[Senate Hearing 109-1130]
[From the U.S. Government Publishing Office]




                                                       S. Hrg. 109-1130
 
   THE IMPORTANCE OF BASIC RESEARCH TO UNITED STATES COMPETITIVENESS

=======================================================================



                                HEARING

                               before the

      SUBCOMMITTEE ON TECHNOLOGY, INNOVATION, AND COMPETITIVENESS

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 29, 2006

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
             Kenneth R. Nahigian, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director
                                 ------                                

      SUBCOMMITTEE ON TECHNOLOGY, INNOVATION, AND COMPETITIVENESS

                     JOHN ENSIGN, Nevada, Chairman
TED STEVENS, Alaska                  JOHN F. KERRY, Massachusetts, 
CONRAD BURNS, Montana                    Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          JOHN D. ROCKEFELLER IV, West 
GEORGE ALLEN, Virginia                   Virginia
JOHN E. SUNUNU, New Hampshire        BYRON L. DORGAN, North Dakota
JIM DeMINT, South Carolina           E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 29, 2006...................................     1
Statement of Senator Ensign......................................     1
Statement of Senator Pryor.......................................    25

                               Witnesses

Bement, Jr., Dr. Arden L., Director, National Science Foundation.    10
    Prepared statement...........................................    11
Drobot, Dr. Adam, Chief Technology Officer, Telcordia 
  Technologies Incorporated; Chairman, Communications Research 
  Division, Telecommunications Industry Association..............    50
    Prepared statement...........................................    52
Jeffrey, Dr. William, Director, National Institute of Standards 
  and Technology, Technology Administration, Department of 
  Commerce.......................................................    14
    Prepared statement...........................................    16
Knapp, Steven, Ph.D., Provost and Senior Vice President for 
  Academic Affairs, Johns Hopkins University.....................    27
    Prepared statement...........................................    29
Marburger, III, Dr. John, Director, Office of Science and 
  Technology Policy, Executive Office of the President...........     2
    Prepared statement...........................................     4
Pietrafesa, Dr. Leonard J., Associate Dean, Professor of Ocean 
  and Atmosphere Sciences, North Carolina State University; 
  Chair, Science Advisory Board, National Oceanic and Atmospheric 
  Administration (NOAA)..........................................    33
    Prepared statement...........................................    35
Ritter, Philip J., Senior Vice President, Public Affairs, Texas 
  Instruments....................................................    44
    Prepared statement...........................................    46

                                Appendix

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared 
  statement......................................................    67
Response to written questions submitted to Dr. Arden L. Bement, 
  Jr. by:
    Hon. Daniel K. Inouye........................................    68
    Hon. John D. Rockefeller IV..................................    70
Rockefeller IV, Hon. John D., U.S. Senator from West Virginia, 
  prepared statement.............................................    67


   THE IMPORTANCE OF BASIC RESEARCH TO UNITED STATES COMPETITIVENESS

                              ----------                              


                       WEDNESDAY, MARCH 29, 2006

                               U.S. Senate,
       Subcommittee on Technology, Innovation, and 
                                   Competitiveness,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:06 a.m. in 
room SD-562, Dirksen Senate Office Building, Hon. John Ensign, 
Chairman of the Subcommittee, presiding.

            OPENING STATEMENT OF HON. JOHN ENSIGN, 
                    U.S. SENATOR FROM NEVADA

    Senator Ensign. Good morning. Welcome to today's hearing on 
the importance of basic research to United States' 
competitiveness.
    As the world becomes dramatically more interconnected and 
competitive, the United States must lead the world's 
innovation. Innovation fosters new ideas, technologies, and 
processes that lead to better jobs, higher wages, and a higher 
standard of living.
    While innovation is key to the future global 
competitiveness of the United States, basic research is the key 
to future innovation. Basic research is research that is 
conducted to understand the basic underpinnings of science, the 
world around us, and how it all operates. It is very broadly-
based research. Although basic research is not specifically 
directed toward solving any one particular problem, it is 
essential research for society.
    Over the past 25 years, basic research supported by the 
National Science Foundation in chemistry, physics, 
nanotechnology, semiconductor manufacturing, and other fields 
has brought about revolutionary technological advances. For 
example, basic research funded by NSF in the 1980s and early 
1990s on laser crystalization of amorphous silicon enabled 
today's popular flat-panel displays for computers and TVs. 
Basic research conducted in the 1980s on hot electron injection 
in thin insulator films facilitated the creation today of 
digital cameras, pocket memory sticks, and iPods. I challenge a 
lot of other Senators to pronounce some of these things.
    [Laughter.]
    Senator Ensign. The World Wide Web, magnetic resonance 
imaging, bar codes, airbags, global-positioning devices, and 
fiber optics technology all emerged through basic research 
projects that received Federal Government funding. In every 
case, research investment by the Federal Government was 
necessary to proceed to the point at which the private-sector 
recognized a potentially-marketable product and invested in its 
further development.
    I believe that increased funding of basic research at the 
National Science Foundation, the National Institutes of 
Standards and Technology, and other Federal agencies should be 
a national priority.
    I am a fiscal conservative, but Federal investment in basic 
research remains vital, because basic research is very 
important to the long-term economic vitality of the United 
States, and corporations and other participants in the private-
sector are not well situated to fund basic research.
    Experts vary in their assessment of the exact rates-of-
return on basic research. There is broad agreement, however, 
that basic research in science, technology, engineering, and 
mathematics makes a critical contribution to the growth of the 
United States' economy. Especially given increased competition 
from nations like India and China, failure to support NSF and 
basic research creates a serious risk for our Nation. U.S. 
competitiveness in global markets and the creation of good jobs 
at home rely increasingly on the cutting-edge innovation that 
stems from high-risk, high-reward basic research. U.S. 
technological leadership, innovation, and jobs of tomorrow 
require a commitment to basic research funding today.
    We are pleased to have two panels of witnesses here to 
testify on the importance of basic research to United States' 
competitiveness. The record will remain open for 7 days for 
Senators to submit questions or statements, and any Senators 
that wish to make statements for the record will be allowed to 
do so without objection.
    On our first panel we will have three witnesses. Our first 
witness will be Dr. John Marburger III. Dr. Marburger is the 
Director of the Office of Science and Technology Policy. After 
Dr. Marburger's testimony, our second witness will be Dr. Arden 
Bement. Dr. Bement is the Director of the National Science 
Foundation. After Dr. Bement's testimony, our third witness on 
this panel will be Dr. William Jeffrey. Dr. Jeffrey is the 
Director of the National Institute of Standards and Technology.
    I welcome all three of you, and look forward to your 
testimony. If you could keep your testimony to around 5 minutes 
in length, it would be helpful. Please summarize where 
appropriate. Your full statements will be made part of the 
record, but if you can summarize your main points we can save 
as much time as possible for a good discussion on this 
important topic. I always like subcommittee hearings, because 
we end up having a lot more give and take. I always enjoy the 
subcommittee hearings a great deal. I look forward to the 
discussion today.
    Doctor Marburger?

         STATEMENT OF DR. JOHN MARBURGER III, DIRECTOR,

            OFFICE OF SCIENCE AND TECHNOLOGY POLICY,

               EXECUTIVE OFFICE OF THE PRESIDENT

    Dr. Marburger. Great. Thank you very much. Chairman Ensign, 
the Administration greatly appreciates the efforts of the 
Senate Commerce Committee, and your work, in particular, to 
highlight the importance and priority of federally-funded basic 
research, which has resulted in good outcomes for our Nation.
    I do have a longer written testimony, and I'll try to 
summarize as quickly as possible.
    President Bush introduced the American Competitiveness 
Initiative in his State of the Union Address to ensure 
America's continued economic competitiveness through innovation 
based on technologies that have their basis in scientific 
research. This initiative occurs in the context of a budget 
that aims to reduce the deficit by, among other things, 
reducing non-Department of Defense, non-Homeland Security 
discretionary spending by almost one-half of one percent. And, 
consequently, this budget is about priorities: winning the war 
on terrorism, securing the homeland; these are necessarily 
urgent priorities. But investing in America's future 
competitiveness through research and development is also of 
critical importance to our Nation.
    The President is seeking a 2 percent increase in nondefense 
R&D within a declining overall nondefense budget. At a record 
$59 billion, the nondefense R&D budget is up $1.1 billion in 
this year's request. The President's budgets have always 
supported research and development at impressive levels. I've 
brought a display here. I like to show this, though, the blue 
mountain here to indicate Federal nondefense spending and how 
it's soared in this Administration.
    The centerpiece of the American Competitiveness Initiative 
is the President's proposal to double funding over 10 years for 
key agencies that sponsor basic research in physical sciences 
and engineering that is likely to have a high impact on future 
economic competitiveness. For FY07, the President is requesting 
$6 billion for the National Science Foundation, $4.1 billion 
for Department of Energy's Office of Science, and $535 million 
for the Department of Commerce's National Institute of 
Standards and Technology core programs. New funds for these 
agencies total $910 million, or a 9.3 percent increase, for 
these agencies.
    The President's budget also prioritizes similarly high-
leverage basic and applied research at the Department of 
Defense in 2007 by requesting additional funding for them.
    Annual increases for these agencies would average roughly 7 
percent to achieve doubling in 10 years, which amounts to a 
total of $50 billion in new investments. And we have another 
display that indicates how the money ramps up for these 
agencies.
    The ACI also identifies priority strategies in education, 
workforce training and integration practices, and Members of 
Congress, including many on this committee, have helped to 
bring attention to the need for such strategies. And many other 
groups also deserve credit for highlighting the importance of 
investment in these areas, including the President's Council of 
Advisors on Science and Technology (PCAST), Council on 
Competitiveness, and the National Academy of Sciences.
    While the Administration designed the American 
Competitiveness Initiative to prioritize and advance scientific 
endeavors with the highest marginal value for future economic 
competitiveness--and, Mr. Chairman, your opening remarks 
summarized the value of this and the conclusions of economists 
that indicate that there is an important return to the public 
for these investments, so I'm not going to go further into 
this; my colleagues on today's panel can offer many examples of 
the contributions their agencies have made that support current 
technologies that have changed our way of life--this 
Initiative, the ACI, directs funds to agencies with well-
defined programs with a clear relevance to future economic 
competitiveness. It does not attempt to expand support for 
every area of basic science, nor even for every field within 
the physical sciences. It seeks the maximum impact with a 
minimum of bureaucratic apparatus, taking advantage of programs 
and processes already in place and working well.
    In view of the many proposals for enhancing America's 
future competitiveness, the challenge now is to retain a focus 
on the most important actions we must take, and avoid diffusing 
the impact of the resources at our disposal. This Initiative 
resists the impulse to act on every good idea. And our plea is 
to reject unnecessary new programs and bureaucratic burdens and 
to keep the Initiative clean and simple.
    President Bush has also called upon Congress to ensure that 
funds provided to the agencies under this Initiative are free 
of earmarks.
    This Initiative enhances fundamental research in key areas 
of the physical sciences and engineering, similar to the 
emphasis on biomedical research over the last decade. A broad 
consensus exists that these are the most important areas for 
generating additional breakthroughs that drive the economy, and 
these are also the areas of Federal R&D portfolio most in need 
of additional resources.
    I look forward to working with you and others in Congress 
to ensure that these critical areas receive the support they 
need to keep our Nation strong.
    Thank you.
    [The prepared statement of Dr. Marburger follows:]

   Prepared Statement of Dr. John Marburger III, Director, Office of 
    Science and Technology Policy, Executive Office of the President
    Chairman Ensign, Ranking Minority Member Kerry, and members of the 
Subcommittee, I am pleased to appear before you today to discuss ``The 
Importance of Basic Research to United States' Competitiveness,'' which 
is embodied in the President's American Competitiveness Initiative. The 
Administration greatly appreciates the efforts of the Senate Commerce 
Committee--and your work in particular Mr. Chairman--to highlight the 
importance and priority of federally-funded basic research, which has 
resulted in good outcomes for the Nation.
    One of these outcomes has been widespread recognition of the 
critical role the science and technology enterprise plays as the 
foundation for the United States' economic competitiveness. This is a 
message President Bush has elevated through his American 
Competitiveness Initiative (ACI), which he announced in his State of 
the Union Address and has repeated in many speeches and remarks since 
then.
    I will discuss the ACI in a moment, and its focus on basic 
research, but it is important first to place it in the context of this 
year's budget.
    President Bush has made it clear that his top budget priority is to 
cut the deficit in half by 2009, by continuing this Administration's 
strong pro-growth economic policies and limiting the growth in Federal 
spending. The President's FY 2007 budget does what is required to 
achieve this goal by reducing non-Department of Defense, non-Homeland 
Security discretionary spending by almost one-half of one percent. 
Consequently, this budget is about priorities. And while winning the 
War on Terror and securing the homeland are necessarily at the top, 
investing in America's future competitiveness through research and 
development is also of critical importance to this Administration. That 
is why the President is seeking a 2 percent increase in non-defense R&D 
within a declining overall non-defense budget. Under the President's 
2007 budget, R&D is 14.3 percent of non-defense discretionary budget 
authority, compared to 13.7 percent in 2001 when the President took 
office. At a record $59 billion, non-defense R&D is up $1.1 billion in 
this year's request.
    Given the overall environment of fiscal discipline, it is notable 
that President Bush once again proposes a record R&D budget--over $137 
billion, 2.6 percent, or $3.4 billion, more than this year's funding 
level. This represents an increase of more than 50 percent during this 
Administration (Figure 1). Funding proposed for the category of Basic 
Research is $28.2 billion in 2007, up from $21.3 billion in 2001--a 32 
percent increase. While this year research received prominence in the 
President's State of the Union address and the American Competitiveness 
Initiative, it is an important fact that the President's budgets have 
consistently supported research and development at levels commensurate 
with other major priorities throughout this Administration. Real five-
year growth in the conduct of the R&D budget has exceeded 40 percent 
for each of the last 2 years, the first time five-year inflation 
adjusted R&D outlays have topped 40 percent since 1967 and the Apollo 
era.


American Competitiveness Initiative (ACI)
    American economic strength and national security depend on our 
Nation's rich tradition of innovation. To assure our future 
technological leadership and take full advantage of America's current 
technological dominance in the world, President Bush launched the 
American Competitiveness Initiative (ACI). The ACI commits $5.9 billion 
in FY 2007, and more than $136 billion over 10 years, to increase 
investments in R&D, strengthen education, and encourage 
entrepreneurship and innovation.
    The centerpiece of the American Competitiveness Initiative is the 
President's proposal to double, over 10 years, funding for key agencies 
that sponsor basic research in the physical sciences and engineering 
that is likely to have high impact on future economic competitiveness. 
Certain areas within the physical sciences not only advance fundamental 
knowledge, but also generate new technologies that are broadly useful 
in society as well as in many other fields of science, such as 
nanotechnology and supercomputing. President Bush seeks to strengthen 
Federal investments in these priority areas by making landmark initial 
investments in 2007 in three key, innovation-enabling research 
agencies: $6 billion for the National Science Foundation (NSF); $4.1 
billion for the Department of Energy's Office of Science (DOE SC); and 
$535 million for the Department of Commerce's National Institute of 
Standards and Technology (NIST) core programs. The President's budget 
also prioritizes the similarly high-leverage basic and applied research 
at the Department of Defense in 2007 by requesting $5.9 billion, $442 
million (8 percent) more than last year's request.
    In 2007, the ACI proposes overall funding increases for NSF, DOE SC 
and NIST core of $910 million, or 9.3 percent (Figure 2). Overall 
annual increases for these agencies will average roughly 7 percent to 
achieve doubling in 10 years. This amounts to a total of $50 billion in 
new investments in high-leverage, innovation-enabling research that 
will underpin and complement shorter-term and mission-oriented R&D 
performed by other agencies and the private-sector. To encourage 
private investment in innovation to be equally bold, President Bush 
continues to propose permanent extension of the R&D tax credit and 
supports steps to modernize it to make it even more effective.


    While the President has given funding priority to specific physical 
science and engineering programs in previous budgets, through such 
coordinated initiatives as the Networking Information Technology 
Research and Development (NITRD) program, the National Nanotechnology 
Initiative (NNI) and others, the ACI recognizes the enabling role of 
broader areas within the physical sciences in contributing to national 
competitiveness, and proposes a significant ramping-up of funding for 
selected agencies over a sustained budget period. Of course national 
competitiveness depends on more than research. The ACI identifies 
similar selected priority strategies in education, workforce training, 
and immigration practices as well. Members of Congress--including many 
on this committee--have helped to bring attention to the need for such 
strategies in our national discourse. Many other groups also deserve 
credit for highlighting the importance of investment in these areas, 
including the President's Council of Advisors on Science and Technology 
(PCAST), the Council on Competitiveness and the National Academy of 
Sciences. It is rare that so many different organizations speak the 
same language. I am optimistic that with your help and the support of 
the scientific community, we can provide funding for the ACI.
Why Basic Research?
    The Administration designed the American Competitiveness Initiative 
to prioritize and advance those scientific endeavors with the highest 
marginal value for future economic competitiveness. Public-sector 
research funding that typically has the highest marginal value is not 
directed toward specific products or technologies, but rather fosters 
the generation of fundamental knowledge that has significant spillover 
benefits that cannot be captured through intellectual property 
protection. Economists have concluded that such research can generate 
large public returns but does not usually provide a direct profitable 
return for private-sector performers.
    The economic payoffs of such research often come in the form of 
process and product innovations that reduce the costs of production, 
lower product prices, and result in new and better products and 
services. This research can even spawn entire new industries. The 
economic return shows up in economic statistics through increases in 
firms' output, aggregate GDP, and ``total factor'' productivity--that 
is, the amount of economic output that we can get from a given amount 
of labor, capital, energy, and material inputs. Consumers ultimately 
benefit from having access to less expensive, higher quality, and more 
useful products and services, as well as from earnings accruing to 
innovative companies. Put another way, basic research raises the 
standard of living.
    Economic research finds private rates-of-return to R&D in the range 
of 20 to 30 percent, reflecting the returns received directly by the 
innovator. These private returns to R&D are considerably higher than 
the roughly 10 percent average return on other types of investments, 
attributable to the considerable risk and uncertainty associated with 
the technical and commercial success of R&D projects, as well as the 
depreciation of innovation value over time. Total social rates-of-
return to R&D--including the ``spillover benefits'' to firms and 
consumers that did not conduct the original research--are typically 
estimated to be much higher than the private returns, ranging from 30 
to 80 percent.
    Innovation spillovers flow through at least three distinct 
channels. First, ``knowledge spillovers'' occur because knowledge 
created by one firm cannot typically be contained within that firm, and 
thereby creates value for other firms and other firms' customers. 
Second, ``market spillovers'' occur when an innovation creates benefits 
for consumers and non-innovating firms that are not fully captured by 
the innovating firm due to competition and other market forces. Third, 
because the profitability of a set of interrelated and interdependent 
technologies may depend on achieving a critical mass of success, each 
firm pursuing one or more of these related technologies creates 
economic benefits or ``network spillovers'' for other firms and their 
customers. Technical standards often have an important role to play in 
the context of markets with significant network effects.
    The location of innovation also matters in that spillovers, at 
least to some degree, tend to spread from a geographical locus. For 
example, flows of knowledge to U.S. innovators are more likely to come 
first from the United States than from abroad. Globalized information 
flows reduce the impact of the distance factor, but it remains 
significant in explaining technology diffusion and spillover effects. 
The comparative advantage of the high-cost countries of North America 
and Western Europe is increasingly based on knowledge-driven innovative 
activity. Thus, the location of knowledge-based activity matters for 
innovation and ultimately comparative advantage.
    The Council on Competitiveness summarizes the importance of basic 
research in a ``calculus of innovation'': (1) Knowledge drives 
innovation; (2) Innovation drives productivity; and (3) Productivity 
drives our economic growth.
Why Physical Sciences and Engineering?
    Certain areas of physical science and engineering research are 
strongly correlated with innovation and economic growth. The ACI 
priority agencies each have special features that merit significant 
attention even in a period of budgetary constraint.

        The DOE Office of Science (SC) is the Nation's largest sponsor 
        of physical science research. It supports physical science 
        capabilities and infrastructure used by a large number of 
        investigators in nearly every field of science, and 
        particularly those related to economically-significant 
        innovations (e.g., nano-, bio-, info-tech, energy, new 
        materials and processes). Within DOE-SC, the new funding from 
        ACI is expected to improve facilities and support approximately 
        2,600 new researchers.

        The National Science Foundation (NSF) is the primary source of 
        support for academic research in the physical sciences. It 
        funds potentially-transformative basic research in areas such 
        as nanotechnology, information technology, physics, materials 
        science, and engineering. The NSF is well-regarded for 
        management of funding through competitive, peer-reviewed 
        processes. The NSF funding derived from the ACI is expected to 
        support as many as 500 more research grants in 2007, and 
        provide opportunities for upwards of 6,400 additional 
        scientists, students, post-doctoral fellows and technicians to 
        contribute to the innovation enterprise.

        The DOC National Institute of Standards and Technology may be 
        the highest-leverage Federal research agency supporting 
        economically-significant innovations. Its world-class team of 
        scientists, recognized by three Nobel prizes during the past 
        decade, plays a critical role in supporting standards 
        development activities that are essential for the commercial 
        viability of new technology. In FY 2007, NIST will seek to 
        focus 3,900 scientists and engineers from government, industry 
        and universities--an increase of 600 researchers over 2006--on 
        meeting the Nation's most urgent measurement science and 
        standards needs to speed innovation and improve U.S. 
        competitiveness.

    While the very nature of basic research limits our ability to 
predict what inventions and technologies will one day arise from 
investments in these agencies, a look at the past value of basic 
research provides a sense of what we might expect in the future. In 
recent decades, fundamental research advances have provided society 
with technology that has enabled microchips, personal computers, the 
Internet, balloon catheters, bar codes, fiberoptics, e-mail systems, 
hearing aids, air bags and automated teller machines, to name just a 
few quality-of-life improving and standard-of-living raising changes. 
These inventions can usually be traced back to Federal support for 
basic research. The development of the portable MP3 player is a timely 
and useful example of this connection (Figure 3).


    The development of MP3 technologies illustrates the unexpected 
benefits of basic research. In 1965, a hand-sized storage and playback 
device that would hold 15,000 recorded songs was the stuff of science 
fiction. Even simple hand-held calculators were rare and expensive at 
that time. Research funded by the Department of Defense, the National 
Science Foundation, the National Institutes of Health, the Department 
of Energy, and the National Institute of Standards and Technology 
contributed to the breakthrough technologies of magnetic storage 
drives, lithium-ion batteries, and the liquid crystal display, which 
came together in the development of MP3 devices. The device itself is 
innovative, but it built upon a broad platform of component 
technologies, each derived from fundamental studies in physical 
science, mathematics, and engineering.

    The inventions and innovations of the future that will be advanced 
in terms of quality, quantity and timeliness by ACI are in the areas of 
nano-, bio-, and information technology and manufacturing, solar, 
nuclear and hydrogen energy, new materials and processes. Specific 
innovation-enabling potential outcomes of ACI basic research include:

   world-leading capability and capacity in nanofabrication and 
        nano-manufacturing--a determinant industry of the future.

   necessary next-generation investigation tools to study 
        materials at the nanoscale.

   world-leading, high-end computing capacity (petascale) and 
        capability (design) and advanced networking as fast as possible 
        to address grand challenges.

   overcoming technical barriers for quantum information 
        processing.

   new technologies for hydrogen, nuclear and solar energy 
        through novel new basic research approaches in materials 
        science.

   addressing gaps and needs in cyber security to lead the 
        world in information, knowledge and intellectual property 
        protection and control.

   basic research on sensor and detection capabilities (e.g., 
        for Improvised Explosive Devices) which can also lead to world-
        leading automation and control technologies.

   solving fundamental technical problems in the application of 
        biometrics.

   develop manufacturing standards for unprecedented 
        technologies for the supply chain.

   improving building standards in high-risk areas (e.g., 
        hurricane and earthquake-prone regions).

   responding to international standards challenges which 
        affect U.S. competitiveness.

Maximizing the Effectiveness of Research Funding
    The widespread support for actions such as proposed in the 
President's American Competitiveness Initiative is deeply gratifying to 
us in government who labor on behalf of science and engineering. I want 
to take this opportunity to point out that the recommendations of the 
many organizations that have spoken out on the need for such an 
Initiative express priorities for action in a very broad and general 
way. When money is tight, and many needs compete for finite resources, 
it is necessary to define priorities with much more specificity than 
these otherwise excellent advocacy reports. The ACI responds to this 
need to prioritize. It attempts to direct funds to agencies with well-
defined programs with a clear relevance to future economic 
competitiveness. It does not attempt to expand support for every area 
of basic science, nor even for every field within the physical 
sciences. It seeks the maximum impact with the minimum of bureaucratic 
apparatus, taking advantage of programs and processes already in place 
and working well.
    In view of the many proposals for enhancing America's future 
competitiveness, the challenge now is to retain a focus on the most 
important actions we must take, and avoid diffusing the impact of the 
resources at our disposal. The ACI resists the impulse to act on every 
good idea. Our plea is to reject unnecessary new programs and 
bureaucratic burdens and to keep the Initiative ``clean and simple.''
    To that end, President Bush has called upon Congress to ensure that 
funds provided to the agencies under the American Competitiveness 
Initiative are free of earmarks. As we discuss the importance of 
pursuing the best science to contribute to U.S. competitiveness, I hope 
the Congress will join with us to encourage competition for research 
funding by rejecting research earmarks in the FY 2007 appropriations 
process.
Conclusion
    America currently spends one and a half times as much on federally-
funded research and development as Europe, and three times as much as 
Japan, the next largest investor. Our scientists collectively have the 
best laboratories in the world, the most extensive infrastructure 
supporting research, the greatest opportunities to pursue novel lines 
of investigation, and the most freedom to turn their discoveries into 
profitable ventures if they are inclined to do so. We lead not only in 
science, but also in the productivity, innovation, and technological 
prowess that is necessary to translate science into economically-
significant products that enhance the quality of life for all people.
    Nonetheless, other nations seek to achieve the quality of life for 
their own large populations that many Americans take for granted. These 
nations aim to close the gap by emulating our successful model--
devoting increased resources to their scientific and technological 
enterprises in an effort to better compete with the U.S. on the global 
economic stage. To ensure that their success does not diminish our own, 
we must act now with the confidence to which our leadership position 
entitles us to build upon our strength.
    The President's FY 2007 budget will sustain this leadership and 
maintain science and technology capabilities that are the envy of the 
world. The proposed ACI basic research investments and R&D tax credit 
changes directly address America's innovation challenges. These are 
sound in terms of science and technology policy, and consistent with 
the broader Administration economic policy to foster and maximize 
America's long-term growth potential. ACI refocuses the Federal R&D 
portfolio by placing increased emphasis on fundamental research in key 
areas of the physical sciences and engineering, similar to the 
increases in fundamental biomedical research over the last decade. A 
broad consensus exists that these are the most important areas for 
generating additional breakthroughs that drive the economy, and these 
are also the areas of the Federal R&D portfolio most in need of 
additional resources. They deserve priority in the FY 2007 budget over 
all other R&D, except perhaps for selected programs supporting national 
and homeland security.
    I would be pleased to respond to questions.

    Senator Ensign. Thank you, Dr. Marburger. Dr. Bement?

