[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





 
                    FUELING AMERICAN INNOVATION AND
                     RECOVERY: THE FEDERAL ROLE IN
                        RESEARCH AND DEVELOPMENT

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, D.C., JULY 8, 2020

                               __________

                           Serial No. 116-28

                               __________

           Printed for the use of the Committee on the Budget
           
           
           
           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                     Available on the Internet:
                         www.govinfo.gov
                            
                            
                             ______

              U.S. GOVERNMENT PUBLISHING OFFICE 
42-242                WASHINGTON : 2020 
                             
                            
                        COMMITTEE ON THE BUDGET

                  JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts,         STEVE WOMACK, Arkansas,
  Vice Chairman                        Ranking Member
HAKEEM S. JEFFRIES, New York         ROB WOODALL, Georgia
BRIAN HIGGINS, New York              BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania         Vice Ranking Member
ROSA L. DELAURO, Connecticut         JASON SMITH, Missouri
LLOYD DOGGETT, Texas                 BILL FLORES, Texas
DAVID E. PRICE, North Carolina       GEORGE HOLDING, North Carolina
JANICE D. SCHAKOWSKY, Illinois       CHRIS STEWART, Utah
DANIEL T. KILDEE, Michigan           RALPH NORMAN, South Carolina
JIMMY PANETTA, California            KEVIN HERN, Oklahoma
JOSEPH D. MORELLE, New York          CHIP ROY, Texas
STEVEN HORSFORD, Nevada              DANIEL MEUSER, Pennsylvania
ROBERT C. ``BOBBY'' SCOTT, Virginia  DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas            TIM BURCHETT, Tennessee
BARBARA LEE, California
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
RO KHANNA, California

                           Professional Staff

                      Ellen Balis, Staff Director
                  Becky Relic, Minority Staff Director
                  
                                CONTENTS

                                                                   Page
Hearing held in Washington, D.C., July 8, 2020...................     1

    Hon. John A. Yarmuth, Chairman, Committee on the Budget......     1
        Prepared statement of....................................     4
    Hon. Steve Womack, Ranking Member, Committee on the Budget...     6
        Prepared statement of....................................     8
    Sudip Parikh, Ph.D., Chief Executive Officer, American 
      Association for the Advancement of Science.................    11
        Prepared statement of....................................    14
    Paul Romer, Ph.D., Professor of Economics, New York 
      University.................................................    27
        Prepared statement of....................................    34
    The Hon. Deborah Wince-Smith, President and Chief Executive 
      Officer, Council on Competitiveness........................   150
        Prepared statement of....................................   152
    Willy Shih, Ph.D., Professor of Management Practice, Harvard 
      Business School............................................   161
        Prepared statement of....................................   164
    Hon. Sheila Jackson Lee, Member, Committee on the Budget, 
      statement submitted for the record.........................   209
    Hon. George Holding, Member, Committee on the Budget, 
      statement submitted for the record.........................   215
    Hon. Ilhan Omar, Member, Committee on the Budget, questions 
      submitted for the record...................................   217
    Hon. Scott H. Peters, Member, Committee on the Budget, 
      questions submitted for the record.........................   218
    Answers to questions submitted for the record................   219


                      FUELING AMERICAN INNOVATION

                           AND RECOVERY: THE

                        FEDERAL ROLE IN RESEARCH
                        .
                            AND DEVELOPMENT

                              ----------                              


                        WEDNESDAY, JULY 8, 2020

                          House of Representatives,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 1:07 p.m., via 
Webex, Hon. John A. Yarmuth [Chairman of the Committee] 
presiding.
    Present: Representatives Yarmuth, Moulton, Boyle, Price, 
Schakowsky, Kildee, Panetta, Morelle, Scott, Jackson Lee, 
Peters; Womack, Woodall, Johnson, Flores, Holding, Crenshaw, 
and Burchett.
    Chairman Yarmuth. The hearing will come to order.
    Good afternoon, and welcome to the Budget Committee's 
hearing on Fueling American Innovation and Recovery: The 
Federal Role in Research and Development.
    I want to welcome our witnesses who are here with us today.
    At the outset, I ask unanimous consent that the Chair be 
authorized to declare a recess at any time to address technical 
difficulties that may arise with such remote proceedings.
    Without objection, so ordered.
    As a reminder, we are holding this hearing virtually in 
compliance with the regulations for committee proceedings 
pursuant to House Resolution 965.
    First, consistent with the regulations, the Chair or staff 
designated by the Chair may mute participants' microphones when 
they are not under recognition for the purposes of eliminating 
inadvertent background noise.
    Members are responsible for unmuting themselves when they 
seek recognition or when they are recognized for their five 
minutes. We are not permitted to unmute Members unless they 
explicitly request assistance. If I notice that you have not 
unmuted yourself, I will ask you if you would like staff to 
unmute you. If you indicate approval by nodding, staff will 
unmute your microphone. They will not unmute you under any 
other conditions.
    Second, Members must have their cameras on throughout this 
proceeding and must be visible on screen in order to be 
recognized. As a reminder, Members may not participate in more 
than one committee proceeding simultaneously.
    Finally, to maintain safety, in light of the Attending 
Physician's new guidance, any Members present in the hearing 
room must wear a mask at all times when they are not speaking. 
For those Members not wanting to wear a mask, the House rules 
provide a way to participate remotely from your office without 
being physically present in the hearing room.
    Now I am proud to introduce our witnesses this afternoon. 
We will be hearing from Dr. Sudip Parikh, CEO at the American 
Association for the Advancement of Science; Dr. Paul Romer, a 
professor in economics at New York University; the Honorable 
Deborah Wince-Smith, president and CEO at the Council on 
Competitiveness; and Dr. Willy Shih, professor of management 
practice at Harvard Business School.
    I will now yield myself five minutes for an opening 
statement.
    Since our last hearing, there have been more than 600,000 
new confirmed coronavirus cases and more than 9,000 Americans 
have succumbed to the virus. Our economy is in free-fall, and 
unemployment is forecast to remain in the double digits for the 
foreseeable future. Across the country, men, women, and 
children are still marching and advocating for a more just and 
peaceful future.
    While the state of our Union remains uncertain, there is 
hope and there are answers yet to be discovered. Reinvigorating 
our science and engineering capabilities could help our nation 
address the crises we face today while better preparing our 
nation for the future.
    But despite its immense potential and history of success, 
the federal commitment to research and development has 
declined, while this Administration systematically suppresses, 
distorts, ignores, or thwarts scientific research in the name 
of false hope.
    Last year, nondefense discretionary funding as a percent of 
GDP equaled its lowest level in 50 years, and government 
support for science and engineering has been one of the 
casualties. Federal R&D funding as a share of the economy has 
fallen from barely 1.9 percent in the mid-1960's to less than 
0.7 percent in 2018, hindering advancements and slowing 
innovation. Not surprisingly, we are increasingly outranked by 
global competitors like China on international benchmarks of 
competitiveness.
    Now, COVID-related disruptions and the Administration's 
failure to take this health threat seriously threaten to 
further derail U.S. innovation. Meanwhile, other nations are 
working to solve both the global health and economic crises by 
ramping up investments in R&D, spurring their recovery while 
planning for future advancements that will help them maintain 
their competitive edge in the global market.
    Experts have stressed the importance of aggressive, 
responsible, and strategic investments to our recovery from 
COVID-19 and the economic fallout. Aside from the obvious, like 
developing vaccines and treatments for COVID-19, Federal R&D 
investments would also help spur an inclusive recovery, boost 
regional economies, and put Americans back to work.
    Targeting federal investments to increase diversity, 
equity, and inclusion in the research and innovation ecosystem 
would allow us to fully tap into talents of all our citizens 
and would accelerate discovery, while also increasing GDP per 
capita by as much as 3 to 4 percent.
    Localized clusters of federally supported R&D in labs and 
universities can increase regional economic opportunities, 
creating jobs in the short and long term. We have seen this 
work before. Evidence indicates that Recovery Act stimulus 
investments in R&D had a large and positive employment effect.
    This investment would attract, not displace, additional 
private investment while creating new opportunities across the 
country and fueling revolutionary solutions to pressing 
problems. It could spur entirely new industries that many 
established companies find too risky or cost-prohibitive to 
explore.
    Recognizing the value of federal investments, Congress has 
begun the work to restore R&D funding. The Bipartisan Budget 
Agreement of 2019 added significantly to both defense and 
nondefense discretionary funds that would otherwise have been 
at austerity levels. And Congress has appropriated additional 
supplemental resources for NIH and CDC as we fight the 
coronavirus pandemic.
    But Congress needs a committed partner in the White House 
to ensure scientific evidence, data, and research are once 
again incorporated meaningfully into federal policy. Instead, 
the Trump Administration has routinely sabotaged the work of 
federal scientists and experts, prioritized politics over 
progress, buried data, purposely misled the public on issues 
ranging from climate change to the impact of chemical exposure 
on our children's health. And now this disdain for science has 
made America a global hotspot for coronavirus infection.
    It shouldn't take a lawsuit for this Administration to 
release data on the racial disparities of coronavirus 
infections. Scientists and experts should never be muzzled and 
prevented from sharing potentially lifesaving information with 
the public. The American people are being forced to withstand 
the tragic results of the Administration's devotion to 
ignorance in favor of political points and division.
    From putting a man on the Moon and the invention of the 
internet to groundbreaking medical advancements, federal 
investments in R&D have fueled our economic growth, helped us 
tackle problems home and abroad, and made America a beacon of 
innovation and discovery. Without a renewed commitment to 
science and innovation, we risk squandering our recovery and 
the opportunity to move our nation forward as a global force 
for good.
    We will not be able to defeat the virus and foster an 
inclusive recovery if our communities don't have the tools, 
knowledge, and freedom to do it. That will take investment and 
an administration that respects science and facts.
    I look forward to this important discussion, and I am eager 
to hear from our witnesses.
    I now yield to the Ranking Member, Mr. Womack, to unmute 
his microphone and give his opening statement.
    [The prepared statement of Chairman Yarmuth follows:]
    
