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FROM GATHERING STORM TO CATEGORY 5: Five Years After Rising Above the Gathering Storm, U.S. Competitive Position Has Declined Further, Report Finds

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“Addressing America’s competitiveness challenge is an undertaking that will require many years, if not decades.”

Despite efforts made by those in government and the private sector, the outlook for America’s ability to compete for quality jobs has further deteriorated over the last five years and, absent a sustained investment in education and basic research, the United States could continue to slip further. That is the conclusion of the committee that prepared the 2005 report Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future in response to a request by a bipartisan group of members of Congress.

“The Gathering Storm effort once again finds itself at a tipping point,” said Norman R. Augustine, coauthor of a new report and chair of the original Gathering Storm committee. “Addressing America’s competitiveness challenge is an undertaking that will require many years, if not decades.”

The original report, which was published and prepared by the National Academies, makes four recommendations that federal policymakers could do to enhance science and technology and improve the United States’s ability to successfully compete in the twenty-first century: (1) move the United States K–12 education system in science and mathematics to a leading position by global standards; (2) double the real federal investment in basic research in mathematics, the physical sciences, and engineering over the next seven years; (3) encourage more United States citizens to pursue careers in mathematics, science, and engineering; and (4) rebuild the competitive ecosystem by introducing reforms in the nation’s tax, patent, immigration, and litigation policies.

The new report, Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5, credits Congress for passing the America COMPETES Act, which authorized many recommendations from the original Gathering Storm report, and enacted a stimulus bill that increased funding for K–12 education, provided scholarships for future math and science teachers, and funded research on energy. At the same time, however, the new report notes that the America COMPETES Act was specified to expire in Fiscal Year 2010 and funding from the stimulus bill is almost gone. Additionally, the national debt has grown from $8 trillion to $13 trillion over the last five years, while other nations have continued to improve their standing, affecting America’s ability to compete for new factories, research laboratories, and jobs.

Given this tough fiscal environment, the new report acknowledges that additional investments will be “extremely difficult,” but it also points out that future consequences in terms of unemployment and related costs will likely be even larger. “In the judgment of the National Academies Gathering Storm committee, failure to support a strong competitiveness program will have dire consequences for the nation as a whole as well as for its individual citizens,” the report reads.

Rising Above the Gathering Storm, Revisited notes that the United States has remained relatively strong in the global economy largely because of past investments made in decades past such as the G.I. Bill and post-Sputnik actions to strengthen science and technology. However, it warns that the continued existence of these assets is not guaranteed and, in many cases, these assets are “subject to atrophy.” It adds that most of the nation’s competitiveness measures have trended flat or in a negative direction in recent years.

The report warns of three new factors that have emerged over the last five years that are particularly significant for the United States. First, rapidly rising debt means that the United States has decreased financial wherewithal to address the competitiveness challenge. As the report points out, the funds needed over the long-term to implement and sustain the original Gathering Storm recommendations will now be substantially more difficult to obtain and sustain with the deficit running at 9 percent of gross domestic product (GDP) and a national debt officially projected to reach $16 trillion by 2020.

Second, not all nations have suffered equally from the recent financial meltdown, especially China, India, and Brazil, where GDP grew at an average rate of 11 percent, 8.6 percent, and 4.5 percent, respectively between 2005 and 2008, the report finds. Consequently, these nations were able to make investments in research and development, as well as higher education, while the United States fell behind. In fact, a recent report from the Information Technology and Innovation Foundation recently indicates that the United States ranks last of forty countries and regions studied in “making progress on innovation and competitiveness.”

Finally, while America is still blessed with a disproportionate share of the world’s best universities, other nations are quickly catching up, the report notes. At the same time, these other nations are placing an extraordinarily high priority on higher education while universities in the United States are seeing their budgets cut as states struggle with large budget deficits. “Given this demanding environment, a number of other countries are seizing the opportunity to attract United States-educated faculty ‘superstars’ from United States universities where they are now employed,” the report reads. “United States universities, for the first time since World War II, are thus faced with a serious—and increasing—competition for talent from abroad.”

Even facing these huge challenges, the United States’s ability to innovate could help maintain or possibly even enhance its citizens’ future standard of living, the report notes. That too, however, is becoming more of a challenge as universities and industrial firms alike are building research facilities outside of the United States because costs are lower, but facilities are excellent and the talent pool is abundant. Therefore, if the nation is to compete, it must preserve an adequate supply of scientists and engineers who can perform creative, imaginative, leading-edge work.

“The Gathering Storm is looking ominously like a Category 5,” the report concludes, “and, as the nation has so vividly observed, rebuilding from such an event is far more difficult than preparing in advance to withstand it.”

The complete report is available at http://www.nap.edu/catalog/12999.html.

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