[Senate Hearing 109-290]
[From the U.S. Government Publishing Office]
S. Hrg. 109-290
INNOVATION IN ENERGY TECHNOLOGIES
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
TO
CONSIDER OUR NATIONAL CAPACITY FOR PRODUCING TECHNOLOGICAL INNOVATION
AND THE IMPORTANCE OF THIS INNOVATION TO OUR GLOBAL ECONOMIC
COMPETITIVENESS; AND TO RECEIVE TESTIMONY DESCRIBING THE RESULTS OF A
RECENTLY RELEASED NATIONAL ACADEMY OF SCIENCES REPORT
__________
OCTOBER 18, 2005
Printed for the use of the
Committee on Energy and Natural Resources
_____
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
RICHARD M. BURR, North Carolina, TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri DIANNE FEINSTEIN, California
CONRAD BURNS, Montana MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia JON S. CORZINE, New Jersey
GORDON SMITH, Oregon KEN SALAZAR, Colorado
JIM BUNNING, Kentucky
Alex Flint, Staff Director
Judith K. Pensabene, Chief Counsel
Bob Simon, Democratic Staff Director
Sam Fowler, Democratic Chief Counsel
Kathryn Clay, Professional Staff Member
Jonathan Epstein, Legislative Fellow
C O N T E N T S
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STATEMENTS
Page
Alexander, Hon. Lamar, U.S. Senator from Tennessee............... 4
Augustine, Norman R., Retired Chairman and CEO, Lockheed Martin
Corporation.................................................... 9
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................ 3
Cicerone, Ralph J., President, National Academy of Sciences, and
Chair, National Research Council............................... 7
Corzine, Hon. Jon S., U.S. Senator from New Jersey............... 2
Domenici, Hon. Pete V., U.S. Senator from New Mexico............. 1
INNOVATION IN ENERGY TECHNOLOGIES
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TUESDAY, OCTOBER 18, 2005
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 3:35 p.m., in
room SD-366, Dirksen Senate Office Building, Hon. Pete V.
Domenici, chairman, presiding.
OPENING STATEMENT OF HON. PETE V. DOMENICI,
U.S. SENATOR FROM NEW MEXICO
The Chairman. Why don't our two witnesses come up, please?
This will not be our last hearing, but it will be the kick-
off hearing. So we are starting today with Dr. Ralph Cicerone.
I think I have met you before. Nice to see you again. And Norm
Augustine.
Each of us are going to make a statement, because the two
Senators, the one on my left and the one on my right, have been
asked to do this. They have both been working on it. I will let
both of them comment. Normally that does not happen, but we are
going to do that today.
I am concerned, as you are and everyone here on this
committee, about the United States' competitiveness in relation
to some of the other economies around the world. This committee
gets involved in those issues as we follow the enormous energy
and resource requirements of China and India, but many of the
signals that we have put forth pose a problem. Clearly some of
them go back, in my case, to the budget days and the Budget
Committee.
I worry about the impact of competitiveness on our ability
to afford many of the social programs that are very
significant, like Medicare, Medicaid and Social Security. I
worry about the lack of competitiveness and its effect on the
balance of trade and the value of the dollar against foreign
countries and currencies.
There are areas in which the United States seems to be the
world leader in research and development, certainly in health
care and medicine. Those come to my mind right off the bat.
However, it does seem that our preeminence in the physical
sciences is simply no longer there.
It seems that the very complex science issue is difficult
for our government to manage and to put our arms around. The
pursuit of scientific knowledge is frequently a wandering path.
I know of technology developed in the nuclear weapons program
being used to fight diabetes, for example.
Government has a hard time managing these sorts of things
that shift from application to application across programs and
across agencies, but it does not mean that they should be
avoided. We do need a major increase and new direction in the
physical science programs of our country.
There is a lot in this report that I am especially
intrigued by. It is a notion of goal-setting to orient our
efforts, as you have proposed and discussed, by declaring an
intent to address the Nation's need for affordable, reliable
energy, which you have not yet recommended. Clearly it seems to
me that in the past, goals have been terrific promoters and
pushers of science advancement. You know better than I what
those are, both of you.
It is a significant goal and it might well require what you
have proposed. That is a new investment of about $10 billion
each year for scholarships and other investments. You have
indicated a 10 percent increase in basic research funding each
year for at least 7 years. Some people think that is way out of
line, but just look at what we have done for far less important
things, objectives, and goals.
So I am going to stay on this thought of energy
independence for the moment. I have never thought that that was
possible, but I do believe that, if pressed, we could find some
way to generate all the energy we need. This challenge is ``at
what cost'' and how the experts will tell us we will get there.
It is not in the interest of our economy to generate domestic
energy that imposes higher energy costs which are too hard and
too high for our economy to be able to compete in the world. So
the challenges for this goal are real.
But let us say we can produce all the energy domestically
and cheaper than we can buy it now. I do not think we are ever
going to get there unless we do something like you are talking
about. So, as chairman of this committee, I am very
enthusiastic.
I want to close by saying, to you and those who have helped
you, one of our government's problems is when we got to funding
medical research, that was an entity, the National Institutes
of Health. One just started a resolution and said, let us
double the funding of the National Institutes of Health. Then
that is passed to each of the institutes. Basic research is not
funded that way. You both know that. It is anywhere,
everywhere, not in the right places. Too much in some places.
But if you try to say, let us double it, we would not know what
to double. So, it is not going to be easy, and your
recommendations cross committee lines. But nonetheless, we know
about it and we ought to move ahead.
Senator Bingaman, thanks for your work and for your
suggestions. Would you give us your opening statement? Then
Senator Alexander, and then we will proceed. Thank you again to
both of you.
[The prepared statement of Senator Corzine follows:]
Prepared Statement of Hon. Jon S. Corzine, U.S. Senator From New Jersey
Mr. Chairman, I first would like to thank you for holding this
hearing. I also would like to commend Senator Bingaman and Senator
Alexander, who asked the National Academy of Sciences to compile the
report are reviewing. They deserve admiration and respect for their
vision and dedication on this important issue. I also would like to
thank the members of the Committee on Prospering in the Global Economy
of the 21st Century. Few other committees have benefited from the
breadth of expertise exhibited by its members. They have produced a
report of special significance, and we should all pay careful attention
to their recommendations.
The committee identified two challenges that are linked to
scientific and engineering capability: The creation of high quality
jobs for Americans and the response to the nation's need for clean,
affordable, and reliable energy. I will address the latter first. The
need for America to reduce its dependence on foreign sources of energy
is inexorably linked with the need for domestic innovation regarding
our use and consumption of natural resources. I have long been an
advocate for alternate sources of energy, and I believe that the
development of such sources can be achieved through domestic
innovation. We cannot simply drill ourselves out of our dependence on
foreign oil. A diversification of our energy portfolio, founded in
scientific innovation, can wean us from our oil addiction. A prime
example of this innovation can be found in increasing fuel efficiency
standards. The Energy Bill that recently passed, which I voted against,
did not include any provisions that would improve automobile fuel
economy, which could reduce the share of foreign oil that we consume by
more than ten percent. These programs, which encourage forward looking
innovation instead of maintaining the status quo, should be pursued
more vigorously.
The task of creating high quality jobs for Americans should also be
considered seriously. Though we currently lead the world in economic
strength, this lead is not sustainable if we merely stay on the course.
America's domestic innovation, the bedrock of our economic strength,
needs to be fortified. The question will require a cohesive and
deliberate policy, aimed to help the United States achieve prosperity
in the 21st Century. Such a policy must be multifaceted and farsighted.
I am heartened that the committee has suggested we strengthen our
science and engineering education system at all levels. We must educate
the next generation of scientists and engineers by providing them with
opportunities and incentives to excel. Cutting the budgets for these
vital education programs not only hurts the individual student, but
also hinders the prospects for American technological ingenuity in the
future. Furthermore, we must continue to support our budding scientists
at the college and post graduate levels. In 2004, China graduated over
600,000 engineers, India 350,000, and America about 70,000. In
addition, 12th graders in the United States recently performed below
the international average for 21 countries on a test of general
knowledge of science and math. All of us should pay close attention to
the disturbing statistics included in this report. Not only do these
finding highlight the poor overall education of our students, they also
point to cracks in the long-term sustainability of America's leadership
in these important fields. Establishing incentives for high school and
college students to study science and engineering will increase the
pool of talented scientists for both the private and public sector.
Increasing the amount and size of scholarships will certainly help this
effort. One particular program, the Math and Science Partnership
Initiative, would increase funding for long term professional
development for the country's teachers and for developing more rigorous
math and science curricula. I have been a proud supporter of this
program since the beginning of my tenure in the Senate, and believe
that such programs will help alleviate the deficiencies we now see in
the math and science education of America's students.
I also heartily agree with another tangential conclusion of this
report; the federal government can actively work with state and local
governments for educating and stimulating our globally competitive
workforce. I have been extremely active in ensuring that my state
remains competitive in the global economy by encouraging high tech
industries to do business in New Jersey. The foundations of these
chemical, pharmaceutical, and defense companies are its scientists and
engineers. We should ensure that we continue to support the homegrown
innovation of these workers.
Historians have often called the 20th century ``America's
Century.'' Indeed, during the last century the U.S. shaped the global
landscape, leading innovation and ensuring its domestic economic
prosperity. It will not be easy, but the vision that our elected
leaders show at the beginning of the 21st century will have momentous
consequences in the coming years. The report by the National Academies
should be studied closely and its advice taken seriously in any future
legislation. I again thank the Chairman and Ranking Member for allowing
this Committee the chance to hear from these witnesses before us about
this crucial topic and I look forward to their testimonies.
STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR
FROM NEW MEXICO
Senator Bingaman. Yes, thank you, Mr. Chairman. Let me
thank Senator Alexander for his leadership in getting us
focused on this issue and thank both of our witnesses and the
panel members that worked with them. We had a stellar group of
experts really who came together to reach these conclusions and
recommendations.
Obviously, the specific recommendations are extremely
important and we need to take them to heart and we need to
implement, but I also think that this report is serving a very
useful purpose in getting us focused on the important challenge
we face long-term. I do think that we have a great tendency
here in official Washington to wake up every morning and read
the paper to see what we ought to be working on that day, and
that is sort of the way we set the agenda around this place. We
see who is saying what and who is attacking whom and then what
investigations are revealing, and then decide what we ought to
work on.
This is a set of issues that are extremely important,
probably as important as any that we could identify for the
country. But since they do not fall under the category of being
on the front page of the paper every day, we do not ever get
around to them. We always put them off and put them off and
give them lower priority attention than they deserve.
So you deserve great credit for getting us focused on these
issues again and I look forward to your testimony and then to
additional opportunities, as we go through the next few months,
to highlight what your recommendations are and hopefully get
the administration and the Congress to embrace these
recommendations and actually move out on them.
Thank you again, Mr. Chairman.
The Chairman. Thank you, Senator Bingaman.
Senator Alexander.
STATEMENT OF HON. LAMAR ALEXANDER U.S. SENATOR
FROM TENNESSEE
Senator Alexander. Thanks, Mr. Chairman.
I am really enormously pleased with what is happening here.
I am the new kid on the block, and I enjoy being that at my age
on any block. Senators Domenici and Bingaman have been working
on this subject a long time. So has Senator Craig. So have many
other Senators. But I have been working on it outside the
Senate, and so I am delighted that Senator Domenici has chosen
to encourage making this a priority of the U.S. Senate, not
just of our committee, but of our Senate, as we work on it.
And it is already receiving, Mr. Chairman, more good
comments among our colleagues than almost anything I have been
involved in. Senator Mikulski and Senator Bond, for example,
who have been interested in this subject, came up to me today
and said, count me in. So I believe there is a consensus among
the Senators that this is a subject matter that we should make
a top priority.
As I have often said, most ideas in Washington fail for
lack of the idea. What you gentlemen and your colleagues have
done is given us the idea of what we ought to be doing for the
next 10 years. If you stop and think of it, Senator Bingaman
and I last May simply did a very simple thing. We walked over
to the people who are supposed to know the answer and asked a
question. The question was: What are the top actions in
priority order that Federal policymakers could take over the
next decade to help the United States keep our advantage in
science and technology?
Now, we could have sat around the room and Senator Domenici
would have said, well, let us do this, and I would have said
that, and Craig would have said that. They might have been good
ideas, but we are not the ones who ought to know the answer to
the question.
And your response has really been remarkable. The fact that
the National Academies of Engineering, of Sciences, and the
Institute of Medicine would ask someone of Mr. Augustine's
stature then to assemble, Mr. Chairman, in a short time, a
matter of a few weeks, such a distinguished panel of university
presidents and other academics, Nobel laureates, business
leaders, government officials, and answer our questions. These
are 10 things the United States ought to do to keep its secret
weapon, which is brain power.
And you reminded us that 85 percent of the increase in our
incomes in this country of ours has come from science and
technology. I would like to remind us of how fortunate we are.
I mean, we are 5 percent of the people in the world, and we
produce about a third of all the money, compared to the gross
domestic product. What we are focused on today is the secret
weapon for our high standard of living and good jobs, and that
is brain power, and what should we do over the next 10 years
about brain power.
Mr. Chairman, I want to put my statement in the record, if
I may, but I would like to say one or two more things from it,
just as a matter of example.
You took our question seriously. And speaking as one
Senator--and I believe there are many who feel the same way--I
am going to take your recommendations seriously and work
through the various committees and with Chairman Domenici and
others to do our best on them.
Next, I think it is important to remember that this great
advantage we have did not happen by accident. We have the best
universities. We have this array of 36 Federal research
laboratories. We have had, at least until recently, the best K-
12 system. We poured Federal Government money into all this,
$22.5 billion for university-based research in science and
engineering. 60 percent of our college students attend college
with Federal grants or loans, $52 billion of Federal student
loans.
While we have been outsourcing jobs, we have been
insourcing brains. 572,000 foreign students attend our colleges
and universities here. Your report addresses that.
So we have asked the right people, the people who ought to
know the answer. You have given us the answer and now it is
down to us.
I suppose the other thing I would want to say is this.
Someone says to me, well, where is the money going to come from
for this? Well, we have a budget of over $2 trillion every
year. I have made budgets before. They have been a lot smaller.
I was Governor and I always started by putting the most
important thing in first, and then everything else, Mr.
Chairman. You have been a budget chairman for a long time.
Everything else comes in after that.
Well, I think if we can have a consensus about what the
most important things we need to do are to keep this astounding
standard of living we have, that we ought to say to the
President, put it in first. And then we will have a restrained
spending budget over the next few years.
Now, my hope is not just that Chairman Domenici and Senator
Bingaman and others of the senior members of the Senate get
interested in this. I want the President to get interested. It
is hard for us to organize ourselves around an agenda. We are
legislators. This really cries out for executive action. I
would hope that your report would be the subject of the
President's State of the Union address and the thrust of his
next 3 years. If he were to do that, I think he would find in
the U.S. Senate a strong bipartisan core of people who agree
with that thrust.
So I thank you very much for your hard work. I look forward
to working with you on your recommendations, and I thank
Chairman Domenici for giving this such a good start.
[The prepared statement of Senator Alexander follows:]
Prepared Statement of Hon. Lamar Alexander, U.S. Senator From Tennessee
In May, Senator Jeff Bingaman and I, with the encouragement of this
Committee's Chairman Pete Domenici, asked the National Academies of
Sciences and Engineering and the Institute of Medicine this question:
``What are the ten top actions, in priority order, that federal policy
makers could take over the next decade to help the United States keep
our advantage in science and technology?''
To answer the question, the academies assembled a distinguished
panel of business, government and university leaders headed by Norm
Augustine, former chair of Lockheed-Martin, that included three Nobel
Prize winners. They took our question seriously, and I intend to do
everything within my power to take their recommendations seriously.
Today, the Energy Committee takes the first step in that response
by holding this hearing to hear from Mr. Augustine and the academies.
It will be the first opportunity Congress will have to hear their
answer to our question.
This hearing is primarily about brainpower and the relationship of
brainpower to good American jobs.
The United States produces almost one third of all the wealth in
the world (in terms of GDP)--but has only five percent of the world's
population. We are a fortunate country indeed. The academies explain
this phenomenon in this way: ``. . . as much as 85 percent of measured
growth in U.S. income per capita is due to technological change.''
This technological change is the result, in the report's words, of
an outpouring ``of well trained people and the steady stream of
scientific and technological innovations they produce.''
The United States has taken extraordinary steps to help create this
outpouring of trained people and new discoveries that have given us
such a disproportionate share of the world's wealth.
We have in our country almost all of the world's greatest research
universities. We have a unique array of 36 federal research
laboratories. More Americans attend college than in any other country,
and the colleges they attend are the best in the world. We have had, at
least until recently, a system of K-12 education unsurpassed in the
world.
Government support for all these enterprises has been massive. In
2001, the federal government spent $22.5 billion for university-based
research in science and engineering. This year the government will
provide 60 percent of American students with grants or loans to help
them attend the college or university of their choice. The federal
government will spend nearly $17 billion on grants and work-study
programs and will provide an additional $52 billion in student loans.
In my last year as governor of Tennessee, half of state dollars and a
larger proportion of local tax dollars went to support education.
And our free market environment encouraged innovation and
enterprise as well as billions of dollars invested in corporate
research. Finally, to top it off, while we have been outsourcing jobs,
we have been insourcing brainpower. 572,000 foreign students attend our
colleges and universities. One half of the students in our graduate
programs of engineering, science and computing are foreign.
There are three reasons I put this question to the National
Academies:
First, Congress is facing huge budget challenges over the next
decade as we grapple with restraining the growth of entitlement
spending. I did not want tight budgets to squeeze out the necessary
investments in science and technology that create good jobs.
Second, as the Augustine report details, there are worrisome
reports from all sides that in the new competitive world marketplace,
the United States will have to make an even grater effort to keep our
high standard of living. To put it bluntly, people in India, China,
Singapore, Finland, and Ireland know very well that since their brains
work just like ours, that ifbrainpower is the secret weapon to produce
good jobs, then there is no reason that they can't have a standard of
living more like ours. They are working to develop better trained
citizens and create their own stream of discoveries.
Third, I wanted to ask the question to those who should know the
answer. Members of Congress are not the best ones to guess what the
first ten things we should do to keep our scientific and technological
edge.
Congress is not efficiently organized to deal with broad
recommendations such as these. I intend to work with my colleagues to
see that all of the recommendations in the report are introduced and
given a fair hearing in the various committees that have jurisdiction.
But what really should happen is that President Bush should make
this report the subject of his State of the Union address and the focus
of his remaining three years in office.
This challenge cries out for executive leadership. This challenge
is the real answer to most of our hopes and the solution to most of our
big problems, from high gasoline prices to the outsourcing of chemical
industry jobs, from the shortage of engineers to the growing number of
lower wage jobs, from energy independence to controlling health care
costs.
This is the challenge that most Americans wish their government
would put up front. We have begun the discussion with a bipartisan
question to the wisest Americans who ought to know the answer. We have
a remarkable opportunity now to act on the recommendations in the same
spirit.
The Chairman. Thank you.
Now we are going to proceed. I just want to say, Senator,
you never are without--I will put it another way. You always
shoot for the moon, and that is good. Your ideas about where we
ought to go are terrific. Maybe we can.
Senator Alexander. My grandfather used to say, Mr.
