[Senate Hearing 112-844]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-844
 
              FIVE YEARS OF THE AMERICA COMPETES ACT: 
               PROGRESS, CHALLENGES, AND NEXT STEPS
=======================================================================



                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,

                      SCIENCE, AND TRANSPORTATION

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 19, 2012

                               __________

    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 TWELFTH CONGRESS

                             SECOND SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     John Williams, General Counsel
             Richard M. Russell, Republican Staff Director
            David Quinalty, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 19, 2012...............................     1
Statement of Senator Rockefeller.................................     1
Statement of Senator Klobuchar...................................     4
    Prepared statement...........................................     4
Statement of Senator Hutchison...................................     6
Statement of Senator Udall.......................................    52
Statement of Senator Thune.......................................    53
Statement of Senator Cantwell....................................    56
Statement of Senator Boozman.....................................    58

                               Witnesses

Norman R. Augustine, retired Chairman and CEO, Lockheed Martin 
  Corporation....................................................     8
    Prepared statement...........................................    10
Carl E. Wieman, former Associate Director, Science Division, 
  Office of Science and Technology Policy........................    14
    Prepared statement...........................................    16
Jeffrey L. Furman, Ph.D., Associate Professor of Strategy and 
  Innovation, Boston University; and Research Associate, National 
  Bureau of Economic Research....................................    23
    Prepared statement...........................................    25
Dr. Peter Lee, Corporate Vice President, Microsoft Research......    34
    Prepared statement...........................................    36
John L. Winn, Chief Program Officer, National Math and Science 
  Initiative.....................................................    45
    Prepared statement...........................................    47

                                Appendix

National Oceanic and Atmospheric Administration, U.S. Department 
  of Commerce, prepared statement................................    63
Response to written questions submitted to Norman R. Augustine 
  by:
    Hon. John D. Rockefeller IV..................................    65
    Hon. Bill Nelson.............................................    65
    Hon. Amy Klobuchar...........................................    65
Response to written questions submitted to Carl E. Weiman by:
    Hon. John D. Rockefeller IV..................................    66
    Hon. Bill Nelson.............................................    69
    Hon. Amy Klobuchar...........................................    70
Response to written questions submitted to Jeffrey L. Furman, 
  Ph.D. by:
    Hon. John D. Rockefeller IV..................................    71
    Hon. Amy Klobuchar...........................................    74
Response to written questions submitted to Dr. Peter Lee by:
    Hon. John D. Rockefeller IV..................................    76
    Hon. Bill Nelson.............................................    78
    Hon. Amy Klobuchar...........................................    79
Response to written question submitted to John L. Winn by:
    Hon. John D. Rockefeller IV..................................    80
    Hon. Amy Klobuchar...........................................    80


FIVE YEARS OF THE AMERICA COMPETES ACT: PROGRESS, CHALLENGES, AND NEXT 
                                 STEPS

                              ----------                              


                     WEDNESDAY, SEPTEMBER 19, 2012

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:37 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John D. 
Rockefeller IV, Chairman of the Committee, presiding.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Hi, we are a little late, we had a vote. 
Actually, it was a pretty important vote that we should get 
bridged through March, and the nation will not collapse right 
away.
    Before I begin, this is probably Kay Bailey Hutchinson's, 
that is this good lady's, last hearing as United States 
Senator. And, I have six pages which I am not going to read 
about her, because my statement is also quite long, my opening 
statement.
    But, let me just say that we, together, have had about 177 
hearings, we have had 28 markups, and we put 100 bills out of 
this Committee. That does not mean they have all passed, but 
they have all gone to the floor, and there is no way for me to 
describe the smarts, the toughness, the tactical instinct, 
strategic intuitions, and the tenacity that Kay Bailey 
Hutchinson has.
    I am a Democrat. She is a Republican. It does not make any 
difference. We made this Committee, for the first time that I 
can remember, into really a bipartisan Committee. I will admit 
you would not know that as you look around today. We have one 
very nice person over here, and I am waiting for some other 
people to come. But, it is a bipartisan Committee, and it is 
known as such. We are known as a Committee which gets stuff 
done, and puts out legislation. A large reason for that is Kay 
Bailey Hutchinson, and, I for one am going to be incredibly 
sorry to see her go, not only as a friend, but as a 
professional.
    For example, the bill that we are working on today, America 
COMPETES, could not have happened without Kay Bailey 
Hutchinson. There are a lot of folks on her side who were very 
recalcitrant, and she set about to one-by-one horse-collar them 
and shake some sense into their heads, and it ended up passing 
by unanimous consent.
    Now I have short-circuited all of the facts just a bit on 
that, but the fact is she worked really hard, because when she 
believes in something, she works really hard to get that 
something.
    She feels the same way about the transportation bill, and 
we worked well together on that. That was a huge bill, not 
necessarily to the American public, but it will be when those 
projects are done. We also did the Federal Aviation 
Administration bill, and she is an expert in aviation, being a 
trained lawyer, and very experienced in all of these things.
    And, there were points in the FAA bill, well, we had a 
funny little thing called a slots problem. And to the average 
person out in America that is the most important problem that 
has ever been brought to the face of the earth. If you live in 
San Francisco, or you live in Los Angeles, or in Portland, or 
you know, in Seattle, and you get one flight a day from D.C. 
Airport, Reagan Airport, out to that airport, and one flight 
back that day, you think that is really dissing the west, and 
it is.
    And, we have had folks on our side who come from the east 
who want to protect the status quo. You know the growth of the 
population is in the west, and the southwest. And so, the 
question of getting people, who did not want to yield more 
slots, that is opportunities for coming and going flights for 
various airlines at Reagan Airport, became a very big deal 
because people need to come here, and we found a solution. And 
again, a lot of that was because of the knowledge and the 
really ferocious lobbying that Kay Bailey Hutchinson did.
    I mean, she is a very nice lady. I do not want to make her 
un-ladylike, but she is ferocious when she wants something, and 
that is important in this business.
    So, Kay Bailey Hutchinson, let me just tell you that I am 
very, very sad that you are leaving, and actually let this be 
on the record. She is the only Ranking Member, or if I were a 
Ranking Member, Chairman, that I have ever sent flowers to on 
Mother's Day. Now, explain that. On the face of that it makes 
me look pretty serious, but I wanted to do it, because I was 
grateful for what she had been doing, and continues to do. So, 
Kay Bailey, you just have to accept this thing I have laid upon 
you.
    NASA, do not get in the way of Kay Bailey Hutchinson on 
NASA. Well then you got to watch out for both Kay Bailey and 
Bill Nelson with different interests, right?
    Senator Hutchinson. No.
    The Chairman. Well, to some extent. To some extent, you 
each got about 200,000 jobs, right?
    Senator Hutchinson. We both support the same thing. 
America's preeminence and manned space exploration.
    The Chairman. Well, you see she is cerebral. Anyway, I do 
not know what you are going to do next, but I do know that it 
will be important, and I know it will be done well, and I know 
that we will miss you very, very much.
    Now, let me go onto our business today. It has been just 
over 5 years since the original America COMPETES Act became 
law, and less than 2 years since the reauthorization was 
enacted.
    Hi, Norman, how are you? I have known you quite a long 
time, and see you very little. Does not matter, you are very 
good.
    Both COMPETES Acts have focused on basically three main 
goals.
    Number one, increasing science and research investments. 
Number two, strengthening science, technology, engineering and 
mathematics, STEM education, where our record may be uneven, 
and developing an innovation infrastructure. These are 
inherently all long-term investments.
    People expect that when you pass something that has quite a 
lot of money in it that you are going to see engineers and 
masters just flying out of schools, and colleges, and graduate 
schools, and it does not unfortunately work like that. So, not 
enough time has really passed to get the full impact of our 
2010 bill.
    Larry Page and Sergey Brin's original research that led to 
Google was initiated with a National Science Foundation grant 
in 1994. And, that was nice.
    Back in the days when they just did individuals [EPSCoR 
grants] as opposed to institutions with infrastructure. And, 
that was a conversation that Erich Bloch and I had to have at 
some length. Because he liked the old way and I liked the 
different way, and eventually with Robert C. Byrd joining in, 
we got our way, and (EPSCoR] has been better because of that. 
So now, colleges and universities all over rural states and 
urban states are getting opportunities for particularly golden 
nuggets of research that are being done there to be able to 
allow that to go forward.
    So, the National Science Foundation did that for Google in 
1994. Google did not go public until 2004. Their small share of 
$4.5 million National Science Foundation grant led to a company 
that today has $200 billion plus, over 50,000 employees. So, 
success takes time.
    Even with these unknowns, we still must take time to 
understand where we are, and what we must do next, which is why 
we are here today, and thankfully you are here.
    The 2007 Act authorized a doubling of funding for the 
National Science Foundation, major research accounts at the 
National Institute of Standard and Technology, and the 
Department of Energy's Office of Science, within seven years.
    Unfortunately, Congress did not follow its own direction, 
with appropriation slowing the doubling period down to 15 
years. OK, well that is better than 25.
    The 2010 reauthorization attempted to find some middle 
ground rule with an 11-year doubling path, but again the 
appropriations and the President's request levels have not 
followed, pushing the doubling out to 18 years.
    Without full support for these programs, we are doing our 
very best to create a disservice for our economic recovery. 
Losing our dominance in science and high-tech fields has led to 
a loss of 687,000 manufacturing jobs since 2000. For example, 
our global share of global high-tech exports has fallen from 22 
percent in 1998 to 15 percent in 2010.
    Unemployment rates for STEM occupations trend lower than 
those for all college educated individuals, and they earned 26 
percent more on average. So, there it is, what an opportunity, 
and where are the people to take advantage of it? Huge problem. 
That is what America COMPETES is for.
    Despite this, our 15-year-olds score lower than the 
international average in mathematics and science, and you know 
all of that.
    We heard, in March, from representatives of several of our 
major Federal science agencies and coordinators. And, today's 
hearing is a continuation of that conversation.
    To start we have Mr. Norman Augustine, who is the former 
CEO and Chairman of Lockheed Martin. Mr. Augustine chaired the 
2005 National Academy of Science report ``Rising Above the 
Gathering Storm'' that helped push Congress toward passage of 
the original America COMPETES Act.
    We also have Dr. Carl Wieman, is that right?
    Mr. Wieman. Wieman.
    The Chairman. Wieman, darn, I apologize. Before the 
Committee again today. Dr. Wieman came before us, this 
Committee, during the nomination to be Associate Director of 
the Science of Office and Science Technology Policiy (OSTP). He 
served the Nation well, before stepping down earlier this year. 
He is a Nobel laureate in physics, and he is a strong proponent 
of science and technology education. We are glad you are here, 
sir.
    Dr. Jeff Furman, the same, we are glad you are here, an 
Associate Professor of Strategy and Innovation at Boston 
University and Research Associate with the National Bureau of 
Economic Research.
    Dr. Peter Lee joins us today from Microsoft Research 
Redmond Laboratory, which he leads in the search for disruptive 
business innovation--excellent phraseology.
    Mr. John Winn, Chief Program Officer of the National Math 
and Science Initiative joins us as well today. Mr. Winn has 
over 35 years of STEM education experience. So, we may have 
some things that we want to ask you.
    I now turn to my distinguished, lauded----

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Mr. Chairman, Mr. Chairman, I have to go 
preside over the Senate. So, I was just going to put my opening 
statement on the record, and also just commend Senator 
Hutchinson for her great work on the Committee and join you in 
your comments. She has been amazing.
    I was talking to some of our auto dealers last week and 
they remembered the work that we did, and so many, just so you 
know, in Minnesota, 1,700 jobs were preserved, and I do not 
think it would have happened without you and all of these great 
things you have done for the country, and I have loved working 
with you, and I know we will talk more about it on the floor at 
the end of the year. But, thank you for your service on the 
Committee.
    Senator Hutchinson. Thank you very much. Thank you.
    [The prepared statement of Senator Klobuchar follows:]

 Prepared Statement of Hon. Amy Klobuchar, U.S. Senator from Minnesota
    Thank you, Senator Rockefeller, for holding this hearing, and thank 
you to our witnesses for being here today.
    I was a co-sponsor of the original COMPETES Act and continue to 
support its mission and goals, which are critical to strengthening our 
economy and keeping our country competitive on the world state.
    We know a thing or two about innovation in Minnesota, the state 
that brought the world everything from the pacemaker to the post-it-
note to the pop-up toaster. We're also second per capita for Fortune 
500 companies and home to some of the world's most innovative 
businesses, like 3M, Medtronic and General Mills.
    Minnesota's economy is doing better than the rest of the country, 
with our unemployment more than two points above the national average, 
because we are committed to innovation and bring our technological 
advances to the marketplace.
    In today's increasingly competitive global economy, this is where 
our focus needs to be as a nation. We can no longer afford to be a 
country that just churns money around on Wall Street. What we need to 
be now is a country that makes things again. . .be a country with a 
competitive edge. . .a country that thinks, that invents, and that 
exports to the world.
    There are a lot of really important policies in the American 
COMPETES Act that are helping us get back to those brass tacks and 
that's why I'm so glad we're holding this hearing today.
    As you know, I also chair the Subcommittee on Competitiveness, 
Innovation, and Export Promotion subcommittee, where I've been focused 
on a lot of these issues myself.
    I believe we need to be building an innovation agenda for America--
a competitive agenda that can build off of the COMPETES Act and get our 
economy moving again.
    Amongst other things, this calls for a renewed focus on exporting, 
so that more of our businesses can reach the 95 percent of world 
customers who live outside our borders.
    This calls for a better system for commercializing university 
research, so that the next pacemaker or post-it-note isn't just 
collecting dust on a laboratory shelf somewhere.
    This calls for an increased emphasis on STEM education--the 
critical science, technology, engineering, and math courses that are 
essential to innovation.
    In a 2009 study, the United States ranked 25th out of 34 countries 
in science and math education, behind countries like China, South 
Korea, and Finland. We must do better.
    If we're going to maintain our competitive edge and innovate our 
way to the top, we'll need to be proactive--and not just reactive.
    We'll need to better equip American students and workers with the 
skills and training they need to succeed in the job market.
    This was the thinking behind the Innovate America Act, a bipartisan 
bill that I introduced last year. It focuses on turning the research 
that comes out of our universities into the products that will grow 
small business and create jobs. It also rewards community and technical 
colleges that strengthen their STEM offerings, so that our students 
have the tools to do the jobs in today's economy.
    Our Universities and Community Colleges are critical partners in 
driving entrepreneurship and innovation. The not only train the workers 
that drive our industry, but the research that leads to new products 
and technologies.
    Research isn't just an academic pursuit--it is an economic 
catalyst. By some accounts, R&D generated 50 percent of our nation's 
economic growth between 1950 and 1993.
    And a majority of that research and development took place in the 
university system, which has long been an incubator for startup 
businesses. It is our job to support these innovators and entrepreneurs 
that bring these products to market and create jobs for Americans.
    And it's not just our four year colleges that are leading the way:
    Whether it's the University of Minnesota developing solar 
thermochemical reactors and other alternative energy research under 
America COMPETES Act programs, or our local community colleges like 
Dakota County Technical College, which has received NSF STEM funds for 
the past two years to encourage retention, training, and placement in 
STEM jobs, these programs will help get local workers into local jobs. 
We need to continue to support this competitive agenda.
    In today's economy, standing still is falling behind. We must 
commit to moving forward. That's why today's hearing is so important. 
As I said before, I co-sponsored the original COMPETES Act and I 
continue to support it today.
    But we want to be sure it is as successful and effective as 
possible and that's why we're here today--to evaluate the program, 
discuss ways to build on its progress and make changes where necessary.
    I look forward to hearing from today's witnesses and getting some 
good ideas for moving forward. Thank you.

    The Chairman. And, your statement is in the record.
    Senator Klobuchar. Thank you.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchinson. Thank you. Well, Mr. Chairman, I have 
to say this is a nostalgic time for me as well, and I cannot 
think of a better partner to have than you, and I think that 
you and I really have done some major things.
    You talk about 100 bills that have passed out, but we have 
done some really big things, and I do not think there has been 
any time when we have not been able to put together our 
differences and go forward in a productive way, and get a 
movement in a major field.
    So, I will not send you flowers, but I do want to throw 
bouquets, and say that you have been a joy to work with.
    I am just going to reiterate a few of those 
accomplishments, before I go onto to talk about America 
COMPETES, because America COMPETES is one of those things of 
which I am most proud. I think it did make a statement from 
Congress at a time when people were saying Congress cannot 
agree on anything and we are not looking at the future, we are 
just looking at today, we are not being as visionary as we 
should be, especially in the Senate, but we did pass America 
COMPETES.
    And, I want to say that we were guided by Norm Augustine 
and his Committee, the ``Rising Above the Gathering Storm'' 
report that gave us a road map, and Congress, in a bipartisan 
way, started the progress on that road map. And, that is the 
way it ought to work, and I appreciate so much all you did to 
make that happen.
    NASA, I think NASA was on the wrong path. Senator Nelson 
and I agreed on that. We were devaluing the future in favor of 
the present in this Administration, and with the help of the 
late Neil Armstrong, Gene Cernan, Jim Lovell--astronauts who 
stood up, and with the commitment of Congress, we were able to, 
I think, balance the plan that would keep a commercial 
opportunity alive for taxiing to the space station, but not at 
the expense of the next generation of space exploration which 
is beyond low earth orbit, and that was preserved. Again, Mr. 
Chairman, I really appreciate your willingness to work on that 
with us.
    The FAA re-authorization bill, nobody talks about that 
being important, but it was huge. It gave our airports and the 
FAA the ability to plan enough that we could start building 
projects for runways, and safety, and efficiency, in our 
airports, and I am really pleased that we could do that, 
because it was those slots that were mentioned earlier that 
were the hold-up for 5 or 6 years, and we were able to pry that 
out.
    The Spectrum Legislation that opened more airwaves for our 
wireless broadband network as well as providing our National 
First Responders more capability to have instant 
communications, unfortunately a lesson from 9/11 when 
everything got clogged, because we did not have enough wireless 
broadband capacity.
    And, the Highway bill that included bus safety 
legislation--that was so important in taking a major step 
forward. Senator Brown and I worked on that, and we got that 
through the Committee, and we were able to put that in the 
Highway bill.
    So, I think we have done some wonderful things, and I have 
loved being the Ranking Member of this Committee.
    On this bill that we are going to hear about today, America 
COMPETES, I do give so much credit to Norm Augustine, and am so 
pleased that you could be with us today, because you did lead 
the effort with that fabulous Committee, to say we are behind 
on STEM education and here is how we think we ought to be going 
forward. And, our America COMPETES Act and the re-authorization 
of that Act certainly did put us in a better situation.
    In the last decade, just to give you one example, growth in 
STEM jobs has been three times greater than non-STEM jobs. But 
today, only 30 percent of U.S. high school graduates are ready 
for college work in science, and 45 percent ready in math.
    That is not going to produce the teachers that we need for 
the future, nor the scientists and engineers that we need for 
the future, to truly compete. Because of our commitment in 
COMPETES, the National Science Foundation has played a major 
role in STEM education, providing for $1 billion in educational 
scholarship programs, so that our professionals and people who 
majored in the STEM courses, science, hard science, 
engineering, math, would get their teacher certificates and 
teach our young people, because they are the ones who can 
inspire our young people to be able to see a future in STEM 
professions. And, it is with those enlightened teachers that we 
know we will have the scientists of the future come out.
    We also authorized UTeach, which is a University of Texas 
program that allowed our majors in science, engineering and 
math to get teacher certificates through electives and, in 
their normal course time, be able to get teacher certification 
as well as major in these subjects, which has been a huge boon 
where it has been used, and I am hoping that in the re-
authorization of America COMPETES we will be able to also fund 
the UTeach going nationwide.
    And, I think that one good thing that was a step forward is 
that Congress spoke, and we did prioritize. Obviously we are in 
a budgetary crisis, and we all understand that, and I think we 
have to set a top line of spending, that should be 20 percent 
or 18 percent, in that range, of our gross domestic product. 
That has been the average through the years, but that is not 
the average right now. It is 26 percent. That is too high.
    But, when we set that cap, we need to make sure we are 
funding priorities that are seedcorn for the future.
    STEM courses, education, research, and NASA exploration are 
all areas, that are seedcorn for the future, and I hope that 
when I am gone, that you, Mr. Chairman, and this Committee, and 
all of the Members of the Congress will prioritize our 
spending, so that we are setting that cap at a low level, which 
we need to do, but prioritizing the future and the investment 
going forward. Thank you.
    The Chairman. Thank you very much, and I will turn to 
Norman Augustine, retired Chairman and CEO of Lockheed Martin 
Corporation.

  STATEMENT OF NORMAN R. AUGUSTINE, RETIRED CHAIRMAN AND CEO, 
                  LOCKHEED MARTIN CORPORATION

    Mr. Augustine. Mr. Chairman, and members of the Committee, 
thank you very much for this opportunity to appear today. With 
your permission, I would like to note that I have had the great 
privilege of appearing as a witness before Senator Hutchinson 
many times over the years, and it truly has been a great 
privilege.
    I should also note that I am not representing any 
organization today. I am here as a private citizen. Finally, 
with the Committee's permission, I would like to submit a 
statement for the record.
    The Chairman. Of course.
    Mr. Augustine. The America COMPETES Act, in my opinion, is 
of the utmost importance. It is about jobs, jobs for all 
Americans.
    Jobs, of course, provide the basis for the quality of life 
that our citizens enjoy. Jobs provide the revenues that our 
government needs if it is to provide the services that our 
citizens have come to expect, everything from national 
security, to healthcare, to maintaining the infrastructure and 
more.
    As has been noted, the America COMPETES Act began with a 
bipartisan request from both Houses, it was passed by 
overwhelming majorities of both Houses, and indeed it, I think, 
today represents one of the finest examples of bipartisanship, 
and bipartisanism is something we have not frequently had the 
opportunity to observe in recent years.
    The National Academy study to which you have referred is of 
course known as the ``Gathering Storm'' study and report. We 
examined, at your request, America's competiveness outlook, and 
the bottom line was that the outlook was not very good. In 
fact, we were clearly losing ground to others.
    The Academy has highlighted two areas deserving highest 
attention. The first of these concerns public K through 12 
education, and the second, as you know, addressed basic 
research.
    But, during the last few years, a new challenge has arisen. 
It is a challenge that, frankly, we never thought of when we 
did the work on the ``Gathering Storm'' report. It certainly, 
as far as I know, never occurred to any of the members, 
certainly not myself. It is that new challenge upon which I 
would like to focus my verbal remarks today.
    What I refer to is the impact events of the last few years 
have had on America's great research universities. The 
``Gathering Storm'' report cited our universities as one of the 
principal advantages that America has in competing globally 
along with our free enterprise system and our democracy. The 
Times of London has said that the top five universities in the 
entire world are all in America, as are 18 of the top 25.
    Today, unfortunately, that position is in grave danger of 
being lost. The reversal of the economy and the decline in tax 
revenues, particularly at the state level, have resulted in our 
universities receiving the lowest fractions of the operating 
budgets from the state funds in over a quarter of a century.
    The fact is that we have been privatizing our public 
universities. One consequence of this is that we have shifted 
the burden of education, higher education, to the students, and 
to the younger generation. This is threatening the American 
dream.
    Over the past decade, tuition and fees have increased 85 
percent on average across the country, and that is after 
financial aid has been included. In many states, such as 
California, the increases far exceed that amount.
    This has not gone unnoticed in other nations--the 
challenges our universities are having. Fixing faculty 
salaries, even cutting salaries, laying off junior faculty, 
increasing teaching loads, and so on. In other countries they 
are trying to identify the most outstanding individuals in this 
country, such as the gentleman who sits next to me, to try to 
attract these people to their own universities.
    Not long ago, I was in another country visiting a 
university that had just hired 14 new senior faculty members. 
Of those, 13 came from U.S. universities. But, as if that were 
not enough, there is more.
    Most universities have barely changed in the past few 
hundred years. They largely consisted of a student, a 
professor, a book, a blackboard, and a piece of chalk. Today, 
the students carry the library around in their pocket, they do 
not need the blackboard and the chalk, and their professor may 
be thousands of miles away.
    It is this wave of technological change that is engulfing 
our higher education system, and providing not only great 
challenges but also great opportunities--if we can manage it 
correctly.
    Stanford University recently, as an example, put three 
courses on the web. They had 350,000 students sign up for those 
courses within a few days. Those students came from 190 
different countries. The courses offered no degrees, but they 
also charged no tuition.
    What can our government do with regard to a higher 
education? I think there are many things. I will cite just a 
few. Many are contentious, even within the higher education 
community.
    Certainly one is to substantially increase support for 
basic research. Another is to be sure that government grants 
fully fund the research that they call for. Another is to 
refrain from using earmarks in awarding research contracts and 
grants. Another is to provide more need-based financial aid to 
students who are being excluded from educational opportunities.
    I am aware, of course, as you pointed out, that our nation 
faces a very severe budget problem. However, my business 
background has taught me that, even in times of great duress 
when you have to cut overall budgets, and indeed I think we 
face such a situation in this country, we increase the budgets 
in some very critical areas, particularly those with long-term 
implications.
    The distinguishing feature, I believe, is whether 
appropriations are for consumption or whether they are for 
investment. And, it is my belief that higher education, 
secondary education, and basic research, are indeed investments 
that will pay large returns for our country's citizens.
    With that, I would encourage you to renew the America 
COMPETES Act, because it addresses exactly those issues that 
will have such a large impact on our country in the decades 
ahead.
    Thank you, very much.
    [The prepared statement of Mr. Augustine follows:]

 Prepared Statement of Norman R. Augustine, Denver, Coloraro: retired 
             Chairman and CEO, Lockheed Martin Corporation
    Mr. Chairman and members of the Committee, thank you for inviting 
me to appear before you today and in particular to do so in the 
presence of such a distinguished group of colleagues.
    I should begin by noting that I am not here representing any of the 
organizations with which I have been associated, but rather appear 
simply as a private citizen. I have chosen to devote a considerable 
part of my retirement to what I consider to be among the very most 
important issues affecting the future of America: namely, its 
competitiveness. This is a topic that has enjoyed strong bipartisan 
support--support that has made it possible to implement some of the 
recommendations that have been offered by organizations such as the 
Council on Competitiveness and the National Academies of Science, 
Engineering and Medicine in their document commonly referred to as the 
``Gathering Storm'' report.
    The quality of life of America's citizens is to a considerable 
degree founded upon their opportunity to find and hold quality jobs. 
Further, it is those jobs, and the firms that provide them, that 
generate the tax revenues which enable our government to provide the 
services upon which our citizens so heavily depend, including national 
security, protection against terrorists, healthcare, a modern physical 
infrastructure, and much more.
    In fact, it is about jobs that I would like to speak today. 
Underlying any such discussion is the truly remarkable change that has 
taken place in the employment market in the past few decades and now 
seems to be accelerating. This change, in my judgment, has been brought 
about largely by two developments in science and technology. The first 
of these is the highly expanded use of modern commercial jet aircraft 
that make it possible to move things, including people, around the 
world at nearly the speed of sound. The second is the revolution in 
information systems that has made it possible to move knowledge . . . 
ideas, data, text . . . around the world literally at the speed of 
light.
    A problem with a computer in New York can now be resolved by 
contacting an expert in Bangalore. A CAT-scan recorded in Chicago can 
be read by a radiologist in Sydney or Mumbai--while you wait. A surgeon 
in New York can remove the gall bladder of a patient in Paris using a 
remotely controlled robot. A video made in California can contribute to 
riots halfway around the world.
    It is a world in which distance no longer matters. Americans no 
longer simply compete for jobs with their neighbors around the block, 
but rather with their neighbors around the globe. If one needs a car, 
it can readily be obtained from Japan, Germany or Korea. If one needs 
software, it can be written in India and sent, in a few milliseconds, 
back to the U.S. If one needs flowers, they can be delivered overnight 
from Holland.
    The critical question, of course, is how well we as a nation are 
adapting to this new reality. That is in fact the question that was 
asked approximately seven years ago of the National Academies on a 
bipartisan basis by members of this body and the House of 
Representatives. The essence of the Academies' assessment as contained 
in the Gathering Storm report is that ``Without a renewed effort to 
bolster the foundations of our competitiveness, we can expect to lose 
our privileged position. For the first time in generations, the 
Nation's children could face poorer prospects than their parents and 
grandparents did. We owe our current prosperity, security, and good 
health to the investments of past generations . . .''
    Intel's Howard High's comments in this regard are fairly 
representative: ``We go where the smart people are. Now our business 
operations are two-thirds in the U.S. and one-third overseas. But that 
ratio will flip over in the next ten years.'' Or, in the words of 
DuPont's then-CEO, Chad Holliday, ``If the U.S. doesn't get its act 
together, DuPont is going to go to the countries that do.'' Bill Gates 
has said, ``We are all going where the high I.Q.'s are.''
    The Academies' report offered 20 explicit, actionable 
recommendations to reverse the current decline in competitiveness, the 
top two which, in priority order, were to repair the U.S. K-12 public 
education system and to significantly increase the Nation's investment 
in basic research. The reason for this emphasis, as viewed by the 
members preparing the report, is that the K-12 system is currently the 
weakest link in producing the Human Capital needed for Americans to 
compete for jobs in a global economy, and investment in basic research 
is the enabler that leads to the Knowledge Capital that underlies a 
substantial portion of job creation. Worthy of note, the U.S. has long 
enjoyed a significant advantage in the availability of Financial 
Capital with which to underwrite innovation; however, Financial Capital 
today travels at the speed of light, without regard to political 
borders, as it seeks opportunities.
    In one of the Gathering Storm reports the National Academies 
itemized factors that it considered to play a major role as 
corporations determine where to establish new research laboratories, 
engineering facilities, factories and logistics centers. Although the 
factors were by no means of equal importance, in ten of the twelve 
factors the U.S. was ranked as inferior to representative rapidly 
developing nations. The categories included, for example, the cost of 
labor . . . an area where Americans are accustomed to receiving wages 
that exceed global averages by factors of as much as ten or even more 
for assembly workers and five to ten for scientists and engineers.
    Given these considerations, many researchers who have studied the 
revolution in competitiveness have concluded that the United States' 
competitive advantage will have to reside in superior innovation: that 
is, creating new knowledge through leading-edge research; transforming 
that knowledge into goods and services through world-class engineering; 
and being first to the marketplace with those goods and services 
through extraordinary entrepreneurialism.
    With regard to Human Capital, in the most respected international 
test U.S. students now rank in 14th place in reading, 17th in science 
and 25th in mathematics. Needless to say, this is not a formula for 
success in the jobs race. Yet, the U.S. spends more per public school 
student than all but two other nations. The issue is not what we spend, 
but how we spend it. The most important two actions we could take to 
improve the situation are to bring the Free Enterprise System to K-12 
education and to assure that every classroom has a teacher who 
possesses a core degree in the subject being taught. Teaching our 
children should be the most respected profession in America.
    Turning to the subject of creating knowledge, significant growth in 
basic research funding followed the initial passage of the America 
COMPETES Act; however, investment in this endeavor has once again 
waned, particularly when inflation is included. Federal funding of 
basic research at universities and university research centers declined 
by 5.6 percent during the past year.
    Margaret Thatcher described the importance of basic research in the 
following terms:

        ``. . . although basic science can have colossal economic 
        rewards, they are totally unpredictable . . . the value of 
        Faraday's work today must be higher than the capitalization of 
        all shares on the stock exchange. . . . The greatest economic 
        benefits of scientific research have always resulted from 
        advances in fundamental knowledge rather than the search for 
        specific applications . . . transistors were not discovered by 
        the entertainment industry . . . but by people working on wave 
        mechanics and solid state physics. [Nuclear energy] was not 
        discovered by oil companies with large budgets seeking 
        alternative forms of energy, but by scientists like Einstein 
        and Rutherford . . .''