       STATEMENT OF DR. ARDEN L. BEMENT, JR., DIRECTOR, 
                  NATIONAL SCIENCE FOUNDATION

    Dr. Bement. Chairman Ensign, I'm delighted to appear before 
you for the first time.
    For over 50 years, NSF has been a strong steward of the 
Nation's scientific discovery and innovation process. The 
President recognized this when he designated NSF to be a key 
participant in the American Competitiveness Initiative.
    Despite its small size, NSF has an extraordinary impact on 
science and engineering knowledge and capacity. While NSF 
represents only 4 percent of the total Federal budget for 
research and development, it accounts for 50 percent of non-
life sciences basic research at academic institutions. In fact, 
NSF is the only Federal agency that supports all fields of 
science and engineering research and the educational programs 
that sustain them across generations.
    We provide funding to the best of the best. Of the 504 U.S. 
individuals who have received the Nobel Prize since NSF first 
awarded research grants in 1952, 166, or 33 percent, received 
NSF funding at some point in their careers. NSF-funded results 
permeate our society, from Doppler radar to MRI scans, from the 
Internet to nanotechnology, from Google to barcodes, and from 
computer-aided design systems to tissue engineering. NSF 
investments have had a profound effect on our quality of life 
and on American competitiveness. Just these examples have added 
hundreds of billions of dollars to the U.S. economy over the 
past 15 years.
    As we know, investments in fundamental research often yield 
unexpected benefits. One example I like to use is NSF support 
for complex auction structures, through abstract auction theory 
and experimental economics. NSF-supported researchers provided 
the FCC with its current system for apportioning the airwaves. 
Since their inception in 1994, FCC spectrum auctions, based on 
game theory, have netted over $45 billion in revenue for the 
Federal Government and more than $200 billion in worldwide 
revenues. Although the payoff was unexpected at the time, it is 
many times greater than the total investment NSF has made in 
the social and behavioral sciences.
    I would like to point out just a few other recently funded, 
less well-known developments with equal promise, most of which 
illustrate the accelerating convergence between the physical 
and health sciences.
    For example, the world's first ultrafast, ultra-accurate 
laser scalpel was developed by a physicist and ophthalmologist 
at NSF's Center for Ultrafast Optical Science. Called 
``InterLase,'' it replaces the old LASIK system that required a 
blade.
    Penelope, a robot surgical assistant, made her operating 
room debut last June. Completely autonomous, it delivered and 
retrieved instruments during an operation at Columbia 
University Medical Center.
    An NSF-funded researcher has developed specially-coated 
nanotubes that can be painlessly implanted under the skin. They 
fluoresce in direct proportion to glucose levels in the blood, 
potentially eliminating the need for glucose testing using 
needles.
    Both the artificial retina to assist the blind to see and 
the new ultra-sensitive artificial cochlea to assist the 
hearing-impaired to hear were developed with NSF support. The 
cochlea replacement is expected to be far cheaper and easier to 
manufacture than today's replacement devices.
    Finally, researchers funded by NSF have engineered a 
biofiltration system that produces hydrogen gas while cleaning 
waste water. The invention won Popular Mechanics' Breakthrough 
Award last year.
    Mr. Chairman, I hope these brief examples of what basic 
research can do to help U.S. competitiveness are compelling. 
But it's important to note that in our efforts to advance the 
frontier, we also aim to enhance development of the Nation's 
STEM talent pool by integrating research and education. The 
world-class scientists, technologists, engineers, and 
mathematicians trained through NSF-sponsored research transfer 
new scientific and engineering concepts from universities 
directly to the entrepreneurial sector as they enter the 
workforce. This capability is a strong suit in U.S. 
competitiveness and one of NSF's greatest contributions to the 
Nation's innovation system.
    Another significant contribution comes from NSF's coupling 
with industry in the private-sector. NSF's research centers 
programs, such our Engineering Research Centers and Science and 
Technology Centers, directly invite private-sector partners to 
engage in and sponsor related cutting-edge research that can 
lead to high-leverage innovations.
    Furthermore, NSF couples investments in our Small Business 
Innovation Research and Small Business Technology Transfer 
programs with high-impact emerging technologies such as 
nanotechnology, information technology, and biotechnology.
    NSF's research and education efforts contribute greatly to 
the Nation's innovation economy and help keep America at the 
forefront of science and engineering.
    Mr. Chairman, I look forward to working with you, and I'd 
be happy to answer your questions.
    [The prepared statement of Dr. Bement follows:]

       Prepared Statement of Dr. Arden L. Bement, Jr., Director, 
                      National Science Foundation
    Chairman Ensign, Ranking Member Kerry, and members of the 
Committee, thank you for this opportunity to testify on the importance 
of basic research. It is a pleasure to appear before you for the first 
time today.
    I am especially pleased that we are able to be talking about 
competitiveness. As you are well aware, the National Science Foundation 
is an integral part of the President's American Competitiveness 
Initiative. The President's request for an 8 percent increase at NSF 
this year represents the first step in the Administration's firm 
commitment to doubling the NSF budget over the next 10 years.
    The ACI encompasses all of NSF's investments in research and 
education. These investments--in discovery, learning, and innovation--
have a longstanding and proven track record of boosting the Nation's 
economic vitality and competitive strength.
    For over fifty years, NSF has been charged with being a strong 
steward of the scientific discovery and innovation that has been 
crucial to increasing America's economic strength, global 
competitiveness, national security, and overall quality of life.
    For many years, the United States economy has depended heavily on 
investments in research and development--and with good reason. 
America's sustained economic prosperity is based on technological 
innovation made possible, in large part, by fundamental science and 
engineering research. Innovation and technology are the engines of the 
American economy, and advances in science and engineering provide the 
fuel.
    Investments in science and technology--both public and private--
have driven economic growth and improved the quality of life in America 
for the last 200 years. They have generated new knowledge and new 
industries, created new jobs, ensured economic and national security, 
reduced pollution and increased energy efficiency, provided better and 
safer transportation, improved medical care, and increased living 
standards for the American people.
    Investments in research and development are among the highest-
payback investments a nation can make. Over the past 50 years 
technological innovation has been responsible for as much as half of 
the Nation's growth in productivity.
    Sustaining this innovation requires an understanding of the factors 
that contribute to it. The Council on Competitiveness, a consortium of 
industry, university, and labor leaders, has developed quantitative 
measures of national competitiveness: the number of R&D personnel in 
the available workforce; total R&D investment; the percentage of R&D 
funded by private industry; the percentage of R&D performed by the 
university sector; spending on higher education; the strength of 
intellectual property protection, openness to international 
competition; and per capita gross domestic product. A similar set of 
indicators has been developed by the World Bank Group, and voluminous 
data have been compiled by NSF. The important point underscored by 
these indicators is that, for America to remain a prosperous and secure 
country, it must maintain its technological leadership in the world.
    Perhaps the Council on Competitiveness' 2004 National Innovation 
Initiative report captured it best by simply stating, ``Innovation has 
always been the way people solved the great challenges facing 
society.''
    Often the connection between an area of research, or even a 
particular scientific discovery, and an innovation may be far from 
obvious. Fundamental research in physics, mathematics and high-flux 
magnets supported by NSF led to the development of today's magnetic 
resonance imaging (MRI) technology. Today, MRIs are used widely to 
detect cancer and internal tissue damage. Fundamental research on 
extremophiles, or microorganisms living in extreme environments, led to 
the polymerase chain reaction, a procedure essential to modern 
biotechnology, as well as one that allows us to use DNA for forensic 
evidence. Continuing progress in basic science and engineering research 
promises more discoveries as well as further improvements in living 
standards and economic performance.
    And still, science and engineering is becoming an ever-larger 
portion of our Nation's productivity. In the early 1950s, Jacob 
Bronowski wrote, ``The world today is powered by science.'' I would 
take this premise one step farther, ``No science; no economic growth.'' 
Our current level of scientific and technological productivity is what 
keeps us ahead of our global competitors as the playing field continues 
to become more level.
    NSF has helped advance America's basic science and engineering 
enterprise for over fifty years. Despite its small size, NSF has an 
extraordinary impact on scientific and engineering knowledge and 
capacity. While NSF represents only 4 percent of the total Federal 
budget for research and development, it accounts for fifty percent of 
non-life science basic research at academic institutions. In fact, NSF 
is the only Federal agency that supports all fields of science and 
engineering research and the educational programs that sustain them 
across generations. NSF's programs reach over 2,000 institutions across 
the Nation, and they involve roughly 200,000 researchers, teachers, and 
students.
    NSF specifically targets its investments in fundamental research at 
the frontiers of science and engineering. Here, advances push the 
boundaries of innovation, progress and productivity.
    Compared to other commodities, knowledge generated from basic 
science investments is unique, long lasting and self-leveraging. 
Knowledge can be shared, stored and distributed easily, and it does not 
diminish by use. Incremental advances in knowledge are synergistic over 
time. NSF is proud to have built the foundation for this knowledge-base 
through decades of peer-reviewed, merit-based research.
    Innovation has become the watchword for our Nation's future. It is 
both a rallying cry and a challenge, one that is now touted by every 
sector of society--industry, academia, and government.
    At the National Science Foundation, we have long heard this clarion 
call and consider it our most important challenge. Innovation is at the 
core of what we are about at NSF, and our vision statement reflects 
that. It is direct and crisp: ``enabling the Nation's future through 
discovery, learning, and innovation.''
    To realize our mission, we see to it that each of our investments 
builds intellectual capital, integrates research and education, and 
promotes partnerships. In all of these endeavors, we focus on the 
frontiers of knowledge and beyond--the fertile territory where new 
ideas are born, nurtured and eventually bear fruit in economic and 
social returns.
    America has always measured its own progress not by comparison with 
others, but with an eye on the next unmet challenge, the territory 
unexplored by other nations. That is becoming increasingly difficult 
with the prospect of nations like China and India building powerful 
economic momentum through a burgeoning science and engineering 
workforce and strong research capacity. There is fierce competition for 
ideas and talent, for comparative advantage and market opportunities 
worldwide.
    As we consider our options for policies that promote and foster 
innovation--whether it is funding for science and engineering research 
and education, or incentives for increasing venture capital, or reforms 
in math and science education--we need to recognize that policies 
should leave ample room for experimentation and exploration. That is a 
hallmark of innovation, and a key to our future.
    Early last year, the American Electronics Association (AeA) 
published a report \1\ that included the chart below. It illustrates 
how some of today's ubiquitous technologies have been generated by 
federally-funded frontier research, and the tremendous role that the 
Foundation has played in helping U.S. competitiveness and innovation.
---------------------------------------------------------------------------
    \1\ Losing the Competitive Advantage? The Challenge for Science and 
Technology in the United States; American Electronics Association, 
February 2005.

        Innovation Resulting From U.S. Federally-Funded Research
------------------------------------------------------------------------
             Innovation                             Funder
------------------------------------------------------------------------
The Internet                          DARPA/NSF
Web Browser                           NSF
Bar Codes                             NSF
Fiber Optics                          NSF
Routers                               NSF
MRI                                   NIH/NSF
Doppler Radar                         NSF
Speech Recognition                    NSF/DARPA
Nanotechnology                        NSF
Computer-Aided Design                 NSF/DARPA
Global Positioning Satellites         DARPA
The Mouse                             DARPA
------------------------------------------------------------------------
Note:
NSF = National Science Foundation.
DARPA = Defense Advanced Research Projects Agency.
NIH = National Institutes of Health.

    There was a time, in the 1960s and early 1970s, when the norm was 
20 years for the results of fundamental research to find their way to 
the marketplace. The AeA report describes how Federal funding of solid-
state physics, and ceramics and glass engineering in the late 1960s 
created the knowledge-base for widespread development and use of fiber 
optic cable in the 1990s. It is also well known that much of this 
seminal work was performed by private industry as well.
    As you know Mr. Chairman, the time frame in which these innovations 
developed has now collapsed in many fields, often to 20 months or less. 
The pace of scientific discovery and technological change has 
accelerated dramatically with the advent of more powerful and 
sophisticated tools, more robust computing and networking, and the 
relentless pressure of global competition. Creative disruption at the 
frontier and reduced lead-time between discovery and application are 
the principal drivers of global competition today.
    In many fields, what was once viewed as a linear process from basic 
research, to application, to commercialization is now much more 
multidimensional, complex and parallel. Even the inquiries encountered 
in developing commercial products and services can generate ideas for 
frontier research. This give and take blurs the lines between the old 
categories, and makes innovation a much broader team sport.
    What remains vital and constant, however, is a focus on frontier 
research and education. Transformational research and technological 
innovation converge on the frontier to produce truly revolutionary 
progress. Tinkering on the sidelines may be important, but it is not 
what drives cutting-edge innovation.
    It is important to note that in our efforts to advance the 
frontier, we also aim to enhance development of the Nation's talent 
pool by integrating research and education. This may be basic 
research's most profound, and lasting, impact. By providing students 
with significant research experiences throughout their schooling, the 
world-class scientists, technologists, engineers, and mathematicians 
trained in this way can transfer new scientific and engineering 
concepts from universities directly to the entrepreneurial sector as 
they enter the workforce. This capability is a strong suit in U.S. 
competitiveness, and one of NSF's greatest contributions to the 
Nation's innovation system.
    And although we are primarily a basic research agency, we are proud 
of our couplings with the private-sector and industry that fosters 
innovation and competitiveness for the Nation. NSF's research centers 
programs, such as our Engineering Research Centers and Science and 
Technology Centers, directly invite private-sector partners to engage 
in and/or sponsor related cutting-edge research that can lead to high-
leverage innovations. The Foundation's Partnerships for Innovations 
program develop entrepreneurial pathways to couple new concepts 
developed in colleges and universities to early adopters in the form of 
new start-up companies and innovation consortiums between private and 
public-sector entities.
    Furthermore, NSF couples investments in our Small Business 
Innovation Research and Small Business Technology Transfer programs 
with high-impact emerging technologies, such as nanotechnology, 
information technology, and biotechnology. We also co-fund cutting-
edge, peer-reviewed research in next-generation semiconductor 
technologies in partnership with the Semiconductor Research 
Corporation.
    Mr. Chairman, I've only touched upon the variety and richness of 
the NSF portfolio. NSF research and education efforts contribute 
greatly to the Nation's innovation economy and help keep America at the 
forefront of science and engineering. At the same time, NSF-supported 
researchers produce leading edge discoveries that serve society and 
spark the public's curiosity and interest. Extraordinary discoveries 
coming from dozens of NSF programs and initiatives are enriching the 
entire science and engineering enterprise, and making education fun, 
exciting and achievement-oriented.
    The President's American Competitiveness Initiative makes clear the 
larger rationale for investments in science and engineering. This is to 
put knowledge to work--to improve the quality of life and enhance the 
security and prosperity of every citizen. NSF is committed to 
cultivating a science and engineering enterprise that not only unlocks 
the mysteries of the universe but that addresses the challenges of 
America and the world.
    Mr. Chairman and members of the Committee, I hope that this brief 
overview conveys to you the extent of NSF's commitment to advancing 
science and technology in the national interest. I look forward to 
working with you in months ahead, and would be happy to respond to any 
questions that you have.

    Senator Ensign. Thank you, Dr. Bement. Dr. Jeffrey?

          STATEMENT OF DR. WILLIAM JEFFREY, DIRECTOR,

        NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY,

                   TECHNOLOGY ADMINISTRATION,

                     DEPARTMENT OF COMMERCE

    Dr. Jeffrey. Chairman Ensign, thank you for inviting me 
today to testify about the importance of basic research.
    The mission of NIST is to promote U.S. innovation and 
industrial competitiveness by advancing measurement science, 
standards, and technology in ways that enhance economic 
security and improve our quality of life. Enabling innovation 
and competitiveness has been an important part of our mission 
since we were founded. That mission is becoming increasingly 
important as the Nation's capacity for technological innovation 
is increasingly driven by the ability to measure, control, and 
manufacture ever more complex and small devices. If you cannot 
measure something, you can't control it. And, if you can't 
control it, you can't reliably manufacture it. NIST's unique 
role is to advance measurements and standards so that the next 
innovation can be realized and commercialized.
    NIST's measurement science is focused at the extremes, 
being able to measure smaller objects faster, or more 
accurately. One example of how these extreme measurements 
enable innovation is the work of our most recent Nobel 
laureate, Dr. Jan Hall. Dr. Hall significantly contributed to 
the development of the laser from a laboratory curiosity to one 
of the fundamental tools of modern science. His research 
concentrated on improving the accuracy with which lasers can 
produce a specific sharp frequency or color of light, and the 
stability with which it can hold that frequency. The 
development of the laser as a measurement tool enabled a series 
of innovations and resulted in the creation of whole new 
industries. These innovations include fiberoptic 
communications, vastly improved clocks, which enable accurate 
navigation, precision spectroscopy for detecting minute 
quantities of a substance, and measurements of fundamental 
physical constants.
    As you can see by this example, NIST's measurement and 
standards infrastructure is one of the foundations upon which 
innovation is built. You can think of this as sort of 
``inftatechnologies,'' as the roads, bridges, and communication 
networks of the scientific world. Just like the physical 
infrastructure, this common good ultimately benefits whole 
industries.
    Another area in which NIST's research impacts 
competitiveness is with standards. Today, thanks in part to 
NIST, most consumers take it for granted that weights and 
measures are accurate and that products fit together. That was 
not always the case. In 1901, there were as many as eight 
different standard gallons, and Brooklyn, New York, recognized 
four different legal definitions of ``the foot.'' Today, 
American consumers and businesses are confident in the quantity 
of products being purchased, making transactions reliable and 
cost-effective.
    So, how is it that we know that measurements and standards 
play such an important role in terms of our economic 
competitiveness? Well, like everything else we do at NIST, we 
try to measure it.
    Over a 7-year period, NIST conducted 19 economic studies to 
develop an indicator of NIST's impact on industry. These 
studies document an average direct return to the economy of $44 
for every one dollar spent by NIST.
    Recognizing the importance of NIST's role in innovation and 
competitiveness, President Bush has included NIST as part of 
the American Competitiveness Initiative. The President's 
Initiative will give NIST the resources that we need in order 
to give U.S. industry and science the measurement and standards 
tools they need to maintain and enhance our global 
competitiveness.
    As part of the ACI, the 2007 budget request for NIST will 
target the most strategic and rapidly-developing technologies, 
increase the capacity and capability of critical national 
scientific assets, meet the Nation's most immediate measurement 
needs, and improve NIST facilities.
    While you've undoubtedly heard of the breakthroughs 
occurring in nanotechnology, I'd like to close today by 
describing a similar, but, in some respects, an even more 
exotic discipline. Quantum physics describes the rules by which 
electrons, nuclei, and other subatomic particles interact. At 
these small scales, the laws of our everyday experience break 
down and new phenomena arise. With several world-renowned 
scientists, including three Nobel Laureates, NIST is well 
positioned to develop the tools for measuring and controlling 
these quantum phenomena and harnessing their properties to 
achieve benefits for the Nation.
    With my testimony today, I've demonstrated how and why 
NIST's basic research plays a unique role in our Nation's R&D 
enterprise. NIST's development of extreme measurement science 
and standards is the nexus between academia and industry, 
strengthening our Nation's capacity to innovate, and, thus, 
compete in the global economy.
    Mr. Chairman, thank you for inviting me to testify, and I'd 
be happy to answer any questions.
    [The prepared statement of Dr. Jeffrey follows:]

Prepared Statement of Dr. William Jeffrey, Director, National Institute 
 of Standards and Technology, Technology Administration, Department of 
                                Commerce
    Chairman Ensign and members of the Subcommittee, I want to thank 
you for inviting me to testify today about the importance of basic 
research and the vital role it plays in enabling competitiveness. I 
have the great honor of being the Director of the National Institute of 
Standards and Technology (NIST), one of our Nation's oldest Federal 
laboratories. Our mission is to promote U.S. innovation and industrial 
competitiveness by advancing measurement science, standards and 
technology in ways that enhance economic security and improve our 
quality of life. Enabling innovation and competitiveness has been an 
important part of our mission since we were founded as the National 
Bureau of Standards 105 years ago. In the Spring of 1900, when Congress 
was considering the Act that created the National Bureau of Standards, 
the accompanying Committee report stated:

        ``. . . that no more essential aid could be given to 
        manufacturing, commerce, the makers of scientific apparatus, 
        the scientific work of the Government, of schools, colleges, 
        and universities than by the establishment of the institution . 
        . .''

    That statement is as true today as it was then. From our early 
electrical measurement research to today's quantum information science, 
NIST has long been a center for high-impact basic research.
    In today's global economy, the ability of the United States to 
remain competitive relies increasingly on our ability to develop and 
commercialize innovative technologies. The amount of scientific 
components in products has increased dramatically. Just think about how 
much more complex an iPod is compared to a record player. The ability 
of America to be technologically-innovative, both drives and is driven 
by our ability to observe and to measure. If you cannot measure 
something--you will not be able to control it. And if you can not 
control it--you will not be able to reliably manufacture it. NIST's 
unique role, or niche, is to advance measurements and standards so that 
the next innovation can be realized and commercialized, thus allowing 
our industries to be competitive. Recognizing the importance of NIST's 
role in innovation and competitiveness, President Bush has included 
NIST as part of the American Competitiveness Initiative (ACI). The 
President's Initiative includes key resources necessary for NIST to 
develop the measurement and standards tools to enable U.S. industry and 
science to maintain and enhance our global competitiveness.
    When the Secretary of the Treasury proposed the creation of the 
measurements and standards laboratory that became this agency, he 
wrote:

        ``The extension of scientific research into the realm of the 
        extremes of length, mass, time, temperature, pressure and other 
        physical quantities necessitates standards of far greater range 
        than can be obtained at present. The introduction of accurate 
        scientific methods into manufacturing and commercial processes 
        involves the use of a great variety of standards of greater 
        accuracy than formally required.''

    Extreme measurements are still needed today; the only difference is 
that today's measurement frontier is smaller, colder, more precise, and 
more accurate. One example of how these extreme measures impact 
innovation is the work of our most recent Nobel Laureate, Dr. Jan Hall. 
Dr. Hall significantly contributed to the development of the laser, 
first demonstrated in 1961, from a laboratory curiosity to one of the 
fundamental tools of modern science and a ubiquitous component of 
modern communications. His research concentrated on improving the 
precision and accuracy with which lasers can produce a specific, sharp 
frequency or color of light, and the stability with which they can hold 
that frequency. His work has been essential to the development of the 
laser as a precision measurement tool. This ability to precisely 
control the frequency and improve stability has enabled a broad range 
of laser innovations in science and technology, including precision 
spectroscopy for physical and chemical analysis, new tests and 
measurements of fundamental physical laws and constants, time and 
length metrology, and fiberoptic communications, among others.
    As you can see by this example, NIST's measurement and standards 
infrastructure is part of the foundation upon which innovation is 
built. You can think of this ``infratechnology'' as the roads, bridges, 
and communications networks of the scientific world. Just like physical 
infrastructure, no one person or company can claim enough benefit from 
the work or has the capability to build this infrastructure. This 
``common good'' infratechnology ultimately benefits whole industries.
    Another area in which NIST's research impacts competitiveness is in 
the area of standards. Standards promote the free market by acting as 
the ``grease'' which increases transactional efficiency, resulting in 
reduced costs and opening of new markets thus enhancing 
competitiveness. Today, thanks in part to NIST, most consumers take it 
for granted that weights and measures are accurate and that products 
fit together. That was not always the case. In 1901, there were as many 
as eight different standard gallons; Brooklyn, NY, recognized four 
different legal measures of the foot, and about 50 percent of tested 
food scales were wrong, usually favoring the grocer. Today, American 
consumers and businesses can be confident in the quantity of product 
being purchased--making transactions more reliable and cost-effective.
    However, the need for standards has increased as the economies of 
the world have become linked through global trade. To compete in this 
global marketplace, U.S. products must meet specified standards for 
quality and performance. NIST collaborates with other agencies and the 
private-sector to represent U.S. interests in the development of 
international standards. Ideally, such standards should not put U.S. 
products at a competitive disadvantage.
    The United States Standards Strategy calls for standards to be 
developed in an open and consensus-driven process and the resulting 
standard to be performance-based and relevant, in other words, to 
create a level playing field for all participants.
    This philosophy is not consistently applied in all countries--
requiring constant vigilance to prevent standards being adopted by 
other countries that de facto serve as barriers to trade.
    NIST works proactively to encourage other countries to adopt 
standards that satisfy the criterion outlined above. For example, NIST 
staff has worked with U.S. based organizations, such as the 
International Code Council (ICC) and the National Fire Protection 
Association (NFPA) to promote the adoption and use of building and 
construction standards in different parts of the world--thus opening 
these markets to exports of U.S. products and services. As just one 
result, Saudi Arabia has adopted significant parts of the ICC Building 
and Construction Codes, requiring technologies that are widely used in 
the United States. The current value of Saudi Arabian new and planned 
construction is approximately $35 billion. The Saudi Arabia Standards 
Organization (SASO) is currently translating the code into Arabic, 
paving the way for its use in other countries in the region.
    So how is it that we know that measurements and standards play such 
an important role in terms of our economic competitiveness? Well, like 
everything else at NIST, we try to measure it. Over a 7-year period, 
1996-2002, NIST conducted 19 retrospective economic impact studies on a 
wide range of technologies and industries that can be collectively 
viewed as a legitimate indicator of NIST industry impact. The average 
benefit-cost ratio of the studies was 44 to 1. That means for every 
dollar invested in these projects, we documented $44 of direct economic 
benefit to the Nation.
    One of the studies looked at the economic impacts of NIST's 
cholesterol standards program. In 1969, the variability of cholesterol 
in blood measurements was reported to be approximately 18 percent. Over 
the following 25 years, NIST--working with the Centers for Disease 
Control--established and maintained a reference infrastructure for 
cholesterol measurements that has contributed to a steady decrease in 
measurement variability to less than 5 percent, representing potential 
savings of over $100 million per year in treatment costs for 
misdiagnosed patients. Additionally, due to the availability of highly-
accurate cholesterol reference materials, manufacturers of cholesterol 
measurement systems experience lower production costs than they would 
if standard reference materials were not available. They also faced 
significantly lower transaction costs than they would if the accuracy 
of their products was not ``anchored' to these nationally-recognized 
standards.
    Maintaining and extending our Nation's competitiveness is critical 
to our Nation's future economic security. To address this, the 
President has proposed the American Competitiveness Initiative (ACI). 
One component of the President's Initiative is the strong commitment to 
double over 10 years investment in the key Federal agencies that 
support basic research programs in the physical sciences--the National 
Science Foundation, the Department of Energy's Office of Science, and 
NIST. ACI allocates $535 million for the high-impact research and 
facility upgrades at NIST. This is an increase of $104.1 million over 
FY 2006--after removing directed grants--a 24 percent increase for our 
measurement and standards programs. The major focus of NIST's portion 
of the American Competitiveness Initiative includes the following:
Targeting the most strategic and rapidly developing technologies ($45 
        million):

   Enabling nanotechnology from Discovery to manufacture ($20 
        million)--This initiative will fund a national research 
        facility for developing and disseminating nanoscale 
        technologies, and an R&D effort, utilizing the resources of 
        both the facility and NIST's multidisciplinary labs to develop 
        measurement science, standards, and technology for 
        nanomanufacturing.

   Enabling the Hydrogen Economy ($10 million)--This initiative 
        will expand research efforts at NIST to develop the technical 
        infrastructure to enable safe production, storage, 
        distribution, and delivery, as well as equitable sale, of 
        hydrogen in the marketplace.

   Quantum Information Science: Infrastructure for 21st Century 
        Innovation ($9 million)--NIST proposes to accelerate advances 
        in this critical field through three complementary efforts: (1) 
        an expanded in-house program; (2) an enhanced effort to exploit 
        the fundamental properties of quantum systems to develop new 
        metrology tools and methods; and (3) funding for a Joint 
        Quantum Institute.

   Innovations in Measurement Science ($4 million), and--This 
        initiative will expand the scope and nature of projects 
        selected for the Innovations in Measurement Science Program to 
        allow this program to keep better pace with the evolving needs 
        of industry and science.

   Cyber Security: Innovative Technologies for National 
        Security ($2 million)--NIST proposes to work with industry and 
        academia to develop measurement science and technologies to 
        identify the level of vulnerability of IT systems, assess the 
        effectiveness of cyber security controls, test system 
        functionality, address vulnerabilities, identify 
        vulnerabilities in real-time, and mitigate attacks.

Increasing the capacity and capability of critical national assets ($27 
        million):

   NIST Center for Neutron Research (NCNR) Expansion and 
        Reliability Improvements: A National Need ($22 million)--This 
        initiative begins a planned five-year program to expand 
        significantly the capacity and capabilities of the NCNR to help 
        meet this pressing national need.