Chairman--he was a railroad engineer. He said, aim for the top.
There is more room there.
[Laughter.]
The Chairman. All right. Which of you wants to go first? Go
ahead.
STATEMENT OF RALPH J. CICERONE, PRESIDENT, NATIONAL ACADEMY OF
SCIENCES, AND CHAIR, NATIONAL RESEARCH COUNCIL
Mr. Cicerone. Thank you. I am Ralph Cicerone, president of
the National Academy of Sciences. The National Academy of
Sciences was chartered by Congress in 1863 and President
Lincoln signed that charter. I also serve as chairperson of the
National Research Council. Together with the National Academy
of Engineering and the Institute of Medicine, we comprise the
National Academies. We are private, nonprofit, and independent
organizations and we respond to requests for independent and
objective studies on challenging subjects involving science,
technology, and medicine. Most of our work is by request of the
Federal Government.
We are honored to undertake the task that is going to be
reported to you today. It was directed to us, as Senator
Alexander just recounted, by himself and Senator Bingaman, with
strong endorsements by Representatives Sherwood Boehlert and
Bart Gordon of the House Science Committee.
Usually we work through committees of experts in our
studies of the National Academies and the National Research
Council, experts who serve without pay. That is the case again
with the report that you are about to hear summarized today
from our Committee on Prospering in the Global Economy of the
21st Century. This committee is unusually distinguished. It is
comprised of very, very busy men and women who are,
individually and as a group, very extraordinary Americans. The
group consists of several corporate CEO's, university
presidents, three Nobel Prize winners, several past
Presidential appointees, and distinguished teachers. The
chairman of the committee is here with us today, Mr. Norman
Augustine.
By way of background, Mr. Augustine was chairman of the
board and CEO of Lockheed Martin earlier in his career. He was
an Under Secretary of the Army and an Assistant Director of
Defense for Research and Engineering of the United States. He
is former chairman of the American Red Cross, former chairman
of the Defense Science Board. He now serves on the Council of
the President of the United States' Advisors on Science and
Technology, and he is a winner of the National Medal of
Technology. He is also an elected member of the National
Academy of Engineering. And he had a good cast to help him. In
just a moment, he will provide an overview of the report.
The committee worked over a very short period of time
during which they analyzed data from a wide variety of sources,
made their own observations, and read the views of and
interacted with many other experts from all walks of life
during the summer just past, and it was a short part of the
summer. And then they responded to criticisms and suggestions
from anonymous reviewers whom we at the Academy selected.
In looking over the data in this report, I think that each
one of us would be taken by the variety of indicators that they
have drawn from. There may be no one indicator that convinces
you completely, but when you add them all together, I think the
committee has come up with a rather compelling argument and
case.
I would like to add just one more observation to all of the
indicators that they summarized in this thick report. Namely,
we at the National Academies asked 21 people to serve on this
committee, to drop what they were doing in August, and work
hard on this task because of the deadline and the time scale on
which Senator Alexander and Senator Bingaman asked for
recommendations on actions that the Federal Government might
usefully take when the two Senators walked over and talked with
us. You will notice that we ended up with 20 members on this
committee. In other words, 20 out of 21 accepted under those
conditions. That level of acceptance of our invitations by
highly accomplished people, dropping all other commitments,
personal, corporate, and otherwise, was truly amazing. It is a
measure of the dedication to the task and their willingness to
work, once again, on behalf of the country.
So if I may, Mr. Chairman, I could turn it over to Mr.
Augustine now who will discuss the report.
The Chairman. Thank you very much, Doctor.
Mr. Augustine.
STATEMENT OF NORMAN R. AUGUSTINE, RETIRED CHAIRMAN AND CEO,
LOCKHEED MARTIN CORPORATION
Mr. Augustine. Mr. Chairman and members of the committee,
thank you very much for the invitation to describe for you our
report. Mr. Chairman, with the committee's permission, I would
like to submit a formal statement for the record and then
briefly summarize it now.
The Chairman. Your statement will be made a part of the
record.
Mr. Augustine. As you have heard, our committee had 20
members. I think I can safely say that we all feel deep concern
and that we also are all extremely excited about the
opportunity that we have to deal with the problems we believe
we face. Our work, of course, was conducted in response to
Senators Alexander and Bingaman's suggestions.
The thrust of our findings is really quite straightforward.
It is that individual prosperity of Americans in the future
will depend very heavily on their having access to quality
jobs, and our collective prosperity will depend upon having the
tax revenues that are underpinned by Americans having quality
jobs. And those collective concerns would include providing
national defense, providing health care, and so forth.
But there has been a change that has taken place in terms
of providing quality jobs. That change is attributable largely
to new technologies. I refer specifically to the fact that in
the information arena, the cost of providing
telecommunications, of processing, and of storage has become
almost free. The implication of this that jobs that used to
require people to be in close physical proximity to one another
no longer require that. That means that jobs are now open to
candidates from around the world, and these are not just jobs
at the so-called lower end of the employment spectrum, but they
are jobs throughout the spectrum.
The change is that job seekers in America no longer have to
compete only with their neighbors, but they have to compete
with highly qualified people from around the world. They
compete in a labor market where we are at a distinct
disadvantage. I recently traveled to Vietnam where you can hire
20 assembly workers for the cost of the U.S. minimum wage. I
was recently in India, where you can hire 11 engineers for the
cost of one engineer in this country. They are fine engineers.
And so if we are to compete, we have to compete on some other
grounds, and that ground, as you have suggested, Mr. Chairman,
and your colleagues, has to be our ability to compete, our
ability to have knowledge that is fresh and new.
Very few jobs are what one might call ``safe.'' I would
cite just a few interesting examples. In many hospitals in this
country, if one has a CT-scan, there is a very good chance it
will be read by a physician in India.
Similarly, very near to where we are now sitting, there is
an office building that the receptionist, who greets you at the
door and controls access to that building, appears on a flat
screen display on the wall. She is actually located in
Pakistan.
If you call to find out where your lost suitcase is, as I
had to do last week, the call center you talk to in this case
was in India. They are now teaching people in India at call
centers to speak with a midwestern accent.
Those are just a few of many examples I could cite.
Tom Friedman in ``The World is Flat'', an extremely
perceptive book, has pointed out that globalization has
accidentally made people from Bangalore, Beijing, and Bethesda
next door neighbors. When it comes to competing for jobs, that
is certainly true since jobs are now just a mouse click away.
But is this not good that other nations are prospering? And
the view of our committee is absolutely yes, it is very good.
It probably portends a safer world. It suggests that American
consumers will be able to buy products at less cost and
American suppliers will be able to have a larger market to sell
their goods and services.
But the problem is that, as with most change, there are
likely to be winners and likely to be losers, and our goal is
to be sure that America is among the winners when it comes to
seeking jobs.
There is an enigma that, as you have pointed out, America
is prospering today, but the reason we are prospering is
largely because of investments made in the past. Many of those
investments were in the area of science and technology, which
underpins much of the opportunities and innovation. There will
be no sudden warning in this case, no 9/11, no Sputnik, no
Pearl Harbor. We will see a gradual erosion, and if we are to
compete for jobs, we need to excel in innovation to offset the
labor cost disadvantage we endure.
The indicators are not good frankly. We have been living,
to a very large degree and to our very good fortune, off of
foreign-born talent. 38 percent of the Ph.D.'s in science and
engineering in America's work force today were foreign-born. 59
percent of the Ph.D.'s granted by American universities today
go to foreign students, and increasingly, those students are
going back home because of the great opportunities that are
offered in other countries.
In a recent international test of mathematics, conducted
with U.S. high school freshmen, the U.S. students, ranked among
other countries in the world, finished in 29th place.
As another example, chemical companies closed 70 plants in
the United States in 2004. They have announced their intention
to close 40 more. In the world, there are 120 new chemical
plants being built, with a value of each of more than $1
billion. Of those, 50 are in China; one is in the United
States.
U.S. companies spend more now on litigation expenses than
they spend on research and development. Once one has lost the
lead in R&D, it is very difficult to recover.
Our committee has produced four recommendations that are
very broad, but we also have produced 20 very specific
implementing actions. We refer to them as ``go do's.'' They
focus heavily on the creation of jobs and on energy, and I can
elaborate on that during the question period, if you wish.
Basically our recommendations are to fix the K-12 science
and technology education process; to provide more money for
research and the physical sciences, mathematics, engineering,
and computer science; to provide more students studying those
fields in undergraduate and graduate school; and to create an
environment in America that is world-class in terms of
friendliness for innovators and for innovation.
Mr. Chairman and members of the committee, I thank you on
behalf of my 19 colleagues, and on behalf of the National
Academies, and the two of us would be very happy to answer any
questions you might have.
[The prepared statement of Mr. Augustine follows:]
Prepared Statement of Norman R. Augustine, Retired Chairman and Chief
Executive Officer, Lockheed Martin Corporation; and Chair, Committee on
Prospering in the Global Economy of the 21st Century, Committee on
Science, Engineering, and Public Policy, Division on Policy and Global
Affairs, The National Academies of Science
Mr. Chairman and members of the Committee: Thank you for this
opportunity to appear before you on behalf of the National Academies'
Committee on Prospering in the Global Economy of the 21st Century. As
you know, our effort was sponsored by the National Academy of Sciences,
National Academy of Engineering and Institute of Medicine (collectively
known as the National Academies). The National Academies were chartered
by Congress in 1863 to advise the government on matters of science and
technology.
The study had as its origin a conversation which took place at the
National Academies with Senator Lamar Alexander several months ago. As
a result of that discussion, the Academies were requested by Senator
Alexander and Senator Jeff Bingaman, members of the Senate Committee on
Energy and Natural Resources, to conduct an assessment of America's
ability to compete and prosper in the 21st century--and to propose
appropriate actions to enhance the likelihood of success in that
endeavor. This request was endorsed by the House Committee on Science.
