, we are tackling this challenge by treating the whole patient, so to speak.
One of my first actions as President of the University of California was to launch the UC Carbon Neutrality Initiative. This is the University’s commitment to become completely carbon neutral in our operations by 2025, and we are actively working toward that ambitious goal.
Our 10 campuses serve as living laboratories where we can test ideas, see what works and what doesn’t, and share that information with other institutions and the wider world.
We’re working to achieve zero waste goals on our campuses. We opened two solar farms that generate 80 megawatts of solar energy – the largest solar purchase of any university in the country. Last year, the UC Irvine campus became the first in the nation to transition to an all-electric fleet of buses. So far, we have saved $220 million through energy efficiency programs.
And earlier this year, we unveiled the University Climate Change Coalition – or UC3 for short. This is a group of 18 leading North American research universities that are trying out a new collaboration model to help local communities achieve their climate goals and accelerate their transition to a low-carbon future.
But it’s the University of California’s research that truly shines in the fight against climate change.
UC scientists are collaborating with colleagues across our campuses and at institutions around the world on technology that will transform our energy systems and sequester carbon.
At the Lawrence Berkeley National Laboratory—one of three Department of Energy national labs that UC manages—researcher Peidong Yang led a team this year that created smart windows that generate electricity.
Our scientists are also uncovering new angles of human psychology and educating the public on the myriad costs of climate change—and the small changes that collectively make a big impact.
There is a tremendous amount of work we must undertake to meet the global challenges we face and to sustain American competitiveness for a stronger and more prosperous future. But that is not something Americans fear. To quote the president this building is named after, the quest for excellence will require “an expenditure of American spirit and just plain American grit.” If we apply that American grit in the smartest way, I believe we can become more innovative, and hence more competitive, than ever.
Public research universities like UC will play a critical role in leading us back to the fundamentally-American qualities of boldness and competitiveness. We can continue the upward trajectory of research and innovation that has cemented America as an innovation leader for decades.
As a nation, we must continue to support university research and recognize the value of academia in propelling our economy. The need for federal research dollars isn’t the sexiest issue in Washington, but it directly relates to our nation’s ability to compete and excel. Failure to tend to the American research enterprise is a failure to invest in America’s economic future.
Let our universities do what they do best. Let the creators of new knowledge serve our nation, and make it ever stronger and more competitive in the global community.
And in the words of the motto of the University of California, Fiat Lux, or Let There Be Light!