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    Mr. Womack. Thank you, Mr. Chairman, for holding this 
hearing.
    And thank you to the witnesses who are joining us today.
    Our nation's strong innovation ecosystem has always been 
driven by the pioneering spirit on which America was founded. 
Throughout the centuries, we have leveraged research and 
development to make unthinkable progress across industries and 
drive the United States--indeed, the world--forward. This has 
enabled our economic competitiveness in many of the country's 
public missions: national security, healthcare, infectious 
disease response, rural development, disaster preparedness and 
response, and a whole lot more.
    Thanks to R&D, advancements that could only once be 
imagined are now possible. Whether it is developing the vaccine 
for COVID-19, next-generation computers and phones, carbon 
capture and storage, or the next stealth multirole combat 
aircraft fighter, the delivery of these capabilities has been 
rooted in the ability to unleash innovation, research, and 
technology.
    I saw an example of this firsthand this week as I visited a 
company in my own district, NOWDiagnostics in Springdale, 
Arkansas. They develop simple diagnostic tests which require 
nothing more than a drop of blood and a few minutes to yield 
results. Their products cover everything from a COVID-19 
antibody test to screenings for Malaria and Ebola. Just one 
example of the many American companies producing cutting-edge 
technology and solutions.
    So how do we continue to encourage these types of 
breakthroughs? Washington should support private industry, 
which has led a vast majority of investment, and promote 
policies that encourage companies to continue to unleash 
opportunity in this critical space. This supporting role of the 
federal government should focus on resources for R&D in areas 
such as early stage research and streamlining regulations.
    As a Member of the Appropriations Committee, I've advocated 
for federal research funding for critical NIH programs, 
including Alzheimer's, ALS, diabetes, and pediatric cancer 
research. We also can't overlook national-security priorities, 
like the Biomedical Advanced Research and Development 
Authority, BARDA, which helps us combat bioterrorism and other 
emerging health threats.
    It is for these programs that I will continue to voice my 
concern for the true challenge that threatens all critical 
federal programs, including R&D initiatives--that is, our out-
of-control deficit and debt. We're spiraling toward a fiscal 
crisis, and once we get there, once it hits, there will be zero 
money to fund these critical programs.
    I've said over and over again, as an appropriator, one of 
my chief concerns is that we continue to have major food fights 
in Appropriations on the House floor about how we fund the 
discretionary side of the budget. There won't be any money for 
R&D if we don't tackle the real problems facing our country, 
and that is on mandatory spending.
    It has grown from 34 percent of the federal budget in 1965 
to 70 percent today. It is projected to grow to 76 percent in 
2030. Discretionary spending, which includes funding for health 
research, space exploration, and the National Science 
Foundation, has declined from 66 percent of the federal budget 
in 1965 to just 30 percent today. It is literally being 
squeezed away.
    What this Committee should be focusing on is putting 
together a budget that addresses out-of-control mandatory 
spending, the driver of our unsustainable deficits and debt. If 
policymakers want to prioritize R&D funding, they must first 
tackle this threat.
    It's not easy. It's going to require political courage. 
Indeed, some Members will go home as a result. Congress must 
get back to making the tough choices. It won't be an easy job, 
but it has to be done. This is the only way critical federal 
programs, both discretionary and mandatory, will continue to 
exist for current and future generations.
    I look forward to hearing from our witnesses today.
    And I'll take just a quick moment of personal privilege to 
say that, on the subject of R&D, my good friend Joe Steinmetz, 
the chancellor at the University of Arkansas, has made research 
an important cornerstone of his administration at the U of A in 
Fayetteville, our land-grant university. I expect within the 
next several days there will be a major announcement of a 
funding source for a major research institute on our very own 
campus in Fayetteville, Arkansas, and I look forward to sharing 
that news with you at the appropriate time.
    Mr. Chairman, as always, thank you for your leadership. I 
yield back the balance of my time.
    [The prepared statement of Steve Womack follows:]
    
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    Chairman Yarmuth. Thank you, Mr. Womack, for your opening 
statement.
    In the interest of time, if any other Members have opening 
statements, they may submit those statements electronically to 
the clerk for the record.
    Chairman Yarmuth. Once again, I want to thank our witnesses 
for being here this morning.
    The Committee has received your written testimony, and they 
will be made part of the formal hearing record. Each of you 
will have five minutes to present your oral remarks. As a 
reminder, please unmute your microphone before speaking.
    Dr. Parikh, please unmute your microphone and begin when 
you are ready.

  STATEMENTS OF SUDIP PARIKH, PH.D., CHIEF EXECUTIVE OFFICER, 
   AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE; PAUL 
ROMER, PH.D., PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY; THE 
    HON. DEBORAH WINCE-SMITH, PRESIDENT AND CHIEF EXECUTIVE 
  OFFICER, COUNCIL ON COMPETITIVENESS; AND WILLY SHIH, PH.D., 
   PROFESSOR OF MANAGEMENT PRACTICE, HARVARD BUSINESS SCHOOL

                STATEMENT OF SUDIP PARIKH, PH.D.