To respond to that request the Academies assembled twenty
individuals with diverse backgrounds, including university presidents,
CEOs, Nobel Laureates and former presidential appointees. The result of
our committee's work was examined by over forty highly qualified
reviewers who were also designated by the Academies. In undertaking our
assignment we considered the results of a number of prior studies which
were conducted on various aspects of America's future prosperity. We
also gathered sixty subject-matter experts with whom we consulted for a
weekend here in Washington and who provided recommendations related to
their fields of specialty.
It is the unanimous view of our committee that America today faces
a serious and intensifying challenge with regard to its future
competitiveness and standard of living. Further, we appear to be on a
losing path. We are here today hoping both to elevate the nation's
awareness of this developing situation and to propose constructive
solutions.
The thrust of our findings is straightforward. The standard of
living of Americans in the years ahead will depend to a very large
degree on the quality of the jobs that they are able to hold. Without
quality jobs our citizens will not have the purchasing power to support
the standard of living which they seek, and to which many have become
accustomed; tax revenues will not be generated to provide for strong
national security and healthcare; and the lack of a vibrant domestic
consumer market will provide a disincentive for either U.S. or foreign
companies to invest in jobs in America.
What has brought about the current situation? The answer is that
the prosperity equation has a new ingredient, an ingredient that some
have referred to as ``The Death of Distance''. In the last century,
breakthroughs in aviation created the opportunity to move people and
goods rapidly and efficiently over very great distances. Bill Gates has
referred to aviation as the ``World Wide Web of the twentieth
century''. In the early part of the present century, we are approaching
the point where the communication, storage and processing of
information are nearly free. That is, we can now move not only physical
items efficiently over great distances, we can also transport
information in large volumes and at little cost.
The consequences of these developments are profound. Soon, only
those jobs that require near-physical contact among the parties to a
transaction will not be opened for competition from job seekers around
the world. Further, with the end of the Cold War and the evaporation of
many of the political barriers that previously existed throughout the
world, nearly three billion new, highly motivated, often well educated,
new capitalists entered the job market.
Suddenly, Americans find themselves in competition for their jobs
not just with their neighbors but with individuals around the world.
The impact of this was initially felt in manufacturing, but soon
extended to the development of software and the conduct of design
activities. Next to be affected were administrative and support
services. Today, ``high end'' jobs, such as professional services,
research and management, are impacted. In short, few jobs seem
``safe'':
U.S. companies each morning receive software that was
written in India overnight in time to be tested in the U.S. and
returned to India for further production that same evening--
making the 24-hour workday a practicality.
Back-offices of U.S. firms operate in such places as Costa
Rica, Ireland and Switzerland.
Drawings for American architectural firms are produced in
Brazil.
U.S. firm's call centers are based in India--where employees
are now being taught to speak with a mid-western accent.
U.S. hospitals have x-rays and CAT scans read by
radiologists in Australia and India.
At some McDonald's drive-in windows orders are transmitted
to a processing center a thousand miles away (currently in the
U.S.), where they are processed and returned to the worker who
actually prepares the order.
Accounting firms in the U.S. have clients tax returns
prepared by experts in India.
Visitors to an office not far from the White House are
greeted by a receptionist on a flat screen display who controls
access to the building and arranges contacts--she is in
Pakistan.
Surgeons sit on the opposite side of the operating room and
control robots which perform the procedures. It is not a huge
leap of imagination to have highly-specialized, world-class
surgeons located not just across the operating room but across
the ocean.
As Tom Friedman concluded it in The World is Flat, globalization
has ``accidentally made Beijing, Bangalore and Bethesda next door
neighbors''. And the neighborhood is one wherein candidates for many
jobs which currently reside in the U.S. are now just a ``mouse-click''
away.
How will America compete in this rough and tumble global
environment that is approaching faster than many had expected? The
answer appears to be, ``not very well''--unless we do a number of
things differently from the way we have been doing them in the past.
Why do we reach this conclusion? One need only examine the
principal ingredients of competitiveness to discern that not only is
the world flat, but in fact it may be tipping against us.
One major element of competitiveness is, of course, the cost of
labor. I recently traveled to Vietnam, where the wrap rate for low-
skilled workers is about twenty-five cents per hour, about one-
twentieth of the U.S. minimum wage. And the problem is not confined to
the so-called ``lower-end'' of the employment spectrum. For example,
five qualified chemists can be hired in India for the cost of just one
in America. Given such enormous disadvantages in labor cost, we cannot
be satisfied merely to match other economies in those other areas where
we do enjoy strength; rather we must excel . . . markedly.
The existence of a vibrant domestic market for products and
services is another important factor in determining our nation's
competitiveness, since such a market helps attract business to our
shores. But here, too, there are warning signs: Goldman Sachs analysts
project that within about a decade, fully 80% of the world's middle-
income consumers will live in nations outside the currently
industrialized world.
The availability of financial capital has in the past represented a
significant competitive advantage for America. But the mobility of
financial capital is legion, as evidenced by the willingness of U.S.
firms to move factories to Mexico, Vietnam and China if a competitive
advantage can be derived by doing so. Capital, as we have observed,
crosses geopolitical borders at the speed of light.
Human capital--the quality of our work force--is a particularly
important factor in our competitiveness. Our public school system
comprises the foundation of this asset. But as it exists today, that
system compares, in the aggregate, abysmally with those of other
developed--and even developing nations . . . particularly in the fields
which underpin most innovation: science, mathematics and technology.
Of the utmost importance to competitiveness is the availability of
knowledge capital--``ideas''. And once again, scientific research and
engineering applications are crucial. But knowledge capital, like
financial capital, is highly mobile. There is one major difference:
being first-to-market, by virtue of access to new knowledge, can be
immensely valuable, even if by only a few months. Craig Barrett, a
member of our committee and Chairman of Intel, points out that ninety
percent of the products his company delivers on December 31st did not
even exist on January 1st of that same year. Such is the dependence of
hi-tech firms on being at the leading edge of scientific and
technological progress.
There are of course many other factors influencing our nation's
competitiveness. These include patent processes, tax policy and
overhead costs--such as healthcare, regulation and litigation--all of
which tend to work against us today. On the other hand, America's
version of the Free Enterprise System has proven to be a powerful
asset, with its inherent aggressiveness and discipline in introducing
new ideas and flushing out the obsolescent. But others have now
recognized these virtues and are seeking to emulate our system.
But is it not a good thing that others are prospering? Our
committee's answer to that question is a resounding ``yes''. Broadly
based prosperity can make the world more stable and safer for all; it
can make less costly products available for American consumers; it can
provide new customers for the products we produce here. Yet it is
inevitable that there will be relative winners and relative losers--and
as the world prospers, we should seek to assure that America does not
fall behind in the race.
The enigma is that in spite of all these factors, America seems to
be doing quite well just now. Our nation has the highest R&D investment
intensity in the world. We have indisputably the finest research
universities in the world. California alone has more venture capital
than any nation in the world other than the United States. Two million
jobs were created in America in the past year alone, and citizens of
other nations continue to invest their savings in America at a
remarkable rate. Total household net worth is now approaching $50
trillion.
The reason for this prosperity is that we are reaping the benefits
of past investments--many of them in the fields of science and
technology. But the early indicators of future prosperity are generally
heading in the wrong direction. Consider the following:
For the cost of one engineer in the United States, a company
can hire eleven in India.
America has been depending heavily on foreign-born talent.
Thirty-eight percent of the scientists and engineers in America
holding doctorates were born abroad. Yet, when asked in the
spring of 2005, what are the most attractive places in the
world in which to live, respondents in only one of the
countries polled indicated the U.S.A.
Chemical companies closed seventy facilities in the U.S. in
2004, and have tagged forty more for shutdown. Of 120 new
chemical plants being built around the world with price tags of
$1 billion or more, one is in the U.S. Fifty are in China.
In 1997 China had fewer than fifty research centers managed
by multinational corporations. By 2004 there were over six-
hundred.
Two years from now, for the first time, the most capable
high-energy particle accelerator on earth will reside outside
the United States.
The United States today is a net importer of high technology
products. The U.S. share of global high tech exports has fallen
in the last two decades from 30% to 17%, while America's trade
balance in high tech manufactured goods shifted from a positive
$33B in 1990 to a negative $24B in 2004.
In a recent international test involving mathematical
understanding, U.S. students finished in 27th place among the
nations participating.
About two-thirds of the students studying chemistry and
physics in U.S. high schools are taught by teachers with no
major or certificate in the subject. In the case of math taught
in grades five through twelve, the fraction is one-half. Many
such students are being taught math by graduates in physical
education.
In one recent period, low-wage employers like Wal-Mart (now
the nation's largest employer) and McDonald's created 44% of
all new jobs. High-wage employers created only 29%.
In 2003 foreign students earned 59% of the engineering
doctorates awarded in U.S. universities.
In 2003 only three American companies ranked among the top
ten recipients of patents granted by the U.S. Patent Office.
In Germany, 36% of undergraduates receive their degrees in
science and engineering. In China, the corresponding figure is
59%, and in Japan it is 66%. In the U.S., the share is 32%. In
the case of engineering, the U.S. share is 5%, as compared with
50% in China.
The United States is said to have over ten million illegal
immigrants, but the number of legal visas set-aside annually
for ``highly qualified foreign workers'' was recently dropped
from 195,000 per year down to 65,000.
In 2001 (the most recent year for which data are available),
U.S. industry spent more on tort litigation and related costs
than on research and development.
As important as jobs are, the impact of these circumstances on our
nation's security could be even more profound. In the view of the
bipartisan Hart-Rudman Commission on National Security, `` . . . the
inadequacies of our system of research and education pose a greater
threat to U.S. national security over the next quarter century than any
potential conventional war that we might imagine.''