    Today, the iPhone, internet, GPS, solar power, nuclear power and 
far more owe their very existence to the work conducted over many years 
by scientists pursuing such fields as solid-state physics and quantum 
mechanics. It is likely that none of these scientists were thinking 
about such devices when they performed their work . . . but this is the 
nature of basic research.
    Although I emphasize the importance of science and technology in 
these remarks, I would hasten to add that the single most important 
academic subject we can teach our children is how to read, since that 
is the basis of almost all learning. But it is also important to 
provide our youth, including our scientists and engineers, with a sound 
understanding of history, literature and ethics so that they can use 
their talents for the good of humankind.
    Nonetheless, a number of studies have found that between 50 percent 
and 85 percent of the growth in America's GDP in recent decades can be 
attributed to advancements in science and engineering. Similarly, it 
has been shown that about two-thirds of the growth in U.S. productivity 
can be attributed to advancements in these same two disciplines. The 
challenge is not, per se, to increase jobs for scientists and 
engineers; only four percent of the U.S. workforce is composed of 
scientists and engineers. Even doubling that number would not have an 
overly profound impact on the U.S. employment outlook. The point is 
that that four percent disproportionately generates jobs for the other 
96 percent of our citizenry.
    A recent study reported in the Journal of International Commerce 
and Economics states that (in 2006) the 700 engineers working on 
Apple's iPod were accompanied by 14,000 other workers in the U.S. . . . 
and nearly 25,000 abroad. Floyd Kvamme, a highly regarded entrepreneur, 
has said that ``Venture capital is the search for good engineers.'' 
Steve Jobs told the president of the United States that the reason 
Apple employs 700,000 workers overseas is because it can't find 30,000 
engineers in the U.S. Data presented in the Chronicle of Higher 
Education reveal that during the past 30 years, an era of burgeoning 
importance of science and technology, the percentage growth in 
engineers ranks 27th among the 31 fields of study listed.
    Perhaps the great irony is that America is never again likely to 
suffer a shortage of engineers. America's corporations have found a 
solution to that challenge which satisfies their shareholders. Simply 
stated, ``If engineers are not available in America, simply move the 
engineering work abroad where there is in fact a rapidly growing body 
of qualified individuals.'' Similarly, in a world where distance does 
not matter, research can be moved abroad, and so can prototyping, 
manufacturing and logistics. In fact, an additional reason for doing so 
is to be near to one's customers and it has been estimated that by the 
mid 2020s there will be twice as many middle-income consumers in China 
as there are inhabitants in America. It has further been estimated that 
within a decade 80 percent of the world's middle class will reside in 
what are now categorized as developing nations.
    It is occasionally argued that America is producing too many 
scientists. That, of course, is true. If one sufficiently under-invests 
in research then one will indeed have too many scientists. ``If one 
does not purchase gasoline, there will be no need for cars.''
    Today, only about 15 percent of U.S. youth who actually graduate 
from high school (and nearly one-third do not) have the credentials to 
even begin a college curriculum in engineering. Of those who do begin, 
about 60 percent do not finish their studies in the that field. 
Additionally, the unfortunate fact is that U.S. youth show a surprising 
disinterest, even disdain, with respect to the study of science and 
engineering, notwithstanding their fascination with video games, 
television, automobiles and most other products of science and 
engineering.
    A recent study by the National Science Foundation notes that in 
terms of the fraction of baccalaureate degrees that are granted in the 
field of engineering, the U.S. now ranks 79th among the 93 nations 
included in the study. The nation most closely resembling the U.S. in 
this regard in both engineering and science is Mozambique. The only 
countries that rank behind the U.S. are Bangladesh, Brunei, Burundi, 
Cambodia, Cameroon, Cuba, Gambia, Guyana, Lesotho, Luxembourg, 
Madagascar, Namibia, Saudi Arabia and Swaziland.
    In the past America has been able to excel in science and 
engineering in considerable part because of its ability to attract 
outstanding foreign-born individuals to our universities and encourage 
them to remain and contribute to the creation of domestic jobs. In 
fact, about two-thirds of those receiving doctorates in engineering 
from U.S. universities have been foreign-born. However, this 
circumstance is beginning to change as opportunities for scientists and 
engineers expand abroad. Foreign graduate students now indicate much 
more frequently an intent to return to their native countries upon 
receiving their degrees and gaining a few years experience in the U.S. 
Our nation's policies regarding such matters as the granting of H1-B 
visas are exacerbating this problem.
    Some individuals, particularly strong believers in the free-market 
system, simply say, ``Let the free-market solve the problem.'' But the 
problem is that the free-market is solving the problem . . . it is just 
not doing so in a fashion that most Americans will like.
    So what should we do? The answer is straightforward: we as a nation 
must compete. And that, of course, is what the America COMPETES Act is 
all about. Renewing the COMPETES Act is of the utmost importance. I 
cannot over-emphasize that fact. But as a mathematician might say, it 
is a necessary but not sufficient condition. We must also follow-
through. In that regard, a very good beginning took place under the 
administrations of both President Bush and President Obama. Upon 
initial passage of the America COMPETES Act, investment in basic 
research increased, as did scholarships for future STEM teachers. ARPA-
E was established, albeit under-funded. However, with the decline of 
the economy much of that progress has now waned. Meanwhile, U.S. 
corporations continue to spend over twice as much on litigation as on 
basic research; the pressures of the stock market cause U.S. firms to 
discount future investments such that research funding is greatly 
diminished; firms remain burdened with high medical costs and what 
recently became the highest stated corporate tax rate in the world.
    When the Gathering Storm study was first published, as its chairman 
I was often asked to speak to government gatherings in other countries, 
ranging from Australia to Saudi Arabia to Singapore to Canada. Not only 
were these nations listening, many took action. Today, America's 
continuing decline in competitiveness is due not only to our own lack 
of aggressive action but to the fact that others are accelerating their 
competitiveness strategies.
    When the Committee preparing the Gathering Storm report issued its 
second assessment five years after the first report, it concluded that 
America had fallen even further behind during the intervening period, 
noting, for example, that another six million students had dropped out 
of U.S. high schools during that period, placing themselves in 
positions of little opportunity to obtain quality jobs or to contribute 
to the creation of jobs for others.
    But as if these challenges were not sufficient, an altogether new 
problem has arisen since the Gathering Storm report was prepared. This 
new challenge deals with an issue that, to the best of my knowledge, 
was unforeseen by any of our committee's members--most assuredly not by 
myself.
    We had noted in our report that our Nation's great research 
universities were among America's most significant assets in the 
crusade to create jobs--along with our freedom and our free enterprise 
system. It is noteworthy that it is our universities that produce the 
talent we need to compete as well as much of the knowledge. Even today, 
according to The Times of London, the top five universities in the 
entire world and 18 of the top 25 are located in the United States.
    But these same institutions are now endangered. The share of their 
operating expenses funded by state governments is rapidly declining and 
now represent the lowest fraction of such resources in a quarter of a 
century. In three decades state financial support of higher education 
as a fraction of personal income has, on average, declined by 71 
percent. One result is, for example, that at the highly regarded public 
universities in California, tuition and fees have grown by 240 percent 
in the past dozen years. Throughout the Nation tuition and fees at 
public universities have increased by an average of 85 percent over the 
past decade, net of financial aid.
    Faculty have on average seen their salaries decline by 1.2 percent 
during the past year--not including the effect of inflation; layoffs 
are not uncommon among junior faculty; and teaching loads are 
increasing. This reduction in state support is, in effect, privatizing 
our public universities--with much of the cost being shifted to the 
students--thereby fundamentally threatening the continuation of the 
American Dream. On the other hand, it may be appropriate for our 
universities to reconsider their own priorities and even their raison 
d'etre. According to USA Today, major college football coaches receive 
an average compensation of $1.47 million per year, ``a jump of nearly 
55 percent in six seasons.''
    Such developments have led institutions of higher education in many 
other nations to prepare lists of exceptional faculty members in the 
U.S. whom they might attract to their countries. One foreign university 
that I recently visited had added 14 new senior faculty . . . of whom 
13 came from America. The attractiveness of such offers is facilitated, 
in the case of engineering, by the fact that 40 percent of U.S. faculty 
members were born abroad.
    But there is still more. A tsunami of an altogether different kind 
is now beginning to engulf America's universities. For some two 
centuries higher education around the globe has largely consisted of a 
professor, a library, a blackboard and a piece of chalk . . . seemingly 
managing to resist change with a truly remarkable tenacity. But now, 
when distance no longer matters, students carry entire libraries in 
their pockets and have access to extraordinary professors located 
throughout the world. Not long ago three courses at Stanford were 
offered online and 350,000 students from 190 countries promptly signed 
up. Although no degrees were offered, no tuition was sought.
    It seems foregone that America's universities are going to have to 
remake themselves, and how well they are able to do so will have either 
a profound positive or negative impact on America's overall 
competitiveness. As this occurs, it will be of the utmost importance 
for government at all levels to recognize this challenge and, among 
other things, provide adequate funding of basic research; appropriately 
fund operating budgets; pay the true cost of research grants; increase 
need-based financial aid; and enable private universities to continue 
to build their endowments.
    Several years ago while I was testifying before a committee of the 
Congress in support of increased funding for education and research a 
member asked whether I understood that America was suffering a budget 
crisis. I responded that I of course was aware of that circumstance, 
but that as an aeronautical engineer, during my career I had worked on 
a number of airplanes that during their development programs were too 
heavy to fly. Never once did we solve the problem by removing an 
engine. In the case of creating jobs for Americans, it is research, 
education and entrepreneurialism that are the engines that propel the 
creation of jobs.
    Over the years, my experience in business has taught me that even 
during difficult times when budgets are being cut, and I indeed saw 
such times when, for example, during about a five-year period some 40 
percent of the employees in our industry and three-fourths of the 
companies departed, some areas must be provided additional funds. The 
point is that one must continue to invest in the future, even during 
hard times. The key is to distinguish between spending for consumption 
and spending for investment.
    Again, thank you for the privilege of sharing these views with you.

    NORMAN R. AUGUSTINE was raised in Colorado and attended Princeton 
University where he graduated with a BSE in Aeronautical Engineering, 
magna cum laude, and an MSE. He was elected to Phi Beta Kappa, Tau Beta 
Pi and Sigma Xi.
    In 1958 he joined the Douglas Aircraft Company in California where 
he worked as a Research Engineer, Program Manager and Chief Engineer. 
Beginning in 1965, he served in the Office of the Secretary of Defense 
as Assistant Director of Defense Research and Engineering. He joined 
LTV Missiles and Space Company in 1970, serving as Vice President, 
Advanced Programs and Marketing. In 1973 he returned to the Government 
as Assistant Secretary of the Army and in 1975 became Under Secretary 
of the Army, and later Acting Secretary of the Army. Joining Martin 
Marietta Corporation in 1977 as Vice President of Technical Operations, 
he was elected as CEO in 1987 and chairman in 1988, having previously 
been President and COO. He served as President of Lockheed Martin 
Corporation upon the formation of that company in 1995, and became CEO 
later that year. He retired as Chairman and CEO of Lockheed Martin in 
August 1997, at which time he became a Lecturer with the Rank of 
Professor on the faculty of Princeton University where he served until 
July 1999.
    Mr. Augustine was Chairman and Principal Officer of the American 
Red Cross for nine years, Chairman of the Council of the National 
Academy of Engineering, President and Chairman of the Association of 
the United States Army, Chairman of the Aerospace Industries 
Association, and Chairman of the Defense Science Board. He is a former 
President of the American Institute of Aeronautics and Astronautics and 
the Boy Scouts of America. He is a former member of the Board of 
Directors of ConocoPhillips, Black & Decker, Proctor & Gamble and 
Lockheed Martin, and was a member of the Board of Trustees of Colonial 
Williamsburg. He is a Regent of the University System of Maryland, 
Trustee Emeritus of Johns Hopkins and a former member of the Board of 
Trustees of Princeton and MIT. He is a member of the Advisory Board of 
the Department of Homeland Security and the Department of Energy, was a 
member of the Hart/Rudman Commission on National Security, and served 
for 16 years on the President's Council of Advisors on Science and 
Technology. He is a member of the American Philosophical Society, the 
National Academy of Sciences and the Council on Foreign Relations, and 
is a Fellow of the National Academy of Arts and Sciences and the 
Explorers Club.
    Mr. Augustine has been presented the National Medal of Technology 
by the President of the United States and received the Joint Chiefs of 
Staff Distinguished Public Service Award. He has five times received 
the Department of Defense's highest civilian decoration, the 
Distinguished Service Medal. He is co-author of The Defense Revolution 
and Shakespeare In Charge and author of Augustine's Laws and 
Augustine's Travels. He holds 29 honorary degrees and was selected by 
Who's Who in America and the Library of Congress as one of ``Fifty 
Great Americans'' on the occasion of Who's Who's fiftieth anniversary. 
He has traveled in 111 countries and stood on both the North and South 
Poles of the earth.

    The Chairman. Thank you, sir, very much.
    And now, I would call upon Mr. Wieman.

         STATEMENT OF CARL E. WIEMAN, FORMER ASSOCIATE

         DIRECTOR, SCIENCE DIVISION, OFFICE OF SCIENCE

                     AND TECHNOLOGY POLICY

    Dr. Wieman. Summarizing the state of STEM education, there 
has really been very little change in either the level of 
interest in STEM or the mastery of STEM subjects by American 
students over the past few decades.
    Here I would like to offer a new perspective on STEM 
education. It both explains this lack of progress and indicates 
what must be done to achieve improvement. This perspective is 
based on advances in research on learning, what I have come to 
appreciate after studying research across several different 
fields for a dozen years or so and doing some research on this 
myself.
    What has been shown is that the learning of complex 
expertise, such as the mastery of math and science, is not a 
matter of transferring knowledge into sufficiently talented 
brains, which is the traditional model of learning. Rather, 
such learning of expertise is a development of the brain, the 
actual change in its structure, in response to strenuous 
practice of the components of thinking that make up expertise. 
This is rather similar to where a muscle grows and strengthens 
in response to strenuous use. Innate talent really plays very 
little role in this learning process.
    Now, this research-based perspective on learning implies 
that effective STEM teaching is similar to effective coaching. 
A good athletic coach, first, figures out the essential skills 
that make up mastery in their sport. Then they create 
challenging practice activities that quite explicitly practice 
these necessary skills. Third, the coach motivates their 
charges to work very hard at this practice. And fourth, they 
offer frequent and targeted constructive feedback to guide 
improvement. All of these same ideas apply to teaching STEM, 
with the STEM thinking skills replacing the list of athletic 
skills.
    These STEM expert teaching skills are discussed in more 
detail in my written testimony.
    This effective research-based teaching has been 
demonstrated, but is profoundly different from what is found in 
the typical K-12 or college classroom. Also, the skills needed 
to teach in this fashion are not part of the normal training 
that is provided to STEM teachers.
    Now, if these were changed, the U.S. would go from being a 
laggard to the world leader in STEM education. And, if the 
quality of teaching and teacher training are not improved, 
nothing else will make much difference in our STEM education 
outcomes.
    However, to improve teaching, one must change some of the 
basic institutional incentives that serve to maintain the 
status quo, and most Federal STEM education programs, rather 
than drive improvements, are actually serving to preserve these 
incentive systems and prop up this dismissal status quo.
    In the case of K-12 teaching, the institutional incentives 
are for teacher training programs primarily to maximize their 
revenue by admitting and graduating as many students as 
possible. One result of this is that the STEM admissions 
standards and curriculum requirements for teacher training 
programs are very low, often the lowest of any college major.
    Much of the Federal STEM teacher training dollars go in the 
form of easily available scholarships, and the result is there 
are more students of questionable quality with money to pay to 
attend such programs of questionable quality. Thus, these funds 
are actually preserving, rather than improving, the status quo.
    At the college level, teaching methods have been 
demonstrated, based on the ideas presented above, that are far 
superior to the prevailing lecture method, typically achieving 
twice the learning and half the failure and dropout rates, at 
the same cost.
    Now, if these methods were widely implemented, it would 
dramatically increase the number and quality of STEM graduates, 
and it would greatly improve the content mastery and models of 
teaching provided to future K-12 teachers. This is a necessary 
first step to fixing K-12 STEM teaching.
    However, these superior teaching methods are not being 
adopted at the university level, largely because the Federal 
Government is paying universities and their faculty members $30 
billion a year to focus their attention on research 
productivity. That money has resulted in an incentive system at 
universities that has been very effective at maximizing 
research output, but it has had the unintended consequence that 
adoption of best teaching practices and improvements in student 
educational outcomes has a very low priority.
    Now, it is not going to be easy to improve STEM teaching in 
the way I have described. You will need to overturn established 
practices and incentive systems that are supported by powerful 
vested interests. However, we have already spent plenty of 
money on fads and easy fixes that do not work, and advances in 
research on learning at least now provide a much clearer 
picture than was available in the past for what is necessary to 
truly make a difference.
    Thank you for the opportunity to make these comments.
    [The prepared statement of Dr. Wieman follows:]

   Prepared Statement of Carl E. Wieman, Former Associate Director, 
       Science Division, Office of Science and Technology Policy
           Applying New Research to Improve Science Education
Insights from several fields on how people learn to become experts can 
                              help us to 
    dramatically enhance the effectiveness of science, technology, 
                engineering, and mathematics education.
    Science, technology, engineering, and mathematics (STEM) education 
is critical to the U.S. future because of its relevance to the economy 
and the need for a citizenry able to make wise decisions on issues 
faced by modern society. Calls for improvement have become increasingly 
widespread and desperate, and there have been countless national, 
local, and private programs aimed at improving STEM education, but 
there continues to be little discernible change in either student 
achievement or student interest in STEM. Articles and letters in the 
spring and summer 2012 editions of Issues extensively discussed STEM 
education issues. Largely absent from these discussions, however, is 
attention to learning.
    This is unfortunate because there is an extensive body of recent 
research on how learning is accomplished, with clear implications for 
what constitutes effective STEM teaching and how that differs from 
typical current teaching at the K12 and college levels. Failure to 
understand this learning-
    focused perspective is also a root cause of the failures of many 
reform efforts. Furthermore, the incentive systems in higher education, 
in part driven by government programs, act to prevent the adoption of 
these research-based ideas in teaching and teacher training.
A new approach
    The current approach to STEM education is built on the assumption 
that students come to school with different brains and that education 
is the process of immersing these brains in knowledge, facts, and 
procedures, which those brains then absorb to varying degrees. The 
extent of absorption is largely determined by the inherent talent and 
interest of the brain. Thus, those with STEM ``talent'' will succeed, 
usually easily, whereas the others have no hope. Research advances in 
cognitive psychology, brain physiology, and classroom practices are 
painting a very different picture of how learning works.
    We are learning that complex expertise is a matter not of filling 
up an existing brain with knowledge, but of brain development. This 
development comes about as the result of intensive practice of the 
cognitive processes that define the specific expertise, and effective 
teaching can greatly reduce the impact of initial differences among the 
learners.
    This research has established important underlying causes and 
principles and important specific results, but it is far from complete. 
More research is needed on how to accomplish the desired learning most 
effectively over the full range of STEM skills and potential learners 
in our classrooms, as well as how to best train teachers.
What is learning STEM?
    The appropriate STEM educational goal should be to maximize the 
extent to which the learners develop expertise in the relevant subject, 
where expertise is defined by what scientists and engineers do. This is 
not to say that every learner should become a scientist or engineer, or 
that they could become one by taking any one class, but rather that the 
value of the educational experiences should be measured by their 
effectiveness at changing the thinking of the learner to be more like 
that of an expert when solving problems and making decisions relevant 
to the discipline. As discussed in the National Research Council study 
Taking Science to School, modern research has shown that children have 
the capability to begin this process and learn complex reasoning at 
much earlier ages than previously thought, at least from the beginning 
of their formal schooling. Naturally, it is necessary and desirable for 
younger children to learn less specialized expertise encompassing a 
broader range of disciplines than would be the case for older learners.
    Expertise has been extensively studied across a variety of 
disciplines. Experts in any given discipline have large amounts of 
knowledge and particular discipline-specific ways in which they 
organize and apply that knowledge. Experts also have the capability to 
monitor their own thinking when solving problems in their discipline, 
testing their understanding and the suitability of different solution 
approaches, and making corrections as appropriate. There are a number 
of more specific components of expertise that apply across the STEM 
disciplines. These include the use of:

   Discipline-and topic-specific mental models involving 
        relevant cause and effect relationships that are used to make 
        predictions about behavior and solve problems.

   Sophisticated criteria for deciding which of these models do 
        or don't apply in a given situation, and processes for 
        regularly testing the appropriateness of the model being used.

   Complex pattern-recognition systems for distinguishing 
        between relevant and irrelevant information.

   Specialized representations.

   Criteria for selecting the likely optimum solution method to 
        a given problem.

   Self-checking and sense making, including the use of 
        discipline-specific criteria for checking the suitability of a 
        solution method and a result.

   Procedures and knowledge, some discipline-specific and some 
        not, that have become so automatic with practice that they can 
        be used without requiring conscious mental processing. This 
        frees up cognitive resources for other tasks.

    Many of these components involve making decisions in the presence 
of limited information--a vital but often educationally neglected 
aspect of expertise. All of these components are embedded in the 
knowledge and practices of the discipline, but that knowledge is linked 
with the process and context, which are essential elements for 
knowledge to be useful. Similarly, measuring the learning of most 
elements of this expertise is inherently discipline-specific.
How is learning achieved?
    Researchers are also making great progress in determining how 
expertise is acquired, with the basic conclusion being that those 
cognitive processes that are explicitly and strenuously practiced are 
those that are learned. The learning of complex expertise is thus quite 
analogous to muscle development. In response to the extended strenuous 
use of a muscle, it grows and strengthens. In a similar way, the brain 
changes and develops in response to its strenuous extended use. 
Advances in brain science have now made it possible to observe some of 
these changes.
    Specific elements, collectively called ``deliberate practice,'' 
have been identified as key to acquiring expertise across many 
different areas of human endeavor. This involves the learner solving a 
set of tasks or problems that are challenging but doable and that 
involve explicitly practicing the appropriate expert thinking and 
performance. The tasks must be sufficiently difficult to require 
intense effort by the learner if progress is to be made, and hence must 
be adjusted to the current state of expertise of the learner. 
Deliberate practice also includes internal reflection by the learner 
and feedback from the teacher/coach, during which the achievement of 
the learner is compared with a standard, and there is an analysis of 
how to make further progress. The level of expert-like performance has 
been shown to be closely linked to the duration of deliberate practice. 
Thousands of hours of deliberate practice are typically required to 
reach an elite level of performance.
    This research has a number of important implications for STEM 
education. First, it means that learning is inherently difficult, so 
that motivation plays a large role. To succeed, the learner must be 
convinced of the value of the goal and believe that hard work, not 
innate talent, is critical. Second, activities that do not demand 
substantial focus and effort provide little educational value. 
Listening passively to a lecture, doing many easy, repetitive tasks, or 
practicing irrelevant skills produce little learning. Third, although 
there are distinct differences among learners, for the great majority 
the amount of time spent in deliberate practice transcends any other 
variables in determining learning outcomes.
Implications for teaching
    From the learning perspective, effective teaching is that which 
maximizes the learner's engagement in cognitive processes that are 
necessary to develop expertise. As such, the characteristics of an 
effective teacher are very analogous to those of a good athletic coach: 
designing effective practice activities that break down and 
collectively embody all the essential component skills, motivating the 
learner to work hard on them, and providing effective feedback.
    The effective STEM teacher must:

   Understand expert thinking and design suitable practice 
        tasks.

   Target student thinking and learning needs. Such tasks must 
        be appropriate to the level of the learner and be effective at 
        building on learners' current thinking to move them to higher 
        expertise. The teacher must be aware of and connect with the 
        prior thinking of the learner as well as have an understanding 
        of the cognitive difficulties posed by the material.

   Motivate the student to put in the extensive effort that is 
        required for learning. This involves generating a sense of 
        self-efficacy and ownership of the learning; making the subject 
        interesting, relevant, and inspiring; developing a sense of 
        identity in the learner as a STEM expert; and other factors 
        that affect motivation. How to do this in practice is dependent 
        on the subject matter and the characteristics of the learner--
        their prior experience, level of mastery, and individual and 
        sociocultural values.

   Provide effective feedback that is timely and directly 
        addresses the student's thinking. This requires the teacher to 
        recognize the student's thought processes, be aware of the 
        typical cognitive challenges with the material, and prepare 
        particular questions, tasks, and examples to help the learner 
        overcome those challenges. Research has shown several effective 
        means of providing feedback, including short, focused lectures 
        if the student has been carefully prepared to learn from that 
        lecture.

   Understand how learning works, and use that to guide all of 
        their activities. In addition to the research on learning 
        expertise, this includes other well-established principles 
        regarding how the human brain processes and remembers 
        information that are relevant to education, such as the 
        limitations of the brain's short-term memory and what processes 
        enhance long-term retention.

    Although many of these instructional activities are easier to do 
one on one, there are a variety of pedagogical techniques and simple 
technologies that extend the capabilities of the teacher to provide 
these elements of instruction to many students at once in a classroom, 
often by productively using student-student interactions. Examples of 
approaches that have demonstrated their effectiveness can be found in 
recommended reading articles by Michelle Smith and by Louis Deslauriers 
et al.
    Effective STEM teaching is a specific learned expertise that 
includes, and goes well beyond, STEM subject expertise. Developing such 
teaching expertise should be the focus of STEM teacher training. 
Teachers must have a deep mastery of the content so they know what 
expert thinking is, but they also must have ``pedagogical content 
knowledge.'' This is an understanding of how students learn the 
particular content and the challenges and opportunities for 
facilitation of learning at a topic-specific level.
    This view of STEM teaching as optimizing the development of 
expertise provides clearer and more detailed guidance than what is 
currently available from the classroom research on effective teaching. 
Most of the classroom research on effective teaching looks at K-12 
classrooms and attempts to link student progress on standardized tests 
with various teacher credentials, traits, or training. Although there 
has been progress, it is limited because of the challenges of carrying 
out educational research of this type. There are a large number of 
uncontrolled variables in the K-12 school environment that affect 
student learning, the standardized tests are often of questionable 
validity for measuring learning, teacher credentials and training are 
at best tenuous measures of their content mastery and pedagogical 
content mastery, and the general level of these masteries is low in the 
K-12 teacher population. The level of mastery is particularly low in 
elementary-and middle-school teachers. All of these factors conspire to 
make the signals small and easily masked by other variables.
    At the college level, the number of uncontrolled variables is much 
smaller, and as reviewed in the NRC report Discipline-Based Education 
Research, it is much clearer that those teachers who practice pedagogy 
that supports deliberate practice by the students show substantially 
greater learning gains than are achieved with traditional lectures. For 
example, the learning of concepts for all students is improved, with 
typical increases of 50 to 100 percent, and the dropout and failure 
rates are roughly halved.
Shortcomings of the current system
    Typical K-16 STEM teaching contrasts starkly with what I have just 
described as effective teaching. At the K-12 level, although there are 
notable exceptions, the typical teacher starts out with a very weak 
idea of what it means to think like a scientist or engineer. Very few 
K-12 teachers, including many who were STEM majors, acquire sufficient 
domain expertise in their preparation. Hence, the typical teacher 
begins with very little capability to properly design the requisite 
learning tasks. Furthermore, their lack of content mastery, combined 
with a lack of pedagogical content knowledge, prevents them from 
properly evaluating and guiding the students' thinking. Much of the 
time, students in class are listening passively or practicing 
procedures that neither have the desired cognitive elements nor require 
the level of strenuousness that are important for learning.
    Teachers at both the K-12 and undergraduate levels also have 
limited knowledge of the learning process and what is known about how 
the mind functions, resulting in common educational practices that are 
clearly counter to what research shows is optimum, both for processing 
and learning information in the classroom environment and for achieving 
long-term retention. Another shortcoming of teaching at all levels is 
the strong tendency to teach ``anti-creativity.' Students are taught 
and tested on solving well-defined artificial problems posed by the 
teacher, where the goal is to use the specific procedure the teacher 
intended to produce the intended answer. This requires essentially the 
opposite cognitive process from STEM creativity, which is primarily 
recognizing the relevance of previously unappreciated relationships or 
information to solve a problem in a novel way.
    At the undergraduate level, STEM teachers generally have a high 
degree of subject expertise. Unfortunately, this is not reflected in 
the cognitive activities of the students in the classroom, which again 
consist largely of listening, with very little cognitive processing 
needed or possible. Students do homework and exam problems that 
primarily involve practicing solution procedures, albeit complex and/or 
mathematically sophisticated ones. However, the assigned problems 
almost never explicitly require the sorts of cognitive tasks that are 
the critical components of expertise described above. Instructors also 
often suffer from ``expert blindness,' failing to recognize and make 
explicit many mental processes that they have practiced so much that 
they are automatic.
    Another problem at the postsecondary level is the common belief 
that effective teaching is only a matter of providing information to 
the learner, with everything else being the responsibility of the 
learners and/or their innate limitations. It is common to assume that 
motivation, and even curiosity about a subject, are entirely the 
responsibility of the student, even when the student does not yet know 
much about the subject.
Failure of reform efforts
    The perspective on learning that I have described also explains the 
failure of many STEM reform efforts.
    Belief in the importance of innate talent or other characteristics. 
Schools have long focused educational resources on learners that have 
been identified in some manner as exceptional. Although the research 
shows that all brains learn expertise in fundamentally the same way, 
that is not to say that all learners are the same. Many different 
aspects affect the learning of a particular student. Previous learning 
experiences and sociocultural background and values obviously play a 
role. There is a large and contentious literature as to the relative 
significance of innate ability/talent or the optimum learning style of 
each individual, with many claims and fads supported by little or 
questionable research.
    Researchers have tried for decades to demonstrate that success is 
largely determined by some innate traits and that by measuring those 
traits with IQ tests or other means, one can preselect children who are 
destined for greatness and then focus educational resources on them. 
This field of research has been plagued by difficulties with selection 
bias and the lack of adequate controls. Although there continues to be 
some debate, the bulk of the research is now showing that, excepting 
the lower tail of the distribution consisting of students with 
pathologies, the predictive value of any such early tests of 
intellectual capability is very limited. From an educational policy 
point of view, the most important research result is that any 
predictive value is small compared to the later effects of the amount 
and quality of deliberate practice undertaken by the learner. That 
predictive value is also small compared to the effects of the learners' 
and teachers' beliefs about learning and the learners' intellectual 
capabilities. Although early measurements of talent, or IQ, independent 
of other factors have at best small correlation with later 
accomplishment, simply labeling someone as talented or not has a much 
larger correlation. It should be noted that in many schools students 
who are classified as deficient by tests with very weak predictive 
value are put into classrooms that provide much less deliberate 
practice than the norm, whereas the opposite is true for students who 
are classified as gifted. The subsequent difference in learning 
outcomes for the two groups provides an apparent validation for what is 
merely a self-fulfilling prophecy. Given these findings, human capital 
is clearly maximized by assuming that, except for students with obvious 
pathologies, every student is capable of great achievement in STEM and 
should be provided with the educational experiences that will maximize 
their learning.
    The idea that for each individual there is a unique learning style 
is surprisingly widespread given the lack of supporting evidence for 
this claim, and in fact significant evidence showing the contrary, as 
reviewed by Hal Pashler of the University of California at San Diego 
and others.
    Because of the presence of many different factors that influence a 
student's success in STEM, including the mind's natural tendency to 
learn, some students do succeed in spite of the many deficiencies in 
the educational system. Most notably, parents can play a major role in 
both early cognitive development and STEM interest, which are major 
contributors to later success. However, optimizing the teaching as I 
described would allow success for a much larger fraction of the 
population, as well as allowing those students who are successful in 
the current system to do even better.
    Poor standards and accountability. Standards have had a major role 
in education reform efforts, but they are very much a double-edged 
sword. Although good definitions and assessments of the desired 
learning are essential, bad definitions are very harmful. There are 
tremendous pitfalls in developing good, widely used standards and 
assessments. The old concept of learning, combined with expert 
blindness and individual biases, exerts a constant pressure on 
standards to devolve into a list of facts covering everyone's areas of 
interest, with little connection to the essential elements of 
expertise. The shortcomings in the standards are then reinforced by the 
large-scale assessment systems, because measuring a student's knowledge 
of memorized facts and simple procedures is much cheaper and easier 
than authentic measurements of expertise. So although good standards 
and good assessment must be at the core of any serious STEM education 
improvement effort, poor standards and poor assessments can have very 
negative consequences. The recent National Academy of Sciences-led 
effort on new science standards, starting with a carefully thought-out 
guiding framework, is an excellent start, but this must avoid all the 
pitfalls as it is carried through to large-scale assessments of student 
mastery. Finally, good standards and assessments will never by 
themselves result in substantial improvement in STEM education, because 
they are only one of several essential components to achieving 
learning.
    Competitions and other informal science programs: Attempting to 
separate the inspiration from the learning. Motivation in its entirety, 
including the elements of inspiration, is such fundamental requirement 
for learning that any approach that separates it from any aspect the 
learning process is doomed to be ineffective. Unfortunately, a large 
number of government and private programs that support the many science 
and engineering competitions and out-of-school programs assume that 
they are separable. The assumption of such programs is that by 
inspiring children through competitions or other enrichment 
experiences, they will then thrive in formal school experiences that 
provide little motivation or inspiration and still go on to achieve 
STEM success. Given the questionable assumptions about the learning 
process that underlie these programs, we should not be surprised that 
there is little evidence that such programs ultimately succeed, and 
some limited evidence to the contrary. The past 20 years have seen an 
explosion in the number of participants in engineering-oriented 
competitions such as First Robotics and others, while the fraction of 
the population getting college degrees in engineering has remained 
constant. A study by Rena Subotnik and colleagues that tracked high-
school Westinghouse (now Intel) talent search winners, an 
extraordinarily elite group already deeply immersed in science, found 
that a substantial fraction, including nearly half of the women, had 
switched out of science within a few years, largely because of their 
experiences in the formal education system. It is not that such 
enrichment experiences are bad, just that they are inherently limited 
in their effectiveness. Programs that introduce these motivational 
elements as an integral part of every aspect of the STEM learning 
process, particularly in formal schooling, would probably be more 
effective.
    Silver-bullet solutions. A number of prominent scientists, 
beginning as far back as the Sputnik era, have introduced new curricula 
based on their understanding of the subject. The implicit assumption of 
such efforts is that someone with a high level of subject expertise can 
simply explain to novices how an expert thinks about the subject, and 
the novices (either students or K-12 teachers) will then embrace and 
use that way of thinking and be experts themselves. This assumption is 
strongly contradicted by the research on expertise and learning, and so 
the failure of such efforts is no surprise.
    A number of elements such as school organization, teacher salaries, 
working conditions, and others have been put forth as the element that, 
if changed, will fix STEM education. Although some of these may well be 
a piece of a comprehensive reform, they are not particularly STEM-
specific and by themselves will do little to address the basic 
shortcomings in STEM teaching and learning.
    The conceptual flaws of STEM teacher in-service professional 
development. The Federal government spends a few hundred million 
dollars each year on in-service teacher professional development in 
STEM, with states and private sources providing additional funding. 
Suzanne Wilson's review of the effectiveness of such professional 
development activities finds evidence of little success and identifies 
structural factors that inhibit effectiveness. From the perspective of 
learning expertise, it is clear why teacher professional development is 
fundamentally ineffective and expensive. If these teachers failed to 
master the STEM content as full-time students in high school and 
college, it is unrealistic to think they will now achieve that mastery 
as employees through some intermittent, part-time, usually voluntary 
activity on top of their primary job.
Why change is hard
    First, nearly everyone who has gone to school perceives himself or 
herself to be an expert on education, resulting in a tendency to seize 
on solutions that overlook the complexities of the education system and 
how the brain learns. Second, there are long-neglected structural 
elements and incentives within the higher education system that 
actively inhibit the adoption of better teaching methods and the better 
training of teachers. These deserve special attention.
    Improving undergraduate STEM teaching to produce better-educated 
graduates and better-trained future K-12 teachers is a necessary first 
step in any serious effort to improve STEM education, but there are 
several barriers to accomplishing this. First, the tens of billions of 
dollars of federal research funding going to academic institutions, 
combined with no accountability for educational outcomes at the levels 
of the department or the individual faculty member, have shaped the 
university incentive system to focus almost entirely on research. Thus, 
STEM departments and individual faculty members, regardless of their 
personal inclinations, are forced to prioritize their time accordingly, 
with the adoption of better teaching practices, improved student 
outcomes, and contributing to the training of future K-12 STEM teachers 
ranking very low. Second, to the limited extent that there are data, 
STEM instructional practices appear to be similarly poor across the 
range of post-secondary institutions. This is probably because the 
research-intensive universities produce most of the Ph.D.s, who become 
the faculty at all types of institutions, and so the educational values 
and standards of the research-intensive universities have become 
pervasive. Third, with a few exceptions, the individual academic 
departments retain nearly absolute control over what they teach and how 
they teach. Deans, provosts, and especially presidents have almost no 
authority over, or even knowledge of, educational practices in use by 
the faculty. Any successful effort to change undergraduate STEM 
teaching must change the incentives and accountability at the level of 
the academic department and the individual faculty member in the 
research-intensive universities.
    A possible option would be to make a department's eligibility to 
receive Federal STEM research funds contingent on the reporting and 
publication of undergraduate teaching practices and student outcomes. A 
standard reporting format would make it possible to compare the extent 
to which departments and institutions employ best practices. 
Prospective students could then make more-informed decisions about 
which institution and department would provide them with the best 
education.
    Most K-12 teacher preparation programs have a local focus, and they 
make money for the institutions of which they are a part. There is no 
accepted professional standard for teacher training, and there is a 
financial incentive for institutions to accept and graduate as many 
education majors as possible. This has resulted in low standards, 
particularly in math and science, with teacher education programs 
frequently having the lowest math and science requirements of any major 
at the institution. This also means that they attract students with the 
greatest antipathy toward math and science. Research by my colleagues 
has found that elementary education majors have far more novice-like 
attitudes about physics than do students in any other major at the 
university. Federal programs to support the training of K-12 STEM 
teachers provide easily available scholarship money, which reinforces 
the status quo by ensuring a plentiful supply of students in spite of 
the programs' low quality. Rewarding institutions that produce 
graduates with the expertise needed to be highly effective teachers is 
an essential step in bringing about the massive change that is needed 
in the preparation of STEM teachers.
    Focusing on STEM learning and how it is achieved provides a 
valuable perspective for understanding the shortcomings of the 
educational system and how it can be improved. It clarifies why the 
current system is producing poor results and explains why current and 
past efforts to improve the situation have had little effect. However, 
it also offers hope. Improvement is contingent on changes in the 
incentive system in higher education to bring about the widespread 
adoption of STEM teaching methods and the training of K-12 teachers 
that embody what research has shown is important for effective 
learning. These tasks are admittedly challenging, but the results would 
be dramatic. The United States would go from being a laggard in STEM 
education to the world leader.
Recommended reading
    S. Ambrose, M. Bridges, M. DiPietro, M. Lovett, and M. Norman, How 
Learning Works: Seven Research-Based Principles for Smart Teaching (San 
Francisco, CA: J. Wiley and Sons, 2010).