    Dr. Parikh. Thank you. Good afternoon, Chairman Yarmuth, 
Ranking Member Womack, and Members of the Committee. Thank you 
so much for the opportunity to testify today.
    I am Sudip Parikh, and I have the privilege of being the 
chief executive officer of the American Association for the 
Advancement of Science and also the publisher of the Science 
family of journals. Our mission is to advance science, 
engineering, and innovation for the benefit of all people, or, 
to put it more simply, to advance science and serve society.
    Today, I want to briefly discuss three reasons why I think 
today's hearing is incredibly timely and then provide three 
recommendations to the Committee--to the Budget Committee.
    First, science and engineering are more important now than 
ever in our national preparation and response to current 
crises, including COVID-19 but also ongoing challenges such as 
climate change and economic competitiveness.
    In response to these crises, the federal government has a 
vital leadership and coordination role that can be the 
difference between success and failure. Successfully preparing 
for and responding to COVID-19, climate change, and threats to 
competitiveness will require the federal government to play the 
role of a quarterback.
    Second, science has a substantive role to play in advancing 
shared opportunity and fair treatment for everyone by 
addressing challenges in the scientific enterprise and 
providing an evidence base for national policymaking. Science 
and evidence must be integrated into the policymaking progress 
to advance shared opportunity and fair treatment for all.
    Science, especially social science, is key to unlocking our 
path forward. The work of scientists is critical to better 
understanding and interpreting data on government spending on 
incarceration, officer-involved shootings, crime reduction, 
health disparities, and other relevant topics.
    To be able to address national policymaking issues, science 
must also look inward to ensure that the scientific enterprise 
is addressing our own biases. The core of our nation's 
innovation ecosystem is more than just funding for research; it 
is also the investment we make in people.
    Third, it is time to increase our investments and update 
our federal policy and investment framework to continue 
harnessing the scientific research that builds the U.S. economy 
and increases the safety and well-being of all Americans.
    Right now, our nation is celebrating the 75th anniversary 
of ``Science: The Endless Frontier,'' written by Vannevar Bush 
in 1945. That provided a policy framework that envisioned a 
national partnership between government, academia, and industry 
to harness basic scientific knowledge for security and well-
being.
    That framework has served as the basis for our investment 
in advancing basic research and industrial innovation and 
economic success, but, frankly, it is time for an update. The 
scientific enterprise has evolved far beyond Bush's original 
vision and now delivers scientific advances, medical cures, 
innovative technology products, raised standards of living, 
economic growth, and, frankly, awe-inspiring understanding of 
the universe.
    That scientific ecosystem is nourished by broad and varied 
federal investment in research and development: universities 
and nonprofits; institute-based scientists driving thought 
leadership; innovative financial instruments to bring private-
sector risk capital; entrepreneurs who are driven to move 
scientific advances from the lab to the consumer; industry 
investment, particularly in development; and agile regulatory 
agencies able to keep up with the progress of science and 
technology and factor it into their decisionmaking. Each piece 
of that ecosystem is important, but it all begins with the 
federal role.
    Our global competitors have seen our success and are paying 
it the highest compliment; they are copying it. The ``2020 
State of U.S. Science and Engineering'' report shows that, 
although the U.S. spent more on R&D than any other country in 
2017, other nations are catching up. And, since 2000, the 
American share of global R&D has declined from 37 to 25 
percent, as U.S. research intensity, or R&D as a share of GDP, 
is well below its peak level and below the investment levels of 
nine other countries.
    How much should we invest? Well, as Chairman Yarmuth 
pointed out, federal funding for research and development 
peaked at 1.9 percent of GDP. We should be investing more than 
we are right now in order to compete with other nations in 
science, technology, and innovation. There are many ways to 
look at this, and I provide additional details in my written 
testimony.
    And this takes us to my recommendations.
    The U.S. should update the Bush framework for advancing 
science and serving society, with an emphasis on full-spectrum 
innovation, including fundamental science, mission-driven 
technology, and useful knowledge programs that meet local, 
national, and international needs, with the federal government 
as a key partner.
    The United States should increase total investment in R&D 
as a percentage of GDP to 1.9 percent, which would require 
increases of approximately 11 percent per year. This would 
match the peak we achieved more than five decades ago and put 
us firmly back into the top three countries for research 
intensity globally by 2035.
    And, last, scientific leaders must ensure that the 
scientific enterprise is supporting opportunities for all by 
addressing challenges within the scientific enterprise and 
providing the evidence base to inform national policymaking. 
This is just critical to ensuring a fairer scientific 
enterprise and a fairer world.
    Thank you for having me today, and I look forward to our 
discussion.
    [The prepared statement of Sudip Parikh follows:]
    
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    Chairman Yarmuth. Thank you very much for your testimony.
    I now recognize Dr. Romer for five minutes.
    Please unmute your mic, Dr. Romer.

                 STATEMENT OF PAUL ROMER, PH.D.

    Dr. Romer. Chairman Yarmuth, Ranking Member Womack, and 
Members of the Committee, thank you for giving me this chance 
to contribute to this discussion about how to fuel innovation 
and recovery and to contribute by summarizing the lessons I 
have learned from my analysis of long-run economic growth.
    We share two ambitions: We want the United States to be the 
leading nation in basic scientific research. We also want it to 
be the leading nation in the delivery of the technological 
progress that lifts the productivity of our work force and 
raises standards of living for our citizens.
    The main message I want to convey today is that it takes 
different types of investment to achieve these two ambitions. 
As a result, you, the Members of Congress, face a tradeoff. 
When you contemplate additional investment in our future, you 
can choose to invest in basic science or in technological 
progress.
    The secondary message that I want convey is that, in my 
opinion, in recent decades, the nation has underinvested in 
technological progress. In particular, we have allowed the 
strengths that we built up prior to World War II to depreciate. 
So, as a result, the investments you could make now that would 
yield the highest payoffs would be investments in the kinds of 
measures that delivered such remarkable technological progress 
before World War II.
    If I could ask for the first of my slides to be displayed.
    
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    This two-by-two table suggests that nations can be either 
leaders or followers in basic scientific achievement or in 
technological progress and that a nation can be a leader in one 
or the other or both.
    If I could have the second slide. 
   
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    The narrative that is often told about the United States is 
that we were in a position of leadership along both dimensions 
after World War II but, because of changes in the environment, 
changes in the economy, other changes, we are no longer as good 
at delivering technological progress. In the language that 
Deborah Wince-Smith will use, we generate ideas, but they don't 
cross the valley of death into the realm where they deliver 
practical benefit.
    If I could have the next slide.
    
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    The story I want to tell of our history is slightly 
different. We started out, as a nation, as a follower in both 
science and in technology, but because of the Morrill Act and 
our investment in the land-grant institutions, including the 
institution that Ranking Member Womack mentioned in Arkansas--
because of our investment in the land-grant universities, we 
moved into a position of technological dominance prior to World 
War II.
    Then, after World War II, we achieved a huge transformation 
where we became the world's leading producer of basic 
scientific research. But this was a new endeavor for us. We 
were not a nation that produced Nobel Prize-quality research 
before World War II. And, unfortunately, in this transition, we 
lost the strengths, we didn't continue to invest in the 
strengths of our system that existed before.
    Now, the extent of the problem that this leaves us with, 
whether you believe in the first narrative or the second one, 
was brought home to me by a conversation with Kari Stefansson, 
who is the founder of deCODE genetics, the company that is 
doing population-scale genetics in Iceland and which was the 
leader in its testing program to combat the pandemic.
    Kari said to me, Paul, all of the insights, all of the 
science that we rely on and every country in the world relies 
on was developed in U.S. universities, but why is it that your 
nation is not taking the same advantage of those developments?
    This suggests that our problem with technology and transfer 
of knowledge is not exclusively one that exists in the business 
sector; we see it in the government sector as well. And we need 
to invest in the mechanisms that once worked, that made us a 
powerhouse in technological progression, and could do so again.
    Thank you.
    [The prepared statement of Paul Romer follows:]
    
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    Chairman Yarmuth. Thank you.
    I would now recognize the Honorable Wince-Smith for five 
minutes.
    Please unmute your mic and proceed.