The good news is that there are things we can do to assure that
America does in fact share in the prosperity that science and
technology are bringing the world. In this regard, our committee has
made four broad recommendations as the basis of a prosperity
initiative--and offers 20 specific actions to make these
recommendations a reality. They include:
``Ten Thousand Teachers, Ten Million Minds''--which
addresses America's K-12 education system. We recommend that
America's talent pool in science, math and technology be
increased by vastly improving K-12 education. Among the
specific steps we propose are:
Recruitment of 10,000 new science and math teachers each
year through the award of competitive scholarships in math,
science and engineering that lead to a bachelor's degree
accompanied by a teaching certificate--and a 5-year
commitment to teach in a public school.
Strengthening the skills of 250,000 current teachers
through funded training and education in part-time master's
programs, summer institutes and Advanced Placement training
programs.
Increasing the number of students who take Advanced
Placement science and mathematics courses.
``Sowing the Seeds''--which addresses America's research
base. We recommend strengthening the nation's traditional
commitment to long-term basic research through:
Increasing federal investment in research by 10% per year
over the next seven years, with primary attention devoted
to the physical sciences, engineering, mathematics, and
information sciences--without disinvesting in the health
and biological sciences.
Providing research grants to early career researchers
Instituting a National Coordination Office for Research
Infrastructure to oversee the investment of an additional
$500M per year for five years for advanced research
facilities and equipment.
Allocating at least 8% of the existing budgets of federal
research agencies to discretionary funding under the
control of local laboratory directors.
Creation of an Advanced Research Projects Agency--Energy
(ARPA-E), modeled after DARPA in the Department of Defense,
reporting to the Department of Energy Undersecretary for
Science. The purpose is to support the conduct of out-of-
the-box, transformational, generic, energy research by
universities, industry and government laboratories.
Establish a Presidential Innovation Award to recognize and
stimulate scientific and engineering advances in the
national interest.
``Best and Brightest''--which addresses higher education. In
this area we recommend:
Establishing 25,000 competitive science, mathematics,
engineering, and technology undergraduate scholarships and
5,000 graduate fellowships in areas of national need for
U.S. citizens pursuing study at U.S. universities.
Providing a federal tax credit to employers to encourage
their support of continuing education.
Providing a one-year automatic visa extension to
international students who receive a science or engineering
doctorate at a U.S. university, and providing automatic
work permits and expedited residence status if these
students are offered employment in the U.S.
Instituting a skill-based, preferential immigration
option.
Reforming the current system of ``deemed exports'' so that
international students and researchers have access to
necessary non-classified information and research equipment
while studying and working in the U.S.
``Incentives for Innovation''--in which we address the
innovation environment itself. We recommend:
Enhancements to intellectual property protection, such as
the adoption of a first-to-file system.
Increasing the R&D tax credit from the current 20% to 40%,
and making the credit permanent.
Providing permanent tax incentives for US-based innovation
so that the United States is one of the most attractive
places in the world for long-term innovation-related
investments.
Ensuring ubiquitous broadband Internet access to enable
U.S. firms and researchers to operate at the state of the
art in this important technology.
It should be noted that we are not confronting a so-called
``typical'' crisis, in the sense that there is no 9/11, Sputnik or
Pearl Harbor to alert us as a nation. Our situation is more akin to
that of the proverbial frog being slowly boiled. Nonetheless, while our
committee believes the problem we confront is both real and serious,
the good news is that we may well have time to do something about it--
if we start now.
Americans, with only 5% of the world's population but with nearly
30% of the world's wealth, tend to believe that scientific and
technological leadership and the high standard of living it underpins
is somehow the natural state of affairs. But such good fortune is not a
birthright. If we wish our children and grandchildren to enjoy the
standard of living most Americans have come to expect, there is only
one answer: We must get out and compete.
I would like to close my remarks with a perceptive and very
relevant poem. It was written by Richard Hodgetts, and eloquently
summarizes the essence of innovation in the highly competitive, global
environment. The poem goes as follows:
Every morning in Africa a gazelle wakes up.
It knows it must outrun the fastest lion or it
will be killed.
Every morning in Africa a lion wakes up.
It knows it must outrun the slowest gazelle
or it will starve.
It doesn't matter whether you're a lion or a
gazelle--when the sun comes up, you'd
better be running.
And indeed we should.
Thank you for providing me with this opportunity to testify before
the committee. I would be pleased to answer any questions you have
about the report.
The Chairman. Well, let me first say I have been here now
in the Senate at the end of this year 34 years. Compared to
what each of you have done in your fields, that is not anything
more than you have done.
But I think we have made a terrible mistake. We have taken
this American machine that produces goods and services and
breakthroughs. We just assumed it would always happen, that we
were just there. And frankly, myself as one Senator and one
American, I have been terribly concerned that we are on the
track to a second-rate economy, a second-rate country. And I
blame it on all kinds of things in my mind. But many of them I
do not know what to do about, but as a result of the request
you have presented to us, I believe, a real opportunity exists
to address that issue.
I think it is true that when we decided that we would go
global--either of you might remember and correct me. This will
sort of be my first question. I think we thought that we were
going to be all right because we were going to keep the high-
scale jobs, high-end jobs, and the low-end jobs were going
elsewhere. So, America, do not worry about it.
What happened was at first that was our worry, but that
worry changed because what happened in these other countries
changed. We assumed they would not catch on. We were the only
one who would do accelerator technology. Right? It turns out we
are second. They are first. And we can go through them all.
I think we are to the point where I would say it is no
longer 20 out of 21 of you agreeing to meet and work because
you see it better than I do, and I think the work is a labor of
love, of concern that something is happening. Now, maybe that
is overstating it and maybe I am saying more than we can do,
but it is worth trying.
So might I ask, is my assessment of the situation, Mr.
Augustine, correct, that when we went into globalization, when
we thought that was a good thing, we were indeed ahead and we
had high-scale jobs, and the others were the Vietnam kind of
workers of today? But has that not changed in a very short
period of time? And if it has, why did it change so fast?
Mr. Augustine. I think your assessment is extremely
accurate. Initially we did believe that we could put low-end
assembly work in plants in Mexico. Now Mexico is having trouble
competing with Vietnam and China even. We then began to move
office work into other countries. Today there is quite a market
of doing our income tax by accounting firms in other countries.
Your tax form may well have been prepared abroad. I could cite
many such examples. I am sure you could as well.
The trend is one that really makes almost no jobs immune to
foreign competition or to moving abroad. I have a friend who
recently had surgery and the surgeon sat across the operating
room from him on the other side of the room and operated on him
using a robot. It is not a huge leap of at least this
engineer's imagination that that surgeon, instead of sitting
across the room, could sit across the ocean, could be an
absolute world-class surgeon who specializes in this particular
procedure. I could imagine that. I do not believe that has
happened yet, but it could.
McDonald's is running an experiment now that if you go to a
drive-in and order your hamburger at McDonald's drive-in, at
some of the drive-ins they send your order from your voice up
through a satellite 23,000 miles away back to the earth 1,000
miles away from where you were. They get the order right and
they send it back to the person preparing the hamburger. That
is happening today. So there are no jobs that are not going to
be vulnerable to the kind of thing you have described.
You are quite correct. Our committee, I think it is safe to
say, feels passionately in terms of our concern, in terms of
the importance we assign to this. We recognize that you and
your colleagues in the Senate and the House and in the
administration face enormous challenges. We are aware of
hurricanes, and we realize there are two wars going on. But
this is a war too, but it is one that is on a longer time
scale. It is a war that if we lose, we likely will lose the
fundamental strength of our economy which underpins most
everything else we do. So I would say your assessment was very
accurate.
The Chairman. Senator Bingaman.
Senator Bingaman. Thank you very much. And thank you again
for the wonderful testimony and the report.
Let me ask about a few of these specific recommendations
you have here. One is that we establish an ARPA-like entity
within the Department of Energy or focused on energy-related
issues. I just would ask, Mr. Augustine, if you would elaborate
on that as to how that would work, who it would be reporting
to? It is clear under DARPA that they are doing the work of the
Department of Defense, and there is no question as to whom they
are reporting and working for. How would you see this other
entity operating?
Mr. Augustine. Senator Bingaman, I guess I should first
indicate why we felt it was important to have this capability.
One of the concerns we have had is that as we produce new
scientific ideas, particularly in the energy area, the idea of
transferring those ideas into practice--there is a large gap in
terms of funding and capability and responsibility to do that.
We are looking in this idea of ARPA-energy, as we call it,
ARPA-E, for breakthrough technologies, transformational
technologies, things that really change the whole paradigm. The
DARPA of the Department of Defense has been extremely
effective, as I think you might agree. You do just that.
I should say also that our focus on energy really has its
origin in the fact that we view energy to be one of the
principal factors in America's competitiveness in the years
ahead. Our ability to provide energy at a reasonable cost,
provide it reliably, cleanly, and also to remove the threats to
national security that are so closely associated to energy all
argue that it is a key part of competitiveness and of
prosperity.
Beyond that, as you would know so well, energy research is
so closely affiliated with the very areas of science and
technology about which we are concerned, mainly the physical
sciences, mathematics, computer science, and engineering. I
separate those from the biological sciences which have been
reasonably well cared for by the National Institutes of Health.
With regard to the specific proposal, it would be our
belief that an ARPA-E would report to the Under Secretary of
Energy for Science, that it would have a staff that rotated.
The people would stay maybe 4 years, much like at DARPA. It
would do no research of its own. It would fund the innovative
breakthrough high-risk, high-payoff research and applied
development. That work would be performed actually at
universities, at companies, at startups, established companies,
and at the national labs. It would be awarded competitively. We
believe by so doing, we can take a major step forward in
improving the health of our physical science, math and
engineering fields and address an important problem at the same
time.