    J. Bransford, A. Brown, and R. Cocking, eds., How People Learn; 
Brain, Mind, Experience, and School (expanded edition) (Washington, DC: 
National Academies Press, 2000).

    G. Colvin, Talent Is Overrated: What Really Separates World-Class 
Performers from Everybody Else (New York: Penguin Books, 2008).

    L. Deslauriers, E. Schelew, and C. Wieman; ``Improved Learning in a 
Large-Enrollment Physics Class,'' Science 332, no. 6031 (2011): 862-
864; and particularly the supporting online material.

    R. Duschl, H. Schweingruber, and A. Shouse, eds., Taking Science to 
School; Learning and Teaching Science in Grades K-8 (Washington, DC: 
National Academies Press, 2007).

    C. Dweck, Self-Theories: Their Role in Motivation, Personality, and 
Development (Philadelphia, PS: Taylor and Francis, 2000).

    K. A. Ericsson, N. Charness, P. Feltovich, and R. Hoffman, eds., 
The Cambridge Handbook of Expertise and Expert Performance (Cambridge: 
Cambridge Univ. Press, 2006),

    H. Pashler, M. McDaniel, D. Rohrer, and R. Bjork, ``Learning 
Styles: Concepts and Evidence,'' Psychological Science in the Public 
Interest 9 (2009): 105.

    S. Singer, N. Nielsen, and H. Schweingruber, eds., Understanding 
and Improving Learning in Undergraduate Science and Engineering 
(Washington, DC: National Academies Press, 2012).

    M. Smith, ``A Fishy Way to Discuss Multiple Genes Affecting the 
Same Trait,'' PLoS Biology 10, no 3 (2012): e1001279. doi:10.1371/
journal.pbio.1001279.

    Carl Wieman ([email protected]), professor of physics and 
director of science education initiatives at the University of Colorado 
and the University of British Columbia, served as the associate 
director for science in the White House Office of Science and 
Technology Policy from Sept 2010 to June 2012. He received the Nobel 
Prize in Physics in 2001.

    The Chairman. Thank you, sir.
    You are all being too succinct.
    Dr. Jeffrey Furman.

             STATEMENT OF JEFFREY L. FURMAN, Ph.D.,

        ASSOCIATE PROFESSOR OF STRATEGY AND INNOVATION,

           BOSTON UNIVERSITY; AND RESEARCH ASSOCIATE,

              NATIONAL BUREAU OF ECONOMIC RESEARCH

    Dr. Furman. Good afternoon, Chairman, Ranking Member, 
members of the Committee. It is an honor for me to be here 
today. This is the first time that I have testified before 
Congress. I am Jeff Furman, Associate Professor of Strategy and 
Innovation at Boston University and Research Associate at the 
National Bureau of Economic Research.
    I have understood my invitation today as relating to two 
issues about which I have some expertise. First, I believe I 
have been asked to talk a little about the overall drivers of 
country-level scientific and innovative output, and the role of 
the Federal Government in supporting science and innovation. 
Second, I understand that I was invited to talk a little bit 
about the 5-year history of the America COMPETES legislation. I 
am one of a number of economists studying innovation who has 
worked in a modest amount of detail on these issues, although I 
suspect that members of the Committee are more knowledgeable 
about the COMPETES legislation than academics who study 
innovation.
    With regard to the first substantive issue, country-level 
science and innovation, the first question I would like to 
address is what is the argument for Federal investment in 
science and technology?
    It is a relatively standard question that was addressed 
famously by Vannevar Bush in a letter to President Roosevelt at 
the close of World War II. Bush's argument was that science and 
innovation, particularly early stage innovation, are public 
goods, and that much like national defense, firms do not have 
the incentives to provide these types of investments because 
firms will be unable to capture the complete set of returns 
associated with those investments. As a consequence, there is a 
very strong argument for governments stepping in to help the 
private sector in supporting science and early stage 
innovation, as these would otherwise not receive the socially 
optimal level of investments.
    The idea that the private sector will underinvest in 
innovation is somewhat like free trade, an idea on which 
economists are in general agreement. There are some differences 
in points of view, but the idea that science and early stage 
innovation as a public good is something on which most 
economists agree.
    That said, there is a different question which relates to 
whether science and innovation leadership is essential. An 
alternative is, rather than having the United States be the 
world leader in science and innovation, we could ask other 
countries to make those leading investments and then simply 
imitate what they have done. The evidence does not suggest that 
this is a particularly ideal strategy for leading in jobs or 
leading in industries, although many countries have been 
following this approach with some degree of success. Indeed, a 
follower approach to science and innovation is often taken by 
countries aiming to get closer to the global frontier.
    There is not as much empirical evidence in large-scale 
studies as an economist would ideally like to have on these 
topics, but there are both a great deal of casual evidence that 
scientific and innovation leadership provides benefits, as well 
as many of the ideas that other panelists and Committee members 
have cited today.
    In work led by Scott Stern of MIT and Michael Porter of 
Harvard and me, we have looked at what drives country-level 
outcomes in innovation. One note is that our approach 
implicitly addressed whether culture was a driver of national 
leadership in science and innovation.
    Our results are inconsistent with this hypothesis, as most 
of the exciting developments in country-level innovation over 
the past 25 years come from countries whose cultures have been 
relatively consistent over the past 100, 200, or even 300 
years. Indeed, the areas in which countries seem to have made 
improvements that lead to outcomes is that they figure out ways 
to continuously ratchet up their investments in innovation, 
both at the Federal level and then also at the private level.
    There is, unfortunately, no obvious magic bullet, other 
than having consistent upgrading in science capabilities. This 
is a little bit like the race of the red queen.
    There is also a great deal of evidence that, at the 
regional level, leadership has its benefits. Some of this 
evidence is casual. We can look to Boston and San Francisco as 
two areas with great scientific institutions that lead both in 
science and then also in associated innovation. But, there is 
increasing evidence in economics, including work by Naomi 
Housman, who looks at the positive impact of the Bayh-Dole Act 
on industries and local universities that have been positively 
affected by the Bayh-Dole Act.
    So, it appears as if investments in science and innovation 
have a substantial impact on the local regions and countries in 
which they are made. This suggests, to me at least, that 
leadership in these areas going forward is, indeed, as many of 
the folks in this room surmised, soundly based in evidence.
    The second issue to which I should turn is an assessment of 
the COMPETES legislation. To be precise, I do not think an 
assessment is a very strong way to describe what economists 
have been able to do so far in this particular area.
    Typically economists are very good at direct assessments of 
very specific individual programs. That is not possible with 
the COMPETES legislation because there are so many programs 
that are a part of it, and because it is very difficult to 
assess the impact of authorization relative to specific funding 
through appropriations.
    I think the summary of what economists can say about the 
COMPETES Act, is that there are some very clear and notable 
achievements that arise directly from the legislation. These 
include the creation of ARPA-E, changes in and expansion of the 
National Institute of Standards and Technology, the ability for 
data to become centralized to evaluate teaching outcomes, which 
I believe John may be able to say a good deal about, the 
creation of Federal prize authority and the expansion of the 
Federal prize authority. One other achievement of the COMPETES 
legislation is that it to have galvanized momentum within 
Federal agencies to continuously emphasize science and 
innovation outcomes.
    That said, a full assessment of the COMPETES Act requires a 
nuanced view of what we think might have occurred in the 
absence of the Acts. If we compare relative to the hope of the 
``Gathering Storm'' report, it appears that as if much has been 
unrealized. Indeed, many of the programs, as the Chairman has 
pointed out, have not been funded. But, as has also been 
pointed out, a great deal has been achieved, simply by unifying 
a bipartisan consensus around the idea that science and 
innovation investments should receive Federal attention. And, 
it is very difficult to assess what may have happened in 
physical science research and engineering research in the 
absence of the COMPETES legislation.
    I think I would like to close on that note. It is difficult 
for an academic to keep things to five minutes, but I hope I 
have done so. Thank you.
    [The prepared statement of Dr. Furman follows:]

Prepared Statement of Jeffrey L. Furman, Ph.D., Associate Professor of 
  Strategy and Innovation, Boston University; and Research Associate, 
                National Bureau of Economic Research \1\
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    \1\ These comments heavily draw upon text the paper, ``The America 
COMPETES Acts: The Future of U.S. Physical Science & Engineering 
Research?'' forthcoming, forthcoming in, Josh Lerner & Scott Stern, ed, 
Innovation Policy and the Economy Vol 13, Chicago, IL: University of 
Chicago Press. The discussion of the America COMPETES legislation in 
that paper draws heavily on reports written by the Congressional 
Research Service.
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I. Introductory Remarks
    Thank you very much for this invitation. It is an honor to testify 
before this Committee and I am grateful for the invitation. A common 
complaint about Washington is that there is gridlock in Congress. I, 
however, have the great pleasure of conducting research on Science and 
Innovation Policy, an issue for which there has been both wide-ranging, 
bi-partisan support for the majority of the past century and a 
tradition of national successes that demonstrate the contributions of 
the public sector, private sector, and interactions between the two.
    I will begin with a brief introduction of my background and 
research. I am an Associate Professor of Strategy & Innovation at 
Boston University and a Research Associate at the National Bureau of 
Economic Research (NBER). I hold a Ph.D. from the Massachusetts 
Institute of Technology in Strategy & International Management. My 
official training is in management scholarship, although much of the 
work that I do is based in economics and contributes to research in 
that field.
    My principal research interests have addressed three general 
questions:

    (1)  What are the historical drivers of national innovative output? 
            Stated somewhat differently, this question asks, ``Why are 
            some countries more innovative than others and what have 
            historically follower nations, like Israel and South Korea, 
            done to close the gap in innovation between themselves and 
            historical leader countries, like Germany, Japan, and the 
            United States? \2\
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    \2\ See, e.g., J.L. Furman (2011) ``The Economics of Science and 
Technology Leadership,'' Leadership in Science and Technology: A 
Reference Handbook, William Sims Bainbridge, Editor, Sage Publications; 
J.L. Furman and R. Hayes (2004) ``Catching up or standing still? 
National innovative productivity among `follower' nations, 1978-1999,'' 
Research Policy; J.L. Furman, S. Stern, and M.E. Porter (2002), ``The 
determinants of national innovative capacity,'' Research Policy; S. 
Stern, M.E. Porter, and J.L. Furman (2000) ``Understanding the drivers 
of national innovative capacity--Implications for Central European 
economies,'' Wirtschaftspolitische Blatter; M.E. Porter, S. Stern, and 
J.L. Furman (2000) ``Los Factores Impulsores de la Capacidad Innovadora 
Nacional: Implicaciones para Espana y America Latina'' Claves de la 
Economia Mundial.

    (2)  What is the role of location in the R&D productivity of 
            science-based firms? For example, in this research line, I 
            have investigated whether pharmaceutical companies' drug 
            discovery efforts are, indeed, more productive when they 
            are located in high-science areas, like Boston, 
            Philadelphia, and San Diego.\3\
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    \3\ See, e.g., J.L. Furman and Megan MacGarvie (2009) 
``Organizational Innovation & Academic Collaboration: The role of 
universities in the emergence of U.S. Pharmaceutical research 
laboratories,'' Industry & Corporate Change; J.L. Furman & M. MacGarvie 
(2008) ``When the pill peddlers met the scientists: The antecedents and 
implications of early collaborations between U.S. pharmaceutical firms 
and universities,'' Essays in Economic & Business History; J.L. Furman 
& M. MacGarvie (2007) ``Academic science and early industrial research 
labs in the pharmaceutical industry,'' Journal of Economic Behavior & 
Organization; and J.L. Furman, M. Kyle, I. Cockburn, & R. Henderson 
(2005) ``Public & Private Spillovers, Location, and the Productivity of 
Pharmaceutical Research,'' Annales d'Economie et de Statistique.

    (3)  How do particular institutions and public policies affect 
            science and innovation output? For example, I have 
            investigated (a) the impact of the U.S. human embryonic 
            stem cell policy on national leadership in this research 
            area; (b) the contribution of Biological Resource Centers, 
            like the American Type Culture Collection in nearby 
            Manassas, VA, to the rate of knowledge accumulation, and 
            (c) the ability of the system of academic retractions to 
            limit the negative impact of false publications. I should 
            note that this last line of research has been supported by 
            a grant from the National Science Foundation's Science of 
            Science and Innovation Policy program and that it has been 
            my most recent line of work.\4\
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    \4\ J.L. Furman, F. Murray, & S. Stern (2012) ``Growing Stem Cells: 
The Impact of U.S. Policy on the Organization of Scientific Research,'' 
Journal of Policy Analysis & Management; J. Furman, K. Jensen, & F. 
Murray (2012) ``Governing knowledge production in the scientific 
community: Quantifying the impact of retractions,'' Research Policy; 
J.L. Furman & S. Stern (2011) ``Climbing atop the shoulders of giants: 
The impact of institutions on cumulative research,'' American Economic 
Review; J.L. Furman, F. Murray, & S. Stern (2010) ``More for the 
research dollar,'' Nature; S. Stern & J.L. Furman (2004) ``A penny for 
your quotes?: The impact of biological resource centers on life 
sciences research,'' in Biological Resource Centers: Knowledge Hubs for 
the Life Sciences, ed. S. Stern, Washington, D.C.: Brookings 
Institution Press.

    In each of these projects, I should recognize the contributions of 
my co-authors, most notably, Fiona Murray and Scott Stern of MIT's 
Sloan School and Megan MacGarvie, my colleague at Boston University.
    My understanding of my invitation today is that my charge is to 
talk about two main issues: (a) the Federal role in Science and 
Innovation Policy and (b) America COMPETES Act. I address these issues 
in turn.
II. The Federal Role in Science & Innovation Policy
II.1. History & the general argument for Federal support for science & 
        innovation
    Although the aim of ``promot[ing] the progress of science and 
useful arts'' was articulated in the U.S. Constitution as a power of 
Congress, this power was expressly linked to providing incentives to 
authors and inventors.\5\ Consistent with the specificity of these 
aims, the U.S. Federal Government administered the patent system but 
did not engage in much centralized policy-making regarding science and 
technology during its first century.\6\ During and following the Civil 
War, the Federal government began to expand its role in promoting 
science and technology by developing some key institutions, including 
the development of research-oriented universities under the Morrill 
Acts of 1862 and 1890, the Hatch Act of 1887, the National Academy of 
Sciences (NAS). The second major wave of Federal science-and 
technology-related investments began during the first two decades of 
the 20th century and accelerated during World War I. This effort 
included the establishment of the National Bureau of Standards (1901), 
the Public Health Service (1912), and the National Advisory Committee 
for Aeronautics (1915), the Naval Consulting Board (1915), and the 
National Research Council (1916).
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    \5\ U.S. Constitution, Article I, Section 8, Clauses 1 & 8: ``The 
Congress shall have Power . . . To promote the Progress of Science and 
useful Arts, by securing for limited Times to Authors and Inventors the 
exclusive Right to their respective Writings and Discoveries.'' Clause 
1 precedes the ellipsis; Clause 8 follows the ellipsis.
    \6\ The Federal Government did engage support some efforts related 
to science and technology, however. For example, Federal support for 
the exploration of Lewis and Clark yielded numerous contributions to 
scientific knowledge, including contributions to natural history 
(including discoveries of new plants and animals), meteorology, and 
cartography (Ambrose, Stephen E. (1996) Undaunted Courage: Meriwether 
Lewis, Thomas Jefferson, and the Opening of the American West, (1996) 
New York, NY: Simon & Schuster; Cutright, Paul Russell (1969) Lewis & 
Clark: Pioneering Naturalists, Urbana, IL: University of Illinois 
Press).
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    The argument for active government participation in funding and 
guiding basic scientific research was made famously by Vannevar Bush, 
Director of the Office of Scientific Research and Development under 
Franklin Delano Roosevelt during World War II, in his monograph, 
Science: The Endless Frontier.\7\ Bush argued both that the scientific 
enterprise was a key to economic growth and improvements in social 
welfare.\8\ His logic for suggesting Federal support for science 
funding was straightforward and reflected an understanding of positive 
externalities: Since investments in basic scientific research 
invariably diffuse to other organizations in way that limits the 
ability of for-profit firms to capture sufficient returns from such 
investments, society overall faces higher incentives to invest in basic 
research than do for-profit firms. Thus, basic research can be usefully 
classified as a public good and, in the absence of government support, 
the private sector will provide an inefficiently low investment in 
science and risky innovation. Bush argued that government should step 
into the void and assume an active role in supporting scientific 
research. Bush's vision resulted in the creation of the National 
Science Foundation in 1950 and has constituted the rationale for 
government investment in basic science since that time.\9\ The 
arguments have taken on an additional salience during the debates on 
national competitiveness that surfaced during the 1980s, when American 
economic preeminence in several industries, including automobiles and 
consumer electronics, faced challenges from imports from numerous 
countries, including Germany and Japan, and during the 2000s, in light 
of the substantial economic development of several countries that had 
been historically imitation oriented than innovation-driven, including 
South Korea, China, and India.
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    \7\ Bush, Vannevar (1945) ``Science The Endless Frontier,'' A 
Report to the President by Vannevar Bush, Director of the Office of 
Scientific Research and Development, Washington, D.C.: United States 
Government Printing Office.
    \8\ ``Advances in science when put to practical use mean more jobs, 
higher wages, shorter hours, more abundant crops, more leisure for 
recreation, for study, for learning how to live without the deadening 
drudgery which has been the burden of the common man for ages past. 
Advances in science will also bring higher standards of living, will 
lead to the prevention or cure of diseases, will promote conservation 
of our limited national resources, and will assure means of defense 
against aggression'' (Bush, 1945, p. 10).
    \9\ Building on Bush's ideas, economists beginning with Nelson 
(1959) and Arrow (1962) described as a public, non-rivalrous, non-
excludable good which creates higher social welfare than private 
benefits. Considering the central role of scientific and technical 
knowledge play a central role in economic growth and social welfare 
(Solow, 1956; Abramovitz, 1956), the fact that scientific knowledge 
evidences the properties of a public good suggest that the creation and 
accretion of knowledge should be central goals for national 
policymakers.
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II.2. National leadership and the role of location
    The argument that science and early-stage innovation are public 
goods requiring government support to achieve optimal levels is 
especially compelling in a world in which there is only one country or 
in which one country is the clear leader in science and technology, as 
the U.S. was during the years following World War II, or in which there 
is no trade between countries. In such a scenario, if the unchallenged 
leader country (or the global science investment body) were to curtail 
investments in science and technology or were to slow the rate at which 
it built on prior research advances, global technological improvements 
would stagnate, as would global economic growth.\10\
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    \10\ See Jones, Charles I. (1995) ``R&D Based Models of Economic 
Growth,'' Journal of Political Economy, 103: 739-784.
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    If a number of countries have relatively similar levels of 
scientific development, national decisions regarding scientific 
investment become more interrelated. This complicates matters, as one 
country's optimal investment decisions will depend on the investments 
of other nations and on the rapidity and completeness with which 
knowledge diffuses. If scientific and technical knowledge diffuses 
slowly and incompletely (or if it is particularly expensive for non-
innovator countries to imitate leader countries, i.e., if catch-up is 
slow), then a leader country is likely to obtain high returns to its 
investments in science. If, however, scientific and technical knowledge 
diffuses sufficiently swiftly and effectively, then there may not be a 
substantial benefit to being a leader country, as fast-follower 
countries can free ride on the investments of leaders.
    Thus, unless it is the unchallenged global technological leader, it 
will only be valuable for a country to pursue a strategy of scientific 
and technical leadership in the presence of relatively strong 
increasing returns to science and technology investment and relatively 
local knowledge diffusion. Stated somewhat differently, in order for 
locally-generated knowledge to be translated into scientific and/or 
technical leadership, researchers in close proximity to an original 
discovery must be able to exploit that discovery more rapidly, 
intensively, and, ultimately, successfully, than researchers who are 
further away.\11\
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    \11\ Furman, Jeffrey L. (2011) ``The Economics of Science and 
Technology Leadership,'' Leadership in Science and Technology: A 
Reference Handbook, William Sims Bainbridge, Editor, Sage Publications, 
Chapter 3.
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    Despite improvements in information technology that have lowered 
the communication costs and made it easier to spread information, the 
often-anticipated ``death of distance'' has failed to materialize. 
Indeed, proclamations that the world is flat (Friedman, 2005) overlook 
the importance of local knowledge spillovers, which are quite strong, 
even in science, one of the areas in which ideas are most likely to 
flow most effectively.\12\ While transportation costs have declined for 
physical goods and cost of direct communication has also declined, 
empirical evidence suggests value of proximity has increased in most 
industries and most sectors as well. Research suggests that investments 
in science and technology at the world's frontier yield spillovers that 
are constrained to geographically proximate regions (Jaffe, 
Trajtenberg, & Henderson, 1993) and that even small barriers to 
diffusion can explain large differences in productivity levels among 
the most advanced nations (Eaton & Kortum, 1999).\13\ Thus, there are 
at least some reasons to believe that investments in scientific and 
technical leadership may yield high rates of return than investments 
encouraging fast-follower approaches. Within the United States, those 
regions that have been historically knowledge-intensive have 
experienced greater economic success, even as the information economy 
has developed further (Glaeser and Ponzetto, 2010).\14\ As well, there 
is also evidence that U.S. Federal science and innovation policies, 
including the Bayh-Dole Act have both a local and national impact on 
economic outcomes, such as patenting and job creation (Hausman, 2012; 
Saha & Weinberg, 2011).\15\
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    \12\ Friedman, Thomas L. (2007) The World is Flat: A Brief History 
of the Twenty-first Century. New York, NY: Farrar, Straus and Giroux.
    \13\ Adam Jaffe, Manuel Trajtenberg, Rebecca M. Henderson (1993) 
``Geographic localization of knowledge spillovers as evidenced by 
patent citation,'' Quarterly Journal of Economics, 79(3): 577-598 and 
Eaton, Jonathan and Samuel Kortum, ``Trade in ideas patenting and 
productivity in the OECD,'' Journal of International Economics, 40(3-
4), 251-278.
    \14\ Edward L. Glaeser, Giacomo A. M. Ponzetto. (2010) ``Did the 
Death of Distance Hurt Detroit and Help New York?'' in Edward L. 
Glaeser, editor, Agglomeration Economics, Chicago, IL: University of 
Chicago Press.
    \15\ Naomi Hausman (2011) ``University Innovation, Local Economic 
Growth, and Entrepreneurship,'' working paper; Saha, Subra B. and Bruce 
A. Weinberg (2011) ``A Framework for Quantifying the Economic 
Spillovers from Government Activity Applied to Science,'' working 
paper.
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    More broadly, research suggests that those countries and geographic 
regions that have invested most heavily in scientific and technological 
infrastructure and adopt innovation-oriented policies have 
substantially improved their science bases and innovative capacity 
(Furman and Hayes, 2004).\16\ The evidence suggests, though, that while 
many leader countries have continued to make science and technology 
investments at increasing rates, a number of former follower countries 
have increased their commitments to innovation at even greater rates. 
This has contributed to the globalization of science and technology and 
has contributed to the erosion of the gap between the leader and 
emerging innovator countries. Concerns about American competitiveness 
in the wake of such advances by other countries were among the factors 
prompting the Gathering Storm Report, the Bush Administration's 
American Competitiveness Initiative, and the America COMPETES Act. I 
turn to the lattermost of these in my next comments.
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    \16\ Furman, Jeffrey L. and Richard Hayes (2004) ``Catching up or 
standing still: Catching up or standing still? National innovative 
productivity among `follower' countries, 1978-1999,'' Research Policy, 
33, 1329-1354.
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III. The America COMPETES legislation
III.1. Introductory comments
    My expertise with the America COMPETES legislation is of a 
particular kind: I prepared an overview of the legislation's history, 
components, and funding for a workshop of the National Bureau of 
Economic Research. The paper had two purposes: (1) to provide an 
overview of the COMPETES legislation for academic economists who were 
broadly aware of the legislation but not familiar with its particulars 
and (2) to lay the groundwork for future projects to assess its impact 
and effectiveness. I believe that I was relatively successful in the 
former task, thanks principally to my ability to build on the work of 
the Congressional Research Service, but the latter task is especially 
challenging. Economics has made extraordinary progress over the past 
couple of decades in ``program evaluation,'' i.e., evaluating specific 
public programs, such as job creation programs, and we are beginning to 
make progress in evaluating science and innovation policy as well. The 
field finds it much more difficult, however, to evaluate packages of 
programs and broad-based changes in funding, such as those associated 
with the COMPETES acts. Thus, I consider the research I have done on 
the COMPETES legislation as the beginning rather than the end of 
analysis on this subject and I believe that this is an area in which 
economists and policymakers can find useful ground for interaction.
III.2. Overview of analysis
    The America COMPETES legislation, including the initial America 
COMPETES Act of 2007 (ACA 2007) and America COMPETES Reauthorization 
Act of 2010 (ACA 2010), was one of the prominent bipartisan legislative 
achievements of the past decade and was seen as having the potential to 
be the most notable science and innovation policy initiative of the new 
millennium.\17\ To date, however, limited systematic analysis of the 
America COMPETES Acts has been undertaken.\18\ My analysis of the Act 
has left me with two central impressions:
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    \17\ See, for example, Broder, David (2007) ``Thankless 
Bipartisanship,'' Washington Post, May 3, 2007, A18; Ensign, John 
(2007) ``Why the America Competes Act is Vital,'' Innovation, 5(3); 
National Governor's Association (2007) ``NGA Praises Congressional 
Passage of the America COMPETES Act,'' press release, August 6, 2007, 
http://www.nga.org/cms/home/news-room/news-releases/page_2007/col2-
content/main-content-list/title_nga-praises-congressional-passage-of-
the-america-competes-act.html accessed 15 June 2012; ASTRA (2007) 
``Congress Passes, President Signs America COMPETES Act,'' Alliance for 
Science & Technology Research In America: ASTRA Briefs, 6(6), 10-14; 
and American Physical Society (2008) ``Supporters of America COMPETES 
Bill Praise Its Passage, Urge Federal Funding,'' American Physical 
Society--Capital Hill Quarterly, 3(1), 1.
    \18\ The notable exception to this is the extensive work by the 
Congressional Research Service, including the efforts of Deborah Stine 
and Heather B. Gonzalez, who have written regular updates on COMPETES 
Act policy issues and funding, and John F. Sargent, who has tracked 
budgeting for COMPETES Act programs relative to historical trends. 
Their work is cited throughout this paper and it forms the basis of 
much of the chapter's analysis.