           STATEMENT OF THE HON. DEBORAH WINCE-SMITH

    Ms. Wince-Smith. Chairman Yarmuth, Ranking Member Womack, 
and Members of the Committee, thank you for the opportunity to 
appear before you today.
    I have the privilege of representing the Council on 
Competitiveness, a nonpartisan leadership organization of CEOs, 
university presidents, labor leaders, and national laboratory 
directors, all committed to advancing U.S. competitiveness in 
the global economy and raising the standard of living for all 
Americans through increases in productivity and economic 
growth.
    Since 1986, the Council has championed the federal role in 
innovation and advocated for measures that could generate 
greater returns to the nation from its public investments in 
research and development, in people, and in infrastructure.
    As we have heard, for 75 years, the federal government has 
fulfilled the vision articulated in Vannevar Bush's seminal 
report, ``Science: The Endless Frontier,'' sowing seeds for the 
innovation-and technology-driven productivity gains that 
propelled our country to global economic leadership, generated 
unprecedented wealth for Americans, drove social progress, and 
ensured our national security.
    However, two decades into the 21st century, the global 
environment for leveraging science and technology for inclusive 
economic gain, social benefit, and national security has 
fundamentally changed, and our nation needs a new game plan.
    First, we compete in a multipolar science and technology 
world. In 1960, the U.S. dominated technology due to the size 
of our investment, 69 percent of global R&D. The U.S. share has 
dropped to 28 percent, and China's has risen to 26 percent.
    Second, great revolutions in science and technology, such 
as biotech, AI, and nanotechnology, coupled to the new phase of 
the digital revolution, are colliding and converging 
simultaneously. These technologies are reshaping the global 
economy, society, and all dimensions of our lives as we speak. 
They will disrupt industries, markets, and jobs. And they pose 
profound implications for our country's economic prowess and 
national-security capabilities.
    Third, China has set its sight on world leadership in these 
technologies. It has launched a full-force, richly funded, 
licit and illicit campaign to achieve this goal, pursuing 
aggressive plans to dominate every single strategic critical 
technology at the heart of President Xi's ``civil-military 
fusion'' imperative.
    In response, the Council on Competitiveness has convened a 
multiyear national Commission on Innovation and Competitive 
Frontiers, comprising more than 60 CEOs, university presidents, 
labor leaders, and national laboratories, led by our 
distinguished board of directors. Over the past few months, 
this commission community has deliberated and identified nine 
priorities that the commission will initially address, five of 
which are directly linked to the federal role in research and 
development.
    One, our economic and military leadership depends on 
securing capabilities in these strategic critical technologies. 
This includes preserving and leveraging, in partnership with 
industry, the world-class assets of our universities, our 
national laboratories, and ensuring our entrepreneurial 
emerging companies can move from startup to scale-up--all part 
of this national innovation ecosystem. And we must also launch 
a new era of strategic partnerships with trusted allies around 
the globe.
    The federal investment in R&D as a percentage of gross 
domestic product has been on steady decline. And we have 
already all spoken about this. So I ask you, Mr. Chairman and 
Mr. Ranking Member, is this a new Sputnik moment?
    Two, we must strengthen U.S. resiliency. The COVID-19 
crisis and virus economy has exposed key weaknesses, such as 
fragile supply chains that focus more on cost and efficiency 
and not on resiliency and security. And we have a lack of 
control over the production and distribution of items critical 
to the health and security of our citizens. We must harness 
advanced technologies, from digital systems to drones, to make 
every level of our society and systems more resilient, more 
adaptive, and more cyber-secure.
    Three, the proverbial valley of death continues to be a 
major bottleneck in the U.S. innovation system and a barrier to 
accelerating the rate and scope of U.S. innovation, as it 
prevents many innovations, as I have said, from startup to 
scale-up. Many never reach the marketplace. They are vulnerable 
to foreign acquisition and bankruptcy. China is shopping now, 
with an unlimited checkbook, for valuable IP, know-how, and 
people.
    Four, we must amplify university and national lab 
technology transfer, commercialization, and industrial 
engagements and, to move beyond bureaucratic barriers, ensure 
that missions and cultures align with this imperative.
    And, five, too many citizens and communities are 
disconnected from the nation's innovation enterprise, with just 
10 states accounting for two-thirds of R&D spending, U.S. high-
tech hubs just on the coast. And we need to see a diversity of 
venture capital funding, as well as ensuring that women and 
minorities engage in this system.
    I look forward, Mr. Chairman and Committee, for your 
questions and to sharing the results of the first stage of our 
innovation imperative when we release this in December this 
year.
    [The prepared statement of Deborah Wince-Smith follows:]
    
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    Chairman Yarmuth. Thank you very much for your testimony.
    I now recognize Dr. Shih for five minutes.
    Please unmute your mic and proceed.

                 STATEMENT OF WILLY SHIH, PH.D.

    Dr. Shih. Chairman Yarmuth, Ranking Member Womack, Members 
of the Committee, thank you for the opportunity to address you 
today.
    Though I teach at the Harvard Business School, I am 
actually a scientist by training, with two degrees from MIT and 
a Ph.D. in chemistry from the University of California, 
Berkeley.
    I have been a beneficiary of our country's investments in 
basic scientific research and engineering post-Sputnik, a time 
when our heroes were scientists like Jonas Salk or Richard 
Feynman. I still remember watching the first Telstar 
transatlantic transmission and the Apollo launches.
    And I tip my hat to Dr. Parikh. AAAS's Science magazine is 
still one of my go-to sources.
    Post-World-War-II was marked by great public faith in 
science. After all, science had won the war, and it wasn't just 
the atom bomb; it was penicillin, antibiotics, radar, digital 
computer, the whole field of operations research, and many 
more. And investments in basic science research led to 
unquestioned American leadership for decades. And the 
spillovers into industry and from industry were spectacular. We 
remember Bell Labs, IBM Research, Fairchild Semiconductor, RCA 
Sarnoff, Rockwell Science Center, a host of others.
    Other countries followed America's lead and invested in 
basic research because they, too, understood the linkage to 
innovation, technological, and economic progress. Chinese 
investments are particularly impressive, but they have been 
part of a roadmap laid out in the mid-1980's to develop the 
capabilities needed in a modern economy.
    Funding for basic research, particularly at universities, 
is all about building capabilities. It is about training future 
generations of researchers. As these researchers flow into 
industry, they bring those capabilities with them.
    It is hard to quantify benefits attached to specific lines 
of research or projects. Rather, it is the ability to recognize 
future problems and opportunities. In the 1870's, Louis Pasteur 
thought he was solving problems with fermentation in the French 
wine industry, but along the way he invented the modern field 
of bacteriology. GE Research was initially focused on improving 
the filaments in lightbulbs but ended up pioneering high-vacuum 
technology and inventing the vacuum tube, which led to the 
groundwork for radio and television.
    The pandemic has exposed the value of capabilities in our 
country. The funding for the human genome program and 
fundamental life sciences research have built unrivaled 
capabilities in genomics and biotechnology. The U.S. scientific 
community has led work on vaccines and therapies for COVID-19. 
We do this better than any other country in the world, and it 
is because we made those long-term investments in basic 
sciences in the preceding decades.
    But the pandemic has also expressed our nation's reliance 
on other parts of the world. With this has come the realization 
we have let our capabilities diffuse away in a wide range of 
sectors, like semiconductors, electronics, machine tools, and 
countless others.
    So what should we do now? I would like to see more funding 
for basic research.
    I have talked to people on both sides of the aisle who I 
think agree with that, but let me tell you another story. My 
late father, when I was growing up, was an economist. And I 
used to watch him come home from work frustrated, and I told 
myself, ``I am never going to do that. I am going to go into 
sciences and engineering,'' OK, which is of course what I did. 
But you know what? I always ended up working on economic 
problems because I found out, if you didn't get the economics 
right, it didn't matter how great the science and engineering 
were. You had to look at the whole picture.
    Basic research needs stable funding that can have patience 
for long-term results. Since the majority of Federal R&D 
funding is discretionary spending, it is perennially at risk of 
getting crowded out by mandatory spending on things like debt 
service and entitlements.
    When I was in high school and had my sights set on science 
and engineering, the mandatory portion of the budget was 34 
percent. It is closer to 70 percent now, as we have heard, and 
we all know that is not going in the right direction.
    So, for sure, more funding for basic research. At the same 
time, I would love to see incentives to encourage firms to 
conduct more research, especially applied and translational 
research. I see great opportunities in manufacturing process 
innovations as well, things like continuous flow reactors, 
biomanufacturing, things that would enable American firms to 
leapfrog competitors.
    We could encourage and even fund precompetitive R&D 
collaborations, where partners work together on a common 
technology platform with which they intend to independently 
develop differentiated products downstream. And I included that 
in my written testimony.
    Finally, I have been thinking a lot about another issue. 
Most prescriptions for rebuilding American competitiveness 
focus on the supply side, incenting firms to move production to 
or back to the U.S. I think we need to focus, as well, on the 
demand side, growing domestic demand in early markets for new 
technologies as a way of incenting the growth of local supply.
    We saw this in the 1960's with DoD and NASA, who bought 60 
percent of all the ICs made, which really helped the American 
semiconductor industry get started. We have seen this more 
recently with NASA and DoD funding SpaceX, and that gives them 
the cash-flow to really change the game.
    Demand provides economic motivation to manufacturers, and 
proximity to production is extremely valuable, OK? I think it 
is also very important for people, because when you have demand 
in a sector, then it drives students to go there for careers.
    Basic science research is at the core of American global 
leadership. It is why the best and the brightest want to come 
here and work here. Let's ensure our continued leadership.
    Thank you for giving me the opportunity to speak with you 
today, and I am happy to take questions.
    [The prepared statement of Willy Shih follows:]
    