So I hope that answers your question.
Senator Bingaman. It does and I thank you for that answer.
Another big thrust of your report, as you describe it, is
to urge some specific actions we can take to get our training
of people in science and mathematics up to where it ought to be
or at least closer to where it ought to be in the near future.
You have one recommendation in here that I heartily endorse. I
just think it sounds pretty ambitious, and again, I would like
your comments on it. It says, by 2010, increase the number of
students in advanced placement and international baccalaureate
mathematics and science courses from 1.2 million to 4.5 million
and set a goal of tripling the number who pass those tests to
700,000 by 2010.
It is easy to talk about these things. It is easy to set
goals. It is harder when you get down to saying, okay, now how
many of those increased AP or IB students are we going to have
in this high school or that high school and how are we going to
get them there. Any comments you would have about the
achievability of that kind of a very ambitious goal?
Mr. Augustine. We believe it is achievable, but we would
share your characterization of a very ambitious goal. That was
my intent. It is nearly a factor of four increase in students
in that area.
We made the recommendation because experiments at various
State and local levels have indicated that having more students
exposed to the AP programs has a major impact in terms of their
overall level of education, how they score on examinations,
college boards and the like, and on the international tests.
To accomplish this goal, though, I think we have to start--
and our committee proposes this--with teachers. We first have
to train the teachers to teach AP programs. We have made a
recommendation as to how to go about doing that. We believe if
we can train those teachers, they can, in turn, train the
students and we will get much better graduates in the process.
With regard to the ambitiousness of our proposal, to some
degree we have scaled the experience of other programs along
this line, one particularly in Texas that has been very
successful. We scaled the school population in Texas with what
it has done in the way of growth that it has actually
accomplished with what we are proposing. Given that, we feel
that with a significant effort, we can do at least as well.
Senator Bingaman. Thank you very much. I think my time is
up although nobody seems to be keeping time around here. Let me
go ahead and defer to Senator Alexander.
Senator Alexander. Thank you, Senator Bingaman.
A couple of comments and then a couple of questions. $10
billion a year. I spent a lot of time as Governor trying to
restrain the growth of Medicaid so we could create centers of
excellence at the universities. We had these choices to make.
Over the next 5 years, Medicaid spending will grow 41 percent
in the Federal budget. Restraining that by 1 percent, 40
instead of 41, would produce $10 billion new Federal dollars a
year, in other words, enough to fund everything you have said
here. So I think we have to think about whether even in the end
putting the $10 billion into roughly the recommendations you
have made might not do more to help transform the health care
system in America and reduce medical costs and improve health
care than spending another $10 billion just on the system we
have got. So the amount of money is well within the reach of
this country.
No. 2, maybe Senator Bingaman and I and the staff of the
committee and the chairman can talk with you more about this. I
think it would be helpful to have a follow-up group from the
Academies to provide technical advice to us as we work through
trying to develop the legislation to implement these
recommendations because just as you have been able to sort out
among all these various ideas that people throw at us 10 or 4
broad categories, once we get down to how do we deal with
teachers, there are 100 ideas out there about how to do things,
programs going on. It would help us to have evaluations. So
that is one thing I would ask you to consider. What would be
the appropriate way, working between the Academies and here to
have the follow-up?
Now, let me just go to the questions. Should we not be
thinking about using the national labs in a big way here? I
have had some experience with dealing with programs for
outstanding teachers and students, and summer academies are
great ways to deal with that. If they were affiliated with the
labs, it would give a luster and a prestige and a place to go
and a new way to deal with issues about career paths and
satisfactory performance and how to pass out stipends and make
sure we were not wasting money in a way that would really
encourage the students and honor the teachers. We have these
labs and they could conduct it. I think of the Governor's
schools for teachers of math and science that we had at
Knoxville at the University of Tennessee. They were
inexpensive, easy to do, enormously well attended, and
competitively sought. So should we not use the labs?
And my second question is: Should we not be more ambitious
about insourcing brains? I mean, you have suggested we would
attach a green card, in effect, to somebody who gets a graduate
degree so they can stay another year. Well, why do we not give
scholarships to the 2,500 most outstanding engineers in the
world in hopes they come here and stay? While we do it for
liquified natural gas, we might as well do it for scientists,
at least in the interim until we grow our own. Should we insist
that every foreign student who comes here swears that he does
not plan to stay here when, in fact, we hope that the smartest
of them would stay here and help improve our standard of living
instead of going home and improving India's standard of living?
So should we not use national labs, and should we be more
ambitious in terms of insourcing brain power?
Mr. Augustine. I would turn to my colleague who has
experience, particularly on the latter topic.
Mr. Cicerone. Why do we not deal with the national labs
first? Because the report does speak quite a bit about the
roles of the national labs in hosting teachers in the
summertime, in student research projects, and in the research
and development. Do you want to handle that first?
Mr. Augustine. All right. We did address the national labs
and view those labs as a national asset. Of course, there are
programs such as the one at the University of Tennessee, when
you were president of the University of Tennessee, that was a
cooperative arrangement of this type.
The national labs have a huge collection of extremely
talented people. They have the stability that industrial
laboratories tend not to have. The national labs tend to be
working at the very leading edge of the state-of-the-art, so
they do provide a great resource not only to provide research
itself, but as a training ground.
With regard to bringing foreign students in and trying to
get them to stay, I must confess that when I first learned a
little bit about this question--I am told that when a foreign
student applies at our embassy for a student visa, the person
in our embassy has to certify that that student intends to go
back home when they get their degree.
Senator Alexander. That is the law.
Mr. Augustine. My reaction was that if I had been a foreign
student that wanted to come to America and I had been asked
that question, my reaction would have been to say, oh, yes, I
promise to stay and get a job in America and help start a
company and make America great. If I answered that way, I would
not have been permitted to come into the country. There is
something backward with this that really does need to be
changed.
Ralph, do you want to comment?
Mr. Cicerone. I do not think I have ever heard the idea
before of having a scholarship program to try to attract the
top, let us say, engineering students from around the world. So
that is a new idea as far as I know.
I think it, obviously, could be implemented. Now, what
would go through the minds of young students--I just left a
campus after 20 years to come here, so I have been in touch
with a lot of students. The things that we all know well. They
are interested in what they think the future of careers are,
where would their best chance at a career be, what kind of
financial aid is available so that when they emerge as a
student, they will not be in debt too much. Are they going to
encounter a welcoming atmosphere in this new place, and then
what would be the opportunity for a really stimulating
experience, for example, doing research as a student? And then
in each one of those cases, they make a comparison to what they
think the opportunity would be either in their home country or
increasingly in other countries that are having English-
speaking instruction, that is, instruction at the undergraduate
or graduate level offered in English.
In the last few years, one unfortunate side effect of our
making it more difficult for foreign students to come here is
that programs have grown up in England, Australia, Canada, and
Japan, for example, where students are offered instruction in
English and they are being actively recruited away from
American universities. This was an unintended consequence of
making it harder for foreign students to come here.
It is a great idea and I think that is what would go
through the minds of the young students whether or not they
should come here or go somewhere else.
Senator Alexander. Mr. Chairman, while you were out of the
room--and I want to make you aware of this--I suggested to Dr.
Cicerone and Mr. Augustine that they might want to consider
setting up a follow-up group to their report that could provide
technical advice to our committee and other Senators, when
asked, as we work through developing legislation, whenever that
is appropriate. So I wanted you to know that I asked that
question.
The Chairman. Very good. Did they say no?
[Laughter.]
Senator Alexander. They did not say.
Mr. Augustine. We said yes.
The Chairman. They are captive. They have no chance.
[Laughter.]
The Chairman. One of the items that you recommend is to
allocate a minimum of 8 percent of Federal research funding to
high-risk, high-payoff research. If the Federal research
agencies are under-investing in high-risk research now, first,
why is that under-investment occurring? And second, do you know
whether the Office of Management and Budget's PART process--
they have a process--as used now, discourages high-risk
research? The first one you probably can answer. If you do not
know what PART is, you cannot.
Mr. Augustine. Let me begin and I will ask my colleague to
continue.
With regard to the deterrents to high-risk research, there
are many deterrents. One of the deterrents, of course, is that
our society has become very failure intolerant. The media is a
part of that. We put far more attention on our failures than on
our successes, in many cases. And if you are a researcher
trying to build a career, it is probably easier to take the
safe route than to try something that might be a total failure.
We also have a peer review system that, by and large, is
very effective, but the peer review system and the people who
lead our laboratories too are pressured to not have failures.
So they tend to bet on the safer thing so that at the end of
the year, they will have something to show that worked.
These things tend to combine to make our researchers
reluctant to take chances.
Also, it has another effect, and that is, it tends to make
it difficult for younger researchers to compete for grants
because they do not have a track record, and that is in spite
of the fact that it has been shown by many studies that some of
the greatest innovations have occurred by people who are quite
young. So these things have combined to be, I think, a real
problem.
Do you want to add to that, Ralph?
Mr. Cicerone. Very briefly on your last point, Mr.
Augustine. Younger researchers are feeling this discouragement,
and it is a disincentive to stay in the field not just from a
financial point of view that they have difficulty obtaining
financial grants, but in terms of getting their own
independence to be able to try out their own ideas and to run
their own laboratories at universities. When they cannot get
their own grants until age 42, which is, I think, now the
median at which an NIH investigator gets his or her own grant,
it is a real disincentive to this field as a career
opportunity.
I think Mr. Augustine is right. Some of this is self-
imposed where with our peer review system everybody is trying
so hard to avoid making mistakes, that we are discouraging
people from taking risks.
And then finally, there probably are some things that have
been imposed by different administrations and different
Congresses, like the GPRA, the Government Performance and
Results Act. The Federal agencies, including the ones that
support basic research, have tried very hard to avoid making
any mistakes. So in an effort to prevent anything bad from
happening, they have prevented a lot of other things from
happening too.