  (1)  The achievements of the legislation can be reasonably viewed as 
        substantial from the perspective of analyzing what may have 
        happened in the absence of the legislation. Key achievements 
        that were enabled by the Acts include important expansions to 
        the power of Federal agencies to implement innovation prize 
        programs, the creation of Advanced Research Projects Agency--
        Energy (ARPA-E), funding for the National Institutes of 
        Standards and Technology (NIST), substantial funding for 
        programs at the National Science Foundation (NSF), the harder-
        to-measure-enabling of agencies to implement programs 
        consistent with the spirit of the COMPETES Acts, and, perhaps 
        most importantly, the maintenance of a tenuous but consistent 
        bipartisan consensus to preserve the funding of physical 
        science and engineering programs even in the face of budgetary 
        difficulties of historical proportions. It is reasonable to 
        conclude that, absent the authorization of funding for science 
        and engineering programs called for by the COMPETES Acts, the 
        level of commitment to these areas would have waned over the 
        past half-decade that U.S. leadership in science and innovation 
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        would have suffered as a consequence.

  (2)  Relative to the standards established by the COMPETES 
        legislation itself, much of the promise of the Acts is yet to 
        be realized. Perhaps the most salient observation about the ACA 
        to the external observer is that a substantial fraction of the 
        funds authorized by the 2007 and 2010 Acts was not appropriated 
        by Congress and that many of the specified programs have either 
        not materialized or have been created but at funding levels 
        much lower than their initial authorizations. This appears to 
        be particularly the case for STEM education funding. Table 1 of 
        my testimony reproduces a table from a 2009 Congressional 
        Research Service report identifying programs authorized for 
        funding under the 2007 Act that did and did not receive 
        appropriations between the 2007 Act and 2009.

    In my understanding, the COMPETES legislation embraced a broad-
ranging series of goals. I will highlight six of these goals and give 
my impressions of the extent to which progress has been made on these 
issues. The issues include:

  (a)  the ``Doubling Path,'' i.e., the aim of doubling the funding for 
        Federal investment in the physical sciences and engineering

  (b)  ARPA-E, the establishment and implementation of the Advanced 
        Research Project Agency--Energy, built on the DARPA model

  (c)  Improvements in America's STEM education infrastructure

  (d)  Modification of programs at the National Institute of Standards 
        and Technology (NIST)

  (e)  Expansion of Federal Prize authority, which was a specific 
        initiative of the 2010 Reauthorization Act that was not 
        included in the 2007 Act

  (f)  Modifications to other Federal programs and clarification of 
        Federal science and innovation responsibilities

    I address each of these issues in greater detail below.
III.3. The Doubling Path
    One of the most prominent features of the COMPETES legislation was 
the ``Doubling Path,'' the aim of doubling of Federal investment in the 
physical sciences and engineering between relative to the 2006 
baseline. The 2007 Act aimed to achieve this result by 2013, while the 
2010 Act re-targeted for 2015. Figures 1 & 2 attached below reflect the 
extent of funding under the COMPETES Act. Both are based in large 
measure on the efforts of the Congressional Research Service. Figure 1 
documents that realized levels of funding and the extent of funding 
appropriated and authorized for the future have been systematically 
revised downwards from the initial aims of the Gathering Storm Report, 
the American Competitiveness Initiative, and the 2007 and 2010 Acts. 
Indeed, the current rate of funding increase for physical sciences and 
engineering is not appreciably greater than it was prior to the 
COMPETES legislation.
    Whether one views this as a success or not depends substantially on 
the perspective that one takes: Federal investment in physical science 
and engineering has not kept pace with the specifications of either 
COMPETES Act; however, in contrast to many areas of the Federal budget, 
funding for these areas has not declined. Thus, investment in these 
areas is relative to other budget priorities is greater than it was 
prior to the COMPETES legislation and is likely substantially greater 
than it would have been in the absence of the 2007 and 2010 
appropriations.
III.4. ARPA-E
    The Advanced Research Projects Agency-Energy (ARPA-E) at the 
Department of Energy was articulated by both COMPETES Acts, the 
Gathering Storm Report, and the American Competitiveness Initiative. 
The agency was created in the 2007, received $15 million in the FY 2009 
budget, but did not receive substantial funding until the 2009 ARRA 
appropriated $400 million, which enabled ARPA-E to begin to solicit 
research proposals and fund research projects. ARPA-E's did not receive 
appropriations in FY 2010, although it did receive nearly $180 million 
in FY 2011 and an estimated $275 million in FY 2012. These funding 
levels have enabled ARPA-E to award $521.7 million in grants to 
approximately 180 awardees as of March 2012. The agency issued a call 
for $150 million in additional proposals in March 2012.\19\ In addition 
to its research funding, the Agency has held three Energy Innovation 
Summits that showcase research by ARPA-E awardees, applicants, and 
other contributors. Although the overall level of funding for ARPA-E 
has not reached the levels envisioned by The Gathering Storm and is 
substantially lower than the DARPA annual budget ($3.2 billion), ARPA-E 
can be considered as an important outcome associated with the COMPETES 
Acts, particularly in light of the fact that the total estimated annual 
U.S. investment in energy-related R&D is approximately $5.1 
billion.\20\ It is currently too early to assess the impact of ARPA-E 
on energy innovation; however, studies like those conducted by Erica 
Fuchs of the nature of DARPA research \21\ and could be insightful and 
could set the stage for further evaluations of ARPA-E's performance.
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    \19\ ARPA-E (2012) ``ARPA-E issues open call for transformational 
energy technologies,'' March 2, 2012, http://arpa-e.energy.gov/media/
news/tabid/83/vw/1/itemid/49/Default.aspx; accessed March 2012.
    \20\ President's Council of Advisors on Science and Technology 
(2010) ``Report to the President on accelerating the pace of change in 
energy technologies through an integrated Federal energy policy,'' 
November 10, 2010; http://www.whitehouse.gov/sites/default/files/
microsites/ostp/pcast-energy-tech-report.pdf; accessed January 2012.
    \21\ Erica R.H. Fuchs (2010) ``Rethinking the role of the state in 
technology development: DARPA and the case for embedded network 
governance,'' Research Policy, 39(9), 1133-1147.
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III.5 STEM Education
    The aim of expanding and improving U.S. STEM education was another 
of the signature initiatives of the 2007 and 2010 Acts. The legislation 
embraced three particular aims: (a) increasing the number of STEM 
teachers, particularly those of high quality and with exceptional 
training, and improving the depth of existing teachers' in STEM areas; 
(b) exposing a larger number of U.S. students to STEM education and 
attracting more into post-secondary STEM education and STEM-linked 
careers; and (c) improving investments in STEM education among women 
and historically under-represented minorities, and high-need schools. 
In this regard, the evidence is mixed. Some programs specified by the 
COMPETES legislation did receive funding, although few received funding 
at the levels authorized by either Act. For example, the Teachers for a 
Competitive Tomorrow: Baccalaureate Degrees and Master's Degrees 
programs, which were authorized by both COMPETES Acts, received annual 
average funding of approximately $1 million, although each had been 
authorized to receive more than $100 million in each fiscal year. Many 
programs, including the Department of Energy's Experiential-Based 
Learning Opportunities; Early Career Awards for Science, Engineering, 
and Mathematics Researchers; Discovery Science and Engineering 
Innovation Institutes; Protecting America's Competitive Edge (PACE) 
Graduate Fellowship Program; and Distinguished Scientist Program, each 
of which was authorized for between $10 million and $30 million in 
funding in FY2010, did not receive appropriations.
    My understanding is that the NSF, which is the agency with the 
greatest responsibility for STEM education, has been able to support 
some STEM initiatives, even as the STEM education programs authorized 
by the COMPETES Acts have been winnowed and real (rather than nominal) 
for education and training programs have declined from 2003 to 2011. In 
particular, it appears as if the NSF has able to support postsecondary 
student funding, through the Graduate Research Fellowship (GRF) and 
Integrative Graduate Education and Research Traineeship (IGERT) 
programs by increasing the fraction of funding derived from its 
Research & Related Activities account.\22\
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    \22\ Gonzalez, Heather B. (2012) ``An Analysis of STEM Education 
Funding at the NSF: Trends and Policy Discussion,'' Congressional 
Research Service reports, 9 April 2012.
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    Overall, however, it does not appear as if the COMPETES legislation 
has substantially shifted investment in STEM education along the 
dimensions of its three initially articulated goals. Again, however, it 
does not appear as if STEM education, or associated outcomes, have 
declined substantially during the COMPETES era and this, itself, may 
constitute a substantial victory.
III.5. Modification of NIST programs
    The modification of programs at the National Institute for 
Standards and Technology (NIST) was another clearly articulated goal of 
the COMPETES Act. While I was not able to conduct a rate-of-return 
analysis on the changes, it appears as if substantial progress has been 
made in funding and programs consistent with this aim. The Advanced 
Technology Program was replaced with the Technology Innovation Program, 
which was ultimately eliminated; the Hollings Manufacturing Extension 
Partnership Programs have been extended; and funding for both NIST Core 
Research and Facilities has been realized at levels not inconsistent 
with those envisioned by the COMPETES legislation. It is noteworthy 
that the levels of funding for NIST funding are orders of magnitude 
below those of other agencies, including the Department of Energy and 
the NSF.
III.6. Prizes
    The 2010 COMPETES Reauthorization Act greatly enhanced the ability 
of Federal agencies to reward progress in science and innovation with 
prizes. Agencies may conduct prize contests of up to $50 million with 
existing appropriations. The approval of prize authority has led to the 
establishment of a clearinghouse for Federal prize programs, 
www.challenge.gov, which posts prize descriptions, eligibility 
conditions, submissions procedures, timelines, and rules. As of March 
2012, www.challenge.gov hosted more than 150 prize challenges, 
representing more than forty Federal agencies.\23\ One of the most 
ambitious Federal prize efforts was an initiative sponsored by the 
Department of Health and Human Services. Called the ``Investing in 
Innovation'' (i2) initiative, the effort involved a novel $5 million 
effort aimed at initiating innovations in Health Information 
Technology. A number of Federal prize programs, most notably those 
operated by NASA, have already become the subject of academic 
study.\24\
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    \23\ Office of Science and Technology Policy (2012) 
``Implementation of Federal Prize Authority: Progress Report,'' 
Executive Office of the President, March 2012.
    \24\ See, in particular, the work of Karim Lakhani and colleagues, 
including Kevin J. Boudreau, Nicola Lacetera, & Karim Lakhani (2011) 
``Incentives and Problem Uncertainty in Innovation Contests: An 
Empirical Analysis,'' Management Science, 57(5), 843-863.
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    The extent of Federal prize programs continues to grow and it is 
too soon to measure the overall impact of such programs on innovation. 
The current scope of prize funding is many orders of magnitude smaller 
than Federal intramural research programs; however, it is possible that 
success with Federal prizes may contribute to momentum for yet larger 
attempts at inducements, such as those described by Kremer and 
colleagues.\25\ More broadly, the opportunity for Federal agencies to 
conduct innovation challenges affords greater latitude for 
organizational innovation than existed in the past. It is possible that 
the seeds sown by expanded Federal prize authority will redound in ways 
that exceed the specific dollar value of prizes offered by Federal 
agencies; at the moment, however, it is too soon to evaluate either 
this possibility or the specific impact of Federal prize authority on 
innovation.
---------------------------------------------------------------------------
    \25\ Michael Kremer and Heidi Williams (2010) ``Incentivizing 
innovation: Adding to the toolkit,'' in Josh Lerner and Scott Stern, 
eds., Innovation Policy and the Economy, Volume 10, University of 
Chicago Press, 1-17.
---------------------------------------------------------------------------
III.7. Additional aims
    In addition to the objectives I address above, the COMPETES 
legislation also addressed additional aims, including the support of 
high-risk, high-rewards projects within each executive agency; and 
greater coordination of Federal science and technology investments. I 
speak to progress on some of these dimensions in my working paper on 
the Act, but regret a lack of time to discuss these in greater detail 
during testimony today.
IV. Concluding Remarks
    I would like to address three areas in my concluding remarks. 
First, I would like to provide a quick summary of my attempt to 
understand the impact of the COMPETES legislation. My impression is the 
COMPETES Acts have led to a number of truly significant achievements. 
These include the development of ARPA-E, which seems like it is off to 
an effective start, the enhancement of Federal prize authority, the 
energizing of Federal agencies around S&E objectives, and, perhaps most 
importantly in the long-term, the reaffirmation and codification of 
bipartisan support for physical science and engineering investment. The 
Acts also appear to have resulted in a substantial positive impact on 
Federal investments in S&E relative to what might have occurred in the 
absence of these Acts. That said, it is important to recognize that the 
level of S&E funding has not kept pace with the authorizations of 
either Act and that a number of the objectives of the Acts, most 
notably those related to STEM education, have been omitted from 
appropriations throughout the half-decade since the initial Act.
    A second issue that I would love to address is the question, ``What 
is the optimal level of funding for S&E?'' While the consensus in 
economics is that the rate of return to additional Federal investment 
is still high, unfortunately, it does not appear to me that there is a 
consensus in economics about the number or fraction of GDP that 
identifies the optimal level of investment. There is consensus that 
leadership in science and innovation continues to reap rewards in terms 
of jobs, productivity, and living standards, even as the world becomes 
increasingly connected and information flows ever faster across 
borders. In the spirit of the glass-half-full, I can say that science 
and innovation policy studies are developing more rapidly than in the 
past and, although labor studies and other areas of economics have a 
longer history of policy evaluation, this area of economics is making 
strides and we should be able to provide more guidance to policy in the 
future than we have in the past.
    The final issue I would like to address regards ideas for what may 
be done in an era of limited budgets to improve S&E competitiveness. 
From the standpoint of my profession, this is a bit reckless as I do 
not link each suggestion directly to a specific study; however, I 
believe that the ideas have a solid basis in prior research. One issue 
around which there is consensus in economics is that leadership in the 
human capital race is important for overall science and engineering 
leadership. Supporting the ability of universities to attract the 
world's best, brightest, and most motivated students and then enabling 
those individuals to remain in the United States, to continue their 
contributions to science and innovation, and to encourage those 
individuals to develop growing businesses is an idea around which there 
is substantial consensus among economists who study innovation. Two 
other ideas for which there is general support are the initiatives to 
support industry commercialization of university-generated ideas, 
potentially through subsidies or tax credits, and continued advocacy of 
intellectual property abroad. Two additional ideas that I will risk are 
that it would be helpful for Congressional acts and Federal initiatives 
to be formulated with an eye towards enabling program evaluation and 
rate of return calculations and the idea that development of scientific 
and innovation capabilities abroad does raise all sails, both by 
contributing to the increasingly rapid pace of technological 
development and by improving the capabilities of American universities 
and firms via competition. Science and innovation are not a zero-sum 
game. Improvements in scientific and innovative capabilities abroad 
augur well for American consumers and for American firms seeking less-
expensive, more valuable intermediate goods. However, the evidence does 
suggest that the greatest rewards in terms of jobs, productivity 
advantages, and social welfare (or lifestyle) do accrue to those 
geographic regions with leadership in scientific and technical 
capabilities.

  Table 1--Overview of FY 2009 Funding Authorizations for 2007 America
                          COMPETES Act Programs
------------------------------------------------------------------------
  Funding includes both FY 2009 Omnibus Appropriations Act and American
                      Recovery and Reinvestment Act
-------------------------------------------------------------------------
 Programs Presumably Not Funded in      Programs Funded at Authorized
              FY 2009                         Levels in FY 2009
------------------------------------------------------------------------
Department of Energy                 Department of Energy
 Pilot Program of Grants to   Office of Science
 Specialty Schools for Science and   National Science Foundation
 Mathematics                          Research & Related
 Experiential Based           Activities
 Learning Opportunities               Major Research
 Summer Institutes            Instrumentation
 National Energy Education    Professional Science
 Development                          Master's Degree Program
 Nuclear Science Talent       Robert Noyce Teacher
 Expansion Program                    Scholarship Program
 Hydrocarbon Systems          Graduate Research
 Science Talent Expansion Program     Fellowship Program
 Early Career Awards for      Major Research Equipment
 Science, Engineering, and            and Facilities Construction
 Mathematics Researchers             NIST
 Discovery Science and        Scientific & Technical
 Engineering Innovation Institutes    Research and Services
 Protecting America's         Construction & Maintenance
 Competitive Edge Graduate
 Fellowship Program
 Distinguished Scientist
 Program
Department of Education
 Advanced Placement &
 International Baccalaureate
 Program
 Math Now
 Summer Term Education
 Program
 Math Skills for Secondary
 Skill Students
 Advancing America Through
 Foreign Language Partnership
 Program
 Mathematics and Science
 Partnership Bonus Grants
National Science Foundation
 Laboratory Science Pilot
 Program
------------------------------------------------------------------------
Source: Deborah D. Stine (2009) ``America COMPETES Act: Programs,
  Funding, and Selected Issues,'' Congressional Research Service,
  RL3428, April 17, 2009.


Figure 1. The ``Doubling Path'' in Research Funding for the Physical 
        Sciences
    Figure tracks potential doubling of Federal funding for science and 
technology, including funding for the NSF, DOE Office of Science, and 
NIST Core Research and Construction relative to FY 2006 appropriations 
levels.


    Source for figure & notes below: John F. Sargent Jr. (2012) 
``Federal Research and Development Funding: FY 2013,'' Congressional 
Research Service report, R42410, 15 June 2012.
    Notes: ``The 7-year doubling pace represents annual increases of 
10.4 percent, the 10-year doubling pace represents annual increases of 
7.2 percent, the 11-year doubling pace represents annual increases of 
6.5 percent, the 15-year doubling represents annual increases of 4.7 
percent, and the 20-year doubling represents annual increases of 3.3 
percent. Through compounding, these rates achieve the doubling of 
funding in the specified time period. The lines connecting aggregate 
appropriations for the targeted accounts are for illustration purposes 
only. With respect to ``Actual Appropriations,'' aggregate data for FY 
2006-FY 2012 is based on regular appropriations (funding provided under 
the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) is not 
included). America COMPETES Act figures are based on aggregate funding 
for the target accounts as authorized by the act. America COMPETES 
Reauthorization Act of 2010 figures for FY 2011-FY 2013 are based on 
aggregate funding for the target accounts as authorized by the act'' 
(Sargent, 2012, p. 9).

Figure 2. Funding for ``Doubling Path'' accounts in millions of nominal 
        (current) dollars, FY 2002- 2013
    FY 2002-FY 2011 (Actual), FY 2012 (Estimated), and FY 2013 
(Request)
    FY 2009 combines funding from FY 2009 and the American Reinvestment 
and Recovery Act.


    Notes: ``NIST--Core Research'' reflects funding for the ``NIST-
Scientific and Technical Research and Services'' (NIST-STRS) account. 
Budget figures for this account and the ``NIST--Facilities'' account do 
not include items appearing under the ``NIST--Industrial Technology 
Services'' (NIST-ITS), which include programs such as the Advanced 
Manufacturing Technology Consortium (AMT), Advanced Technology Program 
(ATP), Technology Innovation Program (TIP), Baldridge Performance 
Excellence Program (BPEP), and Hollings Manufacturing Extension 
Partnership (MEP).
    Source: FY 2002-FY 2005 data from NSF, DOE-Office of Science, and 
NIST annual budget requests (websites listed below); FY 2006-FY 2013 
data from John F. Sargent Jr. (2012) ``Federal Research and Development 
Funding: FY 2013,'' Congressional Research Service report, R42410, 15 
June 2012. NSF budget data from www.nsf.gov/about/budget/; DOE-OS data 
from science.energy.gov/budget/; NIST budget data from www.nist.gov/
public_affairs/budget/. Budget data taken from reports in FY+2 (e.g., 
FY 2006 report used for FY 2004 budget data); JF verified that this 
method yielded match with budget data reported by Sargent (2012).

    The Chairman. You will not go to jail, you know.
    Thank you, Dr. Furman.
    Now, Dr. Peter Lee, Corporate Vice President of Microsoft 
Research.

STATEMENT OF DR. PETER LEE, CORPORATE VICE PRESIDENT, MICROSOFT 
                            RESEARCH

    Dr. Lee. Thank you, Chairman, Ranking Member, members of 
the Committee. Thank you for this opportunity. I am looking 
forward to sharing perspectives on research and education in 
the America COMPETES Act.
    I have been pretty lucky. I have held leadership positions 
in some great research organizations, at Carnegie Mellon 
University, at DARPA, and now at Microsoft. This has allowed me 
to see firsthand the rich interplay between industry, academia 
and government, and how it creates an innovation ecosystem that 
creates a steady stream of ideas, technologies and talent that 
drives American competitiveness.
    This innovation ecosystem, I do not think it came by 
accident. It rose out of an intentional and profoundly 
productive partnership between universities, industry and 
government.
    On the nature of this partnership, I refer you to a 
recently released National Research Council report entitled 
``Continuing Innovation in Information Technology.'' This 
report illustrates, in fact, in the famous diagram referred to 
as the ``tire tracks'' diagram, how fundamental research in IT 
conducted in industry and universities over decades and 
supported by Federal agencies has led to the introduction of 
entirely new product categories that ultimately became the 
basis of new multibillion dollar job-creating industries.
    Just a partial list of these industries includes broadband 
and mobile technologies, the Internet and the web, Cloud 
computing, entertainment technologies, robotics and automation.
    Now, while the U.S. has demonstrated time and again the 
robustness of its IT innovation ecosystem, its current strength 
is not a guaranteed right but the result of American vision and 
sustained investment. The COMPETES Act is a key element of 
this.
    So, what should the Committee be aware of as it begins the 
COMPETES reauthorization? I have two points to make.
    The first is on the importance of investing in fundamental 
research. The multibillion dollar industries I mentioned 
earlier all rely on a pipeline of research advances enabled by 
our past investments. For example, decades of basic research in 
coding theory ultimately enabled today's smart phones, 
streaming video and an array of communications technologies. 
And, at Microsoft, our products and services today build on a 
pipeline of research advances in areas such as machine 
learning, distributed systems and computer graphics.
    Looking forward, it is essential that we keep this pipeline 
full, so as to create new opportunities to contribute to the 
Nation's competitiveness. These include building on the ongoing 
interagency initiatives in big data and in robotics to advance 
transportation, energy, healthcare, and national security, as 
well as transforming education through personalized and online 
learning tools and systems.
    Advances in basic research will also help us tackle grand 
challenges facing our society. For example, we must continue to 
focus on designing IT systems for security and robustness, 
while also developing the research that underpins privacy 
technologies and policies. Also important are advances in 
networking and mobile computing to support technology and 
policies around spectrum sharing for connecting people, 
devices, sensors and the Cloud.
    Now, my second point is about people and investing in the 
future of people. Like all companies in innovation-based 
industries, Microsoft actively seeks to hire people with the 
skills and talent we need to be globally competitive. Yet, in 
August 2012, Microsoft had more than 3,400 unfilled research 
and engineering positions in the United States, a 34 percent 
increase from a year ago. And demand is predicted to go up: the 
Bureau of Labor Statistics estimates that, through the year 
2020, there will be on average at least 120,000 job openings 
per year in computing professions that require at least a 
bachelor's degree. Yet, in 2010, only half that number of 
degrees were awarded in computer science in the United States.
    It is not just people at IT companies or in IT jobs that 
should have the opportunity to study computing. Understanding, 
using and creating information technology matters for people 
involved in research and education, in STEM jobs in industries 
and governments, and in daily life.
    Federal agencies should support efforts to expand computing 
education, particularly at the K through 12 level. Going beyond 
computing literacy, to an ability to think computationally, 
will be a cornerstone for the future workforce.
    In conclusion, I believe that Federal agencies, companies 
and universities all play crucial roles in enabling American 
competitiveness. The reauthorization of the America COMPETES 
Act is an important element in providing Federal research 
agencies with the resources and guidance they need to sustain 
this innovation ecosystem.
    Thank you for this opportunity to testify today and for 
this Committee's longstanding support for scientific discovery 
and innovation. I have additional information in my written 
statement and would be pleased to answer questions. Thank you.
    [The prepared statement of Dr. Lee follows:]

    Prepared Statement of Dr. Peter Lee, Corporate Vice President, 
                           Microsoft Research
    Chairman, Ranking Member, and Members of the Committee, my name is 
Peter Lee, and I am a Corporate Vice President at Microsoft. Thank you 
for the opportunity to share perspectives on research, education, and 
the America COMPETES Act. I appreciate the time and attention the 
Committee has devoted to this topic, and I commend you for advancing 
the dialogue on innovation and competitiveness, including in 
information technology.
    Microsoft deeply believes that investment in research and education 
lay the groundwork for advances that benefit society and enhance the 
competitiveness of U.S. companies and individuals. In my testimony, I 
will:

   describe the profoundly productive interrelationships 
        between industry, academia, and government in the field of 
        information technology;

   provide information and examples from our experiences and 
        activities at Microsoft;

   mention some achievements that have occurred under the 
        America COMPETES Act; and

   identify opportunities in computing research and education 
        for the Committee to consider going forward.