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    Chairman Yarmuth. Great. Thank you very much for your 
testimony.
    We will now begin our question-and-answer period.
    As a reminder, Members may submit written questions to be 
answered later in writing. Those questions and the witnesses' 
answers will be made part of the formal hearing record. Any 
Members wishing to submit questions for the record may do so by 
sending them to the clerk electronically within seven days.
    Chairman Yarmuth. Now we will begin questions and answers. 
I will defer my questioning until the end.
    I now recognize the gentleman from Massachusetts, the Vice 
Chair of the Committee, Mr. Moulton, for five minutes.
    Mr. Moulton. Good afternoon.
    I want to thank all the witnesses for testifying but 
especially the minority witness, Professor Willy Shih, who 
spent a full semester asking me questions not that long ago in 
business school. I only get five minutes, but what an honor it 
is to have those five minutes indeed.
    So thank you, Professor Shih, for being here.
    And a special thanks to my friend and fellow veteran, the 
Ranking Member, Steve Womack, for inviting Dr. Shih, for 
talking about the
    [inaudible] in your opening remarks, and for working to 
come to bipartisan conclusions about the way forward.
    And, Professor Shih, I will add, thank you for being such a 
great professor in my first year of business school that I 
asked you to advise our independent study in my second year.
    We did a financial analysis of the California High-Speed 
Rail Program. We came to two significant conclusions. One, the 
project is going to cost a lot more than California says, a 
conclusion that was borne out soon thereafter when the state 
raised their cost estimates. And, two, despite the higher 
costs, it still is a much better investment, at lower cost and 
higher returns, than the alternative of expanding airports and 
highways to meet the transportation demand of the next 50 
years.
    In other words, if you do a cost analysis, the project 
looks expensive, but if you do a cost comparison, it presents a 
very different conclusion. And if you do a cost-benefit 
analysis, as we should be doing in government budgeting, it 
becomes a no-brainer.
    Professor Shih, you have often said that investing in rail 
is smart because rail is so efficient. And we will get to 
investing in 21st-century infrastructure versus 1950's 
infrastructure in a minute, but, first, I want to amplify 
Chairman Yarmuth's opening remarks with this graph, which 
specifically shows than federally funded R&D as a share of the 
U.S.'s GDP is declining.
    Sam, please display the second slide in my deck, titled 
``Federal R&D as a Share of GDP.''

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    Here in Massachusetts, where Professor Shih and I both 
live, we are quite proud of our biotech industry, the pioneers 
in creating vaccines and treatments for COVID-19.
    Professor Shih, is there any connection between the success 
of a company like, say, Moderna and the graph that we see here?
    Dr. Shih. Well, absolutely. I mean, I think Moderna is kind 
of a textbook example, and not only Moderna but a lot of the 
other U.S. companies that are actively working on this.
    What we have seen is a pivot, and what it reflects is the 
capabilities that have been built up by these very prescient 
investments in the human genome program going back to the late 
1980's, early 1990's and the development of this cluster around 
Massachusetts and New England.
    So it is directly a consequence of the capability 
development in people, I should add, people who have been 
trained as researchers. And then, when we had this crisis, 
those people pivoted from whatever they were doing.
    The most gratifying thing I have seen this in this COVID-19 
crisis is scientists--anybody who is anywhere close to viral 
infection and vaccines or pharmacology or, you know, any of the 
life sciences, we have seen this tremendous pivot, everybody 
working on an angle of this disease. And it is because we built 
those capabilities.
    And it is just like I was talking about with Louis Pasteur 
and, you know, what kind of capabilities, so you can recognize, 
when problems come up, different ways of responding to them. So 
I think it is directly linked.
    Mr. Moulton. Great.
    Sam, if you could just switch the display back to me.
    So, Professor Shih, the next thing I would like you to 
comment on is whether or not it is a problem for America, a 
competitive threat to our leadership, that China is investing 
much more in government funding in biotech than we are here in 
the United States.
    And, Sam, if you would just please display the third slide 
in my deck, titled ``High-Speed Rail By Country.''
    This same story that we are showing here about high-speed 
rail could be told for broadband, green technology, or carbon-
free nuclear energy.
    Sam, you can bring the display back to me.
    