The Chairman. You note in the report that as of 2007 the
United States, for instance, will not have the world's most
advanced high energy particle accelerator. Will the U.S.
researchers not have access to the new world-class accelerator,
even though it would be in Europe? Should we be concerned about
losing our status as the world's leader in high energy physics?
And how does that affect or relate to what we are talking about
here today?
Mr. Augustine. Indeed, the most capable high energy
accelerator in the world will go on line probably in 2007. It
will be in Bern in Switzerland and will be operated by the
European countries. The United States has been permitted to put
its researchers there, as you pointed out, and one of the
concerns is that for high energy physicists in this country, if
they want to have any chance of a Nobel Prize for the 5 or 10
years after 2007, the place to be is in Europe, not in the
United States. And our researchers are voting with their feet.
They are going to where these facilities are. So I think we
will, if we do not take drastic steps, likely lose the lead for
the first time in high energy physics research as these people
go to Europe to use this facility.
The Chairman. I was out a short time and this might be
repetitious on DARPA. But I know, Mr. Augustine, you have been
a staunch supporter if not even an admirer of DARPA as a modus
operandi. It might not be the most direct, but considering how
the Government has to do business with all of the
entanglements, it has been rather successful in your opinion.
Mr. Augustine. Indeed.
The Chairman. Now, who would be the customer of these
technologies that are developed at this new ARPA-E? If the
customer is the private sector and not the Government, then is
this the right approach? Maybe you have already answered that.
Did Senator Bingaman ask that?
Mr. Augustine. We did not address that specific aspect.
The Chairman. Would you tell me that?
Mr. Augustine. The customer would, indeed, be those
organizations generally in the private sector that will provide
the energy we need to run our country in the years ahead. That
is somewhat different, of course, from the Department of
Defense model where the DOD, by and large, is the customer for
the work of DARPA. Nonetheless, we have a lot of experience
with organizations such as the NIH that does basic research
that supports products that are built, say, by the drug
companies and pharmaceutical companies in that case. So that
aspect was not of great concern to us, although we discussed it
at some length.
The question implicit in some of your comments is also a
very good one. Why should the private sector, if it is to be
the beneficiary, not pay for this research? If I might, Mr.
Chairman, in answering your question, I would like to share
with the committee a story. I may have shared it with you in
the past, in fact. It occurred when I was working for Martin
Marietta, the aerospace firm that is the predecessor of
Lockheed Martin.
Our company had some opportunities for some very exciting
research, research that we thought held such enormous promise.
We called a meeting in New York of stock analysts, and we sent
our company's president there to tell them about this exciting
research we were going to do. He made a wonderful presentation.
At the end of the presentation, the analysts got up and
literally they ran out of the room and they sold our stock. Our
stock dropped 11 percent in 3 days and continued to decline for
another year before we got it turned back around.
When I asked one particular analyst--I remember almost
verbatim what he said--I said, what did we say that was wrong?
And his answer was, do you not understand that it takes 10 or
15 years for research to pay off? And your average shareholder
holds his stock about 18 months. So by the time your research
pays off, they could care less about what you have gained. They
will probably own your competitor's stock by that time. They
certainly do not want to pay for the research now. And he
concluded by saying to me that our firm does not invest in
managements with such short-sighted viewpoints. That was his
characterization.
So the fact is, with the pressure of the stock market on
quarterly earnings, it is just very hard for a corporation and
its board to spend much money on basic research. Development is
a different story. Basic research has an additional
disadvantage that you never really know who it is going to pay
off for. It is general. It is generic. And it may pay off for
your competitor and not for you, and that is why organizations
such as Bell Labs and such as GE Labs, many of which exist in
some form, but I think no one argue that they are what they
once were.
The Chairman. I may have missed this somewhere in this big
report. I am not seeing it just today. I have looked at it
briefly. It seems to me that one of the areas where we have a
built-in duplication, if not triplication, and whatever the
next word is, is in the university system. We take a great deal
of pride in having many, many universities, and it is obvious
that on basic things that each one has--that you spend many
times over to have the same kind of facilities. I guess, in
general, I would look out there and say where the Government is
involved in some institutional process that has long tales that
has been there a long time, even the National Institutes of
Health, there may be an opportunity, if not a necessity, in our
country to reassess the allocation of resources so as to move
in the direction you are speaking of in two ways, with new
assets and converting older assets to the right thing. I do not
know enough about that, but it is just patent to me that the
one thing we have plenty of is our universities.
Could you kind of talk to my notion? Did you comment on
reallocation of resources in the whole, broad field so we could
do more of what you are talking about?
Mr. Augustine. Well, we did discuss allocation in general.
We talked about the fact that some of the funding that we have
proposed that--I should mention some of our proposals do not
require additional funding. They would require other kinds of
actions. But before we put new funds in, some of which will be
certainly required, we should examine places where we do have
duplication or triplication or what have you. Some of that does
exist.
We also have in our proposal to establish a new fund for
facilities for research, many of which would be at
universities. Also, that the Government create a new office,
probably in the Office of Science and Technology Policy, to
oversee the planning for this additional fund so that you do
not wind up with the situation you described where you have
similar facilities, particularly expensive facilities. There is
no reason why they cannot be shared among universities, as far
as I know. Dr. Cicerone knows more about universities than I
do, so I will defer to you.
The Chairman. Doctor, would you comment please?
Mr. Cicerone. I think there is good potential for sharing
the expense of facilities and a good deal of it is already
being done. I think that that goal could be worked into these
plans.
Having just been in charge of a campus with a total budget
of a little over $1 billion a year, I was sitting here, since
you asked, Mr. Chairman, trying to think of any examples I
could come up with quickly of facilities that I think where we
were duplicative, and I honestly cannot think of any. I can
think, instead, of having people fighting for access to every
computer, every mass spectrometer. But there is potential and I
think people would take that challenge seriously.
The Chairman. The last one. Do either of you or both of you
or any of you know about this program within the laboratories
called LDRD? That is the one where the----
Mr. Cicerone. Laboratory Directed Research Directives or
something.
The Chairman. In disclosing my vintage, I remember when
that was a very prominent part of the DOE's nuclear
laboratories. 12 or 15 percent when Agnew was at Los Alamos was
left up to the discretion of the director to put into science
that was promising, maybe even directed at the goal, but not
provided for explicitly. Somehow or another that has turned
around up here, and the U.S. House thinks of it as--what do
they call it?
Mr. Augustine. A slush fund.
The Chairman. Yes, a slush fund for the director. Frankly,
I saw it as something spectacular, but I have more confidence
in the projects.
Could you kind of assess that and just talk about it a
minute?
Mr. Cicerone. Mr. Chairman, about 10 or 15 years ago, I
served as a reviewer for a request coming into those LDRD
project funds at the Lawrence Livermore National Lab and a
little bit at Los Alamos. The results were stunning. Those
little bit of funds that the laboratory directors had at their
discretion were dangled in front of people and all the best
ideas came out of the woodwork. Teamwork came out of the
woodwork. Some new technologies, some of the best work that I
ever saw. I had nothing to do with the laboratories except
being called in as an outside reviewer. The results were
stunning for the reasons that you said. I agree with you
completely.
The Chairman. They are down now. They have chipped it away.
What is it?
Mr. Augustine. 1 to 3 percent now. Our committee addressed
that. It is about 1 to 3 percent in most places today. We
recommended increasing it to 8 percent. Some argue it should be
still greater.
But it is true that has been a source of some of the
greatest payoff of all. The reason for that is that nobody
knows what the good ideas are better than the people who are
creating the good ideas.
The Chairman. Senator Bingaman.
Senator Bingaman. Let me ask about two of the issues that
you discussed a little bit there. This national coordination
office for research infrastructure that you recommend. You have
been around this city quite a while and watched the Congress in
action. How can we conceivably legislate something that we
would give $500 million to and keep it all from being earmarked
for the particular institutions that various members of the
appropriations committees here want it earmarked for? Is there
any way to actually do what you are recommending here? It seems
to me to be a great concept but very hard to accomplish, given
the reality of how this place functions.
Mr. Cicerone. From a university perspective, right now
there is no such capability for pay for major facilities. So
the only alternative is earmarking. So I think instead, the
lack of such of a fund is what is causing earmarking to
increase. By setting up this kind of an operation and
potentially having it go through high-level peer review, I
think we could prevent some of the least productive earmarking.
Senator Bingaman. Well, I like the concept. I hope that
that would be the result. I do not know that setting up an
additional fund would prevent earmarking or be an invitation to
earmarking, but I wanted to raise it as an issue.
Mr. Augustine. If I might, Senator Bingaman, I believe that
if the legislation could specify the money is to be allocated
based on peer review, you could do a lot to insulate against
earmarking.
Senator Bingaman. Well, I would hope that would work.
The Chairman. What was it he said was an answer?
Senator Bingaman. He said that we could specify in the
legislation that the funds within this pool of $500 million per
year would be allocated on the basis of peer review and that
would help to guard against earmarking, which as I say, I would
love to see happen.
On the tax incentive recommendation here, provide tax
incentives for U.S.-based innovation, you talk about provision
of incentives for the purchase of high-technology research and
manufacturing equipment. I was fortunate to travel to India in
January and to visit a couple of the large research facilities,
centers in Bangalore, that our own U.S. companies have
established; General Electric's research center; the Jack Welsh
center; and Intel's new center. I am sure there is a whole raft
of others that I did not get the chance to visit.
Are there tax reasons why those are located there? My
impression was that they were there because of, No. 1, the
talent and, No. 2, the cost of the talent, but primarily the
availability of the talent was what caused them to establish
those centers in those locations. Is there also a tax reason,
as you see it?