   Synchrotron Measurement Science and Technology: Enabling 
        Next-Generation Materials Innovation ($5 million)--NIST 
        proposes to accelerate innovation in U.S. materials science by 
        creating a diverse set of scientific instruments at the 
        National Synchrotron Light Source (NSLS) at Brookhaven National 
        Laboratory.

Meeting the Nation's most immediate needs ($12 million):

   Manufacturing Innovation through Supply Chain Integration 
        ($2 million)--This initiative will enable an extensive and 
        wide-ranging program with U.S. manufacturers, to develop 
        standards for seamless data transactions throughout global 
        supply chains.

   Structural Safety in Hurricanes, Fires, and Earthquakes ($2 
        million)--This initiative will allow the development of 
        technical tools required to enable innovations in multi-hazard 
        risk assessment and mitigation technologies, and the scientific 
        basis to improve the codes and standards used in the design, 
        construction, and retrofit of buildings and physical 
        infrastructure.

   International Standards and Innovation: Opening Markets for 
        American Workers and Exporters ($2 million)--Under this 
        proposed initiative, NIST will promote U.S. competitiveness by 
        ensuring that innovative U.S. businesses are better equipped to 
        satisfy standards-related requirements in key export markets 
        and that these firms have access to level playing fields.

   Bioimaging: A 21st Century Toolbox for Medical Technology 
        ($4 million)--NIST will partner its expertise in the physical 
        and information sciences with the experience and know-how of 
        the National Institutes of Health (NIH) and the bioimaging 
        industry to develop the needed measurement capabilities to move 
        from simple observation to quantitative diagnosis.

   Biometrics: Identifying Friend or Foe ($2 million)--NIST 
        will develop: (1) tests to determine the accuracy of multimodal 
        systems; (2) image quality standards and standard measurement 
        techniques to improve the accuracy and interoperability of 
        facial recognition systems used for border security; (3) tests 
        to determine the image quality of live-scan fingerprint 
        equipment; and (4) tests and guidelines to assure that future 
        biometric systems are interoperable and work in realistic 
        environments.

Improving NIST Facilities ($20.1 million):

   Physical improvement to research buildings in Boulder, CO 
        ($10.1 million).

   Increasing the base for Safety, Capacity, Maintenance and 
        Major Repairs of NIST's Facilities ($10 million).

    In today's modern world, measurements and standards are critically 
important for such things as the integration of the manufacturing 
supply chain, development of novel nanomaterials, adoption of a 
hydrogen economy, and harnessing the power of quantum mechanics. I 
would now like to take the opportunity to talk about a few of our 
initiatives and how they will impact the United States' ability to 
innovate and remain competitive.
    America's large manufacturers are globally-distributed enterprises 
that rely on a system of small manufacturers, parts suppliers, 
shippers, and raw materials producers organized in extended supply 
chains. Using the auto industry as an example, the average car has over 
15,000 parts coming from 5,000 manufacturers that must be there on 
time, every time, with the precise specifications of the large 
manufacturers. Production costs are no longer the only cost drivers in 
these global supply chains--an increasingly important factor is the 
cost of engineering and business activities, which depend critically 
upon clear and error-free exchange of information. Successfully 
managing production throughout the supply chain is critical to the 
competitiveness of these extended enterprises. An independent economic 
study commissioned by NIST found that the U.S. automotive supply chain 
loses $1 billion annually from these inefficiencies. NIST research on 
interoperability standards is the key to successfully ``lubricating'' 
these supply chain transactions.
    The nanotechnology-related market is predicted to exceed $1 
trillion globally by 2015. Within the next 10 years, experts expect at 
least half of the newly designed advanced materials and related 
manufacturing processes to be at the nanoscale. The United States is 
making significant investments in nanoscience and nanotechnology, and 
it is essential that we rapidly and efficiently transfer our basic 
scientific discoveries to practice within our manufacturing sector. 
Globally, no one country or region has a significant technological lead 
in this area--with the European Union, Japan, and other countries each 
investing about the same amount of government resources as the United 
States. Successfully translating nanoscale discoveries into 
manufactured products will be critically dependent on: (1) developing 
process technologies to efficiently and reliably produce commercially-
significant quantities of nanomaterials, (2) developing advanced 
measurement and process-control technologies--including standard 
reference materials--to monitor production processes and for quality 
control, and (3) close cooperation and interaction between the research 
sector, the manufacturing sector, and the national measurement 
standards system. In order to meet each of these requirements and thus 
allow the U.S. to be globally competitive, NIST will have to conduct 
the research to support the development of a measurement and standards 
infrastructure for nano-products.
    Everyone understands that one of the factors affecting our global 
competitiveness is our dependence on foreign oil. President Bush issued 
a challenge to the Nation's scientists and engineers in his 2003 State 
of the Union speech to overcome technical obstacles so that ``the first 
car driven by a child born today could be powered by hydrogen, and 
pollution-free.'' In order to make this vision of a hydrogen economy a 
reality, measurements and standards must lead the way.
    For the past 50 years, NIST has been a leading provider of data on 
the chemical and physical properties of hydrogen. NIST's Center for 
Neutron Research (NCNR) is a premier facility for the study of 
hydrogen. The NCNR was cited by a 2002 working group of the White House 
Office of Science and Technology Policy as ``the highest performing and 
most used neutron facility in the United States.'' The NCNR already is 
being used in conjunction with major U.S. manufacturers to study the 
flow of hydrogen through operating fuel cells to help improve the 
efficiency and durability of these devices. NIST is, in fact, the lead 
agency for weights and measures for vehicle fuels and will need to 
develop physical reference standards, calibration services, and new 
consensus standards to help ensure equitable trade of hydrogen in the 
marketplace. Moreover, NIST's expertise will be critical for advancing 
hydrogen process control technologies, the design of fuel cells, and 
the development of innovative tools needed to make the hydrogen economy 
a reality.
    America's future prosperity and economic security may rely in part 
on the exotic properties of some of the smallest particles in nature to 
accomplish feats in physics, information science, and mathematics that 
are impossible with today's technology. Quantum information science 
seeks to use the fundamental properties of nature at very small scales 
to build technologies that can only be imagined today. While classical 
physics describes the way objects interact at the everyday scale, 
quantum physics describes the rules by which electrons, nuclei, and 
other subatomic particles interact. At these small scales the laws of 
our everyday experience breakdown and new phenomena arise. This 
revolutionary new technology offers potential solutions to issues 
looming on the horizon of technology development, including the limits 
of Moore's Law on the microelectronics industry. Around the year 2015, 
the microelectronics industry will reach its limit in reducing the 
size, and increasing the processing speed, of integrated circuits 
manufactured by traditional silicon technology. Additional process 
power and capacity will then only be achieved through revolutionary 
technologies such as quantum information. With several world-renowned 
scientists, including three Nobel laureates, NIST is perfectly 
positioned to play a more critical role in developing the tools for 
measuring, controlling, and ultimately understanding the quantum realm 
and harnessing its power to achieve benefits for the Nation.
    With my testimony today, I have demonstrated how and why NIST's 
basic research plays a unique role in our Nation's research and 
development enterprise. NIST sits at the nexus of science and industry, 
conducting extreme measurement science and developing standards that 
allow industry to innovate and compete in the global economy. The 
President's 2007 budget recognizes this role and provides our 
researchers the ability to keep advancing the critical measurements 
that will enable U.S. industry to develop the most advanced and best 
products and services. Mr. Chairman, thank you for inviting me to 
testify today. I would be happy to answer any questions.

    Senator Ensign. Thanks to all of you.
    I want to ask a question and have each of you comment. And 
it is fine if we go back and forth. I want to discuss how you 
decide what is a meritorious grant proposal. Obviously, we have 
peer review to try to rate the various grant proposals. From 
what I understand, there is an entire rating system that goes 
along with this process. One of the things that I want to 
explore before we go into the amount of money that may be 
required to meet the needs of the grant proposals, rated 
excellent or very good, is how we are and how we should be 
assessing the merits of each grant proposal.
    We were with the President yesterday. He convened several 
Senators, a bipartisan group of us, along with the Secretary of 
Education, to talk about the various proposals, the National 
Innovation Act, which Senator Lieberman and I introduced, the 
PACE proposal, and the President's American Competitiveness 
Initiative. It was a very good meeting. And we talked about 
various topics. But Chairman Mike Enzi, from the HELP 
Committee, mentioned what they do with peer review over in 
Ireland. I guess they have a second panel of the peer review, 
involving business. So that you have academics on the first 
peer-review panel, and you have representatives from business 
conduct a second peer review, because there are limited funds. 
And so, I would like to hear any of your comments on a peer 
review system like that being set up in the United States.
    Dr. Marburger. Let me start answering that question, and 
I'll pass it on to my colleagues.
    The National Science Foundation has the distinction of 
having a particularly well-regarded peer-review process for its 
grant programs. And I might add that the Irish system is 
modeled on our system very closely. But this is a new feature, 
that you mentioned.
    I believe that some types of grants do require input from 
the nonscience community, a community of people who attempt to 
translate technology into commercial products. And most 
agencies that have applied missions work very closely with 
industry in order to calibrate themselves and their judgment. I 
know NIST, among agencies, probably works more closely with 
industry, and has a very effective relationship in that regard.
    But I'd like to ask my colleagues to respond to that, as 
well. I think it is appropriate, in certain contexts, to have 
that kind of input.
    Dr. Bement. Well, I would respond a couple of ways. First 
of all, there has been a program in existence for some time 
that has had that two-level review. It was the Advanced 
Technology Program. The first review dealt with scientific or 
engineering or technical merit. The second review really had to 
do with business feasibility, or had to have a good business 
plan.
    At the National Science Foundation, we feel that our 
mission is to work at the frontier, because if we vacate the 
frontier, we do a disservice to the Nation, so that we're 
looking for investigators who see the frontier, or maybe even 
see beyond the frontier, and determine, or at least have some 
concepts of, where the next big move of the frontier will come.
    That's generally called high-risk research or 
transformational research or frontier research. There are a lot 
of designators. On the other hand, at the other extreme we also 
have programs, like the SBIR and the STTR program, that do deal 
with the private-sector--they're usually small businesses--
where we also look at the technical feasibility and the 
business feasibility of the concept. But in even those cases we 
try to be sure that we pick those projects that are at the 
cutting-edge of emerging technologies, whether it's nanotech or 
information technology or biotechnology, to be sure it's moving 
new technologies forward, rather than just embellishing 
existing technologies.
    Senator Ensign. Good.
    Dr. Jeffrey. I'd just like to expand upon some of the 
comments that Dr. Marburger made. NIST does work very closely 
with industry. In fact, one of the features is that we have as 
many technical researchers on our campus that come from 
industry and universities as we actually have NIST researchers. 
So, we have about 1,800 guest researchers a year.
    In addition, we work with industry consortia in developing 
technical roadmaps that help guide what the investment strategy 
would be. One of the more long-term relationships we've had is 
with the semiconductor industry. In addition, we work with 
other industry consortia in all disciplines, again, trying to 
identify the highest-priority needs, because we do, as Dr. 
Marburger said, ``fill that niche between the pure fundamental 
transformational research,'' that Dr. Bement was talking about, 
and then what industry's requirements are for the future.
    Senator Ensign. I just raise the point, because when 
Senator Enzi mentioned that yesterday, Dr. Bement, what you 
said struck me. That is why I wanted to hear your comments on 
it. I think there is a place for that, but you also have to 
have that transformational foundation research. I think it is 
really important. Because we do not know whether a lot of the 
research is ultimately going to be applicable to anything. 
Someone may have an exciting idea to pursue something, but the 
researchers, scientists, and policy makers do not know whether 
a lot of these are going to be dead-ends. You have to pursue 
some dead-ends.
    I always think back to Thomas Edison and to the number of 
experiments that he did that went nowhere before he conducted 
experiments that were very, very successful. I think that is 
the type of thinking that NSF is especially involved with and 
why I think it is important to bring it out. And to have that 
discussion in public could be helpful going forward.
    Now I want to address now the fact that I proposed and the 
President proposed, significantly increasing funding for NSF 
and NIST and in a more targeted approach than some others have 
done. Senator Lieberman and I took a slightly different 
approach with the National Innovation Act, but, still, I think 
our approach is very similar philosophically with the 
President's proposal. My legislation seeks to use a lot of the 
dollars that we have effectively, and increase funding where we 
can and must. And, just to make that comment, and to re-
emphasize this, I am as fiscally conservative as anybody in the 
U.S. Senate. There are two areas that I think give us a great 
return for our whole economy, where all Americans benefit, 
where the investment is not a drain, actually, on the Federal 
budget. Rather, you actually, you get a positive return. Basic 
research is absolutely one of those areas. And infrastructure 
is the other area. And some of these infrastructure investments 
end up being in cyberinfrastructure in some of the things that 
we have seen.
    But with all of the proposals that we have out there that 
are rated--and I guess I want to get the comments that--OK, 
we've proposed, for instance, in our legislation, doubling NSF. 
And we targeted some increased support for NIST. Can you 
comment--and, once again, I'll have the whole panel comment--on 
if what we've proposed is adequate? Would it meet a lot more of 
the needs? How much more would you need--if you had to put a 
dollar figure on it--to meet what you would consider all of the 
meritorious grants that are out there.
    Dr. Bement. Do you want me to comment?
    Dr. Marburger. The President's budget request for the 
American Competitiveness Initiative tries to make priorities, 
and tries to identify the things that really need to be boosted 
right now in order for us to maintain this very long-term 
capability of producing new science that will lead to new 
technologies in the long-term. And there are--because of the 
generous funding that this and some previous Administrations 
have given to basic science, many parts of our scientific 
enterprise are funded in a way that's nearly commensurate with 
their challenges and opportunities. But there were a few areas, 
particularly in some aspects of the physical sciences, and 
departments like NIST, for example, that create tools for 
everybody else, that we felt were really underfunded, relative 
to their challenges. And the President's budget request 
recognizes those challenged areas. And that's why there is not 
only a pretty significant boost in the first year, but also a 
commitment to those departments, over a long period of time, to 
try to focus on them and build them up to--so that they can be 
where they need to be. We're not trying to do this all at once, 
but over a period of time.
    So, you can imagine, my answer to your question, Mr. 
Chairman, is that we put the proposal together, aware of what 
the needs are and what the capacity is, and this is what we 
think is the appropriate amount.
    Senator Ensign. OK.
    Dr. Bement?
    Dr. Bement. I would have both a philosophical and a 
pragmatic answer to your question. The question, ``How much 
investment in research and development is enough?'' has plagued 
industry, the private-sector, the public-sector for many, many 
years. My feeling about it is, it's enough if it builds the 
capacity that the Nation needs, in terms of a STEM workforce 
that can take on the new jobs to develop the new technologies 
that are coming along. It will be enough if it broadens 
participation so that women and under-represented minorities 
can be part of that workforce. It will be enough if we provide 
the very best math and science education to our children, from 
pre-kindergarten all the way up through graduate study. And it 
will be enough if it keeps the United States in a leadership 
position in the key technical fields around the world, so that 
we can be competitive. If not the leaders, at least equal, or 
at least with enough capacity that we can be fast followers if 
new concepts emerge elsewhere in the world.
    Now, to put a number on that would be far beyond anything 
that we could possibly handle in our current discretionary 
budget. On the other hand, I have to say that the ACI is a 
first big step in moving in that direction.
    Senator Ensign. Thank you.
    Dr. Jeffrey. Just to elaborate on that, NIST is that little 
yellow sliver at the top on the chart. It's one of the pieces, 
again, as part of the technical infrastructure for the Nation, 
that has played a really important role, and as, again, the 
economy is becoming more technical, will play an increasingly 
important role.
    The plan for ACI is exactly what we need, at the right 
time. It not only increases our ability to do some of the 
research, but it also increases our capability and capacity, in 
terms of some of our infrastructure. And so, it was well 
thought through, and, again, would be exactly what we need at 
this point.
    Senator Ensign. Great. One last question that I have for 
this panel is that, in doing some reading about what Michael 
Milken has done with prostate cancer in the Foundation, and 
experiencing some of what National Cancer Institute and NIH 
have done in the life sciences--and I know that some of the 
things are done differently with the physical sciences--but, 
I'm just finishing one of the books that was written about what 
they had done. One of the things that they discovered was that 
the grant proposals that people had to submit were very 
cumbersome, long and inflexible. It would take grant applicants 
a long time to write the grant proposals. But now, they limit 
grant proposals to five pages. The grant proposals would have 
to be five pages. As I recall, the other thing that they did 
was give increased flexibility. I guess what happened a lot of 
times in the life sciences is that the way the grant proposals 
and the strict criteria was written, sometimes halfway through 
a research project, a researcher would realize a project was 
not going anywhere, but the researcher was not allowed to 
adapt, because of the strict criteria written to this grant 
proposal. You could only spend the grant money for this 
particular project in this particular way. There was not enough 
flexibility. So, they tried it in the private-sector, they felt 
like they had more ability to give the researchers that added 
flexibility.
    Any comments on that type of an approach? Is it possible--
is government able to do this?
    Dr. Bement. Yes.
    Senator Ensign. Is government able to be that flexible? And 
is it possible to streamline--are you always looking at ways to 
streamline the grant proposals, but still get enough 
information on whether grant proposals are meritorious?
    Dr. Bement. On the National Science and Technology Council, 
there is a Business Practice Subcommittee that's looking at how 
to normalize these processes across all the Federal agencies. 
In our experience at the Foundation, since many fields of 
research are becoming more complex, proposals may involve more 
than one principal investigator and in some cases, are highly 
interdisciplinary. Our experience is that about 20 pages are 
about optimal to fully describe the research. On the other 
hand, we do have a Small Grant for Exploratory Research 
program, which tries to pay attention to areas that are really 
beyond the frontier. These are really new concepts. And for 
those types of proposals, we accept much shorter proposals, 
about three or four pages. And the program officer has a fair 
amount of discretion in approving those kind of proposals.
    Senator Ensign. OK.
    Dr. Marburger. Dr. Bement referred to the National Science 
and Technology Council. OSTP staffs the interagency working 
groups for this council. And, by popular demand several years 
ago, this committee that Dr. Bement referred to, on business 
practices and business models, was created to identify best 
practices among all the agencies. The grant approval and 
evaluation process does differ from agency to agency. And some 
agencies have more cumbersome processes than others.
    National Science Foundation has good practices in this 
area, with a variety of evaluation mechanisms. And this 
interagency group is trying to encourage other agencies to 
follow this model and to be even more flexible. We recognize 
that there is a burden on investigators for all this paperwork 
and writing reports and so forth.
    But NSF has been very good at being able to get money to 
people to follow up things like damage to the levees in the 
Katrina Hurricane last year, in following up the damage--
deplorable damage to the World Trade Center after 9/11. NSF was 
able to get money to investigators to go in immediately after 
the collapse of those buildings and perform preliminary 
investigations, seemed to me, almost within hours, if not days. 
So, with a capacity like that, we clearly have the mechanisms 
to respond quickly to opportunities and situations where 
immediate scientific analysis would be helpful in the long-
term, and we just have to spread those best practices. That's 
one of the reasons that the National Science Foundation was 
selected for inclusion in this priority ACI, because they do 
have an excellent track record for getting the money out.
    Senator Ensign. I agree with that.
    Dr. Jeffrey. I have nothing to add to that.
    Senator Ensign. OK.
    Senator Pryor?

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman. I'm sorry I was 
late.
    But let me, if I can, Dr. Jeffrey, ask you about the 
Advanced Technology Program. Have you covered that yet, Mr. 
Chairman, the Advanced Technology Program? That much? OK. Well, 
we----
    OK, well, the program is one of the only programs directed 
at innovation that has been actually called effective by the 
National Academy of Sciences. Dr. Jeffrey, do you agree that it 
has been effective?
    Dr. Jeffrey. I believe that the OMB PART score for ATP was 
``adequate.'' So, within its area, that it has made some very 
substantial progress.
    Senator Pryor. OK. And as I understand it, in the 
President's budget, that line item's been zeroed out. If we are 
able to restore that funding, would you be opposed to us 
restoring that funding?
    Dr. Jeffrey. Well, the way that the budget was put together 
is, trying to look at the priorities, based upon a number of 
things, including, reduction of the deficit. And in those 
priorities, I talked about in my opening statement, was the 
role that NIST plays in terms of the general technical 
infrastructure and the things that we do that support entire 
industries. The ATP has been effective, as you said, in terms 
of support of specific technologies in specific companies. But 
in terms of the priorities, we're looking at the broader base 
impacting the entire economy and entire industries. And so, the 
priorities would certainly be with the basic lab programs.
    Senator Pryor. OK. Dr. Bement, let me ask you--there's an 
increase in funding for NSF research and development, and I'm 
just curious about the additional money. How are you going to 
spend that this year? What's the expectation there?
    Dr. Bement. Yes. Our first priority is to advance the 
frontier. So, that's focused on building up our core research 
capabilities among our different directorates. The second 
priority is broadening participation. And significant increases 
have gone to those programs that have had a very significant 
impact on getting larger numbers of under-represented 
minorities, persons with disabilities, into the STEM fields, at 
all levels, including Ph.D. programs. The third priority is to 
invest in the infrastructure in the major facilities that are 
truly transformational, with significant investments in 
cyberinfrastructure, which is having a revolutionary effect on 
how research is being conducted and the levels of complexity 
that we can now deal with in understanding science. And the 
final priority, not necessarily least, is to put more resources 
into our math and science education program.
    Senator Pryor. All right. Let me follow up on that, if I 
can. Just generally, who makes those decisions about how to 
spend money? You've listed out your priorities, but who, in the 
final analysis, actually makes the decision on where the money 
goes?
    Dr. Bement. We go through a fairly elaborate budget 
preparation process, listening to the community, first of all, 
getting inputs from our Advisory Committees and through 
workshops, and also by listening to Congress. We understand 
there are priorities, from previous years' appropriations. Then 
we assemble that information, try to synthesize it, and then we 
review it with the National Science Board. And the National 
Science Board ultimately approves our budget. And that review 
takes place in several sessions throughout the spring and 
summer, prior to our submitting our budget to the OMB in 
September.
    Senator Pryor. OK. And you mentioned math and science, as 
well. Is that part of the President's American Competitiveness 
Initiative?
    Dr. Bement. It is. It's part of building the workforce for 
the 21st century.
    Senator Pryor. And how--in your view, is that going? I 
mean, do we have a good game plan to make progress there? 
Because I know there have been some cuts in the education 
budget, et cetera. But, from your perspective, how's that 
looking?
    Dr. Bement. I think it's going exceptionally well. In our 
Math and Science Partnership program, we have currently done an 
assessment of our first year cohort after 1 year of results in 
testing. We've been able to show that, in the elementary 
grades, we've been able to improve proficiency by at least 4 
percentage points, and, in the high schools, we've been able to 
increase it by as much as 14 percentage points. Now, that's 
quite significant. But that's only 1 year of results in the 
partnership. We expect that those will continue to go up.
    And in some specific schools, the results are really quite 
impressive. I learned, this morning, a report of a school, in 
Pennsylvania, who now ranks first in the world, by 
international testing, in math and science performance at the 
fourth grade. They tied with Korea. They were tied for first 
place. And in the tenth grade, in the same school, they came in 
second in the world, second only to Sweden. These are quite 
dramatic results.
    And they are a member of our Math--they are a----
    Senator Pryor. OK.
    Dr. Bement.--participant in our Math and Science 
Partnership program.
    Senator Pryor. Well, maybe I misunderstand, but has the NSF 
eliminated new Math and Science Partnership grants----
    Dr. Bement. No, that's not----
    Senator Pryor.--and transferred--transferred those over to 
Department of Education.
    Dr. Bement. No, that's not correct, Senator. The program is 
forward funded. Each of the 48 projects under the Partnership 
have a 5-year grant. There is adequate funding in the program, 
at the present time, to continue those grants. We expect that 
they will be continued until they're completed. In addition to 
that, there's----
    Senator Pryor. But are there new grants coming on?
    Dr. Bement. No. We currently have 48 Partnerships, and 
the--those are not being increased. But this, basically, is a 
research and development program that involves 5,000 schools, 
500 school districts. It's the largest research and development 
program of its type that has ever been mounted. And so, our 
next challenge is to deal with scaling that up through 
implementation by working with the Department of Education and 
with the State departments of education.
    Senator Pryor. OK.
    Mr. Chairman, I think that's all I have. Thank you.
    Senator Ensign. Well, thank you.
    I want to thank the witnesses for your excellent testimony. 
And we really look forward to working with you. This is a 
critical area of our economy. We all know that. And so, the 
exciting part about it is that there is a lot of bipartisan 
support for what we're trying to do going forward. And, as we 
know, these days, anything that can be bipartisan, we are 
looking for. So, we are excited about going forward with some 
of these proposals.
    So, thank you. I would now like to call the next panel of 
witnesses to the table.
    Our second panel has four witnesses. The first witness on 
the panel will be Dr. Steven Knapp. Dr. Knapp is the Provost 
and sEnior Vice President for Academic Affairs at Johns Hopkins 
University. The next witness will be Dr. Leonard Pietrafesa. 
Dr. Pietrafesa is the Chairman of the National Oceanic and 
Atmospheric Administration's Independent Science Advisory 
Board. The next witness will be Mr. Philip Ritter. Mr. Ritter 
is a Senior Vice President and Manager of Public Affairs for 
Texas Instruments. And our final witness today will be Dr. Adam 
Drobot. Dr. Drobot is the Chief Technology Officer for 
Telcordia, Incorporated.
    We'll start with Dr. Knapp.