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    But, Professor Shih, it seems that we are falling behind 
across the board.
    And none of these issues should be partisan. I mean, our 
conclusions on California high-speed rail were not geared 
toward a Democratic position or Republican position; they were 
just math. In fact, I never had any idea about your political 
proclivities coming into this, Dr. Shih.
    But could you talk about what future-focused investments in 
infrastructure do to create a market for domestic 
manufacturing?
    Dr. Shih. Well, one of the things I have been thinking 
about is, just as we saw NASA and DoD created demand for 
integrated circuits in the 1960's, OK--and, frankly, that is 
what got the whole integrated circuit industry firms like Texas 
Instruments off the ground, right? Because there was the demand 
for that. OK.
    And I have seen this in China in many areas, where what 
they do is they generate demand for a product, and, first of 
all, what it does is, firms sense opportunity, so they go 
invest. They go invest in plants and equipment, they invest in 
R&D. By the way, they compete with each other, OK? But having 
the demand, bright young people go into it because they see 
career prospects, OK? So they go into it.
    One of the things that my recent research on China has 
really highlighted is, it is much less of a top-down command-
and-control-type model for innovation as well, OK? Because what 
you see is--you know, Beijing may set some directions. I 
mentioned they set this, you know, science and technology 
leadership policy back in 1986. It was called the 863 Program 
because it was established in March 1986. That is when they 
laid out this roadmap for capability development. But then you 
have regions and provinces and cities who say, ``OK, you know, 
government says this. We are going to go invest in these 
areas.'' And they compete with each other, OK?
    So it has a much more market quality than a lot of people 
would recognize, in terms of the results they produce. You get 
a lot of waste, but we see the results in terms of what they 
have done.
    The high-speed rail investment in China is a really 
interesting example. They have used it, as much because they 
want it for transportation, to modernize transportation, it is 
actually a tool for economic development, OK?
    I happened to visit the world's most advanced flat-panel 
factory in Hefei, China, two years ago, and I took the high-
speed rail over from Shanghai. And I asked them, I was like, 
``Why is this factory here?'' OK. Now, that is a much longer 
story. But the fact that you had high-speed rail meant the 
engineers were commuting from Beijing or commuting from 
Shanghai, right?
    And so there is also an economic-development aspect of 
this. So it is an interesting combination of things which has 
led to their leadership, but it is very much driven by this 
demand side.
    Mr. Moulton. Great.
    Thank you very much, Mr. Chairman.
    Chairman Yarmuth. With that, the gentleman's time has 
expired.
    I now recognize the Ranking Member, the gentleman from 
Arkansas, Mr. Womack, for 10 minutes.
    Mr. Womack. And I thank the Chairman again for hosting this 
all-important discussion about research and development, 
particularly in the pandemic phenomenon of where we find 
ourselves today.
    Real quickly, Dr. Shih, you had mentioned in your remarks 
and picked up on the fact that I gave a lot of attention in my 
opening remarks to the fact that the deficits and the debt are 
becoming a chronic problem in our country. And I spoke 
specifically about the fact of what I call this ``big 
squeeze,'' the fact that the mandatory side of our balance 
sheet is continuously squeezing that discretionary side, where 
most of this research and development funding, the lion's share 
of it, comes from.
    And so, if you just kind of project this thing out a few 
more years and if indeed we don't find a solution for 
throttling back the growth of the mandatory programs, this 
situation is not going to get better. Indeed, it is going get a 
lot worse. Would you agree?
    Dr. Shih. Well, that is why I made that comment.
    Now, this is not a political persuasion statement. This is 
just kind of, like, how I grew up. Like, I don't like to borrow 
money and stuff like that. OK. But set that aside.
    When I was in business, I found that this problem is 
essentially the fixed-cost/variable-cost part of your budgeting 
process, OK? And what happens is, when times get tight, 
everybody cuts all the variable costs because those are the 
things they can do. OK. But, in essence, what you do is you 
mortgage your future when you do that. All right?
    So, you know, I understand the importance of the 
mandatories. OK. But we look at where there is going, and, you 
know, I am relying on our leaders, you know, you guys, to be 
thoughtful about how do we manage this problem. Right? Because 
we can project where it goes, and, you know, the money has to 
come from somewhere.
    Mr. Womack. So I want to go to Ms. Wince-Smith for just a 
moment on the same subject.
    It just is inescapable to me that, if you are not able--it 
is one thing to defer the maintenance of a road. With increased 
costs of asphalt, concrete, this sort of thing, labor, yes, if 
you defer it, it is probably going to become more expensive. 
But can you talk, from the area of the Council on 
Competitiveness, delays or deferral of investing in key 
research? It is not the same as just deferring maintenance on a 
piece of infrastructure, is it not?
    Ms. Wince-Smith. Absolutely not.
    And let me just say that, in terms of where our investment 
needs to be in research and development, the basic research has 
been tremendously important. It will continue to be. It has 
given us the seed core for the future. But we do have to ramp 
up, in a major way, our investments in these platform critical 
technologies that I talked about in my opening statement.
    So let me give you an example. We can do a lot of basic 
research in next-generation microelectronics as we reach the 
end of Moore's Law, but if we don't have a capability to bring 
together the industrial infrastructure, the suppliers, the 
ecosystem, and to manufacture at scale here in the United 
States, we will risk the underpinning for basically the future 
economy to China. It is a huge issue.
    We did this very strategically back when SEMATECH was 
created. It had DoD investment matched with private-sector, and 
it changed the game. But we also linked that investment to 
enforcing our trade laws with Japan and having a regulatory 
system that also unleashed private-sector capital.
    So what I would like to say here is, we have to connect the 
pieces we have. That is part of the new game plan. We can't 
just rely on individual investigators and universities. We 
can't just rely on missions in the national labs; startup 
companies and big companies now who aren't investing. We have 
to put all this together in a very strategic way. And the 
federal government has a huge leadership role to play in 
setting this strategy in partnership with the private sector.
    So if I were asked, what is the one thing we could not 
afford to lose going forward? It is the leadership in not just 
the research but in the manufacturing at scale here in the 
United States of the next-generation microelectronics.
    Mr. Womack. So one other question for you, and that is: 
what is the Council's idea or position or thought on the talent 
demand?
    I mean, if you are not investing in the kind of research 
and development that we all know that we need to be doing, what 
does that say to the future scientists and engineers that are 
coming through that pipeline right now about their future 
career choices?
    Ms. Wince-Smith. We have to invest in the development of 
the talent. We have to invest in it starting, you know, in the 
K-12, all the way up to the highest end of the research 
enterprise. And we also have to make this far more inclusive. 
We need to use all of our people in a way that they can 
contribute to this innovation ecosystem.
    So it is very concerning--I mean, I am a woman, of course. 
It is very concerning that, still, after many years and many 
programs, we don't see women in the leadership roles in the 
science and technology enterprise. And, of course, we have, you 
know, racial issues, as well, in underrepresentation.
    So that is a huge issue, and we have to invest. Our 
departments and science agencies need to invest.
    One place where I will say it is being done very, very well 
is in the military. And I have the fortune to have two sons who 
came out of the Naval Academy, and I witnessed firsthand how 
they mentored and developed talent representing our 
demographics and did it in a way that virtually all of the 
midshipmen and--women graduate with full engineering degrees. 
And they make sure that happens.
    We have to do that throughout our country now, and it has 
to be a very high priority. Because without the people, we 
don't have anything to move forward with.
    Mr. Womack. Yes. Thank you.
    Dr. Shih, back to you for just a minute. It goes without 
saying that research and development and manufacturing kind of 
go hand-in-hand. And we've seen this in kind of an unfortunate 
sort of way during the COVID-19 phenomenon with the ability to 
produce ventilators, N95 masks, that whole broad range of PPE, 
basic stuff that you should be prepared to have or be able to 
create in an emergency that we have not been able to.
    Why does a country with such vast resources, such great 
talent, such amazing innovation struggle to keep the innovation 
side and the manufacturing side on the same side?
    Dr. Shih. I think it traces back to demand and, in 