Mr. Augustine. I cannot speak to those specific centers,
but I have talked to enough people and have lived in this world
long enough to know that you don't put facilities someplace
just to have a view. I think there are a lot of factors that go
into that decision, but I think you have got it right,
particularly the research facility. The No. 1 issue is the
quality of the people, and if you can get the highest quality
people, that sort of eclipses everything else.
Now, the cost of the people is obviously a major factor
because research facilities tend to be rich in people costs.
But I think that beyond that--and it is included in the
appendix to our report--when companies go through and look at
where do we want to be located, they look at, for example, for
a factory, the capital gains tax and so on. We are not
competitive with much of the world. In places like Ireland and
Singapore and India and Japan, they figured this out. And
Finland, some very surprising places, have turned their
economy, as you know, by just offering extremely attractive
packages, some total tax forgiveness for a period of years. And
that is what we have to learn to compete with.
Senator Bingaman. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. Senator Alexander.
Senator Alexander. Thank you, Mr. Chairman.
The Chairman. It is getting late, but it is too exciting to
quit, is it not?
Senator Alexander. Senator Domenici is always worried that
I may go on for a while.
The Chairman. I went longer than you just a little while
ago and said less.
Senator Alexander. We are all very excited about this. Did
I gather you said that you would be willing to work with
Senator Domenici and Senator Bingaman to set up a technical
advice follow-up group so that as we work with the committee,
we can continue to get your advice?
Mr. Cicerone. Certainly.
Senator Alexander. Let me ask you about your very
interesting idea about a core curriculum for math and science.
I want to suggest--and this is the reason that the technical
advisory group might be good--you work with the Governors on
that. Going back to 1997, we had the national education goals.
They included math, science, English, history, and geography.
Then under the first President Bush, when I was Education
Secretary, we proposed creating voluntary national standards
and worked in each of those areas to do so. I guess, getting to
the bottom line, what we found was that we cannot impose that
on the States and the local school districts, but it seems to
me that it can be made so attractive that many States and
school districts would want it.
For example, if there were--and there may be--an
engineering and science core curriculum that were approved by
the National Academy of Sciences, just had your stamp on it--
maybe that exists today--then Governors I think would compete
to see how many States could adopt those statewide standards.
In Maryville, Tennessee, where we think we have a great high
school, we would probably want to say, well, we have those
standards. We have the National Academy core curriculum. And if
there were other parts to it, such as AP courses, as Senator
Bingaman mentioned, and if that were integrated into a program
with the national labs--in our case, it would be Oak Ridge. In
other cases, it would be other ones--or certain research
universities where outstanding teachers and students could go,
I could see how, instead of imposing such a core curriculum,
you might just create one. And it would be such a powerful idea
that the forces that exist within our society, when combined
with the efforts we are making for teachers and students, could
within 10 years make it something every school would be
embarrassed not to have.
So what was the discussion that you all had about this core
curriculum?
Mr. Augustine. You have given a very good description of
exactly what we had in mind. Our thought was to collect from
around the Nation world-class experts in teaching and in the
fields themselves to prepare a curriculum in science,
technology, mathematics for K-12 that would be strictly
voluntary, as you suggest, such that we were advising the
Federal Government. The Federal Government obviously cannot
impose this. But if it were so good, then we would think that
States and local communities would voluntarily want to adopt
it. And the idea of having the Governors take some ownership
for this would be a tremendous promotion for it.
Senator Alexander. Did you find, Mr. Augustine, that this
curriculum exists today at all?
Mr. Augustine. There are pieces of it. There are pieces,
but there really is not an integrated curriculum of the type
that we think is needed. It is important that we have not only
the curriculum but that we have standards and that we measure
the standards. We have means of measuring them. So that would
be our hope.
Senator Alexander, if I might footnote this with an answer
to an earlier question you asked about should we not be
offering scholarships and encouraging foreign students more
actively to come here. I wanted to relate an experience.
Recently in Singapore, where I visited Biopolis, which has
to be one of the world's finest biological research facilities
I have ever seen--it would make anyone in this country envious.
The leader of that laboratory showed me a three-hole notebook
he had about 2-3 inches thick. In it were tabs for different
countries: United States, Israel, Germany, France. He opened it
up and in it on each page is a student, a junior in high school
in that country that they have spotted as one of the real
outstanding science/technology students coming along. And they
are going to encourage them to come to Singapore for the last
years of high school. They will pay them to do that. They will
pay their way through college. They will pay them to get a
Ph.D. as long as they stay at the top competitively. Their
belief was, he said, that if you can encourage someone to come
before they are done with high school and stay through a Ph.D.
and you have a good job for them when they are done, they will
probably stay. So there is no requirement that you stay. They
just think you will. So others have tumbled your idea. We are
just behind on this one.
Senator Alexander. Well, the Soviets used to do that with
gymnasts, and Duke University does it with 8th graders. So it
is a good recruiting tool.
Mr. Augustine. My son-in-law played for Duke, so I will
stay out of that.
[Laughter.]
Senator Alexander. But, Mr. Chairman, I would conclude with
just as you are answering our question, by saying not a lot of
gobbledygook, but here are the 10 things that you need to do,
then that gives policymakers, who really do not know that, a
place to go. We are not the only ones like that. School board
members are being elected. Governors are being elected. They
all really do not know what to do. So if in math and science
they could turn to the National Academy of Sciences and you
could say, here is what we recommend you do, I think you would
be astonished at how many people would adopt that curriculum.
The Chairman. And they are perplexed out there. They are
hungry, confused. They are put upon. I taught a little math
when I was just a youngster. Before I went to law school, I was
a math teacher at a junior high school. The only reason I got
the job is because I agreed to coach baseball free. They had a
lot of applicants for my job. It is not like today. I tell you,
even then the bucks they gave you to teach with are just
incredible. I did not know much about it. I never did much in
education. I was a math and science guy, and at the end I said,
well, I do not know if I want to be in a laboratory, so why do
I not get an education certificate. Then they said, well, we
will hire you if you coach baseball. That sounded neat. Then
somebody talked me into going to law school, and that is how I
got to where I am.
Anyway, I want to revert back to goals. In this Energy and
Natural Resource Committee, we have some innate jurisdiction
because we have a lot of science. Nobody knows us as a science
group. It could have been called that, but that was not this
committee's name.
Now, we are involved, while we have this crisis that we are
speaking of, in competitiveness and standard of living and
maintenance. In fact, I would just say when we are talking,
before I get to my point, about bringing more young people to
come and live here, if things do not change pretty quick, they
are not going to be interested in coming here. They are going
to be interested in going elsewhere. There is already
competition for certain kinds of students. Where students know
they can come here even with our ridiculous rules, they are
choosing someplace else. So that is over on the side.
But let me ask on energy. I know you did not come out and
recommend that we change our course on energy and go ahead and
say we want to build this whole physical science and
competitiveness challenge around a goal as big as energy
independence. Talk about that just a minute here, each of you.
I do not know what to do about it. I am excited and encouraged,
but I am wondering. Let us start with you, Norm.
Mr. Augustine. All right, Mr. Chairman. We did address the
question of what should we build this around. I speak
particularly to those things that affected the Department of
Energy and specifically the ARPA-E proposal. It has been most
of our experience that innovation occurs best when you are
trying to solve a specific problem and not just when you go out
and say I will go in the laboratory and see what I can learn.
That is quite the opposite to basic research. So we needed some
focal point for our work. As we tried to address what is the
most important problem we could think of--and the remarks of
Chairman Greenspan just yesterday certainly reinforced the
importance of the energy problem, if anyone ever questioned its
importance--we felt that provided a good centerpiece for our
work. As I mentioned, it also is the place that the physical
sciences, mathematics, computer science, engineering, all tend
to come together. Much of that is in the Department of Energy.
As you know so well, most of the research or much of the
research in the country today in those fields is sponsored by
the Department of Energy. So to us it was an important problem.
It was appropriate to our goal, and so it was sort of a natural
focus for us.
So if I were to say what are the two focuses, if I were
limited to only two things about what is our effort about, the
first is to create jobs for Americans and the second is to
provide affordable energy.
The Chairman. Doctor.
Mr. Cicerone. I will just add something briefly that I
think most people would agree that the new sources of energy
and higher efficiency have become a necessity rather than just
a research luxury. So as a focal point, I think the committee
felt that there is an increasing amount of necessity here, very
interdisciplinary involving all kinds of research and
instruction at the same time. So it was just an appropriate
focus and it will be. We may be entering a high-price energy
future where the matter of necessity will become even higher.
The Chairman. I guess what bothers me is people have
thought for so long that it is unachievable. We pop out of the
box here. We think we have got something exceptional by way of
the dedication and quality and the timing. We pop out of the
box and say now we are going to convert to energy independence.
What would happen?
Mr. Cicerone. It is also a large goal. If this situation
were easy, I think the problem would have been solved. I think
people are anticipating that the easy sources of energy have
already been found and exploited, and now we are in for a
tougher time and that is why it has to be part of the research
agenda.
The Chairman. How about you, Norm? Do you think it would be
a joke? Do you think people would take it seriously? How do you
feel?
Mr. Augustine. My view, Mr. Chairman, would be that people
take this terribly seriously when people pay $50 to fill their
gas tank and it is likely they are going to pay something like
that for quite a while.
The Chairman. And shortages.
Mr. Augustine. And shortages, and when you know what it
implies, the instability in the world politically, I think
people will take this very seriously. Now, how easy the problem
is to solve is another story, but we will not solve it if we do
not try. I think there are things that we can do. We will run
out of fossil fuel energy, as you know. I am not qualified to
say whether it is 20 years from now or 40 years from now, but
we will run out. So we better get started on solving the
problem.
The Chairman. Anything else? We stand adjourned.
[Whereupon, at 4:55 p.m., the hearing was adjourned.]