   STATEMENT OF STEVEN KNAPP, Ph.D., PROVOST AND SENIOR VICE 
    PRESIDENT FOR ACADEMIC AFFAIRS, JOHNS HOPKINS UNIVERSITY

    Senator Ensign. Dr. Knapp, could you push your microphone, 
please to make sure it is on? There you go.
    Dr. Knapp. Is that better? Thank you.
    As you can see from the item displayed to my right here, 
Drs. Brody and Barrett were recently joined by over 140 
business, academic, and other national leaders in support of 
the innovation agenda. I'm pleased to have the opportunity 
today to share our University's perspective on this important 
issue.
    The United States has long been the world leader in 
scientific discovery, thanks in large measure to policies that 
encourage innovation, improve education at all levels, and 
facilitate the transfer of knowledge from the lab to the 
marketplace. But today we face serious threats to this 
preeminence. Other nations bring to the table strong education 
systems, focused government policy, and low-cost workers. Asia 
and Europe are committing unprecedented resources to science 
and engineering.
    Basic research is essential to our capacity to meet this 
challenge. Our ability to compete in the global economy 
depends, first and foremost, on our ability to make new 
discoveries. The more we learn about how things work, the 
principles of basic biology, chemistry, physics, and 
mathematics, the more opportunities we have to put that 
knowledge to use building businesses, creating products, 
improving our standard of living, and preserving the security 
of our Nation.
    Today's most innovative industries are built on decades of 
basic research, research that had no discernible practical 
application when it was undertaken. And, Mr. Chairman, you 
mentioned some examples of this in your opening comments. And, 
just to highlight a few of those:
    Quantum mechanics spawned the semiconductor industry and 
the information revolution. CDs and DVDs? We would still be 
using vinyl and videotape if not for lasers, which are based on 
ideas that have their roots in the theoretical work of Albert 
Einstein.
    In the United States, funding basic research has long been 
a government function. Why is that the case? Because basic 
research must be sustained for years or decades, sometimes 
coming to nothing, and entails no immediate return on 
investment. There is no entity other than government that can 
take on this role.
    But U.S. Federal research and development spending, as a 
percentage of gross domestic product, peaked 40 years ago, in 
1965. It was then just below 2 percent of GDP. In the past 40 
years, that share has diminished by more than half, to about .8 
percent of GDP.
    We must reverse this trend now by strengthening the 
Nation's commitment to science-related Federal agencies and 
programs, particularly NSF and NIH, the Department of Energy's 
Office of Science, NASA, and the basic research programs 
sponsored by the Department of Defense.
    In Fiscal Year 2005, Johns Hopkins won $1.28 billion in 
Federal R&D funding, won that competitively. That support 
allowed us to improve medical care worldwide, advance human 
knowledge, and train new generations of innovative researchers.
    But investment in research universities yields tangible 
economic benefits, as well. In 2004, Johns Hopkins produced 89 
patents. That same year, our friends at the University of 
California won 270 patents, MIT won 159, and Caltech, 142. In 
all, there were more than 3,200 patents issued that year to 
U.S. universities. That's a tremendous amount of knowledge made 
available to American business and the American public.
    Johns Hopkins strongly supports efforts to secure the 
competitive strength and national security of the United States 
by bolstering the Nation's ability to innovate. The National 
Innovation Initiative, the National Academy's report, ``Rising 
Above the Gathering Storm,'' President Bush's American 
Competitiveness Initiative, the National Innovation Act, and 
the PACE Acts, each of these welcome efforts is bringing the 
role of basic science and innovation forward for discussion and 
debate. Each envisions increased support for Federal science 
agencies.
    I'd like to thank Senator Ensign for his leadership on 
these issues and for introducing, with Senator Lieberman and 
others, the National Innovation Act.
    As we engage in this discussion, it is crucial to stress 
that the physical sciences should not be funded to the 
exclusion of the life sciences. Today biologists, 
statisticians, physicists, engineers, and computer scientists 
all work together to advance the knowledge we need to solve our 
urgent problems.
    And to just mention an example that was not in my written 
testimony, we have an exciting case of a young biomedical 
engineer, named Dr. Jennifer Elisseeff, who has figured out how 
to grow replacement cartilage tissue for knee replacements. And 
she does this by inserting cartilage cells into a chemical 
medium that is a ``smart'' gel medium that actually chemically 
signals the cells how much they should grow, and, when the 
cells reach a certain stage of maturity, they signal this 
chemical medium to disappear, to dissolve. And she has now 
patented that, and a start-up company is working on what could 
be a critical technology for a very serious health problem 
affecting many of us in the United States.
    Sustained real growth in funding for all kinds of basic 
research is vital. Last year, with the support of the NIH, 
Johns Hopkins established the Nation's first Institute for 
Computation Medicine. It is staffed by biomedical researchers 
and physical scientists from our schools of medicine and 
engineering, using powerful computers that will mine data for 
new and more effective ways to treat disease. It's noteworthy 
that approximately $2 billion of NIH funding supports research 
in the physical sciences.
    If NIH funding continues to erode, we are concerned that 
projects that meld physical and biological sciences, such as 
the Institute for Computational Medicine, could be among the 
first to suffer.
    In general, we applaud the efforts of our leaders in 
Washington to strengthen American competitiveness. If we at 
Johns Hopkins can assist, please contact us. I invite you to 
visit our campuses, explore our facilities and meet our 
researchers face-to-face. You will find no more persuasive 
argument for the inestimable value of investment in research 
than witnessing the innovative enterprise firsthand.
    Thank you.
    [The prepared statement of Dr. Knapp follows:]

  Prepared Statement of Steven Knapp, Ph.D., Provost and Senior Vice 
        President for Academic Affairs, Johns Hopkins University
    Mr. Chairman, members of the Committee:
    Thank you for inviting me to testify this morning. As you may know, 
Johns Hopkins has been engaged with the innovation issue for a number 
of years--primarily through the efforts of our President, Dr. William 
R. Brody, and most recently through his work on the National Innovation 
Initiative with Intel Corp.'s Chairman, Dr. Craig Barrett. I am pleased 
to have the opportunity today to share our University's perspective on 
this important issue.
    The United States has long been the world leader in scientific 
discovery, thanks largely to government policies that encourage 
innovation, improve education at all levels, and facilitate the 
transfer of knowledge from the laboratory to the marketplace. Today we 
face serious threats to this preeminence. Other nations bring to the 
table strong educational systems, focused government policies, and low-
cost workers. Asian and European countries are committing unprecedented 
resources to science and engineering programs.
    Basic research is essential to our ability to meet this challenge. 
President Brody puts it this way: ``Knowledge drives innovation. 
Innovation drives productivity. Productivity drives economic growth.'' 
Our ability to compete in the global economy depends, first and 
foremost, on our ability to continue making new discoveries. The more 
we learn about how things work--the principles of basic biology, 
chemistry, physics, and mathematics--the more opportunity we have to 
put that knowledge to use. When we know more, we can use that knowledge 
to make our world better, to build new businesses and devise new 
products, and to improve our standard of living.
    America's most innovative industries are built on decades of basic 
research, research that had no discernable practical application at the 
time it was undertaken. No practical application, that is, until a 
light bulb went on in someone's head; until someone said, ``I can use 
that to make something.''
    For example:

   The highly theoretical world of quantum mechanics spawned 
        the semiconductor industry and the information revolution.

   Johns Hopkins scientists thinking about the principle of 
        physics called the Doppler effect used it to invent what became 
        today's global positioning system.

   Two Johns Hopkins biologists shared a Nobel Prize in 1978 
        for using restriction enzymes to cut DNA into fragments. Had 
        that esoteric basic research not been done, we would not today 
        have a thriving biotechnology industry in this country.

   And what about CDs and DVDs? You would still be using vinyl 
        and videotape if it were not for lasers, the roots of which go 
        back to theoretical work by Albert Einstein.

    In the United States, funding basic research has long been a 
governmental function. Why? Because it takes a long time to do it, 
because there is always a risk that any single project will come to 
nothing, and because it is difficult to capture an immediate return on 
investment in an idea that has not yet been developed to the stage of a 
marketable invention.
    Despite a societal consensus that basic research is a government 
responsibility, however, U.S. Federal research and development 
spending, as a percentage of gross domestic product, peaked forty years 
ago, in 1965, at just below 2 percent of GDP. In the past 40 years, 
that percentage has diminished by more than half, to about 0.8 percent 
of GDP. Overall R&D spending, especially in basic sciences, continues 
to decline.
    We must reverse this trend now, by strengthening the Nation's 
commitment to science-related Federal agencies and programs, 
particularly the National Science Foundation, the National Institutes 
of Health, the Department of Energy's Office of Science, the National 
Aeronautics and Space Administration, and the Department of Defense's 
basic research programs.
Research and Innovation at American Universities
    The Johns Hopkins University is the Nation's leading recipient of 
Federal research grants. In FY 2005, our researchers attracted $1.28 
billion in Federal R&D funding and $1.44 billion in overall R&D 
funding, a category in which Johns Hopkins has led all U.S. 
institutions for 25 consecutive years. This support allows us to 
improve medical care worldwide, advance human knowledge, and train new 
generations of innovative researchers.
    But investment in research universities like Johns Hopkins yields 
tangible economic benefits as well. In FY 2004, Johns Hopkins alone 
produced 89 patents, filed 402 new patent applications, and generated 
$6.3 million dollars in income from technology licenses. That same 
year, our friends at the University of California won 270 patents; MIT 
won 159 and CalTech, 142. In all, there were more than 3,200 patents 
issued to U.S. universities. That is a tremendous amount of knowledge 
made available to American business for commercialization and to the 
American public for an incalculable range of benefits.
    Here are just a few recent examples from my own institution; my 
counterparts at other major research universities, were they here 
today, would provide examples equally illustrative of the point:

   Johns Hopkins has filed for a patent for self-assembling 
        cubes, the size of a speck of dust, that can carry medicine 
        into the body. These devices, which come out of an NIH-funded 
        collaboration between engineers and radiologists, open up 
        possibilities for the pharmaceutical industry for a new 
        generation of ``smart pills'' aimed directly at a diseased or 
        injured part of the body.

   The Johns Hopkins Applied Physics Laboratory has greatly 
        improved molecularly-imprinted polymers, or MIPs. These are 
        special materials that can be tailored to detect specific 
        chemical substances. We are now working with a startup company 
        to develop products using this patented technology to improve 
        drinking water and treat wastewater.

   Thanks to the licensing of our technologies to industry, one 
        company outside Baltimore sells thin films that weld materials 
        together in thousandths of a second. Another is developing 
        products to improve the detection of explosives.

   There is a company using Johns Hopkins technology to analyze 
        bone health. Another is using technology originally created to 
        detect submarines to analyze instead the sound of the beating 
        human heart.

Renewing Our Commitment to Basic Research
    Johns Hopkins strongly supports efforts to secure the competitive 
strength and national security of the United States by bolstering the 
Nation's ability to innovate. The National Innovation Initiative, the 
National Academy of Sciences report Rising Above the Gathering Storm, 
President Bush's American Competitiveness Initiative (ACI), the 
National Innovation Act, and the Protecting America's Competitive Edge 
(PACE) Acts: each of these welcome efforts has helped to get the issue 
of basic science and innovation on the table for discussion and debate. 
Each envisions increased support for Federal science agencies. The ACI, 
for example, calls for increased funding for programs at the National 
Science Foundation, the Department of Energy's Office of Science, and 
the National Institute of Standards and Technology.
    As we engage in this discussion, it is crucial to stress that the 
physical sciences should not be funded to the exclusion of the life 
sciences. Today, biologists, statisticians, physicists, engineers, and 
computer scientists all work together to advance the knowledge we need 
to solve our most important problems.
    Unfortunately, we tend at any one time to favor life sciences over 
physical sciences or vice versa, starving one to feed the other. That 
must not happen. The nature of scientific innovation today means that 
starving one starves both.
    The basic life sciences research funded by the National Institutes 
of Health is a key component of our overall national science agenda. 
This Fiscal Year, spending for the NIH has been cut $66 million. This 
was the first cut to the NIH since 1970. For FY07, the President has 
requested $28.43 billion--essentially a freeze at the current level. 
And the number of new NIH grants has already tumbled nearly 15 percent 
from its peak in 2003, hobbling the ability of scientists to open up 
new lines of investigation.
    Last year, with the support of the NIH, Johns Hopkins established 
the Nation's first Institute for Computational Medicine, staffed by 
biomedical researchers and physical scientists from our School of 
Medicine and School of Engineering. Using powerful information 
management and computing tools, research teams will mine data, model 
molecular networks, identify biomarkers of disease at early stages, and 
find new and more effective ways to treat disease.
    As NIH funding erodes, we are concerned that projects that meld 
physical and biological sciences, such as work of the Institute for 
Computational Medicine, could be among the first to suffer. These 
projects provide a vital foundation both for medical advancement and 
for innovation, the kind of innovation that leads to economic growth. 
They should be supported.
Visa Policy
    Return on our national investment in basic research will be most 
fully realized only if universities can continue to attract the best 
and brightest from around the world. Research universities have relied 
on open visa policies designed to promote international intellectual 
exchange. But today, delays and difficulties in obtaining visas to the 
United States have contributed to a declining in-flow of scientific 
talent. At Johns Hopkins, for instance, the number of graduate students 
from China declined from 328 in 2001 to 178 in 2004. The number of 
foreign undergraduate students dropped from 355 in 2001 to 263 in 2004.
    Competitor nations, meanwhile, are quite naturally taking advantage 
of our increasingly cumbersome visa process to lure top talent away 
from the United States. And with the strengthening of foreign science, 
there are many attractive substitutes abroad for U.S. degree programs, 
fellowships, and academic conferences.
    No question: it is critical that Federal policy protect our 
national security. At the same time, however, we must foster an 
environment favorable to international students and scholars. 
Immigration policies should make it easy for the best and brightest to 
come here, to stay here, and then to live and work here when their 
studies are complete. Johns Hopkins supports government policies and 
contracting practices that facilitate rather than hinder participation 
by international students and scientists in the conduct of unclassified 
fundamental research.
K-12 Education
    Neither strong investment in research nor participation from abroad 
will preserve America's competitive edge in the long-term if we do not 
repair our faltering K-12 education system, especially in the areas of 
mathematics, science, engineering, and technology. Advanced research at 
universities can only be built on a foundation of basic education.
    Since 1980, America's nonacademic science and engineering jobs have 
grown at more than four times the rate of the U.S. labor force as a 
whole. But in the same two and a half decades, the performance of K-12 
students in science and mathematics has declined. According to figures 
cited by the Association of American Universities, U.S. fourth graders 
score well against international competition in math and science 
testing. By the 12th grade, however, our students have fallen to near 
the bottom.
    This weakness also shows up at the postsecondary level. In 1966, 
American-born students earned 77 percent of science and engineering 
Ph.D.s awarded in the United States, while foreign-born students earned 
23 percent. In 2000, it was 61 percent for U.S.-born students and 39 
percent for those from abroad.
     At Johns Hopkins, we are able to attract and enroll well-qualified 
students, but our elementary and secondary education experts' work with 
schools around the country reminds us daily that the problem of 
deficient K-12 education in math and science must be addressed--and 
soon.
    Colleges and universities are stepping in to help. At Johns 
Hopkins, we provide enrichment for talented students and programs to 
attract young people into science and technology careers. We help 
schools reform their curricula. We work to train new teachers, 
including scientists or engineers looking for a second career.
    But government action is obviously needed as well.
    The National Innovation Act, the Protecting America's Competitive 
Edge Acts, and President Bush's American Competitiveness Initiative all 
address this problem. I would like to thank Senator Ensign for his 
leadership on these issues, and for introducing, with Senator Lieberman 
and others, the National Innovation Act (S. 2109). This legislation is 
an important step toward solving many of the issues before us today. I 
hope that we will continue to see bipartisan cooperation, both here in 
the Senate and in the House, on all these proposals.
    I would like to offer two examples of what can be accomplished by 
strong K-12 programs. Ryan Harrison and Abe Davis are two incredibly 
gifted and successful Baltimore students. Both were enrolled in 
Baltimore Polytechnic Institute's special foundation-funded ``Ingenuity 
Project'' for gifted math and science students. Both worked with some 
of the city schools' most accomplished teachers; both received 
dedicated and generous mentoring from Johns Hopkins researchers.
    Thanks to their talent and these advantages, Ryan and Abe were able 
to make extraordinary advances while they were each just 17 years old. 
Ryan, working in a chemical and biomolecular engineering lab at Johns 
Hopkins, extended the abilities of a molecular biology program called 
Rosetta. He wrote code late into the night until he had come up with a 
way to predict protein behavior at varying pH levels. Abe also invested 
impossible hours in his project, building an immensely complex computer 
graphics model of the thousands of bounces and collisions that result 
from dropping scores of balls into a box.
    Someday, Ryan's work may help make it possible to create antibodies 
customized to fight a particular patient's cancer. Who knows what 
startling uses medical researchers, scientists, and engineers might 
find for Abe's computer simulation technology?
    Both Ryan and Abe are winners in Intel's Science Talent Search. 
Ryan is now a student at Johns Hopkins and part of our Baltimore 
Scholars Program, which provides full scholarships to graduates of 
Baltimore's public high schools who earn admission to the university.
    Unfortunately, these successes are far from the norm. The kinds of 
advantages Ryan and Abe enjoyed simply are not available in the 
classrooms of most American students, including many of those with real 
math and science talent. Students from disadvantaged backgrounds have 
been especially shortchanged.
    From early childhood and preschool education through high school, 
there are heroic, but isolated, efforts under way around the country to 
better prepare the children of America to make the discoveries and 
technological advances that will save lives, improve living, and drive 
the economy forward. Those isolated efforts, however, must become 
systemic and must be backed by the resources and political will that 
can make them effective.
    Unless we act, stories like Ryan Harrison's and Abe Davis's will 
remain nothing more than happy exceptions.
Conclusion
    Thank you for your efforts to strengthen American competitiveness. 
If we at Johns Hopkins can assist you in this important endeavor, 
please do not hesitate to contact us. I invite you and your staff to 
visit our campuses, explore our facilities and meet our researchers 
face-to-face. You will find no more persuasive argument for the 
inestimable value of investment in research than witnessing the 
innovative enterprise firsthand.

    Senator Ensign. Thank you.
    Dr. Pietrafesa? Am I saying that right?
    Dr. Pietrafesa. Pietrafesa, yes, sir.
    Senator Ensign. Very good.
    Dr. Pietrafesa. Yes.

    STATEMENT OF DR. LEONARD J. PIETRAFESA, ASSOCIATE DEAN, 
  PROFESSOR OF OCEAN AND ATMOSPHERE SCIENCES, NORTH CAROLINA 
               STATE UNIVERSITY; CHAIR, SCIENCE 
       ADVISORY BOARD, NATIONAL OCEANIC AND ATMOSPHERIC 
                     ADMINISTRATION (NOAA)

    Dr. Pietrafesa. Thank you very much, Chairman Ensign, for 
inviting me to testify.
    In the late 1930s, at a time when the government did not 
fund basic research, Alfred Loomis, a wealthy New York 
industrialist and science geek, was the benefactor of basic 
research pursuits of the world's foremost scientists and 
mathematicians. One of the scientific breakthroughs that he 
fostered led to the development of microwave radar. Mr. Loomis 
contacted President Roosevelt. An enormous mismatch in 
capabilities resulted between the Allies and the Axis. This is 
an example of a basic scientific breakthrough that, to great 
measure, is responsible for the position in the world order 
that the U.S. has enjoyed since World War II.
    This story both inspires and saddens my father, a World War 
II veteran seriously injured in Europe. He is enormously proud 
of what the United States accomplished by saving the world. 
Now, in his 90th year, he fears for the economic future of the 
U.S. because of what he perceives as misguided government 
spending priorities. ``Why aren't we leading the world in new 
discoveries like we used to?'' he asks. I cannot answer this 
question.
    Speaking of radars, in 1918 a flu epidemic killed 100 
million people in 24 weeks. We--now, we may be facing the avian 
flu, but we have the NOAA Weather Service National Radar 
Network in place. Buried within the weather radar archives are 
the signals of flocks of birds. Statisticians, radar 
meteorologists, and ornithologists could mine the data and 
determine the likely pathways of migratory birds to spread the 
flu virus, and, thus, provide an advanced warning system for 
the Nation.
    Space weather research and forecasting is a jewel at the 
NOAA Space Environment Center. Sun storms interfere with the 
normal operation of communications, and can cause large-scale 
blackouts. Without basic research advances in space weather, 
the Nation's readiness, transportation, commerce, and 
competitiveness will be severely compromised.
    Autonomous undersea vehicles, unmanned aerial vehicles, 
remotely operated vehicles, and marine buoys would all be 
greatly enhanced with more durable sensors and greatly reduced 
payloads via NSF- and DOD-funded nanotechnology advances. The 
vehicles could fly in and out of hurricanes, through the waters 
below the hurricanes, and in noxious atmospheric plumes and 
harmful algal blooms, a very attractive operational 
possibility.
    Recently, a NASA scientist developed a new mathematical 
method to process nonlinear data in his basic research, and 
opened up an entire new field of data analysis. He was elected 
to the National Academy. However, the scientist has chosen to 
retire from NASA, and will join a university in Asia, where the 
success rate for research proposals is 80 percent, versus U.S. 
rates. The U.S. has lost a National Academy member to a foreign 
country because of scarce U.S. research dollars.
    The area of basic research and the understanding of how the 
atmosphere, ocean, and Great Lakes interact is extremely 
important in forecasts of our weather and climate. But the 140 
marine buoys that collect data in the Nation's coastal waters 
is an order of magnitude too low to properly conduct research 
or to do proper data simulation.
    Here, the NOAA Science Advisory Board has strongly endorsed 
the Integrated Ocean Observing System, IOOS, put forward by the 
U.S. Commission on Ocean Policy. The sustained IOOS could be 
managed by NOAA, in partnership with the university community.
    Coupling global climate to regional to local scale models 
is a significant physical, mathematical, and cyberscience 
challenge, all highly computationally-intensive. The research 
community needs next-generation national computing facilities 
that can be accessed broadly by U.S. scientists so that 
community models can be run and our Nation's knowledge-base 
extended.
    NOAA is the leading environmental mission agency for the 
U.S. It is responsible for environmental observing systems and 
networks, environmental management, and operational 
forecasting. If NOAA were to disappear today, you would have to 
recreate it tomorrow. It was NOAA, working as a team, that 
enabled the delivery of accurate and timely information 
regarding the impending landfall of Hurricane Katrina, a 
forecast that saved tens of thousands of lives; albeit, this 
forecast was a result of 20 years of prior research.
    The SAB recognizes the extraordinary fiscal constraints and 
difficult choices the Subcommittee must make. However, we have 
no birthright to global economic leadership and a high standard 
of living. These are things that we have to continue to earn. 
So, thus, the investments must be made. And many of the 
possibilities that I alluded to earlier require funding.
    In the case of NOAA, that would be to support a $4.5 
billion appropriation for FY07. This would address research 
initiatives, such as I mentioned, in areas of priority 
traditionally supported by the Senate, all focused on U.S. 
competitiveness and leadership. And, incidentally, coupling the 
physical, mathematical, statistical, life, health, socio, and 
economic sciences is, of itself, a basic research challenge.
    Thank you for the opportunity to provide this statement.
    [The prepared statement of Dr. Pietrafesa follows:]

   Prepared Statement of Dr. Leonard J. Pietrafesa, Associate Dean, 
   Professor of Ocean and Atmosphere Sciences, North Carolina State 
    University; Chair, Science Advisory Board, National Oceanic and 
                              Atmospheric 
                         Administration (NOAA)
    A hearing on: the Importance of Basic Research to United States 
Competitiveness--The hearing is intended to explore how basic research 
in the physical sciences impacts both long-term economic development in 
the United States and the ability of American industry to remain 
globally-competitive.
    Mr. Chairman and members of the Subcommittee, I am pleased to 
submit this statement in strong support of the role of basic research 
to United States competitiveness.
    My name is Len Pietrafesa, and I am an Associate Dean and a 
Professor of Ocean and Atmospheric Sciences in the College of Physical 
and Mathematical Sciences at North Carolina State University. I also 
serve as Chair of the National Oceanic and Atmospheric Administration's 
(NOAA) Science Advisory Board.
    The NOAA Science Advisory Board (SAB) was established by a Decision 
Memorandum dated 25 September 1997, and is the only Federal Advisory 
Committee with responsibility to advise the Under Secretary of Commerce 
for Oceans and Atmosphere on long- and short-range strategies for 
research, education, and application of science to resource management 
and environmental assessment and prediction. SAB activities and advice 
provide necessary input to ensure that National Oceanic and Atmospheric 
Administration science programs are of the highest quality and provide 
optimal support to resource management. The SAB consists of 15 members 
with backgrounds and expertise ranging across the spectrum of NOAA's 
mission responsibilities.
    I would like to thank the Chair of the Committee, Senator Stevens 
for inviting me to testify. This is truly an honor to be offering 
testimony, along with Dr. J. Marberger, Dr. A. Bement and Dr. W. 
Jeffreys.
    More than seven decades ago, Dr. James B. Conant, former President 
of Harvard University and a chemist by profession, said ``to advance 
scientific knowledge, pick a man (or woman) of genius, give him (or 
her) money and leave him (or her) alone'' (parentheses added). While 
the paradigm has changed since then, Dr. Conant had a colleague, Mr. 
Alfred L. Loomis, a retired wealthy industrialist and a science geek, 
who in the 1930s, through his vast fortune, became the patron and 
benefactor for basic scientific pursuits to the world's foremost 
scientists and mathematicians of the 1930s (e.g., Bohr, Compton, 
Einstein, Fermi, Heisenberg). These studies were conducted in the then 
state-of-the-science and technology laboratory that Mr. Loomis 
constructed in his massive Tuxedo Park, New York mansion. This was a 
time when the government did not fund basic research. One of the 
subsequent scientific breakthroughs that he and colleagues Dr. E. 
Lawrence, a Berkeley physicist, Dr. R. Varian of Stanford, and others 
from the RadLab of the Massachusetts Institute of Technology led to the 
development of microwave radar. Realizing what he had in his 
laboratory, Mr. Loomis contacted President F.D. Roosevelt, who 
contacted Prime Minister W. Churchill. At that time, the Axis did not 
have microwave radar but in short order the Allies surely did. An 
enormous mismatch in capabilities was affected. This is an example of a 
basic scientific breakthrough that led to a technological advance that 
to great measure is responsible for the position in the world order 
that the U.S. has enjoyed since WWII.
    This story both inspires and saddens my father, a WWII veteran 
seriously injured in Europe, who is enormously proud of what the United 
States accomplished by ``saving the world'' but who now in his 90th 
year, fears for the economic future of the U.S. because of what he 
perceives as ``misguided government spending priorities.'' ``Why aren't 
we leading the world in new discoveries, like we used to,'' he asks.
    Speaking of radars, in 1918 a flu epidemic broke out and killed 100 
million people globally in 24 weeks; more than had died in over a 
century of the Black Plague. Now we may be facing another global 
pandemic, the Avian Flu. But in the U.S. we have a national network of 
radars that was funded by a prior Congress and is managed by the 
Department of Commerce's National Oceanic and Atmospheric 
Administration's Weather Service. Buried within the weather radar 
signal archives are the signals of flocks of birds. So, could 
mathematicians, statisticians and radar meteorologists apply 
methodologies to mine the radar data and figure out what the likely 
pathways that migratory birds might be to spread the flu virus across 
North America? Sure, why not. Basic research in mathematical and 
statistical methodologies and radar science could conceivably provide 
an advanced warning system. What will the value of this prior knowledge 
be worth to the health and the economy of the Nation? The point is that 
the investments made by this Congressional body in the modernization of 
the NOAA Weather Service over the past two decades could under-gird and 
enable new research that will couple the physical, mathematical, health 
and social sciences and result in saving American lives.
    Given the new lives that most of us and all of our children and 
grandchildren will lead, via the Internet, it should be remembered that 
the Internet was derived from Arpanet (which was funded out of DARPA 
for the purpose of defense contractors communicating and exchanging 
technical reports) and other standalone networks such as Omnet which 
was created by oceanographers (with funding from the Office of Naval 
Research and the National Science Foundation, so that these scientists 
could communicate with each other); a basic, fundamental advance in 
communications that has created new jobs, new industries, new products 
and services and led to the virtual flattening of the World; all in the 
relative blink of an eye. Have you used www.gotomeeting.com? Try it, 
you'll love it.
    The U.S. is the hub of global networks and communications. Space 
weather research and forecasting is a scientific and technological 
jewel at the NOAA Space Environment Center in Boulder, CO. Space 
weather describes (http://www.sec.noaa.gov/) the conditions in space 
that affect Earth and its technological systems. Space weather is a 
consequence of the behavior of the Sun and the nature of the Earth's 
magnetic field and atmosphere. Solar disturbances categorized in space 
weather terms are: Radio Blackouts, Solar Radiation Storms and 
Geomagnetic Storms. These storms interfere with the normal operation of 
communications used by airlines and emergency response teams, military 
detection and early-warning systems, global positioning systems (GPS) 
which control the spatial referencing network, satellite components and 
spacecraft operations. Solar storms also have the potential to impact 
power transformers, cause large-scale blackouts in North America. and 
also create a biological threat to both astronauts and people flying in 
aircraft. Basic research in the physical, mathematical and statistical 
sciences is very important in space weather and without the advances 
made and hopefully to be made, U.S. competitiveness would be severely 
compromised. The mathematics of the plasma physics of ``space weather'' 
is daunting and one cannot design the experiments, they come pre-
designed so there are no options. They are dealt with on the fly.
    As an example of mathematical enabling in experimental design, the 
SAS Institute in Cary, North Carolina, the world leader in data 
analysis software, with billions in annual revenues, had its origins 
with a group of North Carolina State University researchers, Drs. 
Goodman and Saul, focused on the statistics of experimental design. The 
researchers made some breakthroughs in statistical methodologies and 
formed a company. These advances have resulted in a strongly 
competitive, well run U.S. corporation (featured on CBS's ``60 
Minutes'').The software itself is used to deliver decision-support such 
as data mining to help other companies make more informed choices.
    In the arena of experimental design for quality improvement, 
carefully constructed settings for factors that affect production allow 
the maximum information extraction for a given amount of experimental 
effort. For example, a grinding experiment to efficiently create an 
optical lens (like an eyeglass), with 12 factors (like wheel speed, 
grit size, etc.) each of which can be at a high or low level, would 
require 2048 runs to see the effect (on say, surface roughness) for 
every combination of the 12 factors. But through the magic of 
statistical optimization, a carefully designed experiment would require 
only 192 runs for all factors. This is an incredible shrinking in an 
economy of scale resulting in huge savings to the optical industry.
    Another area of basic statistical research is in ``anomaly 
detection,'' whereby statistical methods have been utilized to discover 
hot spots of activity, such as disease outbreaks, a topic of current 
basic research. Also methods for automatic flagging of unusual or 
outlier values and methods of detecting change points in data taken 
over time have potential not only for controlling manufacturing 
processes but might be used in a homeland security context and in 
environmental data assessment. This approach would be valuable for 
flagging outliers, unusually extreme or potentially bad data, as these 
data are streaming in; such as data transmitted in real-time from the 
NOAA Weather Service national monitoring network or the upcoming 
Department of Defense (DOD) and NOAA NPOESS Satellite constellation. 
Terabytes (or petabytes?) of data must be evaluated on the fly and the 
results of basic statistical research could provide new methodologies 
to evaluate the trillions (or 10s thereof) of points of data on the 
fly; thus ensuring that the multi-billion dollar investment of this 
Congress in our needed satellite systems (e.g., NOAA GOES and the DOD/
NOAA NPOESS) yields maxima benefits in data utilization.
    To paraphrase a popular ad campaign, you could say that 
statisticians don't make the decisions; they make the decision process 
better. Basic research in statistics provides tools just as a violin 
maker provides an instrument rather than making the music. One cannot 
play beautiful music without a well crafted instrument made for that 
purpose.
    How about Nano-Science? Here are some recent headlines and 
universities involved:

   Nanotechnology Find and Treat Breast Tumors, Dec. 12, 2005, 
        Nanotechwire--Rice University physical scientists offer 
        enticing insights into how these minute particles can be 
        manipulated to have different properties, and tagged with 
        antibodies to target them specifically at cancer cells.

