President Trump recently hosted “Technology Week” at the White House, focusing on “modernizing government technology and stimulating the technology sector.”
Behind this string of photo-ops is the unfortunate reality that Trump’s 2018 budget request has proposed the steepest funding cuts for federal research and development in US history.
The proposed budget would reduce funding for the Agricultural Research Service in the Department of Agriculture by 26 percent, which would lead to the closure of 17 research centers.
The National Institutes of Health, which spends more than 80 percent of its budget on grants to universities and other research centers, would see a 22 percent cut, just like the National Oceanic and Atmospheric Administration’s primary research office.
An agency paying for research into biofuels and green energy batteries would be eliminated altogether. And the Office of Energy Efficiency and Renewable Energy, which invests in critical early-stage research and development of clean energy technologies, faces a 69 percent funding cut, to achieve “increased reliance on the private sector to fund later-stage research, development, and commercialization.”
Unfortunately, a body of evidence from the Organisation for Economic Cooperation and Development and others suggests that less public R&D leads to less private R&D. A 2012 report by the Milken Institute found that every dollar of NIH funding boosted the size of the bioscience industry by $1.70 and that the long-term impact may be as high as $3.20 for every dollar spent. Similarly, a 2013 report by Battelle found that, looking solely at federal support for the Human Genome Project between 1988 and 2012, “every dollar of federal funding helped generate an additional $65 in genetics-related private activity.”
The bigger tragedy is that R&D spending can be a phenomenal investment. For more than a decade, my think tank, the Copenhagen Consensus Center, has studied and compared various ways to improve the planet. Our analysis has repeatedly shown that R&D can generate enormous dividends to society, at a national, regional, and global level.
An examination that Copenhagen Consensus undertook of the United Nations’ development goals found that R&D to boost agricultural yields is one of the most powerful ways to fight food insecurity — and also reduce poverty. Research showed that investing an extra $88 billion in agricultural R&D over the next 15 years would increase yields by enough to save 79 million people from hunger and prevent five million cases of child malnourishment. Every dollar would generate a return to society worth $34.
A Copenhagen Consensus analysis of different policy responses to climate change also concluded that by far the most effective long-term option would be focusing on making major technological breakthroughs in green energy. (Tellingly, the current approach of short-term promises of costly but ineffective carbon cuts ranked lowest.) Researchers found that global annual investment of $100 billion in energy R&D would generate benefits of $11 of climate benefits for each dollar spent, most likely resolving the climate problem this century.
Despite over-optimistic cheerleading from environmental advocates and politicians, solar and wind energy remain far too expensive and unreliable to compete with fossil fuels. Other alternative energy technologies are in their infancy. Considerable R&D is needed to make low-carbon energy sources scalable and competitive.
Similarly, a 2011 project looking at HIV/AIDS found that increasing global spending on vaccine research by $100 million per year could shorten the time in which a vaccine is developed by half to one-and-a-half years. With 37 million people living with HIV (including 1.2 million in the USA), and HIV-related illnesses claiming more than 1 million lives annually, this would have a huge impact. Every dollar would generate around $20 worth of benefits.
As it begins its work on the budget, Congress should take into account the clear evidence of the benefits of well-designed R&D programs. Consistently, economic research shows there are remarkable benefits.
In agriculture, health, and the energy technological revolution that is needed to tackle climate change, more research and development — not less — would unlock American ingenuity and enterprise and help the planet.
Bjorn Lomborg is president and founder of the Copenhagen Consensus Center and a visiting professor at Copenhagen Business School.