    My testimony today is informed by my experiences in academia, 
government, and industry. In the first area, I spent 22 years as a 
professor at Carnegie Mellon University, including serving as the Head 
of the Computer Science Department and as the Vice Provost for 
Research. Between Carnegie Mellon and Microsoft, I served in the 
Department of Defense at DARPA, the Defense Advanced Research Projects 
Agency. There, I founded and directed a technology office that 
supported research and developed innovations designed to keep our 
military at the leading edge in computing and related areas. Now, I 
hold the title of Corporate Vice President, Microsoft Research, where I 
am responsible for managing Microsoft Research Redmond, a laboratory of 
over 300 researchers, engineers, and support personnel dedicated to 
advancing the state of the art in computing and creating new 
technologies for Microsoft's products and services.
We're In This Together
    My experiences in industry, academia, and government have given me 
a range of perspectives on the challenges and opportunities we face in 
sustaining a strong innovation ecosystem that not only is first to 
create new knowledge, but also is effective in deploying that knowledge 
to improve our society and security and maintain American 
competitiveness in the global economy. From the inside of some of our 
nation's best research organizations, I have seen first-hand how the 
rich interplay between industry, academia, and government produces a 
continuous stream of technological and business innovations. In a 
nutshell, our nation has been remarkably effective in supporting a 
productive, interconnected ecosystem of people, ideas, projects, and 
resources that today drive American competitiveness. The COMPETES Act 
is a prime example of this support.
    I will focus specifically on the field I know best, which is 
information technology (IT). The commercial IT industry is a well-known 
and well-appreciated success story of American innovation and 
leadership. American ingenuity has turned advances in IT into an 
incredible driver for global competitiveness and economic growth. 
Today, IT contributes about 5 percent to overall U.S. GDP, according to 
the Bureau of Economic Analysis. Yet the success was not solely the 
outcome of visionary and very hard-working people at companies across 
the U.S., such as Microsoft. Instead, it is the result of a tightly 
interconnected ecosystem of people, ideas, projects, and resources from 
government, academia, and industry.
    The nature of this complex partnership is illustrated in the 
recently released report Continuing Innovation in Information 
Technology.\1\ (I chaired the National Research Council committee that 
produced this study.) The centerpiece of that report is a diagram, 
referred to as the ``tire tracks.'' (See Appendix A.) This diagram 
illustrates how fundamental research in IT, conducted in industry and 
universities over decades, and supported by Federal agencies, has led 
to the introduction of entirely new product categories that ultimately 
became the basis of new billion-dollar industries, including broadband 
and mobile technologies; microprocessors; personal computing; the 
Internet and the Web; cloud computing; enterprise systems; 
entertainment technologies; and robotics. In all of these cases and 
more, there is a complex interweaving of fundamental research and 
focused development, with innovations in academia driving breakthroughs 
in industry and vice versa; with ideas and technologies transitioning 
among fields and applications, creating opportunities in both new 
research and new products and markets.
---------------------------------------------------------------------------
    \1\ Continuing Innovation in Information Technology; Committee on 
Depicting Innovation in Information Technology; Computer Science and 
Telecommunications Board; Division on Engineering and Physical 
Sciences; National Research Council. http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476.
---------------------------------------------------------------------------
    The three sectors of academia, government, and industry play 
complementary roles in ensuring the health of the innovation ecosystem. 
In particular, the study notes that ``the government role has coevolved 
with the development of IT industries: its programs and investments 
have focused on capabilities not ready for commercialization and on the 
new needs that emerged as commercial capabilities grew.'' This evolving 
role of Federal agencies, and the research communities they support and 
nurture, is a critical complement to the activities of companies both 
large and small. Large companies, on the whole, are driven to invest 
more in product and process development, with clear connections to 
existing products and markets and planned rewards that can be 
demonstrated to shareholders in the near term. Start-up companies, 
while more open to potential new areas and opportunities, are focused 
on the implementations that make real the discoveries of past research, 
not on conducting new investigations.
    Without research agencies and universities to focus on the ever-
shifting frontiers of multiple computing sub-disciplines, to explore 
connections across disciplines and products, and to expose each 
generation of students to an array of future possibilities, companies 
will not have the reservoir of ideas and talent to maintain the U.S. 
lead in today's IT sector and build the next set of multi-billion 
dollar job-creating industries.
    The U.S. has demonstrated time and again that the three components 
of the IT innovation ecosystem are each strong and the vital 
connections among them are robust. Yet this situation is not a 
guaranteed right. It is a result of sustained investment and a 
nurturing environment. Other nations have looked at the U.S. successes 
and are applying the lessons they have learned about how to invest in 
research, to nurture a culture of original discoveries at universities, 
and to deploy a legal and regulatory framework to encourage innovation. 
India and China both have made significant progress and are likely to 
benefit from having sizable internal markets for IT products. Other 
nations, such as Ireland, Israel, Korea, Taiwan, Japan, and some 
Scandinavian countries, are also developing strength in specific areas 
within various IT sectors.\2\
---------------------------------------------------------------------------
    \2\ Continuing Innovation in Information Technology, http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476, page 11.
---------------------------------------------------------------------------
Microsoft Research
    Microsoft is a direct beneficiary of, and wholly committed to, its 
role in the innovation ecosystem described above. This requires 
significant investments by us in various elements of this ecosystem. 
Across the company, more than $9 billion a year is directed toward 
research and development (R&D), with the vast majority of those funds 
supporting development activities focused on specific products. A 
critical element, although small in dollar terms, of our overall R&D 
investment is in more fundamental explorations at Microsoft Research 
(MSR). Founded in 1991, MSR is now the largest and highest quality 
industrial computing research organization in the world, with over 800 
Ph.D.s working in more than 55 research areas. MSR is dedicated to 
advancing the state of the art in computing, often in collaboration 
with academic researchers and government agencies, and to creating new 
technologies for Microsoft's products and services. This organization 
and these people allow Microsoft to respond more rapidly to change and 
provide a reservoir of technology, expertise and people that can be 
quickly brought to bear to respond to and create new technologies, new 
competitors, and new business models.
    While MSR activities are distinct from the short-term development 
activities conducted at Microsoft and other companies, distinctions 
such as ``basic'' versus ``applied'' don't really apply to computing 
research. In fact, computing research is a unique and intoxicating 
blend of invention, discovery, and engineering. MSR researchers 
collaborate with leading academic, government and industry colleagues 
and often move in and out of universities and Microsoft business groups 
as the type of activities they are engaged in shift in focus.
    I like to say that within MSR we can see the incredible range of 
possibilities in computing research come alive. A recent example is 
Microsoft's Kinect, which allows you to control games by using your 
body and voice. The real achievement here is the creation of a system 
which recognizes people and their voices in a variety of environments, 
tracks and responds to their body motions in real time, and can be 
produced in bulk. The technology builds on decades of blue-sky and 
disruptive research, conducted both in academia and in MSR, in a range 
of areas including machine learning, image processing, audio 
processing, and natural language processing.
    The impact of Kinect is just one example of the connections and 
synergies between industry and academia that are discussed in the 
Continuing Innovation in Information Technology and illustrates how 
information technology shifts and evolves from research to products 
back to research. By providing a flexible and affordable system by 
which visual and voice feeds can be processed and used by a computer, 
Kinect is already transforming a variety of academic research projects 
and applications in robotics, human-computer interaction, online 
education, and more. In addition, the advances originally targeted at 
the gaming and entertainment business are having multiplier effects 
outside the IT sector as the technology is investigated for deployment 
in retail (virtual car tours)\3\ and for healthcare applications (such 
as autism or post-stroke physical therapy).\4\
---------------------------------------------------------------------------
    \3\ More information about how the Kinect is being used in other 
commercial sectors is available at http://www.microsoft.com/en-us/
kinectforwindows/.
    \4\ More information about how the Kinect is being used in 
healthcare, education, the arts, and other applications is available at 
http://www.xbox.com/en-US/Kinect/Kinect-Effect.
---------------------------------------------------------------------------
The Demand for STEM Knowledge
    Microsoft and MSR actively rely on a vibrant and effective 
education system within the national research environment to produce a 
pipeline of diverse and highly qualified graduates. MSR supports a 
variety of activities to strengthen this pipeline, including 
fellowships for students and early career professors and programs to 
increase the recruitment and retention of girls and women in computing. 
A key element of our deep connection with the community is our annual 
internship program. We bring over 1,800 student interns to Redmond each 
year, with over 300 in Microsoft Research. The MSR interns participate 
in cutting-edge research and also learn about how advances fit into the 
context of a company that must continuously provide innovative products 
to thrive. This experience helps prepare students for a variety of 
career paths--as professors, as entrepreneurs, as industry researchers, 
and some even as Microsoft employees.
    A main reason that MSR, and Microsoft as a whole, devote 
significant attention to our internship programs is that the success of 
Microsoft is strongly dependent on the talent of our employees. We 
aggressively seek out talented people who will help build our company 
into one that is successful in improving our current products and 
creating new ones as we participate in the rapid change that 
characterizes our innovation-based economy. Yet in August 2012, 
Microsoft had more than 3,400 unfilled research and engineering 
positions in the United States, a 34 percent increase in our number of 
unfilled positions compared to a year ago. And predictions suggest that 
this situation could get worse. The Bureau of Labor Statistics 
estimates that between 2010 and 2020, there will be at least 1.2 
million job openings in computing professions that require at least a 
bachelor's degree (on average 120,000 per year) and that in 2020 half 
of the over 9 million STEM jobs will be in computing.\5\ Yet in 2010, 
only about 60,000 bachelor's, master's, and Ph.D. degrees were awarded 
in computer science \6\--far less than the predicted demand.
---------------------------------------------------------------------------
    \5\ This estimate is based on the Bureau of Labor Statistics' 
occupational employment and job openings data, projected for 2010-2020, 
http://www.bls.gov/emp/. Further analysis of the computing jobs 
predictions are available from the Association of Computing Machinery, 
http://cacm.acm.org/blogs/blog-cacm/147077-computer-science-jobs-and-
education-presentation-slides/fulltext.
    \6\ From the Integrated Postsecondary Education Data System from 
the U.S. Department of Education's National Center for Education 
Statistics, available at https://webcaspar.nsf.gov.
---------------------------------------------------------------------------
    As information technology permeates many aspects of our day-to-day 
lives and becomes a critical element of sectors from manufacturing to 
healthcare, from retail to education, other companies too will be 
searching for the people with the core knowledge and creativity to 
reinvent how we do business and keep American companies at the 
forefront of the global economy. Just in the area of skills related to 
the explosion of ``big data'' in multiple industry sectors, the 
McKinsey Global Institute predicts a shortfall of 140,000 to 190,000 
people with deep analytic skills (e.g., in statistics and machine 
learning) and 1.5 million managers and analysts with the skills to 
interpret and make decisions based on the data analysis.\7\
---------------------------------------------------------------------------
    \7\ Report from McKinsey Global Institute, Big data: The next 
frontier for innovation, competition, and productivity, May 2011, by 
James Manyika, Michael Chui, Brad Brown, Jacques Bughin, Richard Dobbs, 
Charles Roxburgh, Angela Hung Byers. http://www.mckinsey.com/In
sights/MGI/Research/Technology_and_Innovation/
Big_data_The_next_frontier_for_in
novation.
---------------------------------------------------------------------------
    Microsoft recognizes that many U.S. employers are searching for 
people with the skills and talent we need to be globally competitive. 
On September 27, Brad Smith, Executive Vice President and General 
Counsel at Microsoft, will speak in Washington, DC at the Brookings 
Institution on this issue and the policy changes necessary to foster an 
education system that provides opportunities for students to access the 
type and levels of education required to secure jobs in innovation-
based industries.\8\ We look forward to continuing the conversation on 
STEM education and policy with the Members of this Committee and the 
larger government, industry, and academic communities that all have 
roles to play in this important area.
---------------------------------------------------------------------------
    \8\ Brookings Institution Event on ``Education and Immigration 
Reform: Reigniting American Competitiveness and Economic Opportunity'' 
on September 27, 2012. See http://www
.brookings.edu/events/2012/09/27-stem-education.
---------------------------------------------------------------------------
Five Years of the America COMPETES Act
    Since the America COMPETES Act was passed in 2006 and reauthorized 
in 2010, the agencies covered under the Act have made important 
contributions to advancing our fundamental understanding of the world 
and training the next generation of scientists and engineers. In 
computing, there are several achievements of the past five years that 
would not have been possible without key contributions by the Federal 
Government.
Research
    Under America COMPETES, we have seen significant interagency 
collaboration on research targeted at major challenges and 
opportunities. Two recent examples are the initiatives in robotics and 
``big data.'' These both illustrate the interconnections between 
industry, academia, and government described above, as they are 
simultaneously areas for cutting-edge fundamental research on hard 
problems that will occur at universities and industry labs, and also 
the focus of development and deployment activities at large 
corporations and in the operations of government agencies.
    The National Robotics Initiative was launched in June 2011. The 
focus is on ``co-robotics''--enabling the development of robots that 
work with or beside people to extend or augment human capabilities, 
taking advantage of the different strengths of humans and robots. An 
important characteristic of the initiative is that it both supports 
core research in areas such as computer vision, language processing, 
and dexterous manipulation that will advance robotics capabilities 
across the board while also supporting research targeted at key 
robotics applications in areas such as health, manufacturing, 
agriculture, defense, and space exploration.
    The Federal Big Data Initiative was launched in March 2012. This 
initiative builds on many years of research at multiple agencies to 
improve the creation, management, analysis, fusion, visualization, 
understanding, and use of very large data sets. Advances in these areas 
will improve scientific research (e.g., on disease or the environment) 
and facilitate real-time decision making (e.g., in the defense and 
intelligence sectors or electricity grid management). Increasing the 
ability to generate and interpret big data is already having an impact 
in diverse sectors, from retailing to healthcare \9\, and Federal 
investment will create new capabilities with even broader benefits. At 
Microsoft, as well as our industry competitors, we are making big bets 
on Big Data. Already, today, nearly every product and service offered 
by Microsoft is improved or enabled by computing research advances in 
an area called machine learning, which pertains to the design of 
systems that become more effective with experience. Today, that 
``experience'' is gained through the analysis of big data. Whether it 
is the analysis of large numbers of electronic health records to 
improve patient care for individuals, or the use of massive amounts of 
training data to improve how well Kinect can track a videogame player's 
movements, advances in big data provide a critical foundation for our 
products.
---------------------------------------------------------------------------
    \9\ The McKinsey Global Institute Big Data report referenced above 
analyzes the potential impact of big data on five domains, including 
manufacturing, retail, and public sector administration.
---------------------------------------------------------------------------
    Another emerging example can be found in research on how large 
numbers of interconnected people and computers can be used together to 
solve hard problems. While I was at DARPA, I led an experiment to see 
if social networks could be used to rapidly mobilize very large numbers 
of people to conduct coordinated operations at global scale. The 
resulting ``red balloon hunt'' (officially called the 2009 DARPA 
Network Challenge) inspired millions of people around the globe to 
collaborate. This experience had a major impact on thinking within the 
Department of Defense. Another approach to this phenomenon can be seen 
in FoldIt, which was also supported while I was at DARPA. FoldIt is a 
crowdsourced computer game for protein folding and protein structure 
calculation, and last year it was used to solve an AIDS-related protein 
structure problem whose solution had eluded the scientific community 
for a decade. At Microsoft and other companies, some products and 
services, such as search engines, are improved as more people use them, 
a form of crowdsourcing. While we have embarked on early research into 
the potential of such online task markets, we rely on new government 
research programs, for example on ``social computing,'' to build a 
coherent research community and pool of talented researchers to 
collaborate with and hire.
Education
    A key attribute of the America COMPETES Act and its reauthorization 
is the recognition of the importance of every element of the system 
that contributes to science, technology, engineering, and mathematics 
(STEM) education in the U.S. From K-12 to undergraduate, from graduate 
education to post-doctoral studies and early career faculty, Federal 
programs have an opportunity to improve the approaches taken in schools 
and universities to ensure rigorous and engaging courses are offered 
and students have the opportunity to experience and explore the STEM 
fields.
    Two examples of recent programs that supported the goals of America 
COMPETES are Computing Education for the 21st Century (CE21)\10\ and 
the Computing Innovation Fellows (CIFellows),\11\ both out of the 
National Science Foundation.
---------------------------------------------------------------------------
    \10\ The National Science Foundation's Computing Education for the 
21st Century (CE21) program is described at http://nsf.gov/funding/
pgm_summ.jsp?pims_id=503582.
    \11\ Information about the Computing Innovation Fellows Project is 
available at http://cra.org/ccc/cifellows.
---------------------------------------------------------------------------
    The CE21 program focuses on generating knowledge and activities 
related to computing education with the goal of building a robust 
computing research community, a computationally competent 21st century 
workforce, and a computationally empowered citizenry. Examples of work 
underway in this program include development of resources to facilitate 
expansion of computer science teaching in high school, such as the 
design assessments and models of teacher professional development for 
new courses, including a new computer science AP course, research on 
the teaching and learning of computational competencies, and alliances 
to broaden participation in computing careers. CE21 is ongoing and 
continues to provide important contributions necessary to advance 
computing education in the U.S.
    The CIFellows Program is a program that ran from 2009 to 2011 and 
was a targeted response to concerns that the economic climate in 2009 
would force a large number of new Ph.D.s in computer science and 
related fields to delay or altogether abandon a research career in 
academia or industry. By providing post-doctoral fellowships, which 
historically had been less common in computing than other fields, and 
matching awardees to mentors, the CIFellows program provided interim 
employment and career development at a critical juncture where the 
research workforce pipeline was in danger of breaking down. It is still 
early to fully assess the impact of this program, but many of the 
CIFellows have now found permanent employment in research organizations 
(including at Microsoft Research) where they can contribute to the 
innovation opportunities outlined elsewhere in this testimony.
Looking Ahead
    As a nation, we can be proud of the achievements that occurred 
under the past five years of America COMPETES, but there are still 
research questions to be answered and societal challenges in technology 
and education to be tackled. The activities of the past lay the 
groundwork that we can build on going forward. Below I provide several 
observations about the opportunities that exist for the Committee to 
consider as it begins reauthorization of the America COMPETES Act.
Invest in the future of research
    The impact and results of research are often unknown when the 
research is started. The value and payoff of a sustained and healthy 
investment in research is often realized well after the initial work is 
done. Today, the U.S. is reaping the benefits in both our quality of 
life and in the global competitiveness of our companies that builds on 
past investments. According to estimates by the Bureau of Economic 
Analysis, the IT-intensive ``information-communications-technology-
producing'' industries grew by 16.3 percent in 2010.\12\ The strength 
of these industries are built on research in many areas over many 
years. One example is research on coding theory that eventually enabled 
modern cell phones and streaming video through the Internet.\13\ 
Another is the research on distributed computing, including in 
software, storage, and networking, that provided the underpinning of 
today's rapidly-expanding cloud computing industry, in which the U.S. 
is the international leader.
---------------------------------------------------------------------------
    \12\ Continuing Innovation in Information Technology, http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476, page 1.
    \13\ Continuing Innovation in Information Technology, http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476, page 11.
---------------------------------------------------------------------------
    Grand Challenges and Computing Research: To maintain American 
leadership in a world where information, knowledge, and people move 
rapidly around the globe, the U.S. must support research in all 
disciplines of science and engineering. Many of the grand challenges 
facing society require not a single breakthrough in a single area, but 
the contributions of researchers in multiple fields and the integration 
of new knowledge into complex systems. Computing is often a central 
element in tackling these grand challenges and improving healthcare, 
transportation, education, national security, energy independence, 
scientific discovery, and prosperity. Looking ahead, examples of the 
opportunities that exist include:

   Advances in big data and robotics targeted at refining and 
        reimagining our transportation and energy systems to improve 
        reliability, safety, and efficiency.

   Continued focus on designing IT systems for security and 
        robustness in light of different levels of risk and threat 
        posed by different applications and environments.

   Advances in networking and mobile computing to enable next-
        generation technology and policies around spectrum sharing \14\ 
        in order to provide the global connectivity among people, 
        devices, sensors, and the cloud that will allow benefits in 
        areas such as continuous health monitoring and smart buildings 
        and cities, as well as expand access to information and 
        technology throughout the world.
---------------------------------------------------------------------------
    \14\ The potential benefits of spectrum sharing and the associated 
policy and technical issues are described in Realizing the Full 
Potential of Government-Held Spectrum to Spur Economic Growth, 
President's Council of Advisors on Science and Technology, http://www
.whitehouse.gov/sites/default/files/microsites/ostp/
pcast_spectrum_report_final_july_20_
2012.pdf.

   Technical and social science research to underpin privacy 
---------------------------------------------------------------------------
        technologies and policies.

   Integrating IT capabilities with educational knowledge to 
        deploy personalized or just-in-time learning tools and systems 
        that improve networks and information for teacher and schools.

    Cyberinfrastructure: New technologies from computing have always 
played a key role in enabling discoveries across multiple fields of 
science and engineering. Today, modern science increasingly relies on 
integrated information technologies and computation to create, collect, 
process, and analyze complex data. Federal agencies must continue to 
support research and deployment activities that facilitate effective 
use of cyberinfrastructure \15\ in ways that recognize the changing 
scale and types of scientific information and the rise of the ``fourth 
paradigm'' of data-intensive science.\16\
---------------------------------------------------------------------------
    \15\ The role of networking and IT infrastructure in research in 
other fields is discussed in Designing a Digital Future: Federally 
Funded Research and Development Networking and Information Technology, 
President's Council of Advisors on Science and Technology, http://
www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-nitrd-
report-2010.pdf.
    \16\ Further discussion of the impact of advanced computing 
capabilities on multiple fields of science is available in The Fourth 
Paradigm: Data-Intensive Scientific Discovery, http://
research.microsoft.com/en-us/collaboration/fourthparadigm/default.aspx.
---------------------------------------------------------------------------
    Interagency Coordination and Existing Legislation: Information 
technology research and education is a critical element within the 
mission and activities of multiple Federal agencies, and the 
interagency Networking and Information Technology Research and 
Development (NITRD) program has for years facilitated the coordination 
of these activities. The President's Council of Advisors on Science and 
Technology (PCAST) report on Designing a Digital Future: Federally 
Funded Research and Development in Networking and Information 
Technology,\17\ and the upcoming PCAST update of that report, clearly 
articulate the opportunities in NIT and recommendations for moving 
forward. Microsoft is supportive of the reauthorization of the NITRD 
program, whether as part of the COMPETES reauthorization or as stand-
alone legislation.
---------------------------------------------------------------------------
    \17\ Designing a Digital Future: Federally Funded Research and 
Development Networking and Information Technology, President's Council 
of Advisors on Science and Technology, http://www.whitehouse.gov/sites/
default/files/microsites/ostp/pcast-nitrd-report-2010.pdf.
---------------------------------------------------------------------------
Invest in the future of people
    Technology, including information technology, is permeating 
society. Citizens of the 21st century will need core analytical and 
quantitative knowledge to manage every-day tools such as smartphones 
and programmable thermostats, to fill well-paying jobs in multiple 
technology-dependent industrial sectors, and to create the new 
technologies that fuel the innovation economy. The Federal agencies 
have key roles to play in ensuring that students today receive the 
education they need for society to thrive in the years ahead.
    Computing Education: As discussed throughout this testimony, 
understanding, using, and creating information technology is key for 
people involved in research and education, in STEM jobs in industry and 
government, and in daily life. Agencies should support efforts to 
expand computing education, particularly at the K-12 level, and ways to 
increase exposure to computing education and research opportunities at 
the university level, for both computing majors and those in other 
disciplines.
    At the K-12 level, good work has been done to date in universities 
on courses and professional development (as mentioned above) and 
advances have been made in some states and cities. Yet still only nine 
states allow computer science courses to count as part of the ``core'' 
curriculum that students can choose to pursue to graduate from 
secondary school.\18\ More information about the opportunities and 
policy challenges is available from the Computing in the Core coalition 
(http://www.computinginthecore.org/), of which Microsoft is a founding 
member.
---------------------------------------------------------------------------
    \18\ Eight states count computer science as a mathematics credit--
Missouri, New York, North Carolina, Oklahoma, Oregon, Rhode Island, 
Texas, and Virginia--and one (Georgia) counts it as a science credit. 
CSTA, ACM (2010). Running On Empty: The Failure to Teach K-12 Computer 
Science in the Digital Age. Available at http://www.acm.org/
runningonempty/.
---------------------------------------------------------------------------
    At the higher education level, it is important that the system have 
the capacity to expand to serve a hopefully growing number of people 
wishing to study computing. Also important is that the content and 
approaches used in college computing courses reflect what is being 
learned about engaging and effective learning and up-to-date content in 
rapidly-changing areas such as cybersecurity.
    In addition to activities that support these goals specifically, it 
is important that general Federal ``STEM'' programs--whether for 
teacher development and support, pedagogy research, undergraduate 
education, or other areas--recognize that computer science is included 
in their purview and clearly enable its inclusion through their 
solicitations, outreach, and review criteria. While the importance of 
including computer science in STEM has been widely recognized for 
several years, accomplishing this may require coordinated action by 
government agencies.
    Education Across Disciplines and Integrated with Research: The pace 
of change and discovery in science and engineering is increasing, as is 
the amount of work involving researchers from multiple disciplines. 
Universities are well-positioned to respond to these trends, and 
Federal agencies should continue to support and drive universities to 
enable students to engage in interdisciplinary courses of study and 
also to develop opportunities and resources for students to access 
courses and knowledge from outside their primary area of study. Also it 
is important that we preserve and build on the integration of research 
and education that is possible within the U.S. research university 
system for undergraduates and graduate students. This exposes students 
to the cutting edge of rapidly changing fields and, through those 
students and their post-graduation employment in industry and 
elsewhere, improves the transfer of knowledge from academia.
    Diversity: The demographics of the Nation are changing. Society 
benefits when people have access to multiple fields and career choices. 
Women and certain minorities have historically been underrepresented in 
many science and engineering fields, including computing. A number of 
efforts are underway to shift this situation, and we all must continue 
to strive to improve diversity in science and engineering.
Summary

   Past investment in computing research has spawned multiple 
        new billion-dollar IT industries that have significant positive 
        impact on the U.S. economy.

   Advances in IT are also enabling innovation in multiple 
        sectors (such as manufacturing, healthcare, energy, education, 
        and retailing).

   Innovation in IT results from an interconnected ecosystem in 
        which government, universities, and industry each play a 
        critical role.

   Federal investment in research is a critical component of 
        tacking national challenges in transportation, health, energy, 
        education, and other areas. This will require support for both 
        multidisciplinary research and strong investments in advancing 
        the core of all research areas, especially computing. It will 
        also require support for the development and deployment of 
        cyberinfrastructure.

   People will need STEM skills, especially computing 
        knowledge, to be citizens, employees, and innovators in the 
        21st century technology-infused world.

   Strengthening the pipeline of STEM education, including 
        computer science education.
              *      *      *      *      *      *      *
    In conclusion, I believe that Federal agencies, companies, and 
universities all have major responsibilities in the interrelated system 
by which curiosity becomes discovery, and knowledge is deployed for the 
sake of the Nation's competitiveness and society's well-being. The 
reauthorization of the America COMPETES Act is an important step toward 
providing Federal research agencies with the resources and guidance 
they need to contribute to our innovation ecosystem.
    Finally, let me thank you for this committee's longstanding support 
for scientific discovery and innovation. I would be pleased to answer 
any questions you might have.
Appendix A: The Tiretracks Diagram


    This is Figure 1 from National Research Council, Continuing 
Innovation in Information Technology, National Academies Press, 
Washington, D.C., 2012. Full report is available at http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB
_045476.
                Witness Biography--Peter Lee--Microsoft
    Dr. Peter Lee holds the title of Corporate Vice President, 
Microsoft Research. In this position he is responsible for managing 
Microsoft Research Redmond, a laboratory of over 300 researchers, 
engineers, and support personnel dedicated to advancing the state of 
the art in computing and creating new technologies for Microsoft's 
products and services. Prior to joining Microsoft, Dr. Lee was a 
professor at Carnegie Mellon University. A devoted teacher and a 
researcher with over 100 research publications, distinguished lectures, 
and keynote addresses, he served as the Head of CMU's Computer Science 
Department and before that had a brief stint as the university's Vice 
Provost for Research. Peter Lee also served in the Department of 
Defense at DARPA, the Defense Advanced Research Projects Agency. There, 
he founded and directed a major technology office that supported 
research in computing and related areas in the social and physical 
sciences.
    Peter Lee has shown executive-level leadership in world-class 
research organizations spanning academia, government, and industry. He 
is a Fellow of the Association for Computing Machinery and serves the 
research community at the national level, including policy 
contributions to the President's Council of Advisors on Science and 
Technology, membership on the National Research Council's Computer 
Science and Telecommunications Board, former chairmanship of the 
Computing Research Association, and testimony before the U.S. House 
Science and Technology Committee.

    The Chairman. Thank you very much, Dr. Lee.
    And now, Mr. John Winn, Chief Program Officer, National 
Math and Science Initiative. Please.

STATEMENT OF JOHN L. WINN, CHIEF PROGRAM OFFICER, NATIONAL MATH 
                     AND SCIENCE INITIATIVE

    Mr. Winn. Thank you, The Chairman, members of the 
Committee. I am indeed honored to testify before you today on 
behalf of Tom Luce, our Chairman and CEO in the National Math 
and Science Initiative.
    The Chairman. Can you pull that mike up toward you a little 
bit? Thank you.
    Mr. Winn. Thank you. I would like to express our gratitude 
for all the good work that went into America COMPETES Act. We 
think it is extraordinary legislation and support it. Tom Luce, 
as well as the rest of us, would like to extend our special 
thanks and gratitude to Senator Hutchison and her great work to 
further the competitiveness of this nation, and particularly in 
STEM education.
    Since its inception five years ago, the National Math and 
Science Initiative has been replicating proven programs in STEM 
education, both in teacher preparation, as well as in advanced 
STEM learning within K-12 education.
    We believe that, through public-private partnerships, and 
through provided guided replication and implementation of 
successful programs in public schools and universities who 
desire to, not only change STEM education, but to transform 
STEM education in an important and powerful way, is indeed an 
incredible mission.
    One particular program that we replicate is the UTeach 
program that Senator Hutchison mentioned earlier. This program 
was created by the University of Texas in Austin, and it 
recruits STEM majors into a integrated program of science, 
mathematics, engineering, as well as providing them with 
education credentials, all within a four-year period. There are 
many programs that provide two degrees, but most of them 
require an additional year of education.
    Ninety percent of our UTeach graduates go directly into 
teaching, and 80 percent of our graduates, our teachers that 
are in the field, are still teaching in STEM fields five years 
later.
    To implement UTeach successfully, it requires a close 
relationship between colleges of natural science and colleges 
of education. Can you imagine a senior engineering professor 
teaching alongside a college of education professor or a master 
teacher? You really do not have to, because you can see it in 
action at the University of California at Berkeley, and at many 
other UTeach sites across the Nation.
    We now have 33 universities across the nation implementing 
UTeach. I will refer you to the map that is included in my 
written testimony.
    UTeach works in all sorts of universities, Research One 
universities, comprehensive, rural and urban settings. These 
universities that are replicating UTeach now have over 5,500 
actively enrolled students who we believe, that by 2020, will 
have taught over four million public school students in STEM 
education.
    As Senator Hutchison pointed out, this Act authorizes to 
replicate and implement programs in institutions of higher 
learning that have integrated course of study in science, 
technology, engineering and mathematics, and teacher education. 
This describes UTeach perfectly.
    UTeach, we believe that there are unfilled opportunities in 
America COMPETES Act to make this subtitle a reality. The 
National Science Foundation rightly allocates funding for 
research and innovation across this nation. We think, by taking 
a broad view of the implementation of research and innovation, 
it can support the UTeach program and programs like it.
    The UTeach program furthers research in two ways. Number 
one, in universities that are replicating UTeach across the 
nation, we are seeing a new wave of research in STEM teaching 
and learning that bubbles up at the faculty level. These 
research activities, many of them are small and within 
universities, but they are happening as a result of the 
replication of the UTeach program and are not dependent on 
external additional funding.
    The second way that it supports research is the UTeach 
graduates become very adept at introducing research 
understanding and practice within the K-12 school system. What 
better way could we inspire students to go into more advanced 
study in STEM education than to have them involved in active 
research?
    Also, the UTeach programs involves innovation, ongoing 
innovation, within the universities that are implementing it. 
By this I mean, although there are core elements of success 
that are followed for the integrity of the program, it requires 
a transformation within the universities that create new 
integrated curricula, develop new partnerships and new 
strategies for integrated teaching, both among STEM faculty and 
among college of education faculty.
    In conclusion, I would like to share with you a situation 
that I noticed in Florida, when I was Commissioner of 
Education. We could never set the passing score in our 
mathematics and science certification test at the level that 
our best teachers recommended. Why? The reason was simple. We 
had too few candidates who could pass that high level.
    I think this stands as a stark reminder that we need to 
produce a new generation of highly competent STEM teachers if 
we are going to reach our national goals.
    Thank you.
    [The prepared statement of Mr. Winn follows:]

  Prepared Statement of John L. Winn, Chief Program Officer, National 
                      Math and Science Initiative
    Good afternoon, Mr. Chairman and honorable members of the 
Committee. I am honored to be testifying before you today. I would like 
to say thank you for your support of innovation in STEM fields and 
would especially like to say thank you to Senator Hutchinson for her 
work to offer solutions to this Nation's growing need to become more 
competitive in a highly technological world. We will certainly miss 
you.
    Today I am testifying on behalf of the National Math and Science 
Initiative located in Dallas, Texas. Since its inception five years 
ago, NMSI has been replicating successful programs to transform STEM 
teaching and advanced learning. Our approach relies on public private 
partnerships, performance management of replication and continued 
guidance and support for public schools and universities that have a 
strong desire, not just to improve STEM learning, but to transform it 
in a way that is powerful and lasting.
    One particular program is UTeach, a teacher preparation program 
first developed at the University of Texas at Austin. This program is 
highly innovative in that it offers service minded majors in math, 
sciences, and engineering an opportunity to earn a degree in their 
field of interest and become a highly competent teacher all within four 
years. Ninety percent of UTeach graduates go directly into teaching and 
80 percent continue teaching five years later. Their trademark is a 
strong knowledge of their subject and four years of teaching practice 
before they enter classrooms.
    UTeach requires a close and lasting partnership between colleges in 
STEM fields of study and colleges of education. Can you imagine a 
senior engineering professor teaching UTeach classes beside a master 
teacher or senior education professor? You don't have to. You can see 
it at the University of California Berkeley and other UTeach sites 
across the Nation. We now have 33 universities replicating the UTeach 
program. I refer you to the map contained in my testimony. UTeach works 
in all types of universities: research, comprehensive, urban, and 
rural. These universities now have over 5,500 students actively 
enrolled and we project that over four million K12 students will have 
been taught by UTeach graduates by 2020.
    How does this relate to the America Competes Act?
    The Act authorizes a program at the National Science Foundation to 
``replicate and implement programs at institutions of higher education 
that provide integrated courses of study in science, technology, 
engineering, or mathematics, and teacher education . . .''
    Subtitle B Section 551 states,

        The purpose of this subtitle is to replicate and implement 
        programs at institutions of higher education that provide 
        integrated courses of study in science, technology, 
        engineering, or mathematics, and teacher education, that lead 
        to a baccalaureate degree in science, technology, engineering, 
        or mathematics with concurrent teacher certification.

    UTeach is just this type of program. We believe that there are 
unfulfilled opportunities to make this statute a reality.
    The National Science Foundation rightly allocates funding to spur 
research and innovation. With the strong support of this committee and 
taking a broad view of these priorities, the UTeach program can be 
supported as described in this legislation.
    Support for research and innovation does not have to be limited 
early development. If we truly want to build a top flight generation of 
scientists, mathematicians, researchers, inventors, etc., we must lay 
the groundwork now. UTeach students learn to bring research 
understanding and practice into the K12 classroom. How better can we 
prepare and inspire students to go into advanced STEM fields and 
further our strong competitive presence? The universities replicating 
UTeach are starting a new wave of faculty driven research into STEM 
teaching and learning. Therefore, support for expanding UTeach is 
expanding research without additional funding.
    There is no doubt that UTeach is a remarkable innovation. But it is 
not a program that can be adopted in a flash. Success requires four 
years of continuous innovation within the replicating university. New 
curricula must be collaboratively developed, new approaches to 
recruiting STEM majors into the program must be created, as well as 
developing additional relationships that make the program work. 
Although replication includes core elements of success, these unfold in 
ways often unique to the university.
    One thing we all know. We can and must do better.
    I would like to end by relaying a situation that underscores the 
need to transform STEM teaching. In Florida, we could never set our 
science and math certification exam passing scores at the level 
recommended by our best teachers. The reason is simple; there would be 
far fewer candidates passing the higher qualifying score. This 
phenomenon is not limited to one state. It is pervasive and it stands 
as a reminder that we need a new generation of highly trained STEM 
teachers if we are to reach our goals.
    Thank you for your attention.