   Nano for Brain Cancer Imaging, Treatment Nov. 14, 2005, 
        Small Times/Richmond Times--Dispatch--University of Virginia 
        researchers are loading tiny, hollow carbon balls with metals 
        and medicine to detect and destroy brain-cancer cells.

   Nanoparticles Create Anti-fog Coating Sep. 7, 2005, 
        Nanotechweb--Massachusetts Institute of Technology (MIT) 
        researchers have devised a silica nanoparticle coating that 
        causes water droplets to flatten into a thin uniform sheet 
        rather than form the usual annoying light-scattering beads 
        eliminating fog on windows, spectacles and other glass 
        surfaces.

   Carbon Nanotube Sheets Aug. 18, 2005, PhysOrg--University of 
        Texas at Dallas scientists have produced transparent carbon 
        nanotube sheets that are stronger than the same-weight steel 
        sheets and have demonstrated applicability for organic light-
        emitting displays, low-noise electronic sensors, artificial 
        muscles, conducting appliques and broad-band polarized light 
        sources, switched in one ten-thousandths of a second.

   Nanotubes For Healing Broken Bones Jul. 8, 2005, Science 
        Daily--University of California Riverside physical scientists 
        have shown that carbon nanotubes make an ideal scaffold for the 
        growth of bone tissue allowing doctors to inject a solution of 
        nanotubes into a fracture for healing.

   Nanotechnology and Hydrogen, Mar. 29, 2005, Eurekalert--
        Rutgers scientists are using nanotechnology in chemical 
        reactions that could provide fuel for tomorrow's fuel-cell 
        powered clean energy vehicles.

    Thank you NSF, and the DOD research arms for sponsoring pioneering 
basic research in ``nano'' science and technology. This basic research 
will enable all other areas of ``S&T''. Still, much more of an 
investment is needed. And the paybacks to society will be great.
    Instruments and sensors deployed in or above the ocean environment 
are often at risk due to high winds, waves, currents, sea spray, bio-
chemical fouling and the marine transportation community not to mention 
the occasional presence of humans. To that end, nanotechnology may have 
much to offer in the development of more reliable and durable sensors 
and instruments. As a corollary, the same technology might advance the 
state of observing science in the atmosphere. Measurements made from 
moving vehicles, such as autonomous undersea vehicles, Unmanned aerial 
vehicles and remotely operated vehicles would all be greatly enhanced 
with more durable sensors and greatly reduced payloads. Data gathering 
by flying in and out of hurricanes and through the waters below the 
hurricanes via unmanned vehicles is a very attractive operational 
possibility. Likewise for noxious atmospheric plume events. The U.S. 
Department of Energy (DOE) supported a robust atmosphere and ocean 
instrument development program that was especially visionary and 
produced many of the off-the-shelf ocean instruments that are available 
today. The DOE Brookhaven National Lab, the Woods Hole Oceanographic 
Institution, the University of Washington, Texas A&M University and 
many other institutions, advanced the state of technology and science 
with funding from DOE in the 1970s, 1980s and mid-1990s. That DOE 
program no longer exists. But basic research is still needed in all of 
the above areas. Perhaps NOAA could be the facilitating agency.
    Speaking about the environment, can basic physical and mathematical 
sciences research be conducted on environmental topics that are of 
value in the competitive position of the U.S.? The answer is a 
resounding ``yes''. Examples and some challenges are given below.
    The long-time series of basic state environmental variables 
constitute our climate record; generally difficult to decompose and 
understand. Albeit, a National Aeronautics and Space Administration 
(NASA) scientist/mathematician developed a new mathematical empirical 
methodology in his studies of the fluid mechanics of water waves and in 
the process of doing this basic research, has opened up an entire new 
field of data analysis, for which he was elected to the National 
Academy. This advance has enabled new breakthroughs in voice 
recognition, aircraft wing deterioration, etc. Colleagues and I have 
used this empirical methodology to determine that the modern rate of 
sea level rise is the second fastest over the past 18,000 years, and 
that the frequency of occurrence of hurricanes in the North Atlantic 
has 3-5, 10-12, 25-30 and 45-55 year modes of variability. So there are 
enormous implications for climate studies to be derived from the 
mathematical breakthrough of this NASA scientist. Incidentally, the 
NASA scientist was recently informed by NASA that he needed to acquire 
more non-NASA sponsored research dollars, at a time in the U.S. when 
basic research dollars are more difficult to obtain. So he has chosen 
to retire from the agency and to accept an offer to join a university 
in Taiwan where the success rate for proposals is closer to 80 percent 
vs. the U.S. NSF rate which is presently 10-20 percent and in which a 
reported $2B of proposals rated ``excellent'' went un-funded last year. 
The U.S. has lost a National Academy member to a foreign country 
because he can no longer afford to pursue the funding for basic 
research in the U.S.
    The development of ``empirical orthogonal functional'' (EOF) 
analysis in the 1950s by an MIT physicist was an important mathematical 
advance. This analysis has recently been used in the development of a 
hurricane land-fall forecast capability. In the NOAA (National 
Environmental Space & Data Information Service and National Ocean 
Service) sponsored cooperative Climate and Weather Impacts on Society & 
the Environment (CWISE), scientists at North Carolina State University 
combined EOF analyses of past hurricanes and tracks with statistical 
regression, and are able to predict several months in advance, the 
number of hurricanes most likely to strike the Gulf/Caribbean and U.S. 
East Coasts. The 2006 forecast for the East Coast is due on 01 April 
and the Gulf on 01 June.
    A scientist from Columbia University was studying plate tectonics 
off of the coast of Asia using an acoustic sound array in December 
2004. He discovered that the acoustic signals generated by the 26 
December undersea earthquake that resulted in the tsunami that killed 
several hundred thousand people in Sri Lanka, India and Phukut without 
warning are evident in his data archive. The key here is that the speed 
of sound in water is 1,500 meters/second while the speed of the tsunami 
wave itself is more like 200 meters/second. So the warning of an 
approaching tsunami can be delivered in \1/7\ the time using acoustic 
devices. This is a serendipitous finding in an all-together unrelated 
basic research project funded by NSF.
    In the early 1980s an air-sea monitoring network was deployed along 
the equator in the Pacific Ocean. Development of the Tropical 
Atmosphere Ocean (TAO) array was motivated by the 1982-1983 El Nino 
event, the strongest of the century up to that time, and not detected 
until nearly at its peak. The event highlighted the need for data from 
the tropical Pacific for an improved understanding of the El Nino 
Southern Oscillation (ENSO). So a modest array was deployed to assess 
how these enigmatic events occurred. What we learned was that ENSO was 
well structured and affected climate and weather patterns globally; 
thus agriculture, fisheries, the global supply of protein, landslides 
in California and so on. Again, basic research in mathematics and 
computational science and in the technological development of related 
monitoring and computational instrumentation has resulted in huge 
leveraging for U.S. industries in the global marketplace. Today, there 
are 70 moorings in the TAO array and NOAA makes seasonal forecasts of 
atmospheric state variables for the U.S. based on the disposition of 
ENSO.
    The area of basic research in the understanding of how the 
atmosphere and oceans exchange heat, buoyancy, energy and momentum is 
extremely important for environmental prediction; such as understanding 
the causes of and forecasts of our weather and climate. We are learning 
a great deal in university laboratories, on NSF, ONR and NOAA field 
expeditions and by using high-performance computing for better data 
collection and analysis. What are the potential benefits of this 
research? Well, what is the value of better forecasts of atmospheric 
storms with heavy precipitation, snow, ice and rain, annually? The ski 
and snowboarding industry cannot prosper without snow and they need to 
plan well in advance to anticipate what the upcoming season holds in 
store. Water managers need this information seasons in advance because 
they need to plan for upcoming allocations; overages and shortfalls. 
Emergency managers, the highway patrol and power companies need to know 
where precipitation will fall, how much, in what form and when and 
whether or not flooding will occur. The average annual costs of snow 
storms alone to the U.S. are: removal  $3B; road closures  $20B; 
flight delays  $4B; public utilities  $2B; and flooding from snowmelt 
 $6B; a total of $35B annually. And agricultural crop and timber 
damage can be up to $2B/ice storm. The cost of flooding to the U.S. in 
2005 will likely total more than $300B. OK, so 2005 was an unusual year 
with Katrina, Rita and 25 additional tropical cyclone events. Or was 
it? More climate research will reveal the rest of the story. 
Unfortunately there are presently too few observing systems that 
monitor air-sea interactions and thus the basic research that can be 
conducted on two fluid interactions is seriously limited.
    How good are we at forecasting precipitation, rain, snow and ice? 
Well the NOAA NWS National Centers for Environmental Prediction (NCEP) 
does a good job, considering the data available to initialize and be 
ingested and assimilated into NOAA NCEP models. But it could be better. 
It could be vastly improved with better information available in real 
time. There are but  140 marine buoys that collect air and near 
surface water temperatures and provide those data in real time, around 
the Nation's coastal waters including the Atlantic, Pacific and Gulf 
Coasts, the Great Lakes, Alaska and Hawaii. Is that coverage adequate? 
The short answer from those of us who do ocean-atmospheric coupled 
fluid research is ``no''. The coverage is an order of magnitude too 
low.
    Here is an image of a two-way interactively coupled atmospheric and 
ocean numerical model system output that shows a winter storm, a 
``nor'easter'' forming off the Carolinas coast in 1996. The white 
represents clouds, green is rain, pink is ice and purple is snow.
    The total of each can be estimated by integrating across the 
volumes of each form of precipitation. How valuable is it to DC, MD, 
PA, NJ, NY, CT, MA, MN, etc. . . . to know these numbers ahead of time?


    In this entire storm area stretching from S.C. to the VA border, 
there are only three permanent coastal NOAA National Data Buoy Center 
buoys providing air-sea information. The red dots are new observing 
sites in a NOAA National Ocean Service-sponsored program called the 
Carolinas Coastal Ocean Observing and Prediction Program, led by the 
University of South Carolina, presently extending from southern S.C. to 
southern N.C. However, the average centroids of these storms tends to 
be closer to Cape Hatteras, N.C. well to the north, near the yellow-
green patch shown in the storm, so more sites are needed to the north. 
The reason that this 1996 storm model output is so robust is that there 
were 29 ocean-atmosphere university research (DOE and NSF-sponsored) 
moorings in the region at the time of the storm and the assimilation of 
these data into the model greatly improved our ability to more properly 
hind-cast the storm. The conclusion: a greatly expanded observing 
network is needed to make better weather predictions, over the ocean, 
along the coasts and over land. Why: to better understand very complex, 
air/sea interactive couplings. This is basic research to a scientist 
like me. The value: greatly improved forecasts of the type and quantity 
of precipitation in a storm, improvements in storm track forecasting, 
improvements in forecasts of ocean current and wave fields, improved 
forecasts of where and how much coastal erosion, coastal mass wasting, 
inlet migration and new inlet formation will occur, and so on. By the 
way, the program alluded to in the winter storm figure shown above was 
the last of the DOE sponsored field expeditions and modeling programs 
linking the atmosphere to the ocean, coastal ocean and estuaries and 
rivers of the U.S. It ended in 1997. It was responsible for enormous 
advances in new instrumentation, new science and new scientists and was 
worth every dollar of investment by Congress.
    Is the story any better for the modeling of hurricanes in transit; 
especially the potential interaction of the hurricane with the ocean 
beneath it? Do exchanges between the air in hurricanes and water masses 
below serve to further intensify or to de-intensify the intensity of 
the wind-field of the hurricane? The figure below (from University of 
Miami and NOAA Hurricane Center scientists) suggests this may well be 
the case. Katrina was more intense over warmer waters and less intense 
over cooler waters. In the Spring 2005, Undersecretary of Commerce for 
Oceans and Atmosphere, VAMD C.C. Lautenbacher, requested that the NOAA 
SAB commission a study of wind intensity forecasting for hurricanes. 
The external evaluation is in progress.


    The NOAA SAB has strongly endorsed the Integrated Ocean Observing 
System (IOOS) put forward by the U.S. Commission on Ocean Policy. These 
observations offer critical information not only for atmosphere and 
ocean and Great Lakes interactions but also on coastal processes 
necessary for addressing issues, such as the health of humans and 
marine life, broadly defined weather and climate now-casts and 
forecasts, homeland security, and resource management. Coastal and 
marine laboratories have been at the forefront in addressing this need. 
However, funding for existing subsystems is difficult to sustain, and 
significant additional funding is required to implement the national 
integrated system. Although efforts have been made in the past to 
coordinate Federal agencies involved in ocean and coastal research and 
national and international programs regarding coastal, ocean, and Great 
Lakes observing systems, further investment and strengthened 
cooperation at all levels is still needed to ensure that these systems 
are sustained and that they incorporate the long-term monitoring 
efforts of the Nation's coastal and marine laboratories. The SAB, and 
both marine and atmospheric science organizations, enthusiastically 
support the development of a sustained IOOS to be managed by NOAA. 
Attached to my testimony is a copy of a ``community generated'' 
resolution endorsing IOOS. However, the university community has an 
important role to play in that it can conduct basic research on data 
recovery, data quality assessment, data assimilation into models, data 
mining and coupled model architecture.
    The examples above lead the SAB to strongly support enhanced 
funding for ocean, atmospheric, coastal, and Great Lakes basic research 
in the physical and mathematical and other natural sciences, the social 
sciences, education, outreach, and related infrastructure. Part of the 
basic research challenge is the connecting of the physical sciences 
through the life sciences and to the social and economic sciences. This 
per se is a very challenging research topic that must be resolved if 
science is to properly serve the various sectors of U.S. society and 
ensure that the U.S. will be globally competitive.
    Improving our knowledge of the ocean, atmospheric and hydrologic 
sciences has much to offer the Nation as it seeks to strengthen its 
ability to innovate and compete in today's global economy. These 
sciences are inherently interdisciplinary, push the envelope in terms 
of technology development, test the boundaries of our data collection 
and analysis systems, and offer an effective training ground for future 
scientists, mathematicians, statisticians and engineers; particularly 
in a setting of working as a team. As the Nation seeks to augment its 
investment in the physical and mathematical sciences to increase its 
international competitiveness, the SAB calls on policymakers to 
recognize the integrated nature of the environmental sciences, 
particularly the ocean and atmospheric sciences and to support an 
enhanced investment in these as well as other science and engineering 
disciplines as part of any long-term economic competitiveness policy.
    Human and environmental health are critical factors in the quality 
of life of the citizenry of the society of the U.S. NOAA has and is 
conducting and supporting important research in such areas as 
atmospheric chemistry tracking and forecasting, coastal nutrification 
monitoring and modeling, remote detection and monitoring of emissions 
or other airborne contaminants, marine debris detection and source 
tracking, and development of technologies to detect and predict the 
pathways of oil spills and harmful algal bloom outbreaks.
    The SAB supports increased Federal funding for the National Science 
Foundation (NSF) consistent with the President's budget for FY 2007. 
Basic research and the transfer and use of the knowledge developed 
through research are vital for the long-term economic competitiveness 
and national security of this Nation. It is increasingly important for 
the Nation to maintain and enhance its scientific edge in a global 
community with emerging new capacities for scientific research. NSF 
provides vital support for basic research and education which enhances 
public understanding of the atmosphere, oceans, coastal areas, and the 
Great Lakes. NSF also provides important support for basic laboratory 
facilities, instrumentation, support systems, computing and related 
cyber-infrastructure, and ship and aircraft access. The final report of 
the U.S. Commission on Ocean Policy makes recommendations on the need 
to develop and enhance ocean, coastal and Great Lakes research 
infrastructure; including research vessels, ocean observing systems, 
and the shore-based instrumentation and equipment needed to collect and 
analyze the data and observations made by research vessels and the 
observing systems. Additionally, kids are science geeks and the 
physical and environmental sciences are great vehicles to ride to 
ensure a scientifically, technologically and environmentally literate 
future U.S. society.
    NOAA is the lead operational environmental mission agency for the 
U.S. NOAA maintains the Nation's environmental weather and climate 
observing networks, oversees environmental management and is 
responsible for operational environmental forecasting. It provides 
decisionmakers with important data, products and services that promote 
and enhance the Nation's economy, security, environment, and quality of 
life. It was NOAA, and its underlying science enterprise, that enabled 
the delivery of accurate and timely information regarding the impending 
landfall of Hurricane Katrina in 2005, a forecast that saved tens of 
thousands of lives. While that forecast could be cast as the result of 
``applied research,'' in point of fact, the ability to model the 
hydrodynamics and thermodynamics of an anti-symmetric vortex, moving 
through and interacting with larger scale and smaller scale atmospheric 
systems and interacting in real time, over compatible spatial and 
temporal scales, with a moving interactive body of water that has its 
own boundary current and eddies, was and remains a basic research 
challenge.
    Moreover, the ability to quality assess, ingest and assimilate 
satellite data, ocean buoy data and aircraft data into the models is of 
itself a mathematical research challenge. The competitive position of 
the Nation must be viewed not only on positive advances and successes 
but also on the role of science in advancing fundamental knowledge to 
the point of leading to success in reducing the negative impacts that 
environmental events can have on the Nation's economy. Basic science, 
conducted to a significant degree by university scientists external to 
NOAA, has led to improved forecasts within NOAA. This science was 
conducted over several decades and melded together creatively by NOAA 
scientists to meet the agency's mission needs.
    For that reason, the SAB supports a $4.5 billion budget for NOAA in 
FY 2007 for NOAA. As suggested by an ad hoc coalition of NOAA 
stakeholders, this amount would fully fund the President's FY 2007 
budget request, restore funding for core programs, and address all the 
areas of concern and priority that have traditionally been supported by 
Congress. It would allow enhancements in the development of an 
integrated ocean and atmospheric observing system; increased research 
and education activities and expanded ocean conservation and management 
programs; and provide critical improvements in infrastructure 
(satellites, ships, high-performance computers, facilities), and data 
management. It would allow the external university community to conduct 
the basic research that will lead to improved forecasts by the agency.
    In August 2004, a Congressionally-requested study of NOAA's 
research programs, entitled, Review of the Organization and Management 
of Research in NOAA concluded that extramural research is critical to 
accomplishing NOAA's mission. The access to such enhanced research 
capacities provides NOAA with world-class expertise not found in NOAA 
laboratories; connectivity with the planning and conduct of global 
science; means to leverage external funding sources; facilitation of 
multi-institution cooperation; access to vast and unique research 
facilities; and access to graduate and undergraduate students. Academic 
scientists also benefit from working with NOAA, in part, by learning to 
make their research more directly relevant to management and policy. It 
is an important two-way interaction and exchange of information and 
value.
    Climate and long-range weather prediction are substantial basic 
science challenges. Coupling global climate models to regional scale 
models at the appropriate scales of temporal and spatial variability 
are significant physical, mathematical and cyberscience challenges. The 
couplings must properly include all components of the Earth system, the 
atmosphere, the oceans, ice and terrestrial components. The couplings 
must be capable of being downscaled, from larger spatial and temporal 
scales to smaller scales and upscaled (from smaller to larger). But 
this is computationally demanding. The university community and the 
NSF-sponsored National Center for Atmospheric Research anxiously await 
next-generation national computing facilities that can be accessed 
broadly by U.S. scientists so that community models can be run and our 
Nation's knowledge-base extended. Business, industry and the military 
await the further development of this fundamental, basic research. The 
future competitiveness of the U.S. will depend to great degree on the 
outcome of what these studies show for the future climate of the U.S. 
and other countries throughout the world.
    The SAB strongly supports a robust NOAA extramural research 
activity and calls on the Senate Subcommittee on Technology, 
Innovation, and Competitiveness to support the NOAA's Ocean and 
Atmospheric Research programs, including the National Sea Grant 
Program, the Ocean Exploration Initiative, a true venture into the 
great ocean abyss on our planet, the National Undersea Research Program 
which Ocean Exploration will embrace, as well as research related to 
aquaculture, invasive species, harmful algal blooms and the various 
joint and cooperative institutes at levels envisioned in last year's 
Senate version of the Commerce-Justice-State Appropriations bill. These 
partnership programs are not only consistent with the findings of the 
Congressionally-mandated August 2004 review of NOAA research, but are 
also consistent with the NOAA strategic plan and enable NOAA to carry 
out its mission at state and local levels.
    The SAB strongly supports implementation of the recommendations 
from the U.S. Commission on Ocean Policy (COP) and the initial efforts 
of the Administration's Interagency Committee on Ocean Policy to 
develop a response to COP's recommendations. COP's analysis of policies 
governing oceans, coasts, and Great Lakes has resulted in a collection 
of bold and broad-reaching recommendations for reform. Implementation 
of these recommendations by the Federal Government will enable the U.S. 
to maintain and strengthen its role as a world leader in protecting and 
sustaining the planet's oceans, coasts, and Great Lakes. The SAB is 
particularly supportive of COP's recommendation to double the Federal 
investment in ocean, coastal, and Great Lakes research as well as its 
recommendation to promote a strong Federal investment in ocean, 
coastal, and Great Lakes education, outreach, and stewardship and in 
IOOS.
    By any measure, basic scientific research has made monumental 
contributions to technology and to the national priorities of the U.S. 
The bond between basic research and the development of both novel and 
current technologies has been and is well in place. Science and U.S. 
society must continue to co-evolve. The nature of this evolution will 
certainly be affected by the extent to which this Senate sets funding 
priorities. Hopefully this Senate will recognize that the dependence of 
the development of successful novel technologies on broadly supported 
basic research will lead to a future Nation that is healthier and more 
economically prosperous than at present. Because of the 
unpredictability of the details of the new science and technology that 
will evolve, the details of social evolution are also unpredictable. 
But the future health and prosperity of this Nation are inextricably 
coupled to the investments made in basic research today.
    We see that we have no birthright to global economic leadership and 
a high standard of living. These are things that we have to continue to 
earn. The pressures and opportunities are relentless and inexorable. At 
the core of these unprecedented challenges, is the requirement for the 
highest caliber of human capital, the need for us to educate and 
challenge students to push the limits of innovation, technology and 
discovery. We need national commitments to drive advancements in 
energy, health, environment, food safety, security, solutions to world 
poverty and much more.
    The SAB recognizes the extraordinary fiscal constraints and 
difficult choices the Subcommittee must make. Nevertheless, the 
research and education programs under the Subcommittee's jurisdiction 
are vital investments in the future of this Nation and deserve the 
maximum support possible. Thank you for the opportunity to provide this 
statement.
                                 ______
                                 
  Appendix: Community Resolution on Integrated Ocean Observing System 
                                 (IOOS)
        Endorsed by the Coastal States Organization, Consortium for 
        Oceanographic Research and Education, National Estuarine 
        Research Reserve Association, National Federation of Regional 
        Associations for Coastal and Ocean Observing, U.S. Chamber of 
        Commerce Space Enterprise Council

    Recognizing that the oceans and coastal waters affect all our 
lives--driving weather and storms, influencing climate, providing 
transport for millions of tons of cargo, and sustaining coastal and 
marine resources.
    Further Recognizing that more than a century ago, the United States 
began creation of a comprehensive weather forecasting and warning 
system and today, daily weather reports are central to the Nation's 
social, economic, and environmental vitality.
    Acknowledging that the Nation's coastal regions, including the 
Great Lakes, are home to more than half the Nation's population, but 
lack basic information to protect those communities and their 
environment, to track, understand and predict change, and to provide 
quality information to those who work on or near the water.
    Understanding that deployment and operation of a sustained 
Integrated Ocean Observing System will: (1) improve the safety and 
efficiency of marine operations, (2) improve prediction of weather and 
natural hazards (including tsunamis and storm surges) to reduce 
resulting damages and costs, (3) improve predictions of climate change 
and its socio-economic consequences, (4) improve national security, (5) 
reduce public health risks, (6) help protect and restore healthy 
ecosystems, and (7) sustain and restore living marine resources.
    Aware that many elements of a national system are already in place, 
but most now operate independently, the IOOS would combine these 
elements into interconnected global and coastal components. The global 
component focusing on the physical observations associated with climate 
and weather prediction, including tsunami detection. The coastal 
component, comprising a Federal ``national backbone'' of observations 
and data management and regional coastal observing systems, addressing 
the complex physical, chemical, and ecological observations needed to 
assess and manage coastal regions.
    Further aware that the national backbone and regional associations 
must work closely with end-users--including state and local 
governments, nonprofit organizations, industry, and citizens--to 
identify and meet their needs and to build partnerships that facilitate 
the opportunity for them to participate and invest in the observing 
system.
    Affirming that implementation of the IOOS system will require a 
substantial sustained investment in research, pilot projects, and 
related infrastructure to develop new data products and system 
enhancements and incorporate new technologies into the system.
    Cognizant that the United States and the world are facing critical 
decisions about the future stewardship and management of the oceans, 
coastal waters, and fresh water resources, including the Great Lakes 
and improved data and predictions resulting from the IOOS is needed to 
support these decisions.
    Our organizations resolve that we are committed to the development 
of an ocean and coastal observing network endorse the following:
    An integrated ocean observing system should include:

        (a) A national program to fulfill national observation 
        priorities, including marine commerce and the Nation's ocean 
        contribution to the Global Earth Observation System of Systems 
        and the Global Ocean Observing System.

        (b) A network of regional coastal and ocean observing and 
        information programs that collect, measure, and disseminate 
        data and information products to meet regional and national 
        needs, managed by certified regional associations.

        (c) The designation of the National Oceanic and Atmospheric 
        Administration as the lead Federal agency for implementation 
        and administration of the system.

        (d) An Interagency Program Office within the National Oceanic 
        and Atmospheric Administration that is responsible for program 
        planning and coordination of the observing system.

        (e) Data management, communication, and modeling systems for 
        the timely integration and dissemination of data and 
        information products from the national and regional systems.

        (f) A sustained research and development program to advance 
        knowledge of coastal and ocean systems and ensure improvement 
        of operational products, including related infrastructure and 
        observing technology and large scale computing resources and 
        research to advance modeling of coastal and ocean processes.

        (g) A coordinated outreach, education, and training program 
        that integrates and augments existing programs to ensure the 
        use of data and information for improving public education and 
        awareness of the Nation's coastal and ocean environment and 
        building the technical expertise required to operate and 
        improve the observing system.

        (h) Data products and information that meets the needs of end-
        users--including state and local governments, nonprofit 
        organizations, industry, and citizens.

    Action either by Executive Branch and/or Congress to establish an 
integrated national system of ocean, coastal, and Great Lakes observing 
systems to address regional and national needs for ocean information.

    Senator Ensign. Thank you.
    Mr. Ritter?