particular, for PPE and ventilators and things like that, 
stable demand. OK? And what we ended up having is a lot of 
commoditization pressure from low-cost suppliers in China in 
particular. OK?
    And I was just talking to an Indian pharmaceutical company, 
because I am looking at the supply chain for pharmaceuticals, 
because, you know, that was exposed during this pandemic as 
well. And they said, ``Well, we used to be vertically 
integrated, but then we had the emergence of all these Chinese 
suppliers who had much lower costs. And if you don't buy your 
active pharmaceutical ingredients from them, you are not 
competitive.'' So they just kind of got squeezed out from that.
    We see that, for example, in steel. I never understood why 
steel could cost 60 percent as much to manufacture in China, 
or, you know, the XFLB factory price for steel in China could 
be 60 percent of what it is in the U.S., when you are buying 
iron ore at world market prices and coking coal at world market 
prices and energy at world market prices. OK. But some firms 
have subsidies.
    But then the consequence of that, for example, is, if you 
want to buy a steel shipping container, there are only two 
manufacturers left in the world, and they are both in China. 
OK? And it is a consequence of those kind of platform things, 
which, because they are cost-driven and people won't pay a 
premium for assured supply, we don't have them in the U.S. OK?
    So I would say, you know, we had PPE makers in the U.S. And 
if we gave them stable demand contracts, that is fine, they 
would still be around. OK. But, you know, we penalize companies 
if they have underutilized capacity or they are higher-cost. 
Right? So it is very hard from a business standpoint to stay in 
those businesses.
    Mr. Womack. Yes. Chairman, again, thank you for bringing 
such an interesting panel, a very qualified panel, to our 
Budget Committee today. And I am going to yield back the 
balance of my time and head pretty soon to a Defense markup. 
Thank you so much.
    Chairman Yarmuth. All right. I thank the Ranking Member. 
His time has expired.
    And I now recognize the gentleman from Pennsylvania, Mr. 
Boyle, for five minutes.
    Mr. Boyle. Thank you, Mr. Chairman.
    I also want to thank all the witnesses. I enjoyed listening 
as well as, before this, reading your written testimony.
    Just a quick plug. Two speakers before talked about the 
investments in high-speed rail. Given that I represent 
Philadelphia that sits smack-dab in the middle of the Northeast 
Corridor and am a frequent user of Amtrak myself, I want to 
echo, any investments that we could make in the United States 
to go toward high-speed rail and finally join our competitors 
in Europe and Asia in an area where we greatly lack.
    I can tell you how important it is here, locally, to our 
economy, so much so that, during my time in Congress, it was 
always an issue that brought together Members of Congress from 
both the city as well as the suburbs, Democratic and Republican 
colleagues.
    But what I wanted to focus on was manufacturing.
    And one of the misperceptions about our economy and 
manufacturing is the notion that caught on in recent decades 
that America doesn't make anything anymore and that we had to 
choose, essentially, this false dichotomy between continuing to 
be a high-GDP country on the one hand and making things on the 
other. Germany completely proves that fallacy. Manufacturing 
makes up a relatively high percentage of that nation's GDP and 
much higher, indeed, than ours.
    I also personally just can't stand the notion that some 
people have about manufacturing when they seem to picture a 
19th-century or early-20th-century factory floor. Anytime I am 
touring a company locally that is involved in manufacturing, I 
am always blown away by the technology that is often used in 
what is considered, quote/unquote, ``blue-collar'' work.
    So it is pretty clear to me, self-evident just even through 
those tours, the link between research and development and 
innovation on the one hand and the present as well as the 
future of manufacturing.
    So for Ms. Wince-Smith or Professor Shih, I was wondering 
if you could speak to that, about the link between the 
investments that we make in R&D and how we can see that product 
in terms of manufacturing here in the United States 
domestically.
    Ms. Wince-Smith. Thank you, Congressman.
    Let me just start by saying that, in my career, some 25 
years ago, I worked on the whole imperative for U.S. leadership 
and manufacturing. And this is when the Japanese were basically 
in a fierce trade war with the U.S. on many high-tech----
    Mr. Boyle. Right.
    Ms. Wince-Smith. And I remember one of the Japanese leaders 
from MITI coming and saying, ``You know, we are worried about 
manufacturing. It is not dirty, dumb, dangerous, and 
disappearing.''
    Twenty-five years later, the Council on Competitiveness has 
articulated in much work that manufacturing is smart, safe, 
sustainable, and it is surging. And if we don't link the 
innovation with the manufacturing, we will lose the next 
generation of innovation.
    So I have to share the example of flat-panel displays. 
Professor Shih mentioned that factory in China. When I was 
Assistant Secretary at Commerce, we had invented in the United 
States, including a path from Kodak, every single flat-panel 
display technology, from liquid crystals, planar, field 
emitters, the whole thing. We had a plethora of startup 
companies, and none of them were able to manufacture once they 
had to buildup a factory at scale because of our capital cost 
structure.
    And this is why we have to bring these issues into this 
discussion. We have to have long-term, patient capital that is 
going to go into scale-up of manufacturing.
    A123 batteries is a perfect example. Lots of federal 
investment, major research. Ended up in bankruptcy. And for 
just a few-million-dollars' bid, over Johnson Controls, China 
got all the intellectual property, the people, everything. 
Lock, stock, and barrel, it is in China.
    So one thing I do want to suggest as a potential major 
initiative for the country--I am sure it will be part of the 
Council's national innovation strategy--we do need a national 
infrastructure bank. We do need to have a different financing 
path going forward. Today, a venture capitalist firm would 
never invest in Intel. They won't invest in the deep science 
manufacturing of the future.
    And so this is an issue where we have to work on financing, 
we have to work on tax incentives.
    Just one last little factoid. We have trillions of dollars 
sitting in hedge funds in Greenwich, Connecticut. They are not 
investing in any of the things we are talking about here. But 
we could create incentives, new capital gains, holdings, all 
sorts of things, to unleash that capital to invest in all the 
things that we are talking about in this hearing. And if we 
don't, I think we are giving away, you know, our future and 
standard of living to our next generation.
    Mr. Boyle. Thank you.
    Chairman Yarmuth. OK. The gentleman's time has expired.
    I now recognize the gentleman from Georgia, Mr. Woodall, 
for five minutes.
    Mr. Woodall. Thank you, Mr. Chairman, and thank you for 
holding the hearing. We could do an entire hearing just on what 
Deborah Wince-Smith raised regarding the vulnerability of IP to 
foreign acquisition. So much to unpack in here, and I am 
grateful to you for doing it.
    First, Mr. Shih, I want thank you for the years of 
investment you put into Mr. Moulton. We are all the 
beneficiaries of your toiling in that vineyard. And I thank you 
for doing the best you could with what you had to work with in 
that environment. America thanks you for that.
    Dr. Romer, I wanted to go first to your chart about basic 
science versus technological progress. It is not lost on me 
that almost every quote in your various testimoneys today on 
what percent of GDP was going to R&D was different. We 
categorize these things in different ways. But you clearly are 
expressing a need to see us move from basic science preeminence 
back into technological progress preeminence as well.
    Does that involve simply additional dollars, as everyone 
has talked about, or does that also involve reprioritizing the 
dollars that are going out the door from the federal government 
today?
    Dr. Romer. So I think a good place to start here is to look 
back at what worked in the past. So what made us a worldwide 
power in petrochemicals? It was universities, who created 
chemical engineering as an entirely new field of study, new 
schools, a new type of graduate degree. And it was the people 
produced by universities who then went out and made us a 
powerhouse.
    So I am echoing something that Dr. Shih said, which is that 
what really matters here are people. And we have forgotten 
this. We tend to think of the government's role as to fund 
papers or patents, and that is what universities produce. But, 
in the past, where universities were singularly effective in 
contributing to technological progress was when we rewarded 
them for producing people who could then go out and raise 
standards of living, be more productive workers.
    One way to recover this would be to go back to what worked 
in the National Defense Education Act and have funds that are 
directly allocated to students to pursue courses of graduate 
education and to go one step further and to say the students 
are the ones who decide what course of study they will pursue.
    Unfortunately, the money that we have has been basically 
captured by professors doing basic research, so all the support 
for graduate students goes to professors, who hire research 