    
    

    The Chairman. Thank you, sir.
    In my opening statement, I referred to three main points, 
the last of which was the development of innovation 
infrastructure. As I was listening to the five of you, and also 
thinking, universities are not rapid in changing the direction 
of their battleships, and I have experienced in my own state 
the programs at major universities where there have been a 
tradition of how institutes are handled, and sometimes one 
person in the faculty, in the health sciences faculty for 
example, has responsibility for 19 institutes. That has not 
changed in some 10 years. I consider that not useful.
    So, I want to give you a chance, any of you, I guess 
starting with you, Mr. Augustine, in talking about developing 
infrastructure, sort of going against what my argument with 
that was, getting away from the individual but developing 
infrastructure, whether, in fact, not the Stanfords and the Cal 
Berkeleys, et cetera, et cetera, but the upper-grade 
institutions across the rest of the country who now can 
participate, and very usefully and happily in America COMPETES 
and, therefore, research, whether--I mean, one could make the 
argument that we are overproducing biologists and we're under-
producing petroleum engineers, and institutions, presumably 
local to that requirement, would seem to want to translate the 
way they do business.
    I am just not sure that universities are any faster at 
changing the way they do things. Well, they are obviously 
faster than government agencies. But, you understand my point. 
And, I would love to have you comment, each of you, on that.
    In other words, sort of getting back to the individual, 
which is what you suggested.
    Mr. Augustine. I would be happy to comment. As you spoke, I 
am reminded of a situation that occurred at MIT when I was 
trying to help the provost there introduce a new program in 
systems engineering that cuts across the traditional 
departments of the university or the institute, and we were 
having a very hard time doing it. The faculty fought it, and 
the provost and I were getting very discouraged.
    He took me aside and he said, ``You know, Norm,'' he said, 
``the thing that you do not appreciate is how difficult it is 
to overcome 100 years of excellence and success.'' That is kind 
of what we are facing. Our universities have been so excellent 
and had such great success, that it is very hard to persuade 
them to change.
    On the other hand, when one is looking at catastrophe, one 
tends to be much more adaptable. In the aerospace industry, we 
went through a period where we were looking at catastrophe, and 
we did many things that none of us would have wanted to do 
before. Briefly, we lost 40 percent of our employees and 75 
percent of our companies in about five years, totally revamped 
the industry.
    I think particularly with technology, this new wave of 
technology, it would just overwhelm our universities, unless 
they do change. So, I think it will be difficult, but I think 
it will come about.
    With regard to your point how will we deal with the fact we 
produce too many biologists and maybe not enough petroleum 
engineers or what have you, I always like to say that, if we do 
not fund biology research adequately, we will produce too many 
biologists. But, the students seem to be very quick to adapt to 
market opportunities, and we saw that in computer sciences, 
where they do change quickly and move into fields that are 
needed, if they can. And, if they can is the major point, that 
we have heard that just too few of our students are qualified 
to study any kind of engineering or science.
    The Chairman. One more person. Dr. Lee, perhaps you.
    Dr. Lee. So, I think this point you are raising, I agree 
with Mr. Augustine, is a crucial one. I think in research there 
is a fundamental tension between, on the one hand, stability, 
and I think the commitment to big ideas and trying to protect 
possibly fragile concepts and ideas that might take a long time 
of investment to really understand on the one hand. And then, 
on the other, trying to be agile and react to obvious emerging 
societal challenges and needs. And, managing that tension, I 
think, is part of the game here, part of the challenge that we 
face.
    By and large, I think that universities can and have done a 
good job in finding the right balance between the tension 
between stability and agility. If we take the current 
activities in online education, there are many, many scenarios. 
Several of us on the panel have stated that there could be huge 
transformations afoot.
    But, we have also all been in this job long enough to know 
that, roughly every 5 years, the next big thing in online 
education that will transform universities kind of hits 
everyone's minds, and there is a big flurry of activity. And 
then, a more considered and deep exploration of these things 
occurs. Those things have, on occasion, transformed 
universities, going back to the complete wiring and putting 
every student on the Internet in the 1980s.
    So, on balance, I would say that universities have 
demonstrated reasonable stability, but also an ability to adapt 
to new conditions.
    The Chairman. OK, I will follow that up further, but my 
time is out. And now it is Ranking Member Hutchison, please.
    Senator Hutchison. Yes, I would like to go to Norm 
Augustine again and ask in the ``Rising Above the Gathering 
Storm'' report, I have read it, and I know we fashioned 
legislation guided by it, but what do you think was not done 
that should be done? What would you do beyond America COMPETES 
when we are looking at a reauthorization? But, let us stipulate 
that we know putting more money into our appropriations where 
the authorizations have been made is a given. We understand 
that is a given, and it should be a priority in our limited 
budget. But, in the substance of where we should go, what would 
be your recommendations?
    Mr. Augustine. Well, I would reiterate that we should 
implement the 20 recommendations that were included in the 
Gathering Storm'' report, fully implement them. We got a good 
start, and then our progress waned.
    I think a couple things. One thing we could do that costs 
very little, if any, money, and that is to try to help our 
young people understand the impact of science and engineering, 
the importance of it. I find it ironic that young people look 
with disdain on science and engineering, consider science and 
engineers to be geeks, but yet they all carry iPhones, and 
video games, and so on. So, that would be one thing we could 
do.
    The other thing that I think is really new that needs to be 
added is some means of addressing the impact that the economy 
is having on our great universities. As I said, we did 
appreciate that when we did the ``Gathering Storm'' report. We 
could have imagined it. But today, those universities really 
are endangered, and I think that would be the main thing that I 
would encourage that be included as you revisit the Competes 
Act.
    Senator Hutchison. You mentioned the higher cost of higher 
education as being one of the issues, and of course, certainly 
affordability is an issue. But, how would you attack that? We 
have tuition going up because costs are going up. You want 
research, although some Governors are saying in their states 
that research is not important. You want teachers in the 
classroom. I think that is shortsighted myself. But, it seems 
to me that the research is the spark that shows the students 
how exciting science can be. But, how would you bring down the 
costs if you do value research as well as teaching?
    And, let me make a second point. Banks used to give student 
loans, but the Federal Government sort of took that over, and 
it is not in the private sector anymore like it had been. Do 
you think that has prevented more students from having the 
capability to get the loans that are necessary to bridge that 
gap of expense?
    Mr. Augustine. You raise a number of important points. In 
my view, one of the elements of success of America's higher 
education system has been that our teachers are researchers, 
that they do both, and that there is a need for a balance. The 
private sector used to do a lot of research, some great basic 
research. Bell Labs would be an example.
    I think there are things that you could do to change the 
tax laws that would encourage industry to invest more in 
research. Very simply, for example, if a person holds an asset 
for one day, the tax on the gain on that asset would be 99 
percent. If they held it for 10 years, the tax would be 1 
percent, and you would draw some kind of a line between the 
two. CEOs would act very differently in that world from the way 
they act today in terms of their willingness to support 
university research.
    Also, how do you make universities more effective or more 
efficient? I think technology is part of the answer. We can 
draw on much more of technology for our teaching. Dr. Wieman 
has done a good deal of research in this area that I think 
offers great promise.
    Therein, I cannot help but say this, that there are some 
very fundamental issues for our universities. One is their 
reason for existence. During the period that faculty salaries 
have been reduced, as they have the last couple of years on 
average, we have vastly increased pay of the football coaches. 
We need to think through what it is we want our universities to 
do.
    Senator Hutchison. Yes, please, Mr. Wieman.
    Dr. Wieman. If I could just make a brief comment on this. I 
think one of the things you really need to look at is something 
Norm talked about early on, is the fully funding of research. 
This is something I have spent a lot of the last year looking 
into and could give you detailed numbers. It takes a lot of 
digging.
    But, if you just look at the AAU institutions or 25 top 
research universities, they are actually spending $5,000 per 
undergraduate per year to subsidize research costs with 
probably 50 to 60 percent of that going directly to cover 
unreimbursed costs associated with federally funded research. 
The agencies do not want to talk about this and the 
universities do not want to talk about this, so it is all kind 
of hidden. But, these unreimbursed costs are coming out of 
tuition. If you track it down, that is the only place it can 
come from.
    So, the result is, if you go and give big increases to the 
research funding, you are actually making college less 
affordable. Harvard, Stanford, et cetera, they have plenty of 
money to pay for this, and they can charge whatever tuition 
they want. The good state universities are the ones really 
getting hurt by this, and this is part of what is causing the 
financial problems they have. But, the administrators at those 
schools cannot admit that they are taking money out of student 
tuition topay for research, because they would all get fired. 
It is a serious issue you need to look into.
    Senator Hutchison. I am so sorry. I do not understand 
exactly what you were saying. That more Federal research 
funding hurts the universities because of hidden costs?
    Dr. Wieman. Yes. It is the hidden unreimbursed costs. For 
example, you know, NIH has hundreds of millions of dollars for 
graduate fellowship programs. They set a cap on that program of 
8 percent to cover indirect costs. If you look at what the 
government feels are the actual costs of supporting and 
maintaining a research graduate student, and what they will pay 
in indirect costs on a regular research grant, it is about 50 
percent higher than that.
    So, if I am in a university, and I have a student who gets 
a NIH fellowship, my university has to pay. It has to find 
money somewhere to actually cover about 50 percent of the real 
cost of that student. If I am a dean, I am faced with a choice 
of saying, ``Oh, we are going to start turning down Federal 
fellowships and research grants, because they are not being 
paid for,'' which would be a terrible thing for a dean to say. 
They would get fired immediately. Or they say, ``I have got to 
find money somewhere else that nobody is going to notice to pay 
for this,'' and that other place, for state universities now, 
is tuition.
    Senator Hutchison. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Udall from New Mexico, and then Senator Thune from 
South Dakota.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you, Chairman. And, I know you have 
noted that this was probably the last hearing for our Ranking 
Member, Senator Hutchison, and I just want to thank her for all 
of her good work for this Committee, and just really solid, I 
think, bipartisan effort in all of the markups we have had and 
the progress we have made. The two of you working together have 
been a great team. So, we are going to miss her a lot. And, I 
particularly enjoyed working with her on the Mexico-U.S. 
parliamentary group, with the Senate coming up, and many, many 
other things. But, thank you for your service, and I think we 
are going to miss you very much.
    Senator Hutchison. Thank you.
    Senator Udall. You bet. You bet.
    Dr. Wieman, I would like to ask you, sir, for your specific 
thoughts on improving STEM education for girls and how to 
encourage more young girls to pursue careers in STEM fields. 
One National Science Foundation reports that women earned only 
21 percent of doctoral degrees in computer science, and many 
women who earned science, engineer and math degrees are not 
hired in STEM fields. Research from the National Association of 
University Women suggest that this disparity threatens our 
ability to innovate and compete globally in these fields.
    What Federal policies would improve our nation's efforts to 
attract and retain women in STEM fields?
    Dr. Wieman. That is a difficult issue, and it extends 
beyond women, to other underrepresented groups, of course.
    Senator Udall. You bet. You bet. And, you can expand out a 
little on that. That would be fine.
    Dr. Wieman. What we do know is these improved teaching 
methods help it. We have good data from colleges and 
universities that these improved teaching methods have a 
disproportionately large impact on underrepresented students. 
And, I could go through in detail why they better relate to and 
help with the particular challenges of such groups, because 
they are better targeted to a student's prior experiences, 
background, and so on.
    But, getting above that into the broader issues of 
employment and so on, a lot of those things are determined by 
broader, cultural aspects. So, Federal efforts are always going 
to be somewhat limited in what they can do. But, there are very 
clear things that have been demonstrated; research that shows 
ways to change teaching that make it much more effective and 
successful for underrepresented groups. This is based on having 
a deeper understanding of the learning process, and the way the 
students' experiences, and the differences in those experiences 
shape their classroom experience.
    Senator Udall. Thank you.
    Dr. Furman, in your testimony, you described the creation 
of the Advanced Research Projects Agency for Energy, called 
ARPA-E. And, as one of the successes, and you know this as one 
of the successes of America COMPETES, ARPA-E which funds 
breakthrough energy technology development. However, with the 
looming sequester, the DOE Office of Science may be cut by $400 
million. DOE's Office of Renewable Energy and Energy Efficiency 
could see $150 million in cuts. This would include cuts to 
ARPA-E.
    What are the long-term costs of major cuts to Federal 
funding for energy science research like ARPA-E.
    Dr. Furman. Thank you very much. I should start by saying 
that I do not have a substantial amount of expertise in 
evaluating ARPA-E in particular. My understanding, however, and 
I will get back to the Committee if I turn out to be incorrect, 
is that ARPA-E represents a fairly substantial fraction of 
Federal support for energy-related research and is a very 
important early stage funder for these types of technologies. A 
good deal is done in the private sector, but it is does not 
appear as if those private sector investments have yet yielded 
very promising outcomes.
    And so, without putting specific numbers on it, which I 
think would be irresponsible of me, it does appear to be a 
fairly substantial long-term impact, unless this turns out to 
be an area in which private funds can rush in, in a measure 
that they have not in the past.
    Senator Udall. Great, thank you for that answer.
    And, I do not have a final question, but Mr. Augustine, I 
just wanted to thank you for putting your emphasis on, even in 
hard times, investing in America COMPETES and all the various 
STEM fields. Really appreciate your effort there and your 
service on the Committee that then led to the legislation.
    Mr. Augustine. Thank you.
    The Chairman. Thank you, Senator Udall.
    Chuck Vest has been a pretty good soldier, too, hasn't he?
    Mr. Augustine. One of the best.
    The Chairman. West Virginia, needless to say.
    Senator Thune, South Dakota.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Chairman. And thank you, the 
Ranking Member, too, for a good couple of years. And I, too, 
will really miss our Ranking Member, Senator Hutchison. It has 
been great working with her on so many different issues like 
transportation, although my thinking is that this may be 
premature, because I have a feeling in a lame duck we may be 
kind of busy around here.
    [Laughter.)
    Senator Thune. So anyway, this could be perhaps our last 
hearing. So, I just wanted to say how much we appreciated 
working with both of you and, of course, with Senator 
Hutchison.
    Let me ask, if I could, Dr. Wieman, a question about 
something you said in your prepared testimony. You stated that, 
and I quote, ``There have been countless national, local and 
private programs aimed at improving STEM education, but there 
continues to be little discernible change in either student 
achievement or student interest in STEM.''
    So, my question is a fairly direct question. In this period 
of extreme stress to the Federal budget, do you believe the 
dollars that we are spending to improve STEM are being wasted?
    Dr. Wieman. It is a sweeping statement to say they are 
being wasted. I think many of them are being well spent, but 
there are also a lot of them that could be spent much better. 
As I mentioned in my remarks, I think the way that we are 
funding K-12 STEM education through scholarships to potential 
teachers, the particular way I think that is being done, I 
think, is not having a particularly desirable effect.
    Also, if you look at the evidence of results, there is a 
lot of money that goes to teacher professional development, 
where I think that is the evidence is it is not working very 
well, and there are some basic reasons it is not. Most of the 
teacher professional development programs end up focusing on 
improving the teacher's STEM content mastery, which is because 
that is where the most serious weaknesses up.
    However, you are trying to take someone who went through 16 
years of school, where their focus was on learning, and then 
say, ``Well, they did not learn during school, so we are going 
to have some voluntary intermittent professional development 
activity to fix it.'' And meanwhile we are paying them full 
salaries.
    It is not surprising that this is not a very good use of 
money. And, I think that money could be put to better use 
focusing on training teachers in the beginning in a much more 
rigorous way.
    Senator Thune. Anybody on the panel disagree with that?
    Dr. Wieman. What?
    Senator Thune. I am just asking if anybody else on the 
panel has a different view or disagree with that, what is your 
view about any discernible progress with regard to student 
interest or student achievement as a result of STEM.
    Mr. Augustine. Well, certainly if one looks at the 
standardized tests having given over the years, there has been 
very little improvement. There will be one area that will 
improve a little bit, one year and another and another. But, I 
think there is no real evidence that we have done much better. 
And, I doubt that there will be that sort of evidence until we 
get teachers that are qualified to teach in the core subject or 
have core degrees in the subject they are teaching.
    Today, the chances are very high that a student will have a 
math or physical science teacher who has neither a degree nor a 
certificate in those fields.
    If you will permit a personal experience, I took early 
retirement because I had always wanted to teach. I have a 
master's degree in aeronautical engineering with a lot of math. 
I tutored math in college. And, it turns out I am not qualified 
to teach eighth-grade math in any school in my state. 
Fortunately, the people at Princeton on the faculty there heard 
I was unemployed and invited me to join the faculty and teach 
in the engineering school, which I did.
    The Chairman. You are a virtual John Nash.
    [Laughter.]
    The Chairman. Ignored by faculty.
    Mr. Augustine. That would be an honor.
    Senator Thune. There was a report out yesterday that I was 
proud to see. It came out of Bloomberg News, that recent 
graduates from a South Dakota engineering college, the South 
Dakota School of Minds and Technology, are earning more than 
recent graduates from Harvard University.
    And, aside from the personal pride in South Dakota that we 
have from that, I am wondering what that says, if anything, 
what that data point says about STEM. Are we reaching a point 
where it really does not matter whether you are receiving a 
STEM education at an elite university or a state university?
    Mr. Augustine. Well, I will be glad to try to comment on 
that. I think that the market is recognizing the importance of 
STEM, and there has been a long perception that STEM degrees do 
not pay well. The truth is that STEM degrees on average pay 
better than most other professions requiring a comparable 
degree of education.
    The difference is that trail of the distribution function 
that shows salary in many other fields is very high, whereas in 
engineering it tends to clip off. You tend to hear about the 
Warren Buffets and so on. But, on average, the STEM fields do 
pay well, particularly engineering. And, I think what you are 
seeing is that a good engineer from the University of South 
Dakota may well draw at least a better starting salary than the 
average graduate from Harvard.
    Dr. Lee. Just from the perspective of Microsoft, we find 
great talent from every school, and we are always receptive to 
that. One slight extension I would make to Mr. Augustine's 
comments is that, in computing education specifically, we have 
continued to see, over the last five years of COMPETES, a very 
good increase in enrollments in undergraduate programs in 
computer science. But, that has not been reflected in high 
school level education in computing.
    And so, as I look to the future, the incorporation of 
computing and computer science in our concept of STEM I think 
would create more opportunities and fill the pipeline.
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cantwell.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman, and thank you 
for holding this hearing. And, I do not know if it is the last 
hearing we are going to have, but certainly want to add my 
thanks to Senator Hutchison for her leadership as the Ranking 
Member and her commitment to this Committee over her time in 
the Senate. I can think of many memorable moments in this 
Committee, particularly around aviation issues and slots, in 
which Senator Hutchison played a key role.
    In particular, I remember one day we had a vote here when, 
I think, our colleague, Senator Hollings, was still Chair of 
the Committee, and the discussion went back and forth, and 
there was a lot of confusion about who was seconding and not 
seconding, and what the normal procedure was. It turned out to 
be a very interesting day, and we appreciated your leadership 
then, and certainly wish you well.
    So, I have no idea whether this is the last hearing or not, 
but certainly do really appreciate your hard work and focus for 
America on many, many issues related to commerce, but 
particularly to aviation.
    I wanted to turn--well, I do have a question, you know, 
about STEM for the panel in general, and that is just that, as 
I have looked at these STEM focuses in Washington State, 
whether it is the Delta High School in Richland, which is 
focused in particular from a lot of help because of the 
national laboratory that is there in Battelle, or I look at 
Vancouver IT Preparatory School, which has gotten a lot of help 
from the high tech industry there, or I look at Aviation High 
School, in Seattle, which has got a lot of help from Boeing, or 
what is now going to happen at Riverpoint Academy in Spokane, 
again a lot of help with the healthcare industry stepping up.
    The question becomes, you know, a lot of these things have, 
you know, incubation or help and support from private sector 
entities that care a lot about establishing these programs, and 
they seem to be doing quite well in breaking down the barriers, 
but what do we do about scalability? Are we only going to have 
successful STEM programs where there are successful private 
sector partners? Or, if a neighborhood just does not happen to 
have that successful partner, how are we going to leverage 
that, you know, private sector commitment for doing STEM?
    So, I do not know if anybody has any comments on that. Dr. 
Lee?
    Dr. Lee. So, I would be happy to give some reactions. So, 
first of all, it is very important for Microsoft to invest in 
education locally. There are lots of reasons for that. If we 
look at the major universities in Washington State, they are 
producing computer science graduates at a rate that is below 
the number of openings we have annually at Microsoft. And, that 
is not just a workforce pipeline issue.
    But, in fact, as we recruit, we are recruiting people who 
tend to have children who they would like to have local 
opportunities for education in similar fields. And so, it is 
also for us a community, and development, and recruiting 
priority.
    And, as you pointed out, then the question is, there is 
only so much that we can do locally. How do we scale? And, how 
do we scale?
    Senator Cantwell. And, is not the number that something, 
like, we need 300,000 computer scientists on a national basis 
every year, and we are graduating like 73-or-some-thousand? We 
are not off by a little. We are off by a lot.
    Dr. Lee. That is right. And so, I think I am heartened by 
the fact that, over the past 5 years of COMPETES, at least at 
the collegiate level, we are starting to gain some traction. We 
are starting to see some increase. I do worry about the 
pipeline running dry though at the K through 12 level.
    So, things that we can do in the context of COMPETES or in 
other ways to increase interest, increase our effectiveness, to 
increase the number of teachers who are able to provide 
instruction and interest and inspiration, particularly at the K 
through 12 level, I think is a very important place to look.
    Mr. Winn. If I may, Mr. Chairman, I would like to respond 
as well. We are expanding a STEM advanced placement program as 
one of our standard programs at the National Math and Science 
Initiative. We are now in 300 high schools in the United 
States.
    And, I can say that the investment, particularly local 
investment of corporations and private industry, are alive and 
well. In fact, far exceed government-sponsored funding for 
implementing new and innovative advanced placement programs.
    We are in the process now, since we have been over four 
years of instilling the programs and scaling them up. We 
started with about 60 schools in 2007 and 2008, and we are in 
300.
    And, we are just now seeing part of our replication program 
is to work on ways to sustain the program, because we believe 
that corporations have an incredibly important role, but more 
as a catalyst to get innovation started than to sustain 
programs in schools over long periods of time. And so, in the 
spirit of that, we have had corporations be very responsive to 
doing just that, and now we are in the process of working with 
state and local school districts and state legislators to help 
fund the continuation of those programs.
    And, part of that process is demonstrating the remarkable 
improvement in advanced placement passing scores by all 
students, but particularly by underrepresented students, 
females and minority students.
    Senator Cantwell. Thank you. Thank you. Did you have 
something, Dr. Wieman, that you wanted to add?
    Dr. Wieman. I would just add that you have touched on a 
very real problem. As Dr. Lee says and Dr. Winn reiterated, 
industries really like to invest locally, and what that means 
in some geographic sense, the rich get richer and the poor get 
poorer. And so that makes it a Federal problem, how to ensure 
those industry efforts do not result in wildly different 
educational opportunities in different regions. I think this is 
a very important problem that you need to think about.
    Senator Cantwell. Well, my time is almost up, but I think 
what Mr. Winn was saying is so, for example, if Dell was the 
big supporter of STEM in Texas that, you know, once you got one 
school district going, then you would go to the state 
legislature and others and say, ``OK, now how do we replicate 
this?'' Is that right?
    Mr. Winn. Yes.
    Senator Cantwell. Is that what you were saying? OK.
    Dr. Wieman. And, if I may----
    Senator Cantwell. So, the question is, how do we, you know, 
take Aviation High School and replicate that across a bunch of 
different jurisdictions, I guess?
    The Chairman. This is the day of the Hutchison bonus. So, 
if you----
    Senator Cantwell. Oh, I have time? OK. All right. Well, I 
just wanted to point one more thing out. I came in right at the 
RPE debate, and I just wanted to point out, I am, you know, 
pretty sure that Bill Gates and the CEO of Cummings basically 
came up with, what they thought was, a private sector number 
for what they thought RPE should really be, right? You may have 
discussed that. But, to me, having those two individuals, you 
know, talk about what RPE investment levels should be and try 
and get people here to recognize that, I think is very 
important, that we try to achieve that level of investment. 
Thank you.
    The Chairman. OK, thank you.
    Senator Boozman from Arkansas.

                STATEMENT OF HON. JOHN BOOZMAN, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman. I do not have any 
questions, but I apologize for being late as this is such an 
important hearing. I, like everybody else, have 2 or 3 days to 
get 2 or 3 weeks' worth of stuff done here. I was able to 
listen to the testimony however, as I was in my meeting. So, I 
just want to thank you all for being here.
    The discussion that we have had is so important as we go 
forward for our country. This has always been the bright spot 
in our country, being able to innovate. I know that we are 
committed to doing all we can to help, and we appreciate your 
comments.
    I would also like to thank Senator Hutchison so much, for a 
number of different deals, in the sense of your leadership, 
your ability----
    The Chairman. Did you say a century of leadership?
    Senator Boozman. Oh no.
    [Laughter.]
    The Chairman. That is good.
    Senator Boozman. Anyway your ability to have so much 
knowledge on the individual issues has been just a great 
example for us young folks in the sense of not having been here 
in the Senate very long. And also, for your kindness in making 
all of us new members to the Committee feel welcome. We 
appreciate it, and you will be very missed. Again, we just 
appreciate all you have done for this Committee through the 
years.
    Senator Hutchison. Thank you very much. I hope we have 
another hearing so I can hear all of this again.
    [Laughter.]
    Senator Hutchison. Except the poor witnesses have had to 
endure it.
    The Chairman. Let me just ask another question. If somebody 
else wants to ask, fine. We have wandered here a bit, have we 
not? And, nobody is challenging America COMPETES. Nobody is 
challenging the need for Federal help on this. We accept two 
stipulations.
    One, that there is probably going to be a cut in this 
program. And, the question is, how much will it hurt? Which 
brings to mind two thoughts, one is that it will hurt, and the 
other is what Norm Augustine said, and that is when Northrop 
Grumman had to cut back by 50 percent or 45 percent, whatever 
it was, they became better. Now, I am not sure that 
corporations work the same way as government, or rather 
government works the same way was corporations, but it is an 
interesting thought.
    The second is what you said, Dr. Lee, and that is, you just 
threw the comment in, and it was very important to me, that we 
are finding good people in all kinds of places.
    So, my overall question is, we recognize that America 
COMPETES is not out to gratify on the short-term basis. It just 
cannot do it. It has been around for quite awhile, and it went 
through some National Science--I am sure there was some 
bureaucratic fulminations about it there.
    But, it did change its philosophy. It did reach out more. 
The world has changed dramatically. And, it has all changed in 
the direction of what it is that America COMPETES, in fact, is 
trying to do, and I do not care if it is biology, petroleum, or 
engineering. I mean, it is that young people are infinitely 
curious. All you have to do is walk into, you know, an 
elementary school lab and look at the intensity of these 
people. You cannot even see their noses because, you know, the 
earpieces are so big, and they are focused on their computer. I 
mean, it is absolutely inspirational.
    Then you get through the latter part of K through 12, and 
that is called the teenage years, and concentrating on anything 
gets to be more difficult. Then you get into the college years, 
and that is when things are meant to get serious, except when 
people say, ``Well, some people go to college just to grow 
up.'' Well, those are not meant to be the people we are 
focusing on. We are meant to be focusing on the people who do 
not go to college to grow up, but to grow really, really good 
at needed STEM subjects and other areas within our entirely new 
economy.
    So, I want somebody just to make the case for America 
COMPETES. One of the five of you is charged with doing that. 
Tell me what it is important, fully funded, three quarters 
funded, or whatever.
    Mr. Augustine. Thank you for the opportunity to take a 
crack at that. Much of what America does and is able to do for 
its citizens requires financial resources by those citizens and 
by the Government. And, our economy today is, to a very large 
degree, underpinned by advancements in science and engineering 
and by our ability to compete for jobs.
    Today, unlike the past, when American citizens competed 
with people across town for their jobs, today they compete with 
people around the world for their jobs. The people around the 
world are now much more highly educated, they are very hungry, 
and very anxious to get good jobs.
    If Americans cannot compete for those jobs, and we are 
becoming less and less competitive as every day passes, we will 
not have the income to pay the taxes to provide for national 
security or healthcare, we will not have the money to provide 
for education.
    And, if we are to fix this, there are two things we have to 
do more than anything else. One is fix K through 12, and in 
addition to that, now I have to add to attend to our higher 
education system. And, the second is to greatly invest into our 
knowledge.
    America cannot compete based on the cost of our labor. The 
fact that we have a lot of capital, that capital invests abroad 
now. So, America COMPETES Act, that is what it is about, is 
creating jobs for America for the kind of reasons I have 
stated.
    Mr. Chairman. So, it is kind of a last course, last stand. 
I do not mean to put that pessimistically, but I will just say 
that. It is kind of a last stand for, are we going to take 
world competition seriously, or are we not?
    I happen to agree, and I wish Kay Bailey Hutchison were not 
in the room right now. I happen to agree with you about paying 
the coaches and the symbolism therein, the emphasis on 
athletics, the domination of ESPN over virtually everything 
that happens in the private time of the American citizen and so 
many universities, and their grasp for that dollar, and what 
they will do to get that dollar, and what suffers because of 
their willingness to grasp for that dollar. I happen to feel 
very strongly about that. There is not much I can do about 
that. So, I have got to live with what remains.
    I would stipulate that the average American, who you 
earlier referred to as perceived to be a geek, that there are a 
lot of them, and that they are very proud of what they can do. 
In fact, it opens up to them, and I am thinking now 
particularly about rural areas, you know, less about Austin and 
more about something that begins with ``A'' in West--Aracoma, 
West Virginia, that--I mean, I will just give the example.
    A number of years ago, 12 years ago, 13 years ago, I met a 
girl from McDowell County, which is one of the four poorest 
counties in the United States of America, year after year, 
after year, after year, after year, to the extent that it has 
been taken over by a teachers union, which happens to be doing 
it without the idea of unionizing, but with the idea of 
improving education in this McDowell County, out of coal, out 
of jobs, out of hope, strung out by drugs, but still there are 
people there. They have taken it over. They want to make it 
work.
    That instinct still lives in this country. So, we are going 
to have to figure out a way. I spent a lot of time sitting with 
math and other STEM teachers, hours with them, including a 
couple women who used to be coal miners, but they are really 
tough math teachers today, and really good, and proud of it.
    So, you cannot tell me that American ingenuity is not 
tapped into, that there is not something that is appealing in 
what is going on in this country so manifestly and clearly, and 
that is high technology, and that people want to tap into that.
    Now, I understand there are rural areas there are people 
that think they cannot tap into it because God has it in that 
they are just not going to be able to tap into it because they 
are poor, and they are going to stay poor, and you know, there 
parents are not pushing them, and all that kind of thing. I 
understand sociology.
    But, most of America does not fit into that category and is 
made up of people who have every reason to be turned on by what 
Microsoft is doing, what you have been working on, Norman, and 
you have been terrific, Carl, at what you have said today and 
your understanding of all of this, and as have you Dr. Furman, 
and therefore, I should say you also, Mr. Winn, turned on by 
this opportunity.
    And, I am confounded that we cannot do it. We put up an 
America COMPETES. America COMPETES helps substantially, but not 
enough. Well, not enough is not a reason to quit something.
    I mean, you know, it is like hacking in cyber security. You 
put up a wall, then somebody else puts up a higher wall to get 
in, and then you put up a higher wall. I mean, that is just 
part of life, and that is going to go on in anything that has 
to do with technology.
    So, for the life of me, I cannot figure out why it is that 
more Americans cannot get turned on by STEM. I have--Sharon and 
I, I should say would be I think rather more fair, for our 
children, two of them are involved in high technology. I had 
not a wit to do with it, nor did my wife. They just--they went 
to good schools. They--one of them was a teacher of special ed 
in Harlem for 4 years, and then sort of graduated on into other 
things. Another is teaching at Johns Hopkins. And they are 
just--you know, sure they got a better start because they had a 
good education.
    But, it defies my sense of hope for America that there are 
not more kids doing this. And, we have a program to help on it, 
where people in states that care about it, most states have 
councils on science and technology, some probably better than 
others. So, maybe we are waiting for a recession to end. Maybe 
we are waiting for a nation to gain confidence, like we are 
waiting for industry to gain confidence, so that the $3 
trillion that they are sitting on, that they will begin to 
spend, because they have confidence in something called the 
future.
    Now, is there any parallel or any sense in anything that I 
am saying? Please, any of you, and then we will be finished 
with the hearing.
    Dr. Wieman. Just make a quick comment. These attitudes 
people have about science is something my own research group 
has done a lot of work on. We have primarily looked at students 
at the introductory college level, but we see that the formal 
schooling system and the formal classes, like an introductory 
science course at a college or university, actually shifts the 
students' attitudes against science, so they see science as 
less useful and less relevant to their lives than they did 
before they ever started that class.
    So, that has told us some things about how these classes 
are being taught that is actually hurting rather than helping.
    The Chairman. Are we talking K through 12?
    Dr. Wieman. No, Our data is from students at the 
introductory college level.
    The Chairman. Introductory college, OK.
    Dr. Wieman. I am quite confident that if we dig down and 
understand why this is happening, we will very likely see that 
it is happening even more so at the K-12 level. This is just 
another one of these advances in research and learning we we 
suddenly realize, ``My God, that is what is happening,'' and 
then you go and figure out how to fix it, which we have done. 
But, there is a lot in the formal school system that I think is 
affecting those attitudes about science and engineering in 
negative ways.
    Dr. Lee. I have a comment. I was really impressed with your 
statement, and I think underlying that is something very 
important.
    A colleague once told me, in tongue in cheek, that a young 
person opting to go to a good college to study science or 
engineering is the modern day equivalent of joining a 
monastery. And, it is a joke, but it is a joke that is getting 
at the basic societal concept that that is a strange choice. 
But, in that----
    The Chairman. Why is that a strange choice, Dr. Lee?
    Dr. Lee. It should not be.
    The Chairman. The examples are all over television, the 
newspapers, they are spoken about all the time, the example is 
exactly the opposite.
    Dr. Lee. I agree completely. And so, I think what is 
exposed by this is, as adults, we see that this is important 
for the future, for our competitiveness, for jobs. But, young 
people who make these choices, also are making choices to go 
for some idealism, to really be a part of a community that is 
just trying to express their curiosities and their creativity, 
and along the way, make a difference in the world.
    And so, to the extent that, as leaders and as legislators 
we are, on the one hand, talking about the practicalities, 
practicalities about finance, about competitiveness, about 
innovation, and jobs, but not forgetting about this basic 
idealism in young people and making sure that we express 
ourselves in a way that touches that idealism, if we forget 
that, we will risk coming off making all of the wonderful 
things we do in science and technology look too mundane. 
Instead, we really need to inspire young people.
    The Chairman. To wit, and then I will quit, the 
applications at the Peace Corps, which I was a part of a long 
time ago, are higher and at higher levels of aptitude than they 
have ever been in its long history.
    Dr. Lee. Perfect example.
    The Chairman. The applications for people who want to join 
the CIA and to do covert or non-covert operations, but dealing 
with algorithms and all kinds of things, is higher than it has 
ever been, and the quality of the applications is the highest 
than it has ever been. That is the ``I want to be a part of the 
future. I want to be a part of the world. I want to make the 
world better.''
    So, the question is, how do you change over to what we have 
been talking about today? And, that we will have to leave 
unfinished business, but with Kay Bailey Hutchison, such as 
time as she still has, but from a distance anyway afterwards, 
and myself, and all of us, determined to make it work.
    I thank you all very much, and this hearing is adjourned.
    Senator Hutchison. Thank you.
    [Whereupon, at 4:23 p.m., the hearing was adjourned.]
                            A P P E N D I X

