Heading into continued budget negotiations with Congress, as well as November’s presidential election, the Obama administration insisted this week in Las Vegas that the federal government should not retreat from hefty investments in education, infrastructure and research and development.
That may be tough sell given the current annual budget deficit is running at $1.3 trillion.
But such spending is crucial to boosting U.S. competitiveness in the global economy, Rebecca Blank, acting deputy secretary for the U.S. Commerce Department, told a panel at the International Consumer Electronics Show.
Investments in research and development are of special interest to Nevada, which has lagged in R&D spending and receipt of government research grants.
The Alliance for Science & Technology Research in America has reported that with Nevada’s economy so dependent on tourism, R&D as a percentage of gross state product during the boom year of 2007 was less than 1 percent vs. 2.62 percent nationwide.
ASTRA said Nevada’s colleges and universities received $191 million in federal R&D spending in fiscal year 2008 — 41st in the nation.
"We don’t get our share," said Robert Lang, a Brookings Institution scholar in Las Vegas who has been leading the call for economic diversification in the state. "We don’t spend much at the state level, so we don’t have much to offer the federal government in partnerships."
With that background in mind, Blank provided an interview with vegasinc.com during her visit to CES.
Here are some of the questions and answers.
Q. Given the continued trillion-dollar plus annual budget deficits, can we afford to invest more in R&D, education and infrastructure?
A. The way you tackle a deficit is exactly what we did in the 1990s when we brought the deficit down to zero over a 10-year period.
It’s long-term fiscal discipline, and you work at it a little bit every year. You don’t fall off the cliff next year by cutting government spending in half. We are cutting budgets and we are cutting significantly, but there are some things we are putting even more money into.
What are the things we need to do more of? I care enormously about American competitiveness. The government has a role in these public goods: The role of education, support for basic research, assistance with intellectual property protection and infrastructure.
Those three (education, R&D and infrastructure) are all in crisis in this country in a variety of ways. President Obama has made a commitment to bring the federal investment in basic R&D back to the same share of GDP (gross domestic product) as when John Kennedy was president. It’s been declining steadily since then. (The percentage was 1.89 in 1963 and by 2008 had fallen to .73. Obama’s fiscal year 2012 budget included $148 billion for R&D).
Q. He’ll try again for more infrastructure funding?
A. I hope so. We are in a major crisis with infrastructure. The highest unemployment among any group is construction workers. If you want to put people to work who are skilled and ready to work, this is a win, win win.
Q. What does Nevada need to do to be more competitive in R&D?
A. You have to have a first-rate university. If you look at innovation industries and clusters, all of them are around areas where you have one and often two or three really good universities.
I understand that many states have faced financial difficulties, and the result of that has been cuts in state universities. That is one of the most foolish things you can do in terms of long-term economic growth, particularly in the innovation sector.
You also want to attract industries that are doing some of that research, but to attract those industries you need the skilled workers. We’re going back to the whole education system that is going to put out so-called STEM workers — science, technology, engineering and mathematics.
Q. And the private sector?
A. You’ve made some strides. Data storage is happening here. The advantage is you have a major city that brings in people from all over the world. When you bring people here for whatever reason, leisure, recreation or gaming, you have an opportunity to attract them to the area.
How can you leverage off of that? The other thing you have that is deeply important is you have a lot of direct flights from all over the country and all over the world. If you want to build international business, you have to have direct flights.