 STATEMENT OF PHILIP J. RITTER, SENIOR VICE PRESIDENT, PUBLIC 
                   AFFAIRS, TEXAS INSTRUMENTS

    Mr. Ritter. Thank you, Chairman Ensign. I appreciate the 
opportunity to testify today.
    TI celebrated our 75th anniversary last year. And we're a 
company that has grown and thrived on innovation and 
investments in research. The competitiveness agenda is our 
highest public priority--public-policy priority. We see this 
issue of investing in basic research, along with STEM education 
and access to top graduate-level talent coming out of our 
engineering and computer science schools, as the most important 
priorities.
    If I may, I'd like to provide an example of the power of 
investment in basic research and its direct tie to economic 
development in this Nation.
    Three years ago, TI had a $3 billion decision to make as to 
where we would locate our next-generation semiconductor 
manufacturing facility. And we looked at numerous sites around 
the world, many of which offered very attractive economic 
incentives, as well as research partnerships. We decided to 
locate this facility in Richardson, Texas. And, when it's fully 
operational, it'll create over 1,000 direct jobs and have a 
tremendous impact on the regional and national economy.
    And I would be remiss if I didn't thank you, Mr. Chairman, 
for your work on the American Jobs Creation Act in 2004. We 
repatriated $1.3 billion in offshore earnings to help fund this 
facility that we're building here in the United States.
    The critical factor in the decision to build this facility 
in Richardson was really the climate for research and 
innovation. We've got about 180 very, very smart technologists 
and scientists that work in our company on advanced silicon 
process technology. And if we're going to attract those kinds 
of people to our location, we need to have, in close proximity, 
excellent research and development facilities. And the factor 
that really turned this deal for us and caused us to build this 
facility in Richardson was the commitment by the State of Texas 
to put $300 million into the Engineering School at the 
University of Texas at Dallas. And this isn't to do contract 
research for Texas Instruments; this is to invest in basic 
facilities, to acquire top faculty, and to fund graduate 
students to do long-term basic research in silicon process and 
other advanced technologies that are important to our industry. 
If they hadn't have done it, we hadn't have come here, we 
wouldn't have built this facility here, and we need the Federal 
Government to continue to fund research that these faculty 
members will be doing, and that other faculty members will be 
doing in related areas at universities around the country.
    You know, the Federal Government's role in basic research 
has always been critical. Jack Kilby invented the integrated 
circuit at TI in 1958, and it was support from NASA and the 
Department of Defense that really created the research 
environment for the semiconductor industry to grow and thrive 
in this country. Today, it's a $215 billion industry. It 
employs over 225,000 Americans. And, you know, 30-40 years ago, 
nobody ever believed the semiconductor industry would 
contribute anything to the U.S. economy.
    Kilby actually holds patents on the electronic handheld 
calculator, as well as the basic patents on semiconductors. And 
he did that to prove there would be commercial viability to 
semiconductor technology. But the Federal Government knew it 
before anybody else knew it.
    Another example of how investments in basic research 
translate directly into jobs is in technology known as 
``digital light processing,'' and I've got a DLP chip here. 
There are about 1 million individual tiltable mirrors on this 
single piece of silicon. Each one of these 1 million mirrors 
can flutter up to 5,000 times a second. And this is the core 
engine in advanced display technologies that you're seeing in 
digital cinema, digital TV, and office and conference-room 
projectors. This arose out of a basic research program in the 
Department of Defense, 25-30 years ago, to improve cockpit 
displays. And today it's a technology that employs 1,000 people 
in our operations in Dallas, Texas, who work in our DLP 
division. But it's another example of how investments in basic 
research translates directly into jobs for our country.
    The chip industry invests about 13--or about 15 percent of 
our revenue into basic research every year. TI will spend $2 
billion this year on basic research--or, excuse me, on research 
and development, but a lot of it is in the development side of 
the house. Our products have very, very short life cycles, 
sometimes mentioned in months. And many of our key business--
the high-performance analog business, for example, 50 percent 
of our product portfolio was invented less than 3 years ago.
    So, you know, we've got to invest in the short-term and 
bring products to market as quickly as we can. And that means 
we're going to have to rely, longer-term, on universities to do 
the long-term basic research that's important for the health of 
the semiconductor industry.
    This is critically important at this time in our industry's 
history, because probably in about 10 to 15 years, we're going 
to reach the end of how many circuits we can pack on a single 
piece of silicon using current manufacturing processes. So, 
we've got to get about the business of inventing the 
breakthrough innovations in advanced research on 
microelectronics and things like nanoelectronics if we're going 
to remain competitive in this global industry. And, I'll tell 
you, universities in India and China and elsewhere are making 
the investments in nanoelectronics and other areas in order to 
try to pre-empt this very, very important field in the future.
    So, what's been proposed, in terms of the NSF funding, 
funding through DARPA, funding through NIST, funding through 
the Competitiveness Initiative that the Administration's 
proposed, we view as very, very important and fundamental to 
the future competitiveness of our company and our industry.
    Thank you for the opportunity.
    [The prepared statement of Mr. Ritter follows:]

    Prepared Statement of Philip J. Ritter, Senior Vice President, 
                   Public Affairs, Texas Instruments
    Chairman Ensign, Ranking Member Kerry, members of the Committee, 
thank you for the opportunity to testify today on the importance of 
basic research to U.S. competitiveness.
    Texas Instruments is a company with a 75-year history of 
innovation. While our products have changed many times over the years, 
we have always fundamentally been a company of engineers and 
scientists. We have always looked to the future by investing in R&D. 
Based in Dallas, TI has become the world's third largest semiconductor 
company.
    American competitiveness is the highest public policy priority for 
TI. We view increased investments in basic research, along with math/
science education and access to a skilled workforce, as the three 
critical components to the future competitiveness of both our company 
and our Nation.
Research and Investment
    Let me provide an example of the power of investment in research on 
economic development. Three years ago, Texas Instruments had a $3 
billion decision to make about where to locate our new semiconductor 
manufacturing facility. We looked at sites around the world, and many 
countries offered attractive incentives.
    This year, we will complete construction on our new state-of-the-
art facility--in Richardson, Texas, a Dallas suburb. When operational, 
it will produce the most advanced semiconductors in the world, support 
over 1,000 direct jobs, and bring thousands of indirect jobs to the 
Dallas area. An economic impact study estimated the investment would 
generate $13.2 billion in expenditures, $7 billion in gross product, 
and support 82,404 permanent jobs in the Dallas/Ft. Worth area.\1\ The 
total cost of the construction is $321 million. Of that amount, 25 
percent was spent with minority-owned businesses and more than 10 
percent with women-owned businesses. This was an aggressive goal that 
we believe had never been matched in the Dallas area.
---------------------------------------------------------------------------
    \1\ The Perryman Group. Economic and Fiscal Impact of Texas 
Instruments 300mm Wafer Facility and Collateral Investment at UT 
Dallas, June 2003.
---------------------------------------------------------------------------
    The new facility has environmental and energy conservation 
innovations, with anticipated 20 percent energy reduction, 35 percent 
less water usage, and 50 percent emissions reduction. For the facility, 
TI received the 2005 Summit Award for Environmental Excellence from the 
Leadership in Energy and Environmental Design program of the U.S. Green 
Building Council.
    Research was the critical decision factor for making our investment 
in Richardson. First, access to our R&D staff based in the Dallas area 
drives better time-to-market. Second was a commitment by the state to 
invest $300 million at the University of Texas at Dallas, to further 
develop research and engineering capacity and improve the innovation 
ecosystem of North Texas. The investment at UTD will enhance basic 
research capabilities in close proximity to several TI manufacturing 
facilities.
    Co-locating research with manufacturing is critical in the 
semiconductor industry, as it creates an infrastructure that allows 
discoveries to go from ``lab to fab'' efficiently. Corporate R&D 
projects are frequently done in the same facility as volume 
manufacturing, to ensure smooth transition to the new technology with 
maximum yield. Often, new tools introduced in the R&D process become 
part of full-scale manufacturing.
    TI invests $2 billion annually, or 15 percent of revenue in R&D. 
Most of this spending is on the nearer-term ``development'' phase to 
ensure introduction of new products in an industry with short product 
cycles. In our high-performance analog division alone, we introduced 
400 new products in 2004, and 50 percent of that division's revenue was 
from products introduced within the past few years.
    Leading-edge semiconductor companies are on a two-year cycle in 
reaching the next ``technology node,'' which is characterized by 
smaller and smaller critical dimensions of the components on a chip. 
For example, the minimum dimensions of individual transistors \2\ are 
currently less than 50 nanometers.\3\ This is an outstanding example of 
nanotechnology in volume production today.
---------------------------------------------------------------------------
    \2\ A transistor is a component device that opens or closes a 
circuit.
    \3\ A nanometer is one-billionth of a meter. A human hair is 
roughly 50,000 nanometers wide.
---------------------------------------------------------------------------
Basic Research Critical to Semiconductor Industry
    In 1958, when Jack Kilby invented the integrated circuit at TI, 
many were skeptical about his discovery. NASA and the Defense 
Department were among his first supporters in the late 1950s, and 
Federal support was critical to developing the manufacturing 
technologies in the mid 1960s and 1970s. Today, the worldwide 
semiconductor industry posts annual sales of $213 billion, with U.S. 
companies capturing about half of the market. The semiconductor 
industry employs a workforce of 225,000 in the U.S. Semiconductors have 
revolutionized the way we live, with computers, cell phones, broadband, 
television, medical imaging, and global positioning systems.
    Another more recent example is Texas Instruments' Digital Light 
Processing (DLP) technology. DLP is used in televisions, business 
projectors, and cinemas. The digital mirror device technology that 
underlies DLP was originally developed as part of the High-Definition 
Display Systems program at DARPA. Initial research started in the late 
1970s as part of an effort to improve aircraft cockpit displays. DLP 
technology now employs over 1,000 TI'ers in Dallas.
    Overall, the U.S. chip industry invests 15 percent of revenue in 
R&D, one of the highest of any industry. However, given short product 
cycles, most funds are for relatively near-term development activity. 
For the majority of longer-term basic research, TI and other companies 
in the industry depend upon activities at universities and Federal 
labs.
    The Federal Government is uniquely positioned to fund basic 
research. It historically has been a primary source of basic research 
funds for universities. The Federal Government plays an important role 
in supporting higher-risk, exploratory research where the economic 
benefits may not be realized for decades.
    Yet, Federal investment in basic research has not kept pace in key 
areas such as engineering and physical sciences, whether for 
semiconductor related research or other areas of inquiry. It has been 
essentially flat for three decades. As a percentage of GDP, it has 
declined.


    While investment in the life sciences has grown exponentially, 
Federal resources in the physical sciences, engineering, math, and 
computer science have been stagnant. These neglected areas must be 
revitalized, at least at the levels proposed in the Administration's 
American Competitiveness Initiative.


    There has also been a portfolio shift toward development 
activities, often at the expense of basic research. At the Department 
of Defense, basic research as a percentage of the total science and 
technology portfolio declined steadily from 1994 to 2004, to 11 
percent.\4\
---------------------------------------------------------------------------
    \4\ American Association for the Advancement of Science. Trends in 
DOD S&T, February 2005.
---------------------------------------------------------------------------
    For the past forty years the chip industry has been delivering on 
Moore's Law, which states that every eighteen to twenty-four months the 
component content of a semiconductor chip will double. This means 
faster, more powerful and less expensive semiconductors. The Bureau of 
Economic Affairs estimated that Federal, state, and local governments 
saved a cumulative $181 billion in computing price declines from 1995-
2004.\5\
---------------------------------------------------------------------------
    \5\ Bureau of Economic Affairs www.bea.gov/bea/dn/comp-gdp.xls.
---------------------------------------------------------------------------
    But, to continue to deliver on Moore's Law, significant research 
hurdles must be overcome. The chip industry has mapped out the 
technical challenges it faces and the research needed to adhere to 
Moore's Law. Each year, the industry brings together 1,000 technical 
experts and updates the International Technology Roadmap for 
Semiconductors (ITRS). The ITRS identifies several hundred technical 
challenge areas that collectively comprise a ``red brick wall''--in 
other words, problems for which there is no known manufacturable 
solution.
    Collaborative research with outcomes expected in three to 8 years 
requires industry to pool its resources and partner with government. 
Longer -term research--8-15 years out--involves government-sponsored 
university research through the National Science Foundation, the 
Department of Defense, the National Institute for Standards and 
Technology and others to undertake the most fundamental research that 
will result in completely new technologies in the coming decades.
    Industry experts agree that a replacement technology for the 
current 30-year old semiconductor process,\6\ which is reaching its 
physical limits, needs to be discovered and manufactured by 2020, to 
continue the historical trends of performance enhancements, size 
reductions, power conservation, and cost savings. Seminal research 
papers usually appear 12-15 years before commercialization, in other 
words within the next few years.
---------------------------------------------------------------------------
    \6\ Complementary Metal Oxide Semiconductor (CMOS).
---------------------------------------------------------------------------
Key Agency Partnerships: Defense, NSF, NIST
    The Department of Defense has historically been a funder of basic 
research in the physical sciences. However, in constant dollar terms, 
the level of basic research (6.1 account) at DOD was the same in 2004 
as it was in 1984.\7\
---------------------------------------------------------------------------
    \7\ American Association for Advancement of Science. Trends in 
Basic Research, March 2005.
---------------------------------------------------------------------------
    The Focus Center Research Program is a partnership between the 
Defense Department and the semiconductor industry to fund university 
research at 33 institutions nationwide. All funding goes directly to 
universities, and funds research centered on the key technical 
challenges to extending the life of the current chip-making process and 
transition to the next technology. Federal funds are leveraged through 
an industry match, which is very rare for a basic research program. 
This is an excellent example of the type of activity the Defense 
Department can support with the basic research account. DARPA has been 
a great supporter of the program, providing both funding and expertise. 
Yet unfortunately, the Defense Research and Engineering request for the 
program has been at zero the past few years, requiring Congressional 
additions for the program to be fully funded.
    The National Science Foundation is also critical to funding basic 
university research in the physical sciences and engineering. The 
Nanoelectronics Research Initiative (NRI) is a cooperative effort co-
funded by NSF and the semiconductor industry to support university 
research to find the next generation of semiconductor technology by 
2020.
    Other countries are investing heavily in the nanoelectronics 
research area and could surpass U.S. discoveries in this area. If the 
U.S. does not discover and capture the new technology first, the U.S. 
semiconductor industry will be at a global competitive disadvantage. 
The NRI partnership will be key to this effort, and is an excellent 
example of how industry and the NSF can work together.
    The National Institute for Standards and Technology (NIST) has 
ongoing activities relevant to the industry in semiconductor/
electronics metrology (measurement), nanomanufacturing, and quantum 
information science.
Research and Workforce
    Finally, basic research is important in terms of developing a 
workforce skilled in science and engineering. Many of the funds provide 
stipends for graduate students to conduct research in these fields, 
both during the course of their education as well as post-doctoral 
opportunities. It has been well-documented that students follow the 
money. Basic research in this capacity contributes to building the 
pipeline of students with advanced degrees in science, technology, 
engineering, and math fields. In turn, this builds a skilled U.S. 
workforce for our businesses.
    Foreign nationals represent a large percentage of graduates from 
U.S. universities in science and engineering fields. In 2005, 55 
percent of the Masters and 67 percent of the Ph.D. graduates in 
electrical engineering from U.S. universities were foreign nationals. 
Electrical engineers are in high demand, with an unemployment rate of 
only 1.7 percent. Unfortunately, current policies and long wait times 
for permanent resident status are a disincentive for these degree 
holders to stay in the U.S. and contribute to our economy. Most of 
these graduates have participated in important basic research at 
universities. Companies like Texas Instruments need to be able to 
access all talent graduating from U.S. universities, regardless of 
nationality. Employing these individuals in the U.S. private-sector 
also assists the Nation in capturing returns on basic research 
investment.
Role of States
    State governments are also critical in supporting public research 
universities from a budget perspective. In addition, states play an 
important role in facilitating commercialization from universities to 
industry. For example, Texas created a $200 million Emerging Technology 
Fund. The fund has three goals: invest in public-private endeavors 
around emerging scientific or technology fields tied to 
competitiveness; match Federal and other sponsored investment in 
science; and attract and enhance research superiority in Texas. Several 
other states have similar mechanisms.
    Last year, the President's Council of Advisors on Science and 
Technology issued a five-year assessment report on the National 
Nanotechnology Initiative. One of the recommendations was to increase 
Federal cooperation with the states, especially by leveraging state 
research investments. Further, the report recognized the important role 
of states in commercializing nanotechnology research results.
Conclusion
    The American Competitiveness Initiative and 2007 budget requests on 
NSF, NIST, and DOE Office of Science will be critical to reversing the 
flat to downward trend in basic research in the physical sciences and 
engineering. The FY 2007 incremental increase is $1.05 billion, which 
in the context of the overall Federal budget is relatively small. These 
increase requests are an investment in our country's future economic 
competitiveness, and should not be viewed as spending.
    The technical challenges faced in the semiconductor industry 
provide just one example of the importance of basic research. The 
programs outlined in this testimony illustrate how the industry, 
Federal Government, and the states can work together to find research-
based solutions that enhance our Nation's competitiveness.
    Finally, the role of university research in TI's decision on where 
to build its new facility demonstrates how investment in research can 
be a powerful economic development tool.
    Thank you for the opportunity to testify today. TI appreciates the 
Committee's interest in basic research and its role in U.S. economic 
growth. We look forward to continuing to work closely with you on the 
broader competitiveness agenda.

    Senator Ensign. Thank you.
    Dr. Drobot? You can just pull that microphone to you.

        STATEMENT OF DR. ADAM DROBOT, CHIEF TECHNOLOGY 
   OFFICER, TELCORDIA TECHNOLOGIES, INCORPORATED; CHAIRMAN, 
               COMMUNICATIONS RESEARCH DIVISION, 
            TELECOMMUNICATIONS INDUSTRY ASSOCIATION

    Dr. Drobot. Thank you, Chairman Ensign and members of the 
Committee. I am appearing today as the Chief Technology Officer 
of Telcordia, and also as the Chairman of the 
Telecommunications Research Division. And we are very grateful 
for the opportunity to appear before you today, and such a 
distinguished panel of witnesses, to discuss the importance of 
basic research to United States competitiveness.
    If you look at the industry that I'm representing today, 
it's roughly 3 .5 percent of our GDP. It plays a fundamental 
role that really touches all other industries. It impacts the 
productiveness of our economy in very fundamental ways. And 
it's really the underpinning of law enforcement, emergency 
response, and a lot of things that go on in the Department of 
Defense.
    One of the things that I'd like to convey is the fact that, 
as a scientist, we learned something called the Law of 
Continuity, ``You don't put something in the hopper on the 
front end, nothing comes out the back.'' When it comes to 
technology, it's basic research, followed by transitional 
activity, followed by development. Having that healthy front 
end of basic research is what makes the goods come out the 
other end of the pipe.
    And when we look at what has happened over the last two 
decades in our own industry, the technologies in communications 
and services have not only benefited the United States, they've 
really led to rising standards of living around the world.
    If we were to take a look at the critical elements of our 
infrastructure, telecommunications is a fundamental backbone, 
and the flow of new ideas from basic research to transitional 
activity to the development of the key next-generation services 
really requires that investment be made in the front end.
    We believe that the advances that can be expected in the 
future can be summarized very simply by, ``You ain't seen 
nothing yet.'' OK? If you look at the last 25 years, the 
explosive growth of the Internet, the use of computers in 
business, driving commerce around the world, the convenience of 
mobile cell phones, information services, how they impact how 
we spend our time, interact with our fellow citizens, you know, 
all of those things have been impacted by the way 
communications has gone over the last two decades.
    The same is true of our national defense posture. If you 
look at the roadmap for that, as captured in Vision 2020, 
situational awareness, precision strike, dominant maneuver, 
focused logistics, all of those rely fundamentally on advances 
in communications.
    It is vital, as a consequence, for the United States to 
maintain leadership in these areas and to be competitive in the 
future of this critical industry. And to steal the words from 
Vannevar Bush, ``For the health, general welfare, and defense 
of our population.'' I think those wise words, said in the 
1940s, apply as much today as they did back then.
    Please let me turn to the situation as we see it today. 
Federal spending in our field, in communications research, as a 
percentage of the total spent on information technology has, in 
fact, gone down over the last 5 years. This is in the face of 
significant growing public investment in other geographies. If 
you were to look at examples in Europe, from the Framework 
Programmes, the national programs with the tiger economies in 
the Far East, China, these programs are accompanied by 
coordinated transitional activities where, in native markets, 
technologies are first deployed, with an aim to, in fact, 
dominate world exports in those technologies to other 
geographies.
    If I were to look at specific examples, there is a new 
standard called WiMax. The first deployment of that on a 
national scale will be done in Korea by an initiative called 
WiBro. It's mobile services at 10 megabits per second, 
developed--delivered to a handheld device.
    If I were to take a look at third-generation systems, the 
Internet protocol multimedia subsystems for all IP-based 
communications, those are first going to be developed and 
deployed in other geographies. While the United States is the 
single largest market for communications, and has a very robust 
economy, we now rank 16th in the penetration of high-speed 
networks.
    If I were to go down through this litany, I think the 
future investments through the Innovation Act, through the 
President's proposal, are really critical, and the investments 
to be made in basic energy--in, I would say, basic research are 
really the cornerstone of what ought to be done in the future.
    Let me quickly, sort of, jump to the end of my 
presentation. What we have done is attach a white paper to this 
testimony. The Research Division at TIA, that I represent, has 
membership from 40 CTOs of U.S. corporations. And what we have 
done is prioritized, I think, the agencies we believe ought to 
be the recipients of those funds. They are NIST, DOE, and the 
6-month programs in the Defense Department. We have also 
prioritized the directions those investments should go in: 
security, broadband, the use of nanotechnology for 
telecommunications.
    And if I could share with you a couple of examples, we 
believe that if those investments are made, there will be 
future devices that are just as exciting as what's happened the 
last quarter century, integrated devices that you can hold in 
your hand that do everything from communications, projection, 
viewing information, greater connectiveness--and all of those 
at incredible speeds. We hope the kind of investments that are 
made in interfaces, are simple enough that all citizens can 
easily use them.
    Same is true, if I were to take a look at the amount of 
time we spend in automobiles and on the roads, reduction in the 
number of traffic accidents and deaths by a factor of two over 
the next decade or so--again, enabled by fundamental changes in 
the communication industry.
    Growing problems in healthcare with an aging population. 
Again, communications can play an incredible role in that. The 
same is true of new economic systems.
    What we hope is that the investments that are made here, 
will create the critical mass of citizens, of businessmen, and 
scientists who are familiar with technologies and can make the 
breakthroughs. We hope that those do not happen first in other 
geographies.
    So, I'd like to thank you for the opportunity to appear 
before you today, and we hope that the critical needs of this 
industry, and, really, of all basic research in the United 
States, are met.
    Thank you.
    [The prepared statement of Dr. Drobot follows:]

   Prepared Statement of Dr. Adam Drobot, Chief Technology Officer, 
     Telcordia Technologies Incorporated; Chairman, Communications 
       Research Division, Telecommunications Industry Association
    Thank you, Mr. Chairman, Ranking Member Kerry and members of the 
Committee. I am appearing today as the Chief Technology Officer of 
Telcordia Technologies Incorporated and as the Chairman of the 
Telecommunications Industry Association's Communications Research 
Division. Telcordia is grateful for the opportunity to appear before 
you today among such a distinguished panel of witnesses to discuss the 
importance of basic research to the United States' competitiveness.
    Telecommunications, as an industry, represents about 3.5 percent of 
our Gross Domestic Product and plays a fundamental role that touches 
all other industries, impacts the productivity of our industries and 
our economy, and pivotally effects emergency response, law enforcement 
and national defense. Prior investments in basic and transitional 
research, and aggressive development of new communication technologies 
and services, have benefited the United States through significant 
gains in productivity and contributed to raising standards of living 
around the world. Today, communications represent a critical element of 
our infrastructure and form the backbone on which all industries and 
government depend. No industry could function effectively today without 
communications. The flow of new ideas from basic research to 
transitional activity to development is the key to continuing the 
creation of the next generation of communication technologies and 
services.
    The advances we can expect are as profound and far-reaching as what 
we have experienced over the last quarter century--the explosive growth 
of the Internet, computers connected by high-speed networks driving 
commerce around the world, the convenience of wireless mobility, and 
information services which are changing everything from how we spend 
our time to how we interact with our fellow citizens. The same is true 
of our national defense posture, where the four elements of Vision 
2020, situational awareness, precision strike, dominant maneuver, and 
focused logistics, rely on advanced communications and networks. It is 
vital for the United States to maintain the leadership and future 
competitiveness in this critical industry--for the health, general 
welfare and defense of our population.
    Please let me turn to the situation today. The Federal spending on 
communications-focused basic research, as a percentage of total Federal 
information technology research and development in the United States, 
is declining--down 5 percentage points in the last 6 years. This is in 
the face of significant growing public investments in other 
geographies. Examples are: the Framework Programmes in the European 
Union; national programs in Korea, Taiwan, Hong Kong, Singapore and 
Japan conducted through national laboratories and economic development 
authorities; and growing investments in China targeted at all aspects 
of communications. These programs are further accompanied by 
coordinated transitional activities which forge academic, national 
laboratory, and local industry partnerships aimed at native deployment 
and eventual domination in international markets. An example would be 
the deployment of ``WiBro'' in Korea--this is high-speed Internet 
connectivity at speeds greater than 10 megabits per second for 
ubiquitous fixed and mobile wireless services based on the WIMax 
standards. A by-product of the early stage investment in innovation 
that these geographies have made is the deployment of next-generation 
systems significantly ahead of the United States. These systems enable 
third generation (3G) and Internet protocol multi-media sub-system 
(IMS) services.
    While the United States is still the single largest market for 
communications and has the most robust economy, we now rank 16th in the 
penetration of high-speed broadband, and we have not commercially 
brought 3G or IMS services to the consumer. As a consequence, it is 
more than likely that the next wave of services and technologies will 
be developed where test beds and deployment of infrastructure will 
support experimentation of new concepts and ideas and where the human 
capital is concentrated--locations where business executives, 
scientists and engineers are familiar with the technology. The 
experience from my own corporation confirms this. Telcordia, which 
traces its heritage to ``Bell Labs'' and which participated in the 
invention of much of modern communications, is the largest seller of 
operations support systems to the telecommunications industry. To 
maintain our edge, we are finding it a necessity to rely on growth in 
foreign markets and are facing increasing foreign competition, which is 
advantaged by public spending in the local markets and long-range 
government funding.
    Speaking as the Chairman of the Telecommunications Industry 
Association's Communication Research Division, our Division--made up of 
Chief Technology Officers and heads of research from 40 companies--is 
advocating that Federal funding for communications-specific, pre-
competitive, basic research be increased beyond the 0.07 percent \1\ of 
total Federal R&D that we have identified as targeted at communications 
in the current budget. The members of our Division believe that 
research is the foundation of the communications industry and the 
building block for future products and services. As an industry, we are 
not looking for a hand-out. To the contrary, we are asking that the 
Federal Government invest more of its research dollars in this critical 
area. This will benefit companies, universities and national 
laboratories in the long-run, and it will make our Nation stronger--
economically and technologically. We are encouraged by the President's 
American Competitiveness Initiative and support the doubling of budgets 
in the National Science Foundation (NSF), National Institute of 
Standards and Technology (NIST), and the Department of Energy's (DOE) 
Office of Science. We would like to convey to you that developing 
leading-edge communications applications is complex, requiring, time, 
money, and long-term vision. Fierce competition and financial realities 
have made it difficult for U.S. industry to self-fund long-term, basic 
research, and because the U.S. Government is not devoting sufficient 
resources on long-term communications research, the U.S. position in 
this vital area is waning.
---------------------------------------------------------------------------
    \1\ $100 million out of a $137.2 billion Federal research and 
development budget for FY 2007.
---------------------------------------------------------------------------
    We include a copy of a white paper from the TIA Communications 
Research Division as part of the testimony. In it, we recommend that 
increased funding focused on communications basic research in NSF, 
NIST, and the Department of Defense (DOD) 6.1 will greatly benefit the 
Nation. We further recommend investing additional money in: Universal 
Broadband; Network Security; Interoperable Mobility; Telecommunications 
Research for Homeland Security; Networking Architectures; and 
Communications-Specific Nanotechnologies as priority areas.
    I would like share some examples where the investments that we 
propose could impact the citizens of our great country:

   In everyday life--devices with much simpler interfaces, but 
        at the same time, much more functionality with greater adoption 
        in our society--Imagine a single device the size of your cell 
        phone today, which is your PC, your camera, a projector, shows 
        HDTV, plays music, is a portal to the internet--without a 
        button in sight?