      Prepared Statement of the National Oceanic and Atmospheric 
              Administration, U.S. Department of Commerce
    The National Oceanic and Atmospheric Administration (NOAA) is proud 
to support the America Creating Opportunities to Meaningfully Promote 
Excellence in Technology, Education, and Science (COMPETES) Act. NOAA 
thanks Members of the Committee for giving the agency a prominent role 
in this historic effort to enhance American competitiveness.
    As part of America COMPETES, NOAA was charged with implementing 
programs and activities ``to advance ocean, coastal, Great Lakes, and 
atmospheric research and development, including potentially 
transformational research.'' As a mission-driven, scientific agency 
NOAA has to balance incremental scientific advancements to operations 
with transformational research. Transformational research and 
development is an investment that often carries a level of uncertainty, 
but has the potential to positively affect society in substantial ways 
that increase earth system knowledge and produce technological advances 
that fuel economic opportunity. NOAA's transformational research 
inspires students and researchers alike to push the limits of 
knowledge.
    As an example, consider the High Resolution Rapid Refresh (HRRR) 
weather model. This new experimental model, under development by NOAA's 
research community in collaboration with our operational weather 
forecasters, is designed to more accurately predict high impact weather 
events. This new generation of ultra-high resolution (3 km) weather 
models predicted the derecho event on June 29, 2012 in excellent detail 
ten hours in advance of its arrival to Washington, DC. Models such as 
this have the potential to radically transform our ability to forecast 
events such as the derecho and therefore greatly enhance NOAA's ability 
to conduct its mission to save and protect lives and property. As 
computing capability continues to improve, HRRR could be transferred 
from research to operations and applications. NOAA is also active in 
moving hydrodynamic coastal models from research to operations by 
developing and implementing coastal nowcast/forecast systems for 
several major U.S. Ports. These ports systems are taking advantage of 
NOAA's High Performance Computing and Communications facility for safe 
and efficient management and use of our coastal resources.
    In addition to model improvements, NOAA has transformed its ability 
to gather observations over the last decade. In the climate and oceans 
arena, drifting probes that can be deployed throughout the ocean--
called Argo floats--have revolutionized our ability to observe and 
record the physical conditions of the global ocean. In the past, 
scientists studying the interplay between ocean and atmosphere used CTD 
(conductivity/temperature/depth) recorders deployed from research 
vessels to get temperature and salinity profiles. These profiles formed 
the basis of much of our basic understanding of the ocean. Limited by 
our ability to physically sample wide areas of the ocean and the 
inherent costs and limitations associated with ship time, there were 
large data gaps such as the Southern Ocean, and data were mostly 
limited to the upper 750 meters of the ocean. Argo floats are now 
routinely used to continuously collect data at depths of up to 2,000 
meters and transmit the data to scientists on shore via satellite. The 
Argo float network and other global array systems have allowed for the 
collection of temperature and salinity profiles throughout the global 
ocean. They have vastly improved our ability to estimate and forecast 
sea level rise, and play a key role in improving seasonal climate 
forecasts and providing new insight into hurricane activity. The next-
generation of Argo, deep-Argo floats, is under development and will 
extend our ability to comprehensively observe the ocean far beyond the 
existing 2,000 meter depth to as many as 6,000 meters.
    While the development of the HRRR model and the Argo float network 
are examples of transformational research, use-inspired incremental, or 
evolutionary, research also has the ability to shift paradigms over 
longer time scales. An example of this is the shift from traditional 
species-by-species fisheries management to ecosystem-based management. 
The traditional management strategy for fisheries and other living 
resources has been to focus on one species of fish and shellfish in 
isolation. For example, if there were a decline in the number of a 
certain type of fish in the Gulf of Mexico, the relevant Council might 
recommend and NOAA might decide to decrease the number of that species 
that could be taken. That approach does not take into account other 
elements such as interactions with other species and the effects of 
pollution and other stresses on habitat and water quality. To more 
effectively assess the health of any given fishery and to determine the 
best way to sustain it requires a holistic understanding of the 
ecosystem. Ecosystem approaches are transforming our ability to manage 
fisheries by considering the cumulative effects from various sources, 
and the balance of conflicting uses.
    The power of America COMPETES speaks not only to our Nation's 
strong scientific expertise but it also furthers NOAA's strong 
education ethic. The Act complements existing education mandates found 
in the authorizing legislation of specific NOAA programs, and provided 
NOAA with a broad, agency-wide authority for education. To provide a 
clear and coordinated path forward, the NOAA Education Strategic Plan 
(http://www.education.noaa.gov/plan) was developed, which outlines our 
20-year education vision, goals, and strategies needed to support the 
agency's mission. The NOAA Education Strategic Plan, the subsequent 
Implementation Plan, and most recently, the Monitoring and Evaluation 
framework have resulted in increased internal collaboration and 
leveraging of resources, not only among the agency's education programs 
but also with external partners. We are proud to report a few 
illustrative examples of the progress NOAA has been able to make in 
response to the Act this year.
    In 2012, NOAA is projected to support 513 students through 
competitive internships, fellowships, and scholarships who have been 
awarded NOAA mission-related Science, Technology, Engineering and 
Mathematics (STEM) post-secondary degrees, out of which 57 are from 
underrepresented communities. For America to be competitive in the 
global marketplace, we need bright, creative minds. Our job is to see 
that we give as many young people as possible many opportunities to 
learn, stretch in new directions, develop critical thinking, ingenuity, 
and scientific expertise.
    In 2012 alone, we project 49.7 million people will visit informal 
learning institutions with a NOAA-funded exhibit or program that 
integrates NOAA's unique science products and services. NOAA partners 
with informal learning institutions such as museums, zoos, and 
aquariums to make NOAA sciences, data, and other information widely 
available to the American public through interactive STEM exhibits and 
programs. NOAA's products and services are essential to explaining 
current, real-world STEM issues such as climate change, oil spills, 
extreme weather and weather safety, appropriate management of coastal 
environments, and overfishing.
    In 2012, NOAA will serve an estimated 41,000 educators through 
professional development programs and estimates nearly 7 million visits 
to NOAA education websites. Such programs and resources aim to enhance 
understanding and use of ocean, coastal, Great Lakes, weather, and 
climate environmental information with the goal to promote stewardship 
and increase informed decisionmaking.
    Through scientific rigor, cutting-edge research, and integrated 
STEM education NOAA is committed to developing and attracting the next 
generation of scientists who will drive the scientific and 
technological innovation our country needs to stimulate the economy and 
create jobs. Through the authority granted by the America COMPETES Act, 
we offer the American people access to the unique and significant 
resources of a mission-driven, scientific agency. Coupled with NOAA's 
investment in education ($53.8 million in FY 2011), we effectively 
leverage NOAA's significant scientific expertise, laboratories, data, 
ships and aircraft, and places of special significance to the Nation 
(such as our National Marine Sanctuaries and National Estuarine 
Research Reserves) to offer high quality, mission-relevant, formal, and 
informal education opportunities.
    Educating our students in the STEM disciplines will help them 
understand their world and provide useful scientific advances to 
society. In turn, that prepares them with the critical thinking skills 
they need to get better jobs with better pay for a brighter future. We 
at NOAA will continue our efforts to attract, promote, and engage more 
talented scientists of all ages--scientists who will help keep America 
on course to win the future and help us develop the next 
transformational scientific break-through.
    Thank you again for the opportunity to share our enthusiasm for the 
strong support that you have shown in propelling our Nation's economy 
and competitiveness forward. NOAA is proud and pleased to play a role 
in this effort--both in developing the next transformational scientific 
tools and in preparing the next generation of scientists to make those 
discoveries for tomorrow.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                         to Norman R. Augustine
    Federal funding for physical science and engineering basic research 
increased at a faster rate in the past five years than in the preceding 
decade, but applied research funding has declined with inflation.

    Question 1. What might be the competitive implications of 
increasing the funding for basic research as compared to flat or even 
declining funding for applied research?
    Answer. As your question implies, there needs to be a balance 
between funding for basic and applied research. My own view is that 
basic research was so severely underfunded, particularly in the 
physical sciences, engineering and mathematics, that the steps of the 
past few years have been in the direction of restoring balance rather 
than disturbing it. Unfortunately, at least as one looks towards 
sustainability, much of the increase in basic research was funded by 
the stimulus package and has therefore been consumed.

    Question 2. What innovative, funding-neutral policies should the 
Federal government pursue that it is not currently?
    Answer. This is a very difficult question because, unfortunately, 
the fundamental problem is one of underinvestment in both basic and 
applied research. Most revenue-neutral changes tend to have an impact 
at the margins; however, constructive actions would include placing 
greater emphasis on high payoff (perhaps higher risk) efforts; greatly 
reducing administrative costs associated with reporting requirements; 
cutting the time-demand associated with writing grant requests; and 
eliminating earmarking.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Bill Nelson to 
                          Norman R. Augustine
    Question. Dr. Lee noted that Microsoft invests more than $9 billion 
a year towards research and development. However, right now, companies 
in the U.S. are sitting on around $1.7 trillion in cash instead of 
investing it in new technology, and you noted that U.S. corporations 
spend over twice as much on litigation as on basic research. What can 
the government do to encourage companies to invest more in research and 
technology here in the U.S.?
    Answer. Frankly, were I an active CEO at this point in time I, too, 
would be ``sitting on'' our firm's cash. The reason for this is that 
CEO's bear a legal fiduciary responsibility to their shareholders and 
the uncertainty in the market affecting everything from taxes to 
interest rates to inflation are simply too great to warrant major 
investment under today's conditions.
    But there are constructive steps the government could take with 
regard to the permanence and magnitude of the R&D tax credit; the 
repatriation of foreign earnings; and the clarity of tax policy.
    A principal problem in encouraging long-term investments (in such 
areas as R&D) is the ``results now'' psychology of Wall Street that 
encourages ``financial engineering'' rather than productive pursuits. 
This could be changed overnight by adopting a new capital gains tax 
policy whereunder profits from investments held one day would be taxed 
at ninety-nine percent and profits from investments held over ten years 
would be taxed at one percent. . .with some schedule between the two 
that produced whatever revenues were sought.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                          Norman R. Augustine
    Question 1. You discuss effective teaching models in your testimony 
when it comes to both STEM courses and the fact that U.S. youth seem 
disinterested in the study of science and engineering despite a 
fascination with the products of these fields. How do we effectively 
motivate students to enter and stay in STEM fields? What impact does 
the Federal government have in inspiring students through events like 
the Curiosity landing on Mars last month? What are the keys to 
inspiring students to pursue STEM education goals?
    Answer. In my generation a large fraction of those who pursued 
careers in various branches of science and engineering were inspired to 
do so by the Apollo Program. I believe that the same effect could be 
produced today by a (sustained) Apollo-like program in the field of 
energy.
    But it is also clear that the most important single step government 
could take is to ensure that every classroom has a teacher with a 
degree specifically in the field wherein they are teaching. This is far 
from the case today, particularly in math and science. This objective 
could be accomplished by fully implementing the proposals related to 
this subject that were contained in the Gathering Storm report.

    Question 2. I worked to include university commercialization 
reports in the COMPETES Reauthorization Act. I understand measuring the 
long-term economic impact of the COMPETES Act programs is inherently 
difficult--it is often difficult to trace any specific breakthrough or 
innovation all the way back to a specific research grant, additionally, 
these projects take time. What is the best way to measure the success 
of these programs? What indicators should we look to? For example, is 
there a way to estimate how many jobs are created by a program or by 
the Act?
    Answer. I, of course, am an engineer and not an economist. However, 
I agree both with your emphasis on measuring outcomes and with the 
difficulty of doing so, particularly when addressing research efforts. 
I feel certain that the individuals working on quantum mechanics and 
fundamental materials behavior many years ago did not have iPads and 
iPhones in mind!
    There have been a number of generally successful efforts to measure 
the impact of prior advancements in research and engineering on the 
growth in GDP. My own correlations suggest that each percentage point 
growth in GDP is accompanied by at least a 0.6 percentage point growth 
in employment. It is unfortunately difficult to isolate cause and 
effect; however, my own experience suggests that there is an ample 
amount of the former present. I do believe that such quantitative 
analyses are possible and meaningful--but are limited as a management 
tool because of the long time-lags that exist.
                                 ______
                                 
 Response to Written Question Submitted by Hon. John D. Rockefeller IV 
                           to Carl E. Weiman
    Question. What innovative, funding-neutral policies should the 
Federal Government pursue that it is not currently?
    Answer.

    1. Making transparency in STEM teaching methods a requirement for 
Federal research grant eligibility.

    Current Federal programs are providing incentives to preserve bad 
STEM teaching at both the college and K-12 levels. At the college 
level, far more effective methods of teaching have been repeatedly 
demonstrated, but faculty and institutions ignore those results and 
continue to use ineffective lectures as they focus solely on research 
(see recent NRC study). The large amount of Federal money for research 
has driven that single-minded focus. What is needed is to attach some 
modest level of educational accountability to the large amount of 
Federal support for science research ($30 B/yr).
    The Federal Government should establish a policy that would require 
transparency in the teaching practices used by STEM faculty members and 
academic departments, in order for them to be eligible to receive 
Federal research funds. This could be done by requiring each STEM 
department to report in a standard format on the teaching practices in 
use in their undergraduate courses, as well as overall student 
outcomes, such as number of majors and graduation rates for majors, and 
completion rates in first year courses. In my university work, I 
developed a survey that adequately captures the extent to which a 
course is being taught with new, demonstrably more effective, teaching 
methods, or less effective traditional lectures. This survey only takes 
about 5 minutes to fill out for each course offered, so the cost of 
collecting such data would be minimal. NSF should be charged to develop 
the instrument and collect the data on behalf of all the agencies, 
since the NSF has the most expertise and are best positioned to 
institute such a system rapidly.
    Universities would be required to provide this data for every STEM 
department that wanted to be eligible to receive Federal research 
funds. This departmental level data would then be published so that 
prospective STEM students could compare departments and institutions as 
to which were using more effective teaching methods and which had the 
best student outcomes, and make their decisions about where to enroll 
accordingly. I am confident that this would be sufficient to bring 
about rapid improvement in the teaching practices in use at the 
university level. It will provide accountability and transparency at 
the level where teaching practices are determined and can be changed, 
namely the level of the academic department. It would be unnecessary 
for the Federal Government to attach any requirements to educational 
practices and outcomes, other than transparency.
    This reporting of teaching practices will be opposed by the leading 
research universities because they have achieved their elite status by 
focusing entirely on research prominence. This will now subject them to 
a different standard--one where they likely will not fare nearly as 
well, and it will force their faculty and administration to shift their 
priorities slightly if they are to look respectable.

    2. Shift current Federal STEM teacher preparation funds and STEM 
teacher professional development funds to create a program to drive the 
overhaul of teacher preparation programs.

    To improve STEM teaching at the K-12 level will cost money to 
change the teacher preparation programs, but this could be achieved in 
a funding neutral manner by putting all the money that is currently 
going for STEM teacher training and professional development for in-
service teachers to this much better use. This would amount to several 
hundred million dollars per year. As I discussed in my written 
testimony, the evidence shows that these funds are currently 
accomplishing very little and there are basic structural reasons why 
such programs can never be effective. Current teacher training programs 
focus largely on admitting and graduating as many students as possible 
to maximize tuition revenue, with very little attention paid to the 
STEM competence of those teachers or the training needed to be 
effective STEM teachers. Much better use of those funds would be to 
support Federal programs that provide incentives to institutions to 
create rigorous new STEM teacher training programs and recruit highly 
qualified students to complete those programs. There should be rigorous 
criteria established for programs to be eligible for these Federal 
funds, criteria that will require major changes in most every teacher 
training program. These criteria should focus on ensuring every teacher 
candidate achieves both high levels of STEM content mastery and 
detailed training and practice in effective STEM teaching methods that 
are aligned with the latest research. The programs should require joint 
involvement of both the Schools of Education and the STEM academic 
departments at the institution. It would be sensible to consider also 
supporting this program with some of the money that is currently going 
to support programs that fund various informal science activities that 
are designed to inspire students. As I discuss in my written testimony, 
there is little evidence that these programs accomplish the goal of 
getting more kids to pursue STEM careers, and good reason to believe 
they never can, for the reasons I gave in response to Senator 
Klobuchar's question. Whatever inspiration these programs may create, 
it will not survive the uninspiring teaching of science that takes 
place in school and which dominates students' career decisions. So 
working to improve the teachers and help them build inspiration into 
the science they are teaching every day is the only way to achieve 
large gains.

    3. Changes in the organizational structure of the Department of 
Education

    Currently the U.S. Federal Government is badly organized for 
improving STEM education. Although done by many different agencies, it 
is always the third, fourth, or fifth priority of that agency and so 
never attracts the level of funding and quality of people and authority 
that is necessary to make a real difference. Historically the 
Department of Education has had little responsibility for STEM 
education, and as a result there is no place in the current 
organizational structure for STEM education and very little STEM 
competence in the department. The NSF has lots of STEM competence, but 
is fundamentally a research agency, and so is well suited to carry out 
critically important research on improving STEM education, but it is 
not well suited to drive large-scale change in educational practices 
across the country. That requires more extensive connections with 
States and local districts, like the Department of Education has. 
However, if the Department is ever going to be able to play a serious 
role in STEM education, it needs to create a new position with 
significant policy and budgetary authority and fill that position with 
a person who has solid STEM education expertise.

    4. Fully funding the cost of Federal science and engineering 
research and stopping the increase in the reporting and compliance 
burden associated with Federal research.

    Current policies unknowingly serve to drive up indirect costs and 
transfer those costs to undergraduate tuitions, seriously impacting 
college affordability. The typical undergraduate at a large public 
research university now pays about $5,500 per year of tuition to 
support research, with much of that total going to subsidize federally 
supported research. This has come about because of a variety of 
policies that have increased the indirect costs associated with 
federally supported research at academic institutions while also 
reducing the reimbursement for those costs. Because the amount of 
Federal research funding and associated prestige is all-important to a 
university, university administrators have quietly covered these 
unreimbursed costs by raising tuition rather than turning down Federal 
grants. Some university administrators have told me in private that it 
would be professional suicide for them to either admit to this policy 
or to oppose it. The extent of the problem can be seen in the NSF 
tabulation of the amount of institutional funds that each public 
university spends on research. This now averages $160 M/yr for a top 20 
public university, up from approximately zero dollars 25 years ago. 
These institutions have no source of revenue other than tuition that 
has increased by nearly this amount over this time period, so most of 
this $160 M/yr can only be coming from tuition. Further analysis shows 
that much of it goes to subsidize Federal research by paying for the 
unreimbursed costs. While this has short-term benefits for the Federal 
research enterprise, it cannot be good for the long-term interests of 
the Nation. To illustrate how these costs arise, I will give one 
specific example, the NIH graduate fellowships. Tthe Federal 
Government, after careful auditing and negotiation, has concluded that 
there are indirect costs associated with having a graduate research 
assistant that amount to about 60 percent of their salary at a typical 
institution. These costs arise from the need to process their pay, 
taxes, etc, and the cost of providing them with office space, desks, 
labs, electricity and water, etc. However, the NIH only pays 8 percent 
indirect cost on all of its many fellowships, who all work as research 
assistants their respective universities. So if an institution has a 
student who receives and NIH fellowship, the institution has to find 
some other source of funds to cover those indirect costs amounting to 
52 percent of their salary.
    Changing this system will involve shifting costs from student 
tuition to the Federal Government, and so if the funds for research 
remain unchanged, will involve reducing the amount of research that is 
produced by a modest amount. However, I do not think that anyone would 
support a Federal policy of having student tuition being used to 
unknowingly subsidize Federal research, if they actually realized that 
is what is happening.
    Because this issue involves billions of dollars a year and is so 
entrenched in the system of research funding, I would recommend dealing 
with it in stages. The NSF established policies and carried out much, 
although not all, of the first two stages below over a period of time, 
demonstrating that it can be done. Applying similar policies to the 
other agencies, particularly the NIH, which has the most research 
funding and the most programs that pay reduced indirect costs, is a 
necessary next step. As research universities have already demonstrated 
that they are willing to use surreptitiously tuition revenue to boost 
research productivity and prominence, the implementation of the stages 
listed below should be linked in some way to commitments to some 
combination of tuition reduction, increased student aid, or other 
appropriate enhancements of undergraduate education.
    Stage 1--Preventing further growth in the number of programs that 
pay indirect costs that are ``below negotiated rate''. There should be 
a much higher barrier to agencies paying less than negotiated rate, for 
example, any such rates must be approved at a high OMB level. Similar 
restrictions should apply to programs wishing to use cost-sharing as 
part of the proposal selection criteria. So called ``voluntary cost-
sharing'' is not at all voluntary when it impacts whether the proposal 
does or does not get funded.
    Stage 2--Establish a schedule for gradually rolling back both the 
current ``below negotiated rate'' policies for specific programs, and 
the consideration of institutional cost sharing in proposal decisions. 
Some of these may be congressionally mandated. I think that may be the 
case for the 8 percent overhead paid on the NIH fellowships. However, 
if congress was made aware that for every dollar of Federal money that 
goes for an NIH fellowship, 50 cents from undergraduate tuition goes to 
support that fellowship, they may well be willing to reexamine that 
issue. This payment of the negotiated overhead rate and elimination of 
institutional cost-sharing will involve some modest reduction in the 
amount of research that gets supported. However, to put that in 
perspective, the amount of student tuition that currently goes to 
support research at the average large public research university is 
just about the same amount as the average annual debt incurred by every 
student at that university.
    Stage 3--While the first two steps would reduce the problem of 
student tuition subsidizing Federal research it will never eliminate it 
as long as the artificial 26 percent cap on federally reimbursed 
facilities and administration costs remains in place. With that cap in 
place, agencies, congress, auditors, and OMB, will continue considering 
new requirements and regulations without carrying out a reasonable 
cost-benefit analysis. This situation has led to dozens of requirements 
and regulations being added over the years that didn't cost the 
government money because of the cap, but have very real costs to the 
universities. The universities complain, but they can never admit what 
the real cost is, because they have put themselves in the position that 
they cannot admit that they are subsidizing Federal research with 
tuition money. So we currently have a system where new indirect costs 
keep getting added by government policies, but they are paid through 
secret increases in tuition, so no one complains. Only if you eliminate 
the 26 percent cap so the government is paying the actual cost of 
research will there be transparency and an accurate cost-benefit 
analysis to any proposed new regulations or reporting requirements.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                             Carl E. Wieman
    Question 1. Dr. Wieman, your testimony suggests that in order to 
substantially enhance STEM education in the U.S., we need K-12 
educators who have both a mastery of a science or engineering 
discipline and are well versed in the latest research regarding the 
learning process. How can we develop or attract educators to our K-12 
classrooms that have such specialized knowledge and experience in both 
engineering AND education? Would it be more worth-while to invest in 
training experienced scientists and engineers to become teachers, or to 
invest in developing science and engineering skills in experienced 
educators?
    Answer. This is a very important question. At the college level the 
data is pretty clear. It takes far less time for a scientist or 
engineer to learn to become a highly effective teacher than it takes to 
learn to become a scientist or engineer. The ratio is roughly a few 
hundred hours versus 10,000 hours.
    The answer is less clear for the K-12 level, first because there 
are more factors involved in teaching effectively. The teacher has to 
learn to handle discipline issues, special needs students, classroom 
management, meeting state and district content standards, etc. that are 
not present at the college level. My speculation, based on the college 
results and the poor results from professional development of existing 
teachers, is that it would be more cost effective to train existing 
scientist and engineers to be effective teachers, but it will require 
much more than the few hundred hours of training and practice required 
for the college level. That speculation is strengthened by the results 
from teacher professional development, attempting to develop science 
and engineering skills in experienced teachers. Those results have been 
so dismal that almost anything else would be better.
    However, it is unlikely that there could ever be sufficient 
scientists and engineers interested in going into teaching to meet the 
demand via this route. So I believe that the best approach would be to 
have programs to recruit and properly train a select group of 
experienced scientists and engineers to become teachers, and to develop 
the pre-service teacher training programs so that their graduates have 
the necessary STEM content mastery to be effective teachers. All of the 
evidence would imply that both of these approaches, training scientists 
and engineers to become teachers, and better training of pre-service 
teachers, will be more cost-effective than trying to retrain existing 
teachers so that they have high level STEM content mastery.

    Question 2. Dr. Wieman, in your testimony you note that current 
practices incentivize universities to prioritize research over 
teaching, and you suggest as a partial remedy that Federal science and 
technology research grants should more closely tied to educational 
outcomes. What specific measurements would tell us which universities 
are best educating their students in the STEM fields?
    Answer. I have spent a lot of time considering this issue. The 
situation is greatly complicated by the selection effects that make the 
student cohort at each institution unique. So the kind of measurements 
used with K-12 schools, which already have serious limitations in that 
context, are meaningless at the higher education level. Skipping a full 
discussion of all the complications here, I will just give my 
conclusions as to most useful and practical measurements to make.
    Data should be collected on a combination of basic student outcomes 
and teaching practices used; all collected and reported at the level of 
the individual academic department. The most meaningful student outcome 
measures would be (1) number of student majors, (2) number of 
graduating majors, and (3) student completion rates for first year 
courses. It would be useful to have this data broken down by different 
under-represented minority groups, but care would be required in doing 
that in such a way it would not violate privacy laws when numbers are 
small. Departments typically collect all this student outcome data 
anyway, and they are already reporting much of it through the IES 
website, so collecting and providing all the data would be negligible.
    In terms of teaching practices, the data that should be collected 
are what methods of teaching are being used in the undergraduate 
courses. How much of the class time is traditional lecture with the 
instructor presenting new material by talking while the students 
listen, and how much of the time has students and instructor involved 
in several teaching methods that have consistently been shown to 
achieve better learning and high student success rates compared to 
lectures. (The recent NRC study on Discipline-Based Education Research 
in Science and Engineering provides a good review of this research and 
which teaching practices are more effective.) This could be done by 
requiring each STEM department to report in a standard format on the 
teaching practices in use in their undergraduate courses. In my 
university work, I developed a survey that adequately characterizes how 
a course is being taught to allow distinctions as to the quality of 
teaching practices that were used. This survey and only takes about 5 
minutes to fill out for each regular undergraduate course that is 
offered. For a large department, that is only 15-25 per year, so the 
amount of time and hence cost that an academic department would need to 
collect all the required data is rather minor, and departments 
seriously paying attention to undergraduate education should already be 
collecting much of this information themselves.
    This data should be collected and published by the Federal 
Government to thereby provide transparency on teaching practices and 
student outcomes for each academic department that receives Federal 
research funding. I would strongly recommend against using the data in 
any decisions on research funding. The requirement would thus be one of 
transparency but not direct Federal accountability. I believe that 
would be the most effective way to accomplish the desired purpose, and 
it would be far easier to implement. Prospective STEM students could 
compare departments and institutions as to which were using more 
effective teaching methods and which had the best student outcomes, and 
make their decisions about where to enroll accordingly. I am confident 
that this market pressure would be sufficient to bring about rapid 
improvement in the teaching practices in use at the university level. 
This will have the further benefit that it will bring transparency and 
resulting accountability at the level where teaching practices are 
determined and can be changed, namely the level of the academic 
department.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                             Carl E. Weiman
    Question 1. You discuss effective teaching models in your testimony 
when it comes to both STEM courses and the fact that U.S. youth seem 
disinterested in the study of science and engineering despite a 
fascination with the products of these fields. How do we effectively 
motivate students to enter and stay in STEM fields? What impact does 
the Federal Government have in inspiring students through events like 
the Curiosity landing on Mars last month? What are the keys to 
inspiring students to pursue STEM education goals?
    Answer. Any time that society gives recognition to science 
activities and successes it helps attract students into STEM. However, 
in themselves, events like the Curiosity landing have little long term 
effect. The problem is that students may get excited by missions to 
Mars, or Hubble pictures, or science fair projects, but then the 
science they see in school is totally different and quite uninspiring, 
and the ``school science'' is what determines the long term career path 
for most students. That is necessarily the result of school being their 
dominant exposure and hence defining experience as to what STEM is. 
This is true even into college, where many students switch out of STEM, 
because of poor teaching and boring curriculum. It is worse at lower 
grades where many of the teachers have little understanding or 
appreciation of science and present it as an exercise in rote 
memorization.
    Ultimately, if we are to have more students enter and stay in STEM 
fields it will require teachers at all levels who can make science and 
engineering interesting and meaningful, and show students how these 
subjects are not just memorization of lots of facts and words, but 
rather creative intellectual processes that can solve problems that are 
meaningful and interesting to the students. Without that, events like 
NASAs latest triumph will make little difference, unfortunately. With 
that, those NASA triumphs will be seen as an extension and goal of what 
they are learning in school and will further inspire them to pursue 
STEM.

    Question 2. I worked to include university commercialization 
reports in the COMPETES Reauthorization Act. I understand measuring the 
long-term economic impact of the COMPETES Act programs is inherently 
difficult--it is often difficult to trace any specific breakthrough or 
innovation all the way back to a specific research grant, additionally, 
these projects take time. What is the best way to measure the success 
of these programs? What indicators should we look to? For example, is 
there a way to estimate how many jobs are created by a program or by 
the Act?
    Answer. I must defer to the economists who study such things for 
this question. I do not feel qualified to offer an answer.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                      to Jeffrey L. Furman, Ph.D.
    Federal funding for physical science and engineering basic research 
increased at a faster rate in the past five years than in the preceding 
decade, but applied research funding has declined with inflation.

    Question 1. What might be the competitive implications of 
increasing the funding for basic research as compared to flat or even 
declining funding for applied research?
    Answer. This is an excellent question to which, I believe, academic 
research has not yet supplied a fully satisfactory answer. The U.S has 
experienced a number of episodes in which basic research programs 
received substantial infusions of funding, including aerospace research 
(in response to the Soviet space program) in the late 1950s and the 
Apollo Program in the 1960s, the War on Cancer during the Nixon 
Administration, the doubling of NIH funding between 1998 and 2003, and 
the increase in research funding in the 2009 ARRA.
    While such funding boosts are often a boon for short-term science 
and have been effective in achieving near-term missions (e.g., the 
Manhattan Project), Freeman and Van Reenen's study of NIH budget 
doubling, which was not accompanied with equal expansion of applied 
research funding, suggest that such policies may have less-than-hoped-
for outcomes, particularly if expenditures following the spending boost 
remain flat or decline in real terms. In particular, the authors 
conclude that adjustment costs, including the ability of the market for 
scientifically-and technically-trained workers to respond quickly, 
limit the short-term effects of such doubling efforts. This, in turn, 
harms the downstream commercialization opportunities associated with 
brief funding boosts.
    Freeman and Van Reenen also note that globalization strengthens the 
argument for global funding of basic research while weakening the 
argument that any one particular nation should subsidize basic 
research, since the fruits of that investment in any one country are 
likely to yield spillover benefits worldwide. At the same time, they 
note that the argument for subsidizing applied research, which may be 
commercialized more quickly in any one region, increase with 
globalization.
    Boosts in basic research funding can make valuable contributions 
even without attendant support for applied funding, as the positive 
spillovers from DARPA's research efforts, the Space Program, and even 
Israel's experience with spillovers from military spending to their IT 
sector demonstrate.
    It may also be possible to support applied research and 
commercialization without targeted funding increases by increasing R&D 
tax credits, as Bloom et al., (2002) and Hall and Van Reenen (2000) 
describe.
References
    Bloom, Nick, Rachel Griffith, and John Van Reenen.(2002) ``Do R&D 
Tax Credits Work?'' Journal of Public Economics, 85:1-31.

    Hall, Bronwyn H., and John Van Reenen. (2000) ``How Effective Are 
Fiscal Incentives for R&D? A Review of the Evidence.'' Research Policy, 
29(4-5), 449-469.

    Richard Freeman, John Van Reenen (2009) ``What if Congress Doubled 
R&D Spending on the Physical Sciences?'' in Josh Lerner and Scott 
Stern, Innovation Policy & the Economy, vol 9, University of Chicago 
Press: Chicago, IL

    Question 2. How can the United States best take advantage of the 
results of federally-funded research before they are picked up by other 
nations?
    Answer. My understanding of research on this question is that the 
answer involves elements of both hope and concern.
    The element of concern is that models and large scale quantitative 
studies of knowledge generation and diffusion agree with casual 
empiricism that much basic research diffuses widely and with some speed 
to researchers at the global frontier regardless of where they are 
located.
    While this may have some deleterious effects for U.S. industry and 
the workforce and may appear to lower the rate of return on Federal 
investment in science, I think that economists generally agree that the 
benefits of diffusing science outweigh the potential benefits of 
secrecy: As Freeman and Van Reenen (2009) note, the everyone would 
benefit if a cure for cancer were found, regardless of whether that 
cure were identified in the U.S., Europe, or Asia and regardless of the 
location of original knowledge on which the discoverers of that cure 
built.
    That said, evidence suggests that basic scientific knowledge 
diffuses more quickly towards commercialization in the regions close to 
its discovery. Thus, the U.S. has an inherent advantage in building 
upon and commercializing basic research relative to regions and 
countries that are more geographically distant (see, e.g., the classic 
and often reexamined study by Jaffe, Trajtenberg, and Henderson, 1993).
    In this regard, the Earth is very far from flat. Two key factors 
appear most important to the ability of a country to benefit from its 
own discoveries: (1) the overall strengths of its research and 
innovative capacities and (2) the ability to link the results from 
basic research to entities that can commercialize those efforts. 
Historically, the U.S. has been a leader in each of these areas, due to 
substantial investments in university research and the strength of 
technology licensing and venture funding (including venture capital) 
(Furman, Porter, & Stern, 2002). Ensuring that these areas sustain high 
levels of investment and competitiveness will support the local 
commercialization of federally funded research.
References
    Adam B. Jaffe, Manuel Trajtenberg, Rebecca Henderson (1993) 
``Geographic Localization of Knowledge Spillovers as Evidenced by 
Patent Citations,'' The Quarterly Journal of Economics, 108(3), 577-
598.

    Jeffrey L. Furman, Michael E. Porter, & Scott Stern (2002) ``The 
Determinants of National Innovative Capacity,'' Research Policy, 31, 
899-933.

    Question 3. What innovative, funding-neutral policies should the 
Federal government pursue that it is not currently?
    Answer. I believe that there are a few options that could be 
pursued to support science and innovation that would not require 
additional Federal funds. I list a few recommendations below and 
elaborate on these thereafter:

  (1)  Implement a program to support high-skilled immigration

  (2)  Require that Federally-funded research projects include support 
        for and a mandate for supported scientists to deposit research 
        materials associated with federally-funded research

  (3)  Require that licenses for technology supported by Federal 
        funding be disclosed and non-exclusive

  (4)  Institutionalize the evaluation of federally-sponsored 
        research--require recipients to identify the fruits of 
        sponsored grants and consider these as relevant (though not 
        dispositive) when deciding upon future funding.

  (5)  Shift existing tax structures to ensure that prices more 
        accurately reflect actual costs; doing so would enable the 
        price mechanism to provide appropriate incentives for 
        innovation and the associated burdens on firms and individuals 
        could be alleviated via revenue-neutral tax rebates.
High Skill Immigration
    The first, and most often-discussed of these would be a program 
supporting high-skilled immigration or giving individuals. Economists 
who study innovation have undertaken a number of useful projects on 
this topic. Descriptive statistics note the over-representation of 
immigrants and first-generation Americans among Americans receiving 
patents and among the population of high tech entrepreneurs. More 
structural analyses demonstrate that admission of additional high-
skilled immigrants--for example, through H1-B visa expansion in the 
1990s--yields benefits, in terms of patents, innovation, and the size 
of the science and engineering workforce.
    Some well-done academic work ont these topics has been conducted by 
William Kerr of Harvard Business School and Jennifer Hunt of Rutgers 
University. Two of their relevant papers include:

   William R. Kerr & William F. Lincoln (2012) ``The Supply 
        Side of Innovation: H-1B Visa Reforms and U.S. Ethnic 
        Invention,'' Journal of Labor Economics, vol. 28(3), pages 473-
        508, 07.

   Jennifer Hunt & Marjolaine Gauthier-Loiselle (2010) ``How 
        Much Does Immigration Boost Innovation,'' American Economic 
        Journal: Macroeconomics, vol. 2, pages 31-56.

    While the politics of supporting high-skilled immigration may be 
difficult, academic research on this topic suggests that the addition 
of highly-trained immigrants yields improvements in science and 
innovation that would otherwise not have been achieved.
Disclosure requirements for licenses associated with federally-
        sponsored research
    A second, budget-neutral recommendation is that all licensing 
transactions associated with Federally-sponsored research be disclosed, 
not concealed. In nearly all cases, the results of Federally-sponsored 
research are made accessible through the academic process of 
publication and presentation, the exchange of materials (such as tissue 
samples or cell cultures) and licensing contracts often occur without 
any disclosure.
    This secrecy can inhibit downstream research based on Federally-
funded projects. This secrecy over technology licensing has developed 
in part as a result of university Technology Licensing Offices' (TLOs') 
efforts to maximize fees and to protect the strategic concerns of 
licensees'. The potential value to society, however, of this disclosure 
likely exceeds the value of secrecy in this case. Making disclosure a 
requirement of funding to report the existence of, parties to, and 
broad features of each transaction related to the products of 
Federally-sponsored research would help untangle a legal web and 
support commercialization and downstream research efforts. This could 
be facilitated by a standardized, accessible database, which could be 
managed by the National Science Foundation and could be managed 
relatively cheaply, in the model of ClinicalTrials.gov. (Fiona Murray, 
Scott Stern, and I articulate this suggestion in the co-authored paper, 
``More for the research dollar,'' (2010), Nature, 468, 757-758 and the 
text above is based closely on text in that article.)
Require deposit of research materials associated with federally-funded 
        research
    Researchers studying the economics science suggest that 
establishing rules and practices that maximize the productivity of 
research in the long term can increase the rate of return of current 
Federal R&D funding. Implementing this approach, however, can create 
inconveniences or push-back from current grant recipients.
    One example of how short-term researcher interests were overcome by 
long-term plans arises in the effort to sequence the human genome. The 
disparate, often competing efforts (which included the U.S. National 
Institutes of Health and the UK Medical Research Council) introduced 
rules (called, the ``Bermuda Rules,'' which required publicly funded 
researchers to disclose their sequencing information every day. Whereas 
researchers were previously able to monopolize their information for 
weeks or months, the Bermuda Rules ensured that the public could 
benefit from this information essentially immediately and enabled 
complementary research and downstream work on the genome to progress 
more swiftly.
    While this type of disclosure is unique to the case of the genome 
sequencing effort, the general lesson that the deposit and broad 
sharing of research materials speeds complementary work and downstream 
work has wide application to Federally-sponsored research projects. 
(Fiona Murray, Scott Stern, and I articulate this suggestion in the co-
authored paper, ``More for the research dollar,'' (2010), Nature, 468, 
757-758 and the text above is based closely on text in that article.)
Institutionalize evaluation of Federally-funded research
    A policy that is simple in theory, though substantially more 
difficult in practice would be to institutionalize the evaluation of 
federally-sponsored research. Part of this effort could be built on 
grantees' self-reports about the outcomes of federally-funded research. 
This could be achieved in a number of ways, including requirements that 
Federal funding identify the fruits of sponsored grants, either as 
requirements of receiving year-to-year funding, or as final reporting 
requirements, or as requirements for future grant applications. These 
outcomes should then be considered (though they should not be the only 
factors considered) when individuals or firms apply when deciding upon 
future funding.
Shift existing tax structures to ensure that prices reflect actual 
        costs (to the extent possible)
    The most general of my recommendations is likely also the most 
controversial. By ensuring that negative externalities (like pollution 
and products with deleterious health effects) do not result in prices 
that involve implicit subsidies, the costs of fuel and other substances 
that involve such negative externalities will rise to a degree that 
fosters innovation. The burdens that such prices impose on firms and 
individuals of more limited means could be ameliorated with lump sum 
tax rebates. Ensuring that prices reflect marginal costs, however, will 
support the appropriate incentives for innovation. I recognize, 
however, that such efforts (e.g., the Acid Rain Program and potential 
carbon tax) face substantial political difficulties.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                        Jeffrey L. Furman, Ph.D.
    Question 1. Your testimony mentions that one way we can improve the 
COMPETES Act is through initiatives supporting industry 
commercialization of university-generated ideas. Can you expand on how 
we can work to promote getting these projects into the market, as well 
as what promoting university research does for our international 
competitiveness?
    Answer. The issue of technology commercialization is one of the 
more well-researched topics in the economics of innovation. Research in 
this area has addressed the commercialization of university-generated 
technology in a number of ways that related to U.S. competitiveness and 
technology policy. These include:

   Comparisons of university commercialization efforts across 
        countries: These studies generally conclude that the United 
        States is among the world leaders in this effort, as a 
        consequence of the historical role of American universities in 
        collaborating with for-profit companies to achieve 
        commercialization, in part because of policies that enable 
        faculty to work with private companies when continuing their 
        academic pursuits, and in part because of the Bayh-Dole Act.

   Assessments of specific programs that support technology 
        commercialization: These include the Bayh-Dole Act, the 
        ``professor privilege'' (to patent and commercialize lab 
        research), university intellectual property policies, the 
        development and behavior of Technology Licensing Offices, among 
        others. My reading of these studies is that they support the 
        conclusion that the United States pursues policies supporting 
        technology commercialization to a greater degree than other 
        industrialized counties. The most recent studies of the Bayh-
        Dole Act suggest that it continued growth in university-
        industry relationships that existed prior to the Act's passing, 
        but that it has effectively supported commercialization in the 
        United States and that it has become a model for other 
        countries' efforts at commercializing technology (see Mowery et 
        al., 2001, and Mowery & Sampat, 2005). One of the most 
        sophisticated analyses of the Bayh-Dole Act in the United 
        States (Hausman, 2012) suggests that, ``long-run employment and 
        payroll per worker around universities rise particularly 
        rapidly after Bayh-Dole in industries more closely related to 
        local university innovative strengths.'' That is, the results 
        suggest that Bayh-Dole had a statistically and economically 
        meaningful positive impact on employment and worker earnings in 
        geographic regions and industries matched to local university 
        research strengths.

    While suggesting that the U.S. is at the forefront of global 
efforts to commercialize university-generated technology, this research 
does not imply that improvements are not possible.
    Some improvements can come from university policies. Recently, a 
number of technology licensing offices have been moving away from a 
model in which they attempt to maximize university licensing revenues 
and towards a model in which they maximize the diffusion of knowledge 
generated by universities (Siegel et al., 2003). As well, Siegel and 
Phan (2005) note that improving university management practices, 
training for students and faculty, and coordinating engineering schools 
with business schools could improve university-industry technology 
transfer.
    Public policies can support university efforts by ensuring that all 
licensing transactions associated with Federally-sponsored research be 
disclosed rather than concealed. This secrecy can inhibit downstream 
research based on Federally-funded projects. This secrecy over 
technology licensing has developed in part as a result of university 
Technology Licensing Offices' (TLOs') efforts to maximize fees and to 
protect the strategic concerns of licensees'. The potential value to 
society, however, of this disclosure likely exceeds the value of 
secrecy in this case. Making disclosure a requirement of funding to 
report the existence of, parties to, and broad features of each 
transaction related to the products of Federally-sponsored research 
would help untangle a legal web and support commercialization and 
downstream research efforts. This could be facilitated by a 
standardized, accessible database, which could be managed by the 
National Science Foundation and could be managed relatively cheaply, in 
the model of ClinicalTrials.gov. (Fiona Murray, Scott Stern, and I 
articulate this suggestion in the co-authored paper, ``More for the 
research dollar,'' (2010), Nature, 468, 757-758 and the text in this 
paragraph is based closely on text in that article.)
    Expanding R&D tax credits and providing subsidies for risky 
commercialization efforts are other programs that have, historically, 
been employed to support university-industry technology transfer 
efforts. Research suggests that R&D tax credits can, indeed, support 
such activities, although the rate of return suggests that these are 
not a panacea (see Bloom et al., 2002, and Hall and Van Reenen, 2000). 
Research on R&D subsidies is more mixed, with some studies suggesting 
that public R&D subsidies crowd out private investment fully 
(Wallsten's (2000) study of the SBIR program suggests this, for 
example) and other studies suggesting that public support supplements 
rather than simply replaces private investment (David et al., 2000). 
Overall, research in on subsidies suggests that their success may 
depend on the details of particular programs.
References
    Bloom, Nick, Rachel Griffith, and John Van Reenen.(2002) ``Do R&D 
Tax Credits Work?'' Journal of Public Economics, 85:1-31.

    David, P. A., Hall, B. H., and Toole, A. A. (2000), ``Is public R&D 
a complement or substitute for private R&D? A Review of the Econometric 
Evidence,'' Research Policy, 29, 497-529.

    Furman, Jeffrey L. Fiona Murray, Scott Stern, (2010) ``More for the 
research dollar,'' Nature, 468, 757-758.

    Hall, Bronwyn H. and John Van Reenen. (2000) ``How Effective Are 
Fiscal Incentives for R&D? A Review of the Evidence.'' Research Policy, 
29(4-5), 449-469.

    Hausman, Naomi (2012) ``University Innovation, Local Economic 
Growth, and Entrepreneurship,'' working paper, Dept of Economics, 
Hebrew University of Jerusalem: https://sites.google.com/site/
naomihausman/research/.

    Mowery, David C., Richard R Nelson, Bhaven N Sampat, Arvids A 
Ziedonis (2001) ``The growth of patenting and licensing by U.S. 
universities: an assessment of the effects of the Bayh-Dole act of 
1980,'' Research Policy, 30(1), 99-119.

    Mowery, David C., Bhaven N. Sampat (2005) ``The Bayh-Dole Act of 
1980 and University-Industry Technology Transfer: A Model for Other 
OECD Governments?,'' in Essays in Honor of Edwin Mansfield: The 
Economics of R&D, Innovation, and Technological Change, Albert N Link & 
Frederic M Scherer, ed., 233-245.

    Siegel, Donald S., Phillip H. Phan (2005), Analyzing the 
Effectiveness of University Technology Transfer: Implications for 
Entrepreneurship Education, in Gary D. Libecap (ed.) University 
Entrepreneurship and Technology Transfer (Advances in the Study of 
Entrepreneurship, Innovation & Economic Growth, Volume 16), Emerald 
Group Publishing Limited, 1-38.

    Donald S Siegel, David Waldman, & Albert Link (2003) ``Assessing 
the impact of organizational practices on the relative productivity of 
university technology transfer offices: an exploratory study,'' 
Research Policy, 32(1), 27-48.

    Wallsten, S. J. (2000), ``The effects of government-industry R&D 
programs on private R&D: The case of the Small Business Innovation 
Research Program,'' RAND Journal of Economics, 31, 82-100.

    Question 2. I worked to include university commercialization 
reports in the COMPETES Reauthorization Act. I understand measuring the 
long-term economic impact of the COMPETES Act programs is inherently 
difficult--it is often difficult to trace any specific breakthrough or 
innovation all the way back to a specific research grant, additionally, 
these projects take time. What is the best way to measure the success 
of these programs? What indicators should we look to? For example, is 
there a way to estimate how many jobs are created by a program or by 
the Act?
    Answer. Assessing the impact of university commercialization or any 
efforts to support science or innovation is both an important and 
difficult task. Some of the issues and difficulties are outlined in the 
Siegel papers cited above. The ideal indicators that one would like to 
have include indicators of knowledge outputs (e.g., patents, papers, 
students trained), indicators of commercialization (e.g., new firms, 
new products, and new jobs). Two difficulties, however, are (a) that it 
is difficult to obtain useful measures of inputs (e.g., dollars spent 
on research by universities and firms) that can be used to compare with 
the outputs in order to compute productivity and (b) that, even if one 
could obtain those measures, it is difficult to identify what 
economists call ``counterfactuals,'' which refer to what would have 
occurred in the absence of the support or policies.
    Economics has made substantial advances in policy evaluation 
(Imbens and Wooldridge, 2009), some of which has been incorporated into 
recent evaluations of science and innovation policy (Furman, et al., 
2012). Estimating the impact of public policies on employment is made 
particularly difficult by the problem of knowing what would have 
happened in the absence of such policies. The Hausman study of the 
Bayh-Dole Act described above is one of the few recent studies that 
credibly assesses the causal impact of an innovation policy on 
employment outcomes.
    By designing public policies with evaluation in mind (e.g., by 
including natural variations in the timing of implementation, by 
including variations in specific policies across regions, etc.), 
however, it may be possible to lay the ground work for more systematic 
evaluations of their effects. Each of the papers referenced below 
describes ways to do this and I would be happy to discuss possibilities 
further.
References
    Imbens, G.W., and J.M. Wooldridge (2009) ``Recent developments in 
the econometrics of program evaluation,'' Journal of Economic 
Literature, 47, 5-86.

    Furman Jeffrey L., Fiona Murray, & Scott Stern, (2012) ``Growing 
Stem Cells: The Impact of U.S. Policy on the Organization of Scientific 
Research,'' Journal of Policy Analysis & Management, 31(3) 661-705.

    Hausman, Naomi (2012) ``University Innovation, Local Economic 
Growth, and Entrepreneurship,'' working paper, Dept of Economics, 
Hebrew University of Jerusalem: https://sites.google.com/site/
naomihausman/research/.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                            to Dr. Peter Lee
    Question 1. Federal funding for physical science and engineering 
basic research increased at a faster rate in the past five years than 
in the preceding decade, but applied research funding has declined with 
inflation. What might be the competitive implications of increasing the 
funding for basic research as compared to flat or even declining 
funding for applied research?
    Answer. In computing research, distinctions such as ``basic'' 
versus ``applied'' don't really apply, and advances in capabilities do 
not necessarily follow a linear path from fundamental research to 
commercial application. As described in the National Research Council's 
``Continuing Innovation in Information Technology,'' \1\ there is a 
complex interweaving of fundamental research and focused development, 
with innovations in academia driving breakthroughs in industry and vice 
versa; with ideas and technologies transitioning among fields and 
applications, creating opportunities in both new research and new 
products and markets. Individuals and projects can shift focus among 
discovery, invention, and engineering, and the lessons learned in any 
one area inform and inspire future work. This interplay between 
research with different drivers and timescales can be seen within 
Microsoft Research as well. Our research includes mission-focused, 
blue-sky, sustaining, and disruptive activities. Flexibility is a key 
attribute of our ability to meet these interrelated goals, and our 
researchers collaborate with leading academic, government and industry 
colleagues and often move in and out of universities and Microsoft 
business groups as the type of activities they are engaged in shift in 
focus. At DARPA, similar benefits have emerged from connecting research 
and communities across different types of projects. Therefore, when 
thinking about the range of research activities the government can 
support, for computing research, what matters is that Federal programs 
and agencies enable flexibility in partnerships and the flow of people 
among different projects and different types of projects.
---------------------------------------------------------------------------
    \1\ Continuing Innovation in Information Technology; Committee on 
Depicting Innovation in Information Technology; Computer Science and 
Telecommunications Board; Division on Engineering and Physical 
Sciences; National Research Council. http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476.

    Question 2. From an industry perspective, which government 
investments most directly contribute to the economic growth of our 
country?
    Answer. Different government investments contribute to economic 
growth in different ways. Certainly investments in research and 
education are a critical factor. The strength of the U.S. economy and 
the competitiveness of U.S. companies in innovation industries reflects 
the quality of the people the companies can hire and the quality and 
quantity of research conducted by the entirety of the innovation 
ecosystem, including government, businesses, and academia.
    Therefore, one critical element in facilitating economic growth is 
encouraging and supporting the conduct of research by companies, 
universities, and Federal agencies. This includes sustained investment 
by government in research, especially fundamental research, in all 
disciplines of science and engineering. The government can take a 
longer and broader view of research activities, allowing agency 
programs to cultivate emerging research concepts and fields. Many of 
the opportunities for leadership and growth by American companies will 
be realized through the combination of work from multiple fields and 
the integration of new knowledge into complex systems. Today, 
technology is an integral component of many sectors of the economy, 
including manufacturing, transportation, energy, healthcare, financial 
services, and national security, and therefore investment in research, 
and especially in computing, will make contributions across companies 
and geographies.
    Complementing Federal support for research, the government can 
support and encourage U.S. industry investment in R&D by permanently 
and seamlessly extending the R&D tax credit. This tax credit provides a 
critical, effective, and proven incentive for companies to increase 
their investment in U.S.-based R&D. Microsoft also supports increasing 
the alternative simplified credit rate from 14 percent to 20 percent.
    Another critical component for enabling economic growth in the U.S. 
is a talented and appropriately-prepared workforce. On this topic, 
Microsoft has released a National Talent Strategy,\2\ which outlines 
the challenges and opportunities facing the U.S. today in improving the 
science, technology, engineering, and mathematics (STEM) pipeline and 
preparing people for the jobs of the 21st century, especially in areas 
such as computing and engineering. The strategy offers specific 
recommendations within four areas:
---------------------------------------------------------------------------
    \2\ The Microsoft National Talent Strategy is available at http://
www.microsoft.com/en-us/news/download/presskits/citizenship/MSNTS.pdf.

  1.  Strengthening K-12 STEM education by providing additional 
        resources to recruit and train STEM teachers and implement 
        Common Core State Standards and Next Generation Science 
        Standards that will better prepare students for college and 
---------------------------------------------------------------------------
        work in these disciplines.

  2.  Broadening access to computer science in high school to ensure 
        that all students have the opportunity to gain this 
        foundational knowledge and explore careers in computing.

  3.  Addressing our national crisis in college completion by helping 
        students who start college to finish it faster and expanding 
        higher education capacity to produce more STEM degrees, with a 
        particular focus on computer science.

  4.  Targeting changes to high-skilled immigration both to bridge the 
        short-term skills gap, and to help fund some of the investments 
        in strengthening the STEM pipeline.

    In all of these areas, government, businesses, and schools and 
universities have a role to play in increasing opportunities for 
American youth and enabling U.S. companies to access skilled workers in 
support of our global competitiveness in innovation.

    Question 3. Since 2004, nearly 85 percent of R&D-related employment 
growth by U.S. multinational companies has been abroad. How does 
Microsoft's internal R&D enterprise benefit from its location in the 
United States, and what would make the company choose to relocate R&D 
abroad?
    Answer. Microsoft spends 83 percent of its worldwide R&D budget in 
the United States. This reflects the impact we receive from enabling 
close collaboration between our R&D and business and product teams and 
the flow of people and ideas among these organizations. It also 
reflects the value of the partnerships we have with the U.S. innovation 
ecosystem, which includes our partners, our customers, and especially 
the American higher education system. Research universities are a 
critical source of ideas and collaborations, and the students who 
become employees at Microsoft and other R&D-intensive companies are a 
key conduit for keeping U.S. companies at the forefront of innovation 
industries.
    This fundamental reliance on access to smart, skilled people is not 
unique to Microsoft, and it is not unique to the information technology 
sector. But companies across various industry sectors cannot continue 
to focus R&D jobs in this country if we cannot fill them here. Other 
countries are graduating larger numbers of individuals with the STEM 
backgrounds that the global economy so clearly calls for. In the short 
term this represents an unrealized opportunity for American job growth. 
In the longer term, unless the situation changes, it is possible that 
unfilled jobs will migrate over time to where the workforce is, and 
this may spur the development of economic competition in a field that 
the United States pioneered. In the Microsoft National Talent Strategy 
(as described in the response to question (2) above), there is a 
discussion of these issues and of the changes that would help ensure 
U.S. companies in general have access to an appropriately-trained 
workforce in the U.S.

    Question 4. What innovative, funding-neutral policies should the 
Federal Government pursue that it is not currently?
    Answer. The response to question (2) above outlines key ways in 
which the Federal Government supports innovation, including investment 
in research and in education. Examples of policy steps that can be 
taken within these areas include:

   Reauthorizing the interagency Networking and Information 
        Technology Research and Development (NITRD) program.

   Ensuring that computer science-focused projects and teachers 
        are eligible for and included in Federal STEM education 
        programs, especially those that provide funding for teacher 
        professional development, research on pedagogy, and assistance 
        to States on standards and assessments.

   Supporting interdisciplinary research and education, 
        especially the integration of computing into STEM programs in 
        higher education and in collaborative research.

   Increase focus on methods and incentives for retention and 
        completion of degrees in STEM subjects, including computer 
        science.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                             Dr. Peter Lee
    Question 1. You note that Microsoft invests more than $9 billion a 
year towards research and development. However, right now, companies in 
the U.S. are sitting on around $1.7 trillion in cash instead of 
investing it in new technology, and Mr. Augustine notes that U.S. 
corporations spend over twice as much on litigation as on basic 
research. What can the government do to encourage companies to invest 
more in research and technology here in the U.S.?
    Answer. Companies do not invest in and conduct research and 
development (R&D) in a vacuum. The amount of business investment in 
R&D, and the impact of those R&D programs reflects the quality of the 
people companies can hire and the quality and quantity of research 
conducted by the rest of the innovation ecosystem, especially 
universities with the support of Federal agencies.
    Therefore, one critical element in encouraging company investment 
in R&D is complementary investment by government in research, 
especially fundamental research, in all disciplines of science and 
engineering. The government can take a longer and broader view of 
research activities, allowing agency programs to cultivate emerging 
research concepts and fields. Many of the opportunities for leadership 
and growth by American companies will be realized through the 
combination of work from multiple fields and the integration of new 
knowledge into complex systems. Computing is often a central element in 
enabling these opportunities in sectors like manufacturing, 
transportation, healthcare, and national security. On this front, in 
addition to supporting Federal investment in research in general, 
Microsoft also specifically is supportive of the reauthorization of the 
interagency Networking and Information Technology Research and 
Development (NITRD) program.
    Another critical element in companies' conduct of R&D in the U.S. 
is the access to a talented and appropriately prepared workforce. On 
this topic, Microsoft has released a National Talent Strategy,\3\ which 
outlines the challenges and opportunities facing the U.S. today in 
improving the science, technology, engineering, and mathematics (STEM) 
pipeline and preparing people for the jobs of the 21st century, 
especially in areas such as computing and engineering. The strategy 
offers specific recommendations within four areas:
---------------------------------------------------------------------------
    \3\ The Microsoft National Talent Strategy is available at http://
www.microsoft.com/en-us/news/download/presskits/citizenship/MSNTS.pdf.

  1.  Strengthening K-12 STEM education by providing additional 
        resources to recruit and train STEM teachers and implement 
        Common Core State Standards and Next Generation Science 
        Standards that will better prepare students for college and 
---------------------------------------------------------------------------
        work in these disciplines.

  2.  Broadening access to computer science in high school to ensure 
        that all students have the opportunity to gain this 
        foundational knowledge and explore careers in computing.

  3.  Addressing our national crisis in college completion by helping 
        students who start college to finish it faster and expanding 
        higher education capacity to produce more STEM degrees, with a 
        particular focus on computer science.

  4.  Targeting changes to high-skilled immigration both to bridge the 
        short term skills gap, and to help fund some of the investments 
        in strengthening the STEM pipeline.

    In all of these areas, government, businesses, and schools and 
universities have a role to play in increasing opportunities for 
American youth and enabling U.S. companies to access skilled workers in 
support of our global competitiveness in innovation.
    Finally, another step the government can take to make the U.S. 
environment conducive to and supportive of U.S. industry's investment 
in R&D is to permanently and seamlessly extend the R&D tax credit. This 
tax credit provides a critical, effective, and proven incentive for 
companies to increase their investment in U.S.-based R&D. Microsoft 
also supports increasing the alternative simplified credit rate from 14 
percent to 20 percent.

    Question 2. Dr. Lee, given that finding the brightest and most 
well-prepared students is so important for recruitment at a high tech 
firm like Microsoft, what specific measurements would tell us which 
universities are best educating their students in the STEM fields?
    Answer. As the U.S. economy increases shifts to a focus on 
innovation industries, universities and other organizations will be 
critical in preparing the workforce of the twenty-first century. The 
Bureau of Labor Statistics projections forecast that occupations that 
require post-secondary education will grow faster than those which 
require a high school diploma or less.\4\ However, as various 
institutions of higher education serve different populations and train 
people for different jobs and fields, it is difficult to suggest 
specific metrics. However, there are some key areas to watch. One is 
college completion--whether students are able to achieve the degrees 
and credentials that twenty-first century jobs require. Another is 
retention of students studying in STEM fields. According to analyses 
done for the President's Council of Advisors on Science and Technology, 
fewer than 40 percent of students who enter college intending to major 
in a STEM field complete a STEM degree.\5\
---------------------------------------------------------------------------
    \4\ From the U.S. Bureau of Labor Statistics' occupational 
employment and job openings data, projected for 2010-2020. Overview 
available at http://www.bls.gov/ooh/About/Projections-Overview.htm.
    \5\ President's Council of Advisors on Science and Technology. 
Engage to Excel: Producing One Million Additional College Graduates 
with Degrees in Science, Technology, Engineering, and Mathematics. 
http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-
engage-to-ex
cel-final_2-25-12.pdf. This report derived the number from U.S. 
Department of Education, National Center for Education Statistics, 
2003-04 Beginning Postsecondary Students Longitudinal Study, Second 
Follow-up (BPS:04/09), See Appendix C of PCAST Report.
---------------------------------------------------------------------------
    Finally, it is worth noting that information technology is becoming 
a critical element of research and work in all of the STEM fields. 
Students in STEM areas would benefit from exposure to computing 
principles and experience with how information technology applies 
within their field as part of their educational programs.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                             Dr. Peter Lee
    Question. I worked to include university commercialization reports 
in the COMPETES Reauthorization Act. I understand measuring the long-
term economic impact of the COMPETES Act programs is inherently 
difficult--it is often difficult to trace any specific breakthrough or 
innovation all the way back to a specific research grant, additionally, 
these projects take time. What is the best way to measure the success 
of these programs? What indicators should we look to? For example, is 
there a way to estimate how many jobs are created by a program or by 
the Act?
    Answer. As noted above, it is difficult to measure the economic 
impact of individual programs in an interconnected system such as the 
innovation ecosystem in the U.S. This is particularly challenging in 
the information technology space, where new products and capabilities 
build on a broad collection of technologies and advances and can't be 
traced to a single research paper or patent or graduate student.
    In the longer term, the overall benefit to the economy due to 
investments in research can be seen in the emergence of new industries. 
The National Research Council's ``Continuing Innovation in Information 
Technology'' describes eight entirely new product categories that 
ultimately became the basis of new billion-dollar industries, including 
broadband and mobile technologies; microprocessors; personal computing; 
the Internet and the Web; cloud computing; enterprise systems; 
entertainment technologies; and robotics.\6\ Federal investments in 
research, mostly in academia, played a critical role in all of these 
areas, both by funding specific research areas that opened up new 
opportunities and supporting the education of the scientists and 
engineers who powered the new products and companies.
---------------------------------------------------------------------------
    \6\ Continuing Innovation in Information Technology; Committee on 
Depicting Innovation in Information Technology; Computer Science and 
Telecommunications Board; Division on Engineering and Physical 
Sciences; National Research Council. http://
sites.nationalacademies.org/CSTB/CurrentProjects/CSTB_045476.
---------------------------------------------------------------------------
    Similarly, the connections between investments in information 
technology research and job creation are hard to measure narrowly. 
Looking at employment just in the information technology sector does 
not reflect the value that advances in information technology 
capabilities bring to sectors across the economy, including financial 
services, manufacturing, healthcare, and others.\7\ In addition, there 
is the impact of high tech companies on local economies. It has been 
estimated that for every high tech job created in a metropolitan area, 
five additional local jobs are created outside of the high tech 
industry.\8\
---------------------------------------------------------------------------
    \7\ Of the people working in computing occupations, 9 percent are 
in information services, 12 percent are in financial services, 36 
percent are in professional and business services, 7 percent are in 
government and public education services, and 12 percent are in 
manufacturing. Georgetown University Center for Education and the 
Workforce report on STEM (October 2011), by Anthony P. Carnevale, 
Nicole Smith, and Michelle Melton, available at http://cew.george
town.edu/stem/.
    \8\ Enrico Moretti, The New Geography of Jobs (2012).
---------------------------------------------------------------------------
                                 ______
                                 
 Response to Written Question Submitted by Hon. John D. Rockefeller IV 
                                  to 
                              John L. Winn
    Question. What innovative, funding-neutral policies should the 
Federal Government pursue that it is not currently?
    Answer. I propose making STEM a priority for many K-12 and higher 
education grant programs.

        Require Title II to have a STEM focus in state strategies.

        Make Title II STEM programs be more competitive.

        Give scholarship programs a STEM priority component.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                              John L. Winn
    Question. I worked to include university commercialization reports 
in the COMPETES Reauthorization Act. I understand measuring the long-
term economic impact of the COMPETES Act programs is inherently 
difficult--it is often difficult to trace any specific breakthrough or 
innovation all the way back to a specific research grant, additionally, 
these projects take time. What is the best way to measure the success 
of these programs? What indicators should we look to? For example, is 
there a way to estimate how many jobs are created by a program or by 
the Act?
    Answer. The USDOE needs to develop common metrics toward improving 
the STEM education and workforce development and require these metrics 
to be reported on. Once data is being collected on common metrics, they 
should be analyzed and used to drive future policy on what works. These 
evaluations are often put aside as the government moves on to next 
year's grants.
    The Federal Government should focus on scaling effective programs 
in STEM fields. One major problem is local successes are never really 
scaled to make a larger impact.
    The state of Florida has done a fabulous job of tracking students 
from education through employment. Look to their program. There are two 
issues: (1) How many more skilled workers do we have going into 
relevant STEM fields and (2) How many new jobs are being created. Not 
sure how to measure the second one as jobs tend to follow innovations 
developed in the market place and based on consumer demand.

                                  