   Reduction in traffic accidents and deaths--sensors on a car 
        that could alert you to hazardous conditions, such as black 
        ice, another vehicle in your blind spot when you are about to 
        change lanes, a deer in the roadway, a washout in the highway, 
        and the communications system that can convey warnings about 
        such hazards to traffic behind you.

   Healthcare for the elderly--a handheld device that your 
        grandmother has, which could diagnose and warn about medical 
        problems, call for a nurse or a doctor's intervention, or 
        improve quality of life by fostering the ties with a grandchild 
        three time zones away through effortless, high-quality 
        communications.

   New commercial systems--a slim and light portable device to 
        securely purchase, receive, redeem, and store concert tickets, 
        airline boarding passes, subway tickets, and conduct financial 
        transactions from anywhere--without printing a thing?

    I would like to close by saying that U.S. industry is unable to 
fully self-fund the research necessary to discover and exploit long-
term, ground-breaking advances so critical to the health and 
competitiveness of the Nation. The history of the telecommunications 
industry has left us with weak public mechanisms for funding pre-
competitive research in communications, paradoxically, because so much 
of the research was initially done in a dominant institution--``Bell 
Labs.'' While that institution left an incredible legacy of successful 
inventions which has paid off well for our Nation--the mechanisms of 
funding on which it depended no longer exists. New partnerships between 
industry, government and universities are needed to meet tomorrow's 
challenges and to maintain the competitive position of the United 
States in the communications industry.
    Thank you once again for the opportunity to appear before you 
today.
                                 ______
                                 
 Investing in Communications for Tomorrow's Innovations: The Case for 
               Increased Communications Research Funding
Background
    Research is the backbone of the communications industry, a critical 
national resource. It is the building block for the future development 
of advanced telecommunications products and services. In recent years, 
the need for federally-funded communications research has dramatically 
increased. As a result of the communications market crash of 2000, 
intense market competition and a focus on low price points keeping 
profit margins at a minimum, companies remain focused on survival. This 
has translated into an era of deep cost-cutting and lean workforces, as 
well as a focus on product development and incremental research, rather 
than innovating for the future and seeding technology development. 
While the United States has been and continues to be regarded as a 
leader internationally in technology research, the innovation of recent 
years cannot be taken for granted.
Why Federally-Funded Communications Research Is Necessary
    The nature of communications industry investment is long-term, 
capital-intensive and generally, non-cyclical. At the same time, the 
process of conducting communications research is extremely complex--
involving time, money and foresight that must be sustained for a decade 
or more to yield the full fruits of investment. \1\ Because of the 
tremendous infrastructure requirements associated with the deployment 
of communications networks, a great deal of time, money and vision is 
needed to advance challenging, high-risk, enabling technologies that 
could provide broad-based economic and societal benefits for the U.S. 
\2\ This is precisely why, with constantly diminishing corporate 
research funds available, the Federal Government's budget for research 
has become an increasingly important source of funding for U.S. 
communications research.
---------------------------------------------------------------------------
    \1\ See PITAC presentation at http://www.itrd.gov/pitac/meetings/
2004/20041104/compsci.pdf.
    \2\ ATP Document on Investments in Telecom and Related Technology 
Fields, 2003.
---------------------------------------------------------------------------
    Advances in communications dramatically transform the way in which 
people live, work, learn, communicate and conduct business, and long-
term research is essential to ensure that these transformations serve 
human needs, are productive for society and sustainable over the long-
term. Moreover, long-term communications research has significant 
positive effects, in terms of technical and economic spillovers. 
Research is a key factor in enhancing innovative performance and 
productivity, as well as long-term economic growth. This is because 
communications is a supporting sector for the economy as a whole, 
affecting many specific industry sectors, such as distribution, retail, 
agriculture, financial services and machine building, among others. In 
fact, all sectors depend on and derive benefits from communications 
research. This is precisely why the Federal Government should be 
concerned about the poor state of funding for communications research 
and should more actively support the sector.
    Research in this area is the principal source of fundamental 
advances in the digital technologies powering vital national defense, 
national security and homeland security capabilities. A strong, well-
funded communications research program benefits innovation in vital 
infrastructure protection measures, such as increased information 
security, reliability and survivability of networks, as well as 
facilitates development of the technologies and tools used to detect 
and prevent terrorist attacks. \3\
---------------------------------------------------------------------------
    \3\ See Networking and Information Technology Research and 
Development FY 2004 report.
---------------------------------------------------------------------------
Current State of Federal Communications Basic Research Funding in the 
        U.S.
    For years, when compared with other industries, communications 
basic research has not been well supported in the U.S. Government's 
Federal budget. In Fiscal Year 2007, the Federal Government budgeted a 
little more than $3 billion \4\ across relevant agencies for networking 
and information technology research and development (NITRD). This is a 
minute fraction--about 2 percent--of the $137.2 billion \5\ in total 
research and development funding requested for this fiscal year.
---------------------------------------------------------------------------
    \4\ See http://www.nitrd.gov/pubs/2007supplement/
07%20Supp%20Sections/07Supp_FINAL-AgencyNITRDBudgets.pdf.
    \5\ See http://www.ostp.gov/html/budget/2007/2007FactSheet.pdf.
---------------------------------------------------------------------------
    To further illustrate the lack of Federal focus on communications 
basic research, the total amount of Federal funding budgeted for large 
scale networking (LSN) research--the part of NITRD that includes 
communications and high-performance networking research and development 
in leading-edge technologies and services--totaled about $400 million 
\6\ in Fiscal Years 2006 and 2007, or about 0.3 percent of the Federal 
Government's total research and development budget. Given the fact that 
LSN includes more than just communications-focused basic research, and 
this figure includes both research AND development spending, as well as 
spending on infrastructure and applications, only a fraction of this 
number is actually spent on communications basic research, likely no 
more than $100 million.
---------------------------------------------------------------------------
    \6\ For the first time, the NITRD LSN budget for FY 2006 and FY 
2007 includes research statistics from the OSD budget. The OSD budget 
includes funding from the DOD Service research organizations (Air 
Force, Army and Navy), as well as DOD's High Performance Computing 
Modernization Program Office. Once this line item is subtracted, the 
total amount of funding allocated for the LSN Program Area in FY 2006 
is $252.1 million, and FY 2007 is $273.8 million. No similar statistics 
are publicly available pre-FY 2006, and the addition of these 
statistics into Federal reporting charts makes year-on-year comparisons 
nearly impossible to make.
---------------------------------------------------------------------------
    Moreover, between Fiscal Years 2002 and 2007, the percentage of 
U.S. Government research funding allocated to the large-scale 
networking program area declined by 5 percentage points, from 18 
percent to 13 percent (see the chart \7\ below). All of these 
statistics suggest that the Federal Government views communications-
sector basic research with decreasing importance to the economy and 
security of the United States, this despite the fact that 
communications is a critical infrastructure and it is the backbone for 
all information technologies. Communications are an indispensable part 
of every other industry, from automobile manufacturing to healthcare to 
financial services and more. No industry today could survive without 
communications technologies and services.
---------------------------------------------------------------------------
    \7\ See http://www.nitrd.gov/pubs/2007supplement/
07%20Supp%20Sections/07Supp_FINAL-AgencyNITRDBudgets.pdf.
---------------------------------------------------------------------------
    The following chart depicts LSN as a percentage of the total NITRD 
budget during the past six Fiscal Years.


U.S. Communications Research Falling Behind Other Countries
    Communications is a highly competitive, global industry. With 
relatively little Federal and industry money going toward long-term, 
high-risk communications research, the leadership position of the 
United States in this vital area is waning, threatening our country 
with potential innovation declines. Decreasing emphasis domestically, 
both in terms of political support and dollars, on the importance of 
funding research in this field is strengthening the growth of research 
funding and related institutions overseas, as other countries seize an 
opportunity to outpace the U.S. in this important, strategic field, and 
companies find high-level support from other governments. This creates 
an incentive for companies to move research facilities to other 
countries where funding and support exist.
    For example, Europe is in a competitive race with the U.S. and Asia 
for a leadership position in technology, especially technology that 
will impact global markets. In the European Union's (EU) 6th Framework 
Programme,\8\ 3.98 billion euros of funding has been prioritized for 
information society technologies (IST) research, making it the main 
source of EU funding for IST research projects.\9\ This is part of the 
EU's overall goal to increase research and development expenditures to 
3 percent of GDP by 2010, and this also makes IST research the largest 
funding priority in the entire EU research program. According to the 
European Commission, ``Europe can lead the world if it can develop a 
common vision embracing researchers, industrialists, governments and 
societies across Europe.'' \10\
---------------------------------------------------------------------------
    \8\ 2002-2006.
    \9\ See http://europa.eu.int/information_society/research/
index_en.htm.
    \10\ See http://europa.eu.int/information_society/research/
index_en.htm.
---------------------------------------------------------------------------
    The EU also is currently developing its 7th Framework Programme 
(FP7).\11\ Entitled ``ManuFUTURE Vision for 2020,'' the EU's new 
Framework focuses on innovation in underlying technologies that will 
enable more efficient manufacturing. FP7 aims to move the EU from an 
economy of quantity to one of quality by using digital methods to 
integrate new technologies into the design and operation of 
manufacturing processes. The EU's goal is to optimize resources and 
transfer them to all areas where they can be employed, thereby 
remaining competitive in a global marketplace. Funding for IST research 
in the 7th Framework Programme has increased more than three-fold over 
the 6th Framework Programme, to 12.7 billion euros.\12\
---------------------------------------------------------------------------
    \11\ See http://europa.eu.int/comm/research/future/index_en.cfm.
    \12\ See http://www.cordis.lu/fp7/breakdown.htm.
---------------------------------------------------------------------------
    China has developed a five-year plan for the 2001-2005 period, 
which purports that the communications industry will be the leading 
industry among all other industries in its national economy, and the 
country announced plans to shift resources toward achieving this 
goal.\13\ In fact, between 1996-2002, China's science and technology 
research and development funding, as a share of GDP, doubled from 0.6 
percent to 1.2 percent.\14\ According to the OECD, its total R&D 
investments lag only those of Japan and the United States in absolute 
terms.
---------------------------------------------------------------------------
    \13\ See summary of China's tenth five-year plan.
    \14\ OECD Science, Technology and Industry Outlook, 2004, p.18.
---------------------------------------------------------------------------
    The United Kingdom (UK) has set a target to increase its share of 
publicly-funded science and technology research and development from 
1.9 percent to 2.5 percent of GDP by 2014. The country's Science and 
Innovation Investment Framework \15\ proposes that the public science 
budget increase 5.8 percent annually, in real terms, from 2004-2005 and 
2007-2008.\16\
---------------------------------------------------------------------------
    \15\ See http://www.hmtreasury.gov.uk/spending_review/spend_sr04/
associated_documents/spending_sr04_science.cfm.
    \16\ OECD Science, Technology and Industry Outlook, 2004, p.56.
---------------------------------------------------------------------------
    In December of 2005, the Academy of Finland and the National 
Technology Agency Tekes launched a new research funding program. This 
program aims to strengthen science and technology research by 
attracting top foreign personnel to conduct research for a fixed time-
period in Finland. Researchers will focus on basic research, science 
and researcher training.\17\ Tekes, the main Finnish research funding 
body, allocated 409 million euros to research programs in 2004, with 
122 million Euros going to information and communication technology 
research.\18\
---------------------------------------------------------------------------
    \17\ See http://www.tekes.fi/eng/news/uutis_tiedot.asp?id=4593.
    \18\ See http://www.tekes.fi/eng/tekes/rd/statistic04.html.
---------------------------------------------------------------------------
    Japan raised the total amount of government research and 
development spending by nearly 24 trillion yen (about $233 million) 
between FY 2001 and FY 2005. And, the Korean government set a target to 
double national research and development spending between 2001 and 
2007. \19\
---------------------------------------------------------------------------
    \19\ OECD Science, Technology and Industry Outlook, 2004, p.57.
---------------------------------------------------------------------------
    An increasing number of OECD governments are offering special 
fiscal incentives to businesses to increase spending on research and 
development, largely because R&D and innovation are considered keys to 
productivity and growth performance. For example, the countries of 
Japan, Korea, Portugal and Spain all offer greater tax incentives than 
the U.S., at rates of 45-50 percent, on incremental increases in 
science and technology research and development investment. \20\ 
Additionally, unlike in the U.S., many countries--including Australia, 
Austria, Belgium, Denmark, Hungary, and the UK--offer generous tax 
allowances of greater than 100 percent for research and technology 
development.
---------------------------------------------------------------------------
    \20\ OECD Science, Technology and Industry Outlook, 2004, p.66.
---------------------------------------------------------------------------
    These are just a few examples of how other countries are investing 
the time, money and intellectual capital to create attractive 
environments for science and technology research. The United States 
cannot afford to ignore the fact that U.S. industry needs Federal 
Government support in order to remain competitive for the long-term.
TIA's Solution
    With this background, TIA's Communications Research Division has 
identified four mechanisms to address the funding problem and six 
technical areas where we would like to see Federal funding for 
communications research directed. Further information about these items 
is attached. In addition, we believe policymakers should reflect on 
these issues as discussion occurs regarding a rewrite of the 1996 
Telecommunications Act.
                                 ______
                                 
    TIA Priority Areas for Federally-Funded Communications Research
Mechanisms To Address the Funding Problem
    1. Prioritize communications research funding within Department of 
Defense (DOD) 6.1 Basic Research Programs.

         a. In the 1990s, the Department of Defense and the Defense 
        Advanced Research Projects Agency (DARPA) began to rely heavily 
        on dual-use and industry research funding. Thus, DOD funding 
        became unavailable for technologies that were commercially 
        available. As a result, DOD restricted its research funding to 
        military-unique needs, which at the time was acceptable because 
        private-sector-led research was driving high-end research.

         b. With the communications downturn, however, the commercial 
        sector has ceased to be the major driver of high-end, long-term 
        research. As a result, DOD--and DARPA--need to increase their 
        focus on and investment in dual-use technologies.

    2. Prioritize communications research funding within the National 
Institute of Standards and Technology (NIST).

         a. Miniaturization of electronic components in communications 
        devices continues, resulting in faster, more powerful and more 
        reliable products. Yet, the continued shrinking of component 
        parts, at the nanoscale, is hindered by metrology and 
        manufacturing challenges. NIST programs address some of these 
        key issues and should be adequately funded.

         b. Additionally, we support the continuation of the National 
        Information Assurance Partnership (NIAP), a collaboration 
        between NIST and the National Security Agency. The long-term 
        goal of NIAP is to help increase the level of trust consumers 
        have in their information systems and networks through the use 
        of cost-effective security testing, evaluation, and validation 
        programs.

    3. Prioritize communications research funding within National 
Science Foundation (NSF) Research programs.

         a. Federal funding for physical sciences research, the 
        foundation of our Nation's economic competitiveness, has 
        dramatically decreased. Technological advances driving the 
        economy require the reversal of this trend.

         b. The National Science Foundation Authorization Act of 2002 
        called for doubling the NSF budget over 6 years; fulfillment of 
        that goal is lagging.

         c. In conjunction with increasing NSF's budget, we advocate 
        for the creation of an NSF Communications Technology Research 
        (CTR) program, similar to the Information Technology Research 
        (ITR) program that recently concluded. Such a program would 
        greatly benefit the communications sector by creating 
        opportunities at the frontiers of communications research and 
        education.

    4. Establish a National Technology Council, whose charter would be 
to define and guide strategic areas in communications that require 
further research critical to the future growth of the U.S. economy. 
Such a Council should include representation from different sectors, 
such as government, academia and industry.

         a. To utilize scarce financial resources effectively, 
        representatives from government, academia and industry should 
        be sought to establish long-term priorities. Additional 
        research would help identify the technologies likely to be most 
        relevant to U.S. economic growth and competitiveness.

         b. This Council should be modeled after the European Union's 
        6th Framework Programme initiative, wherein the Council 
        receives proposals from industry consortia regarding specific 
        areas of focused research and development and has available 
        substantial funding from the government to help fund those 
        proposals.

         c. This Council should also borrow from the United States 
        Alliance for Technology and Engineering for Automotive 
        Manufacturing (U.S. A-TEAM), a partnership created between the 
        U.S. Department of Commerce's Technology Administration (TA) 
        [consisting of the Office of Technology Policy (OTP), the 
        National Institute of Standards and Technology (NIST), and the 
        National Technical Information Service (NTIS)] and the United 
        States Council for Automotive Research (USCAR). U.S. A-TEAM 
        brings together engineers from the government and industry 
        bodies that are parties to the agreement to facilitate 
        technological research and technology policy analysis focused 
        on improving the manufacturing competitiveness of the U.S. 
        automotive industry.

         d. The Council, in cooperation with industry, would determine 
        the priority of the specific research initiatives of national 
        concern.

Technical Areas Where Research Is Needed
    1. Universal Broadband--Affordable broadband access and 
connectivity, using all available media (copper, coax, fiber, spectrum, 
etc.), carrying all services (voice, data, video) to all customers 
everywhere (urban, suburban, rural, mobile) in order to enable a 
greatly upgraded ``superhighway.''

         a. Broadband Internet access is critical to support technology 
        convergence and advanced communications. A forward-looking U.S. 
        Government should support universal access for broadband 
        Internet, as well as policies that promote widespread 
        connectivity. Infrastructure upgrades create increasing returns 
        to our economy and encourage the development of businesses, 
        entertainment, education, and e-government solutions and 
        capabilities.

         b. Additional federally-funded research in this field is 
        needed, particularly because special technologies will be 
        needed for rural access, and corporate and venture capital 
        financing for research has dropped significantly over the last 
        several years. Extremely significant cost reductions are 
        necessary in order to meet the technology needs of rural areas. 
        Additionally, the provision of broadband access in rural areas 
        is costly due to challenges associated with terrain, low 
        population density, etc.

    2. Security--New authentication, encryption and monitoring 
capabilities for all public broadband networks to protect 
communications assets from attack.

         a. The U.S. is a post-industrial information society, and as 
        such, its cyber-infrastructure is vulnerable to attack.

         b. Continued research is needed to prevent systemic attacks to 
        infrastructure and may provide an opportunity for university-
        based ``centers of excellence.''

    3. Interoperable Mobility--The ability to access commercial mobile 
services and emergency services over any mobile network from any mobile 
instrument.

         a. Interoperable mobility enables public safety and law 
        enforcement officials to use the various public safety and 
        cellular mobile networks while avoiding the necessity of 
        carrying multiple mobile devices. It also promotes coordinated 
        communications between various public service agencies and 
        allows higher-priority use of scarce spectrum resources for 
        emergency use.

         b. Federally-funded research is necessary because the 
        emergency services market is critical for the common good. 
        Also, bringing commercial technologies and emergency services 
        technologies closer together will result in lower costs and 
        more advanced features for critical emergency services.

    4. Communications Research for Homeland Security, including 
interoperability, security, survivability and encryption.

         a. Homeland Security is a superset of several other listed 
        visions. Security technologies can help protect public networks 
        and other public infrastructure from malicious attacks. A large 
        amount of economic activity today depends on the continued 
        availability of public broadband networks and infrastructure. 
        Successful attacks can significantly slow down national 
        economic activity and can have other disastrous consequences 
        (e.g., in case of identity theft).

         b. Research is needed in all areas (interoperability, 
        security, survivability and encryption) because the needs of 
        first responders and critical infrastructure protection far 
        exceed the needs of ``typical'' commercial applications. 
        Further research also is needed because new worms and viruses 
        constantly are being invented, and new techniques are needed to 
        prevent attacks before there is significant resulting damage.

         c. The country needs a broad program to address our 
        vulnerabilities and ensure the integrity of first responders' 
        systems. The government should support these ``extreme case'' 
        applications, since they are unlikely to be sufficiently 
        developed in normal commercial systems.

    5. Nanotechnology.

         a. Many of the advances in communications have been driven by 
        fundamental scientific discoveries of materials at the 
        nanoscale level.

         b. Examples of important research areas include: sensors, 
        displays, power systems, radio frequency and nanomicrophones.

         c. Advances will reduce cost, increase mobility, decrease 
        power consumption, and improve healthcare, homeland security 
        and public safety.

    6. Networking Architectures.

         a. Advanced networking research on hardware and software for 
        secure and reliable communications and tools that provide the 
        communication, analysis and sharing of very large amounts of 
        information will accelerate discovery and enable new 
        technological advances.

    Senator Ensign. Thank you.
    We've been holding a series of hearings--those of you who 
are paying attention--on education, regulation, various other 
ways that our global competitiveness is affected. And even what 
affects how capital is going to be available to firms? You 
know, what kinds of things do we need to do up here to make 
that capital available that the private-sector is willing to 
put at risk to make us stay on that competitive edge? So, we've 
been taking a holistic approach to this whole competitiveness 
issue. And, obviously, the purpose of today's hearing is to 
discuss the importance of basic research and the dollars 
applied to that research. There's no question that broadband 
and our bill for video franchising and trying to encourage the 
investment in our broadband infrastructure and our high-speed 
infrastructure is critical to this whole aspect of remaining 
competitive. But that is another topic for another day.
    I would like to explore just a little bit, though, and 
maybe start with you, Dr. Drobot, because of the industry that 
you are in. You know, Bell Labs was a preeminent research 
institution when AT&T had a state-sanctioned monopoly. But, no 
longer--we don't see nearly the investment in basic research--
they used to do even basic research with some of their applied 
research. Why the change today, compared to what it was some 
time ago, as far as basic research is concerned, from the 
private-sector?
    Dr. Drobot. I think it's a, you know, fantastic question. 
OK? Let me--and I have a little bit of this covered in the 
testimony. You know, fundamentally, in 1984, almost all 
research in communications was done by Bell Labs. There was a 
funding mechanism for doing this, and that was a small tax on 
every telephone call. And if you look at the style of the 
research that was done, there was a large basic component. If 
you look at the laser, you look at the transistor, you look at 
a lot of the fundamentals, OK, they came out of Bell Labs. I 
think they enriched the Nation, they enriched the world.
    With the dissolution of AT&T, what you find is that that 
kind of funding mechanism disappeared. I represent a company 
that came off the Bell Labs stem. It was called Bellcore. It 
supported the Regional Bell Operating Companies. Roughly a 
third of Bell Labs was in it. In today's world, with the 
pressures, just as at TI, we cannot afford to fund basic 
research. Everything gets turned out on 6-month/12-month 
cycles. That's not basic research. The pressure is to produce 
more of those kind of goods. And so, basically, the mechanisms 
of collecting enough funds that are actually tied to needs and 
requirements is broken, as a mechanism.
    Senator Ensign. OK. I need to attend to another matter 
briefly. I was hoping that one of the other Senators would be 
able to take over in my absence. But, we'll take a short 
recess, and then we'll reconvene.
    [Recess.]
    Senator Ensign. The next place I want to explore is the 
global nature of competitiveness. A couple of you mentioned the 
rest of the world in your testimony. ``Competitiveness'' means 
that we are competing against somebody. And the rest of the 
world is starting to step up. We realize that. And I think that 
it is the exact, right observation that some have made that as 
the rest of the world improves, we have to worry about what 
we're doing. We have to worry about us getting better. But we 
also have to put that a little bit in context of what the rest 
of the world is doing. They are increasing the amount of money 
that they are spending on research and development, and they 
are certainly focusing more on education, graduating a lot more 
engineers and a lot more students with advanced degrees than we 
are here in the United States. And that is why a big part of 
our competitiveness, depends upon our education.
    Maybe you could make some comments about the rest of the 
world. Europe is increasing investments in innovation. Asia is 
increasing investments in innovation. Some other places are 
increasingly focusing on innovation. But can you just put that 
in context with how much we're spending on innovation and 
related education, compared to the rest of the world?
    Let's start with Dr. Knapp. You know, how much the United 
States invests as a percentage of GDP in basic research. But 
can you tell, as far as total dollars--what we're investing in 
research, compared to some of the other nations, Europe or 
Asia?
    Dr. Knapp. Mr. Chairman, I--we can certainly--well, I don't 
have that data right in front of me, in terms of comparing the 
percentage of GDP here in whole dollars.
    Senator Ensign. You don't have to give me exact numbers, 
but----
    Dr. Knapp. Yes. I mean, our----
    Senator Ensign.--from what I understand, we're still 
investing a lot more than the rest of the world.
    Dr. Knapp. Yes. And--but there does seem to be--and we have 
a lot of connections with China right now. We have a campus, 
actually, in Nanjing, China, which we've operated for more than 
20 years now. And so, we're constantly in dialogue with people 
in technical fields there. And what seems to be the case is 
this kind of seamless--and I think this was mentioned by 
earlier witnesses--the seamless relation that is very carefully 
planned between what goes on in the schools, in feeding 
students and preparing the infrastructure and all the rest of 
it. And whatever the overall rate of expenditure is, there is a 
strategic and a kind of aggressive focus there that we've 
noticed.
    There's an aspect to this that I mention in the written 
testimony, did not touch on in the oral testimony, that I think 
is--also needs to be brought into the picture, and that is that 
for many years we have benefited from foreign talent coming to 
this country in a very extraordinary way, and that has, of 
course, now been complicated because of the conditions created 
by the war on terrorism. And one of the things--we've been 
working very closely with the relevant Federal agencies on 
trying to get enough of a system arranged for immigration to 
make it possible for talented scientists and engineers to come 
to this country and to work here, and, if they are effective 
contributors, even to achieve permanent residence here. That's 
become more difficult now than it used to be. And it's--you 
know, I have statistics in the written testimony about the loss 
of access to graduate students and post-docs and young 
scientists.
    Senator Ensign. We have that. And, actually, you mentioned 
Dr. Craig Barrett. He testified a few weeks back on the idea of 
attaching a visa or green card to advanced degrees. And we're 
looking into immigration reform, as you may have noticed in the 
papers.
    [Laughter.]
    Dr. Knapp. Well, I----
    Senator Ensign. We are actually looking at what the 
Committee has done and I don't know if you've looked at the 
Committee bill that came out--but we're looking at that. And if 
there are some additional things that need to be done. There is 
no question that our current system is crazy. I mean, we 
subsidize foreign students education, then we say, ``When 
you're done, you go back.'' I mean, that is just as stupid as 
anything that we have ever done. We've always been the brain 
drain for the rest of the world. And, I think that we should 
continue to be, because talented people come here and create 
jobs. And that has to be part of our overall strategy. And one 
of the great things--you know, I look back--and you think about 
Japan, back in the 1980s especially, and you heard some 
Americans saying, ``Well, you know, we can't compete.'' You 
know, part of the beautiful thing about our system--and even 
when you look at India and China, part of the beauty of our 
system is that we have this entrepreneurial spirit that, due to 
the freedoms that we have, is unmatched anywhere in the world. 
And it is part of our economic system. It's just part of our 
system of government. It's part of everything here, and I think 
it will remain an advantage for the United States into the 
future. But we still have to watch what they are doing 
elsewhere around the world and look at the strategies that they 
are using, and not rest on our laurels. And that's part of what 
we need to focus on.
    Dr. Knapp. Sir, if I might comment on that--on that point, 
just to highlight what you've just said, I think it is 
absolutely the case that--our experience is that the kinds of 
education we provide in science and technology, because of that 
flexibility and that entrepreneurial spirit, remains a key 
advantage that the United States has over these other 
institutions in Asia and elsewhere. Right now, however, the 
other countries are aggressively going after the students who 
are not finding a comfortable reception----
    Senator Ensign. Right.
    Dr. Knapp.--here. And that includes commonwealth countries 
that are English-speaking, and they have a systematic approach 
to that, which I think is cutting into what used to be a very 
powerful brain drain to the advantage of this country.
    Senator Ensign. I agree.
    Dr. Pietrafesa?
    Dr. Pietrafesa. Yes, I'll comment in several ways. One is 
that the ocean and atmospheric sciences are funded by several 
agencies principally, for example, the Office of Naval 
Research, which was actually the first funding agency for basic 
research in the United States. It preceded NSF, after the 
second World War. But ONR, along with the Department of Energy, 
funded not only basic research in the ocean and atmospheric 
sciences, but actually funded the development of new 
instrumentation and advanced new technologies. But both have 
significantly reduced funding for basic research. The 
Department of Energy has essentially gone out of the ocean and 
atmospheric sciences research funding business. So, that has 
put more pressure on the National Science Foundation and on 
NOAA.
    Now, the National Science Foundation, I understand, had up 
to $2 billion worth of unfunded proposals last year that were 
rated excellent.
    Senator Ensign. Right.
    Dr. Pietrafesa. And, that, I consider to be a tragedy for 
this Nation. And, as I said in my testimony, we lost a member 
of the National Academy to an Asian university because he isn't 
willing to spend the time to write ten proposals to get funded 
one time. And I consider that to really be tragic.
    Again, on the ocean and atmospheric sciences side, kids 
love the ocean, they love the atmosphere; they're science 
geeks. And we could capitalize on this through education at the 
K-12 levels, and then entrain them into the physical and 
mathematical sciences through aggressive education. And so, I 
really do deeply believe, and the community believes, that we 
are undercapitalized in basic research, broadly defined, but 
certainly in the physical sciences and the mathematical 
sciences, including ocean and atmospheric sciences.
    Thank you.
    Senator Ensign. Mr. Ritter, I'd like to ask you, being from 
the private-sector, can you comment on what Wall Street would 
do if companies like yourselves started spending a lot of money 
on research that may take 20 years--basic research, this 
foundational research that we've been talking about? I mean, it 
is important to have for the record.
    Mr. Ritter. Yes. Well, the investment community is looking 
for a fast return on investment on any expenditure that we 
make. And to the degree those expenditures aren't going to 
return revenue to the company with the placement in the market 
of products that our customers want, we're not going to get 
rewarded for doing long-term research.
    Yes, we have a--we have an internal metric that we use, in 
terms of looking at our own research spending, and it's called 
R&D efficiency. I mean, we spend, you know, as I mentioned, $2 
billion a year on research. But how quickly and over what time 
line does that research expenditure translate into revenue? And 
that's what we're measured on by Wall Street. I mean, we like--
we'd wish they were more forward-looking and long-term in their 
approach, but the reality is that they're not.
    Senator Ensign. Very good.
    You know, it's interesting, a question we should always 
ask. I have this little document. It's called the Constitution. 
And I always like to say, ``What we're doing here, is it 
Constitutional?'' And I just want to make sure that everybody 
understands that what we are doing helps to ``To promote the 
progress of science,'' Article I, Section 8 of the Constitution 
mentions science in the context of patents. And I think that 
our founders, you know, recognized that there were certain 
things that should be handled by the Federal Government, and 
promoting the progress of science is built right into the 
Constitution. Even as a fiscal conservative who believes in 
market forces, for those who believe in market forces, OK, 
market forces can't apply to basic research. Market forces 
wouldn't allow basic research, in the general sense, as our 
economy is set up. And that's why it's so critical that we 
recognize the valuable role that the Federal Government can and 
should play here.
    What the right amount of funding is, is very difficult to 
determine. You know, you could put $200 billion to support 
basic research, and some would say that's not enough. And it is 
always difficult, in setting these priorities. That's why we 
doubled the funding for NIH, and now we're proposing doubling 
the funding for NSF and increasing some of the support for 
these other agencies and other programs out there. But it is 
difficult, as you all know, setting the priorities.
    Mr. Ritter, you wanted to comment.
    Mr. Ritter. Yes. While reciting the Constitution, how about 
the tenth amendment and what the states are doing in this area, 
too? Because, I'll tell you, there's a very robust discussion 
going on in several states about how to align, you know, higher 
education and research assets behind, you know, state economic 
development goals. And, you know, as industry is increasingly 
unable to spend for the long-term on research, you know, we're 
not only here with the Federal Government, but we're also 
working with the states and in industry collaborative efforts 
to create new research partnerships.
    You know, a great example of that is the partnership that 
the semiconductor industry has created with the National 
Science Foundation in nanoelectronics research. And there are 
two, soon to be three, nanoelectronics research centers that'll 
be up and running--one in New York, one in California, and one 
in Texas--that will have a combination of Federal, state, and 
private-sector funding, doing advanced research. And so, you 
know, the States have an important role to play in this in 
providing, you know, facilities, faculty, and graduate 
students, you know, who can do the kind of research and compete 
for the sort of merit-based grants, which you're looking at 
funding in some of the Federal research programs that you're 
looking at.
    Senator Ensign. Good.
    I want to thank all of you. It's been a fascinating 
discussion. I guess we just got notice that we have a vote 
coming up in 5 minutes. And these kinds of discussions are very 
important. You can see why I like them better. Nobody else 
shows up. I get----
    [Laughter.]
    Senator Ensign.--to spend more time asking questions and 
having a discussion with you all. But your testimonies are all 
valuable as we go forward. We're hoping that we can get a bill. 
You know, some of us think that it should be a comprehensive 
innovation and competitiveness bill. I would love to see that. 
We don't know whether, in the current climate, we'll be able to 
do a comprehensive bill. But if we can't get a comprehensive 
bill, we're at least going to try to pick off what we can get 
done this year, and maybe pick up the rest of it next year. But 
it is an exciting process.
    And, you know, the President takes a lot of criticism these 
days. One thing that I told him yesterday in our meeting, was 
that I was really pleased that he mentioned innovation and 
competitiveness in his State of the Union Address. Without 
Presidential vision, without leadership from the White House--
he's the only one with a bully pulpit--it's just like 
Eisenhower, with Sputnik, he gave us that vision that we had to 
compete--and we talked yesterday about the President giving us 
that vision, calling on the American people. If we want to 
compete in this globalized economy, there's no question, we 
have to set some certain priorities for our country. And the 
President is the one who has to challenge us to do that. And I 
think that if he does that, we will be up to that challenge.
    So, thank you all very much for your testimony. And, before 
we leave, I just want to recognize Susan McDonald. She is over 
here to my right, retiring after 30 years of dedicated 
employment to the Senate.
    Congratulations, Susan. You've done a great job. You've 
made all of our lives a lot better, and made a lot of these 
hearings over the years go a lot more smoothly. So, thank you. 
Thanks for your service.
    [Applause.]
    Senator Ensign. This hearing is adjourned.
    [Whereupon, at 11:40 a.m., the hearing was adjourned.]
                            A P P E N D I X

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    Technological innovation is the lifeblood of U.S. economic growth 
and well-being, and basic research is at the core of this system.
    The National Academies of Sciences describes basic research as the 
``seed corn'' for innovation. In their report, ``Rising Above the 
Gathering Storm,'' they point out that this country is essentially 
eating its seed corn by failing to make the proper investments in basic 
research necessary to maintain a competitive edge. Federal support for 
all research and development (R&D) has fallen from 67 percent in 1964 
down to less than 30 percent today.
    Industry has increased its support for R&D. However, much of this 
support is for near-term development and not the long-term basic 
research that is so vital.
    Industry has a great history of supporting basic research through 
venerable names such as Bell Labs and Xerox PARC. But today, Wall 
Street's focus is on the near-term only, and shareholders do not reward 
companies for making significant investments in basic research.
    This investment is essential for our long-term, economic 
competitiveness, and it is becoming clear that only the government can 
afford to support the kind of research that may not bear fruit for a 
decade or more. I would like to hear more from our witnesses today 
about how we can rectify the current situation and ensure that we are 
putting the country on the right path.
    Finally, many of the current reports and proposed legislative 
initiatives fail to address oceanic research. The oceans cover 70 
percent of the Earth's surface and can be a source of numerous new 
technologies and innovations. We must not disregard this important 
resource.
                                 ______
                                 
          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia
    I am delighted that the Subcommittee has taken up the subjects of 
basic research and competitiveness, and I regret that I cannot be 
present to take part in the discussion. There is no doubt that the 
choices we make now about investments in basic research, both the size 
and the nature of our investments, will be a major factor in American 
prosperity a generation from now.
    The globalization of the world economy is a reality, an 
accelerating trend that we cannot stop. It is also a matter that we 
must address with some urgency. Where we can, we must take steps to 
protect American jobs. Where we cannot, we must work to mitigate the 
impacts on our workers, their families, and their communities. And we 
absolutely must work to assure that our children and future generations 
will have good jobs, by making certain that America is competitive in 
the global economy of the future.
    It's well established that basic research conducted at universities 
can stimulate strong regional economic development. Companies focusing 
on high technology products find it profitable to locate near major 
research universities where they have convenient access to faculty 
researchers and highly trained graduates. The regions known as Silicon 
Valley in California, Route 128 in Massachusetts, and Research Triangle 
in North Carolina, are perhaps the best-known examples, but it happens 
wherever there are strong research universities.
    I'm concerned that, as we stimulate innovation through investments 
in basic research, we assure equal opportunity, and proactively draw 
upon the talent, creativity, and energy of all Americans.
    Congress and the National Science Foundation have long recognized 
the importance of regional diversity in research funding. It's explicit 
in the NSF charter: ``. . . it shall be an objective of the Foundation 
to strengthen research and education in the sciences and engineering, 
including independent research by individuals, throughout the United 
States, and to avoid undue concentration of such research and 
education.''
    In 1988, Congress authorized NSF to establish the Experimental 
Program to Stimulate Competitive Research (EPSCoR), to help 
universities in states that receive a very small share of NSF funding 
improve their competitiveness in research. Indeed, through the EPSCoR 
Program, the research capabilities of many universities have been 
improved. I strongly support the EPSCoR program's focus to enhance 
research capacity which is done through the Research Infrastructure 
Improvement Grants. However, the geographic distribution of NSF 
research grants is still highly uneven.
    Currently, 60 percent of NSF funding goes to institutions in just 
10 states and 91 percent goes to institutions in 26 states. The 
remaining 9 percent is distributed in the remaining 24 states plus the 
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The 27 
jurisdictions that together receive only 9 percent of NSF funding are 
home to 19 percent of the U.S. population, 20 percent of the top two 
categories of research universities (by Carnegie Foundation ratings), 
15 percent of employed scientists and engineers, and 14 percent of 
graduate students in science and engineering. And they are home to a 
large portion of Minority Serving Institutions--minorities that have 
not yet participated proportionately in the development of the American 
science and technology enterprise.
    I also believe that NSF's investments in education are essential. 
It is vital for our Nation to improve the quality of education, and to 
evaluate programs and teaching methods to learn what really works. I 
was proud to be a sponsor of the Math and Science Partnership (MSP) 
program a year ago, and I believe it shows promise and deserves 
additional funding.
    I am sure than many of my colleagues on this Subcommittee will 
agree with me that we must do better. Eleven of us, both Republicans 
and Democrats, represent states that receive a very low percentage of 
NSF grants. Others cannot get an MSP grant due to funding limitations. 
It's an issue of equal opportunity. But it's also in the broad national 
interest that we enlist as many Americans as we can into the cause of 
assuring prosperity for future generations.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                        Dr. Arden L. Bement, Jr.
    Question 1. The Advanced Technology Solar Telescope (ATST) is 
slated to be built on Haleakala. Using adaptive optics technology, ATST 
will be able to provide the sharpest views ever taken of the solar 
surface. The National Science Foundation (NSF) has declared the project 
in ``readiness.'' However, the Foundation has instituted new processes 
for selecting Major Research Equipment and Facilities Construction 
(MREFC) projects. ATST is the first project living under the new rules.
    In order to be on the ``approved'' list and be budgeted for 
construction funding, a project must have all of its environmental 
approvals and a firm cost for any intended mitigation. On the other 
hand, the shelf life of any environment impact statement (EIS) is 
limited, particularly with regard to the location of flora and fauna. 
If too much time elapses between the issuance of the EIS and the 
initiation of construction, some fear that the EIS may have to be 
redone. In addition, it is difficult to get community buy-in for a 
project when construction funds seem elusive or far off. There had been 
some talk of the potential for ATST to be included in the FY 2008 
budget, but we now have indications that it will be included in FY 
2009, at the earliest.
    Can you tell me when the Advanced Technology Solar Telescope (ATST) 
can be included in the Foundation's Major Research Equipment and 
Facilities Construction budget?
    Answer. In order to be included in the Foundation's Major Research 
Equipment and Facilities Construction budget, ATST must successfully 
pass two milestones:

        1. The preparation of the necessary environmental impact 
        statement as well as the required consultations under Section 
        106 of the National Historic Preservation Act.

        2. An extensive review of cost, schedule, and management that 
        will be carried out in October 2006, in order to establish the 
        baseline budget and schedule.

    Provided that the review is satisfactory, this schedule would 
support a possible decision by the National Science Board to include 
ATST in the Foundation's FY 2009 budget request.

    Question 2. Can you assure me that you will work with the ATST 
advocates to ensure that the new requirements for Major Research 
Equipment and Facilities Construction project development and funding 
are realistic and allow projects to move forward in a timely manner?
    Answer. NSF can give you that assurance. Indeed, representatives of 
ATST, the Division of Astronomical Sciences, and the Office of the 
Deputy Director for Large Facility Projects have already met to discuss 
the necessary steps and resultant time scales that must be completed 
before ATST can be included in an NSF budget request. The Division of 
Astronomical Sciences and the Office of the Deputy Director for Large 
Facility Projects are working closely together to plan the upcoming 
baseline review of ATST in order that the requirements are fully 
understood and the project can be well prepared for the review.
Environmental Management

    Question 3. In late January, OMS announced a new scorecard to be 
applied to Federal agencies that would evaluate, among other things, 
their environmental management systems. Though in the past, NSF has 
funded primarily scientific research projects with few environmental 
impacts, there are now more than 25 projects on the various Major 
Research Equipment and Facilities Construction priority lists, most of 
which involve construction or activities that would likely impact the 
human environment. Moreover, before most of these projects can move 
forward, the agency will have to demonstrate compliance with all 
requisite environmental, biological, and historical laws or risk 
litigation and millions of dollars in cost overruns.
    Has NSF's infrastructure and facilities planning capabilities 
advanced sufficiently to manage these increased environmental 
management and compliance issues?
    Answer. As is the case with ATST, the Foundation uses program and 
support staff to ensure sufficient consideration of environmental 
issues. Whenever a large facility project is suitably advanced for 
consideration and possible funding, NSF assigns a program officer to 
support project-specific environmental requirements through the NSF 
grants and cooperative agreements process. The Office of the Deputy 
Director for Large Facility Projects and the Office of the General 
Counsel work closely with program officers to ensure proper 
identification and management of environmental issues. NSF's Grant 
Policy Manual, the particular terms of a solicitation or announcement, 
and the various documents that inform the oversight and management of a 
large facility all support the Foundation's management of environmental 
issues. The Foundation's experience has been that its processes and 
infrastructure provide sufficient opportunity for responsible 
management of environmental issues.

    Question 4. Do you need additional legislative authority to build 
dedicated environmental management expertise at NSF? If not, how to you 
intend to build that expertise?
    Answer. NSF has broad legislative authority pursuant to its organic 
act ``to do all things necessary to carry out the provisions of this 
chapter [to initiate and support basic scientific research and 
programs].'' 42 U.S.C. Sec. 1870. Accordingly, NSF would not need 
additional legislative authority to further strengthen environmental 
management at the Foundation.
    NSF recognizes that environmental considerations are an important 
part of planning for many large facility projects. NSF has staff with 
specialized expertise in this area within the Office of General Counsel 
and in some Directorates. NSF also recognizes that the demand for this 
expertise is likely to expand as a number of large facility projects 
advance into more mature stages of pre-construction planning. This is 
especially true for those Earth-observing systems that will consist of 
widely distributed infrastructure at multiple locations.
Development of New, Very Large Projects
    Question 5. Last year, a provision was included in the National 
Aeronautics and Space Administration (NASA) Authorization bill to 
examine the problem of designing very large projects, including 
consideration of allowing funding for some planning and design work to 
come from the MREFC account rather than the research account.
    What is the status of that review? How can we make sure that the 
design of new facilities does not overwhelm the capacity of the Science 
Directorates?
    Answer. The NASA authorization addresses two pertinent items: (1) 
``Senior Review'' of the facilities portfolio within the Division of 
Astronomical Science, and (2) design and development for Major Research 
Equipment and Facilities Construction (MREFC) projects, including a 
provision to consider alternative funding sources.
    Item one, the Senior Review, is being conducted under the auspices 
of the Directorate for Mathematical and Physical Sciences. The final 
report is expected to be issued shortly. Item two, planning for very 
large projects, has been considered by the Foundation. The Office of 
the Deputy Director for Large Facility Projects recently published 
Guidelines for Planning and Managing the Major Research Equipment and 
Facilities Construction Account, which outlines the pre-construction 
planning and development process. NSF's position is that funding for 
pre-construction planning of MREFC candidate projects should not be 
provided within the MREFC account. While the Foundation recognizes that 
the resources needed are very large, from five to as much as twenty-
five percent of total construction/acquisition costs, NSF does not use 
MREFC funding to support these activities for several reasons:

   Annual operations and maintenance (O&M) costs for major 
        facilities, once constructed, usually range from ten to twenty 
        percent of the total construction cost. The annual outlay for 
        operations and maintenance is roughly equivalent to the annual 
        outlay for pre-construction planning. O&M budgets are funded 
        from the Research and Related Activities (R&RA) Account. Over 
        the 20-30 year typical operational lifetime of a facility, 
        cumulative O&M expenditures represent a much larger total 
        outlay than the construction funding, and one that competes 
        directly with the pool of funds available to individual 
        investigators in that discipline. Having these activities 
        funded from R&RA ensures the backing of stakeholders. The 
        research community served by the proposed facility must 
        strongly support the facility throughout its various life-cycle 
        phases and endorse the balance between the support of 
        infrastructure and support for researchers using that 
        infrastructure. NSF funds pre-construction activities within 
        the R&RA account to retain pressure on the Directorates to 
        propose no more facilities than they can afford to study and 
        operate.

   Facilities ultimately proposed for construction funding are 
        the result of a very long process of review by the supporting 
        research community and NSF. This includes: peer review of the 
        candidate project's scientific merit; NSF's ranking and 
        relative prioritization of the project within its discipline 
        and across disciplines served by NSF; and a thorough assessment 
        of its relative importance to the Nation in comparison to other 
        opportunities and national needs. This multi-step process 
        involves progressive levels of scrutiny as the project 
        definition matures. At any stage of review a project may be 
        rejected, and many are. Assessment must be objective, based on 
        expert review and peer judgment. Including specific projects in 
        the MREFC budget at early stages of planning, before this 
        objective judgment can be fully applied, would give them 
        stature prematurely and would compromise this careful review 
        process.

   Large facilities built by NSF almost always involve 
        interagency and international partnerships. It is important to 
        send the right messages to these partners regarding NSF's 
        intentions, so that the tentative nature of investment in pre-
        construction planning activities is fully understood. MREFC 
        funding for pre-construction planning may appear to give 
        unintended ``standing'' to a project that may not progress to 
        late-stage planning.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                      to Dr. Arden L. Bement, Jr.
    Question 1. How well is NSF performing in its mandate to assure 
that it avoids undue concentration in research funding? Please provide 
the Subcommittee with data showing how the geographic distribution of 
research funding has changed over the past several years.
    Answer. As noted in its mission statement, the NSF EPSCoR program 
is designed to assist the Foundation in its statutory function to 
strengthen research and education in science and engineering throughout 
the U.S. and to avoid undue concentration of such research and 
education. Therefore, broadening participation is a major objective for 
NSF EPSCoR and its investment portfolio is structured to enhance the 
competitiveness of EPSCoR jurisdictions for NSF's spectrum of regular 
research funding. The regression line on Figure 1 demonstrates that the 
initial 22 EPSCoR jurisdictions (AL, AK, AR, HI, ID, KS, KY, LA, ME, 
MS, MT, NE, NV, NM, NO, OK, PR, SC, SO, VT, WV, and WY that have 
participated in EPSCoR for at least 5 years) increased their aggregate 
percentage of NSF research support funds from approximately 5.1 percent 
in FY 1980 to 6.9 percent in FY 2005. This increase verifies that 
modest progress has occurred in the ability of the initial 22 EPSCoR 
participants to compete for merit-based research support from NSF.


    Figure 2 shows a similar graph for all the current 27 EPSCoR 
jurisdictions (the preceding 22 plus U.S.-VI, DE, NH, RI, and TN that 
were added during the FY 2002-2004 period). The regression line on this 
latter graph illustrates that the aggregate percentage of NSF research 
support funds awarded to the 27 EPSCoR jurisdictions went from 
approximately 7.6 percent in FY 1980 to 9.2 percent in FY 2005. Another 
measure of EPSCoR's impact is the positive trend in the total annual 
amount of NSF research support funds awarded to EPSCoR jurisdictions 
during the past 6 years. The amount of this NSF funding has increased 
from $273 million in FY 2000 to $383 million in FY 2005. Such data 
reveal that the EPSCoR strategy has indeed improved the geographic 
distribution of NSF's research funding.


    Question 2. The President's Budget for FY 2007 proposes a smaller 
increase for the NSF EPSCoR program than for the total NSF budget. I 
believe that the NSF EPSCOR budget should increase proportionally with 
the total budget to meet the basic goal of not leaving the EPSCoR 
states behind. What do you think and how can we meet geographic 
diversity goals without increasing EPSCoR?
    Answer. The EPSCoR budget is small relative to the overall NSF 
budget and is used primarily to support investment elements that 
stimulate an increased research/education capacity in EPSCoR 
jurisdictions through: (1) awards to advance research infrastructure, 
both physical and human resources, in focused areas; (2) support for 
outreach activities to further acquaint the EPSCoR community with NSF 
opportunities, priorities, policies, and people; and (3) co-funding of 
meritorious proposals submitted from EPSCoR investigators to other NSF 
programs that are recommended for funding by the peer review process 
but for which there are insufficient funds for an award without joint 
support from EPSCoR. The awards co-funded by EPSCoR often involve young 
or new faculty members, members of underrepresented groups, graduate 
and undergraduate students, private-sector partnerships, and cross-
disciplinary projects. The infrastructure awards are sufficient to 
``initiate'' the development of new scientific capacity (research 
equipment, start-up packages for attracting new faculty, competitive 
stipends for recruiting talented graduate students and post-docs, 
etc.). The jurisdictions are aware that EPSCoR investments should lead 
to other sources of significant funding to fully develop the assets 
needed for increased capacity, competitiveness, and project 
sustainability.
    One measure of competitiveness of EPSCoR participants is the 
absolute difference between overall NSF and EPSCoR funding rates for 
proposals submitted to the Foundation's research support programs. 
Figure 3 shows a plot of these absolute differences in success rates 
for the FY 1996 through FY 2005 period. As shown, the success rate 
difference was approximately 8 percent in FY 1996 (27 percent for all 
NSF proposals compared to 19 percent for EPSCoR-based proposals) but 
decreased to about 4 percent in FY 2003 (24 percent for all NSF 
proposals compared to 20 percent for EPSCoR-based proposals), and has 
stayed near this 4 percent delta value since FY 2003. This ``closing-
of-the-gap'' in funding rates for proposals submitted from EPSCoR 
jurisdictions is largely due to the successful EPSCoR co-funding and 
infrastructure improvement programs.


    Question 3. The primary strategy of the NSF EPSCoR program has been 
to invest in the research infrastructure of states that receive very 
small portions of NSF funding. Do you agree that competitive grants for 
research infrastructure should continue to be the principal tool used 
by EPSCoR to enhance regional research competitiveness?
    Answer. Please see the next response.

    Question 4. What improvements would you recommend for the EPSCoR 
program, and will you be sure to consult with the stakeholders and 
Congress on any major changes?
    Answer. Investment in critical research infrastructure is a 
productive and essential tool for enhancing the research capacity and 
competitiveness of EPSCoR jurisdictions. The evolving EPSCoR investment 
portfolio has yielded definite gains during the past years as evidenced 
by the trend lines in Figures 1 through 3. However, these gains appear 
to have leveled-off during the recent FY 2001-2005 period. Such 
indicators suggest it is now prudent to think about the optimum 
investment strategy for catalyzing further progress by the EPSCoR 
jurisdictions during the next 10-15 years. Therefore, NSF is organizing 
a community workshop entitled EPSCoR 2020 to obtain broad, expert input 
on the goals, objectives, and investment strategies that will help 
define the future EPSCoR program at NSF. A proposal to develop and 
conduct this workshop event has been submitted to NSF by the University 
of South Carolina. The workshop, scheduled for June 15-16, 2006, will 
bring together key representatives from both the EPSCoR and non-EPSCoR 
communities to discuss and develop an updated vision for the NSF EPSCoR 
program. Such a strategic planning exercise is timely because of the 
essential contributions that EPSCoR-based scientists, engineers, 
teachers, and students can make to the American Competitiveness 
Initiative. NSF and its EPSCoR Office look forward to the opportunity 
of obtaining further input from our multiple stakeholders and their 
concomitant recommendations for EPSCoR 2020. Potential changes in the 
EPSCoR program as a consequence of our attentive consideration of these 
recommendations will be discussed with stakeholders and Congress.
Math and Science Partnership Program
    Question 5. Can you provide more information about the promise of 
the MSP program, and what NSF could do to enhance education if Congress 
provided the amount of money authorized for the program which is $200 
million?
    Answer. America's students have significant aspirations for their 
own education. More than 90 percent of the Nation's high school seniors 
plan to attend college, including two-year colleges, and approximately 
70 percent of graduates actually do go on to college within 2 years of 
their graduation [Education Trust, 1999]. Yet, the middle and high 
school years foster a leaky pipeline in science, technology, 
engineering, and mathematics (STEM) education that falls short in 
supporting student aspirations and therefore requires special 
attention.
    NSF's Math and Science Partnership (MSP) program has yielded some 
promising findings for students, for teachers, and with newly developed 
tools and instruments. NSF's MSP has focused on building human and 
institutional capacity to engage in K-12 STEM education, especially in 
the Nation's institutions of higher education. Approximately 1,200 
faculty and administrators have documented their participation to date. 
Of these, 69 percent are STEM disciplinary faculty and 67 percent are 
tenured or on a tenure-track. Additionally, 30 percent report ``no 
prior experience'' in K-12 reform. To further build and sustain the 
capacity of the Nation's STEM disciplinary faculty for educational 
work, the new MSP solicitation (NSF 06-539) calls for proposals that 
engage the national disciplinary/professional societies. MSP is also 
building human capacity to engage in high-quality evaluation (e.g., 
evaluation-focused projects at Utah State University, University of 
Wisconsin--Madison). Evidence: An Essential Tool--Planning for and 
Gathering Evidence using the Design-Implementation-Outcomes (DIO) Cycle 
of Evidence (NSF 05-31) is an example of an MSP product for guiding 
project-level evaluation.
    MSP has contributed to sustainability through the development of 
tools and instruments that did not exist previously, including a number 
of such resources being extensively used in the Department of 
Education's MSP sites in the states. Examples include tools that assess 
teachers' growth in content knowledge in mathematics (University of 
Michigan) and the sciences (Horizon Research & AAAS for one project, 
Harvard University for another), that address student motivation 
(University of Michigan) and that evaluate STEM education partnerships 
(Georgia Institute of Technology).
    MSP work has changed teacher education. In a first analysis of a 
sample of 10 Partnerships, over 100 college courses have been 
redesigned or newly developed with MSP support. Most new courses are 
packaged within existing, formalized programs or as part of new pre-
service programs. Most are also aligned with state standards and 
external disciplinary recommendations. Every Partnership in the sample 
has developed new programs, certificate pathways or degrees.
    NSF looks forward to applying these and other findings to support 
the important work of the Department of Education's MSP program.

                                  
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