assistants and support graduate students through their grants 
but to work on the things the professors want to work on. And 
it means that our system doesn't respond when a bunch of young 
people see an opportunity that they would like to get trained 
in and like to go work on.
    So I think it is not just more money, but it is spending it 
in different ways and, in particular, betting on and counting 
on students, and also not relying on the same degree of 
centralization at the federal level. Go back to what worked 
before, which was to count on the competition between 50 
universities in 50 states that were all competing to do a 
better job.
    Mr. Woodall. Well, let's talk about that for a second. Dr. 
Parikh has a chart, a graph, in his presentation that looks at 
investment in basic science. And while the government 
investment over the last 40 years has fallen in half, industry 
investment has doubled. And so, as a percent of GDP across our 
nation, unlike a centralized economy like China, we are still 
expanding. We are just expanding in different ways.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Dr. Parikh, when you included that chart, are those things 
created equal? Do we get more of the focus that Dr. Romer was 
talking about on people and applied sciences when the industry 
is making those investments? Help me to understand whether that 
is good news or bad news as you laid it out.
    Dr. Parikh. Yes. It is good news and bad news.
    The good news is that industry is very good at development, 
and when it sees an opportunity to go from a discovery to a 
product, it does a very good job of finding capital and getting 
there.
    The challenge becomes that people part. There is not as 
much development of people whenever the development funding is 
coming from industry. Those people are created in academia; 
they are created in these graduate programs. And they are the 
biggest asset.
    It is going to take people from everywhere to get cures for 
COVID, to get cures for cancers. And when we are limited to 
just development, it breeds just a certain type of person, 
whether it is the engineer in that one lane or it is the 
molecular biologist who knows just that one area. It doesn't 
give us the breadth of backgrounds that really create the 
innovation and the amazing advances that we see.
    Mr. Woodall. All right.
    OK. Mr. Chairman, thank you for the hearing. I yield back.
    Chairman Yarmuth. I appreciate that.
    The gentleman's time has expired.
    I now recognize the gentleman from North Carolina, Mr. 
Price, for five minutes.
    Mr. Price. Thank you, Mr. Chairman.
    And thanks to all of our witnesses for a very interesting 
and productive hearing.
    I want to maybe start with Dr. Parikh but ask any of you to 
chime in who wish to. My broad topic, probably what I would 
have asked before this week, would still involve questions of 
personnel, the flow of students and post-docs and research 
fellows from all over the world, the intersection of 
immigration policy and the research enterprise in this country.
    But because it is occurring when it does, this has the feel 
of another national crisis and certainly a political 
controversy. I know I have heard from every institution of 
higher education in my district, research institutions, who are 
in a near-panic over this: apparently, the intention of the 
Trump Administration to not let the immigrant students and 
researchers stay here whose universities, this fall, go to 
completely--or have to stick completely with online education, 
which, of course, is a big unknown and certainly throws a lot 
of questions into how they are going to be able to operate, and 
not just what the fate of the students is, but what also the 
universities are to do about this.
    So I want to ask you about that incident, this problem in 
particular. And, of course, it is in the context of a larger 
question about how immigration policy and the research 
enterprise, the vitality of the research enterprise in this 
country, intersect.
    I come, as some of you may know, from a very research-rich 
environment in North Carolina, the Research Triangle area. 
Higher education and research are our stock in trade. And along 
with that we have a very diverse and impressive immigrant 
population, people who come in for training and research 
efforts and then many of whom stay. And so this announcement 
has sent waves of apprehension and, as I said, near-panic 
through the higher-education community.
    It seems to me that the decision about opening this fall, 
this is a very, very difficult decision. I think it is going to 
be. And as the cases spike, it looks worse. I can't imagine 
that we are helped by adding this element to the decision, to 
make it more complex by adding in the element of what the 
effect on international students is, and with the effect on 
international students, the effect of the projects and the 
enterprises that they are a part of in the university.
    So I would appreciate your comments on this, the effects 
that the administration policy would possibly have. I am sure 
you are in touch with institutions; you are hearing, just like 
I am, what the effects might be. And then any broader 
reflections on the intersection of immigration policy and the 
research enterprise I would be interested in as well.
    Dr. Parikh, I would like to start with you, but I would be 
happy to hear from all of our witnesses.
    Dr. Parikh. Thank you, Congressman.
    So just to start specifically with the ICE policy announced 
yesterday, we are very concerned--I am very concerned. Graduate 
students from around the world populate our laboratories, and, 
frankly, even though they are students, they are conducting a 
lot of our research and a lot of our basic research. And so the 
fact that we are implementing a policy where we might not have 
them in the laboratory or participating in the research is 
just--it is bad for America.
    Second, it is cruel to the students. These are students who 
might be here already who might have to go back. It is cruel, 
and it is just not the right thing to do.
    To reflect on immigration policy, I am a second-generation 
American, and I have the privilege of leading the AAAS. My 
parents came from India to rural North Carolina, Hickory, North 
Carolina, you know, in 1968. And that is a story that you will 
hear from thousands of scientists around this country. And, you 
know, as Ronald Reagan said, you know, the United states is the 
one place where you can come from all over and you can be an 
American. And scientists have proven that.
    And 38 percent of the Nobel Prizes awarded to Americans 
since 2000 have gone to immigrants. You know, the population of 
post-docs in America, that population who are working in 
artificial intelligence, who are working on biomedical, who are 
working on physics, that population is one-third immigrants.
    It is self-defeating to create a policy that doesn't 
continue the fact that America is a crossroads of science.
    Dr. Romer. If I could just comment on this----
    Chairman Yarmuth. OK. Go ahead. Briefly, if you can.
    Dr. Romer. Yep.
    So we are dependent on foreign talent to make our 
university research system run. So if you cutoff the supply 
when you are dependent on a foreign source, you are going to 
have trouble.
    But we should step back and ask, why is it that it is not 
our goal to be fully self-sufficient in talent, if need be? We 
benefit a lot from flows of people across borders, but why are 
we so short on American talent in our graduate programs?
    And I think the reality is that we have not made it 
attractive enough for bright people from the United States to 
go on in graduate education. And the right kind of fellowship 
program that puts students in charge in designing and pursuing 
a graduate career could substantially increase the number of 
bright U.S. citizens who want to be part of this system.
    Chairman Yarmuth. Thank you.
    Mr. Price. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Yarmuth. The gentleman's time has expired.
    I now recognize the gentleman from Ohio, Mr. Johnson, for 
five minutes.
    Mr. Johnson. Well, thank you, Mr. Chairman, and I 
appreciate you having this hearing today. It is an important 
topic.
    You know, as a former chief information officer, I 
understand the importance of research and development and the 
critical role that the federal government and the private 
sector play when it comes to fueling American innovation and 
economic growth.
    Thanks to various sectors funding and performing R&D, 
including the federal government, businesses, state 
governments, higher-education institutions, and nonprofit 
organizations, the United States has been for a long time a 
leader, a global leader, in R&D efforts for decades.
    And we continue to fund the majority of annual global R&D 
efforts. In fact, in 2018, the United States spent about $580 
billion on R&D, more than any other in the Organization for 
Economic Cooperation and Development, including China. Two 
sectors, businesses and the federal government, have, together, 
accounted for more than 90 percent of U.S. R&D funding since 
1953.
    And as we recognize the importance of federal investments 
in R&D, Congress must do more to remove any barriers that may 
discourage the private sector from taking the lead on product 
development.
    And this, you know, COVID-19 pandemic has exposed our 
nation's reliance on other countries to supply the production 
of critical supplies like PPE and other things, and it has 
highlighted the importance of creating products, supply chains, 
and intellectual capital right here at home.
    It is time to fully unleash Americans' spirit of 
innovation, which is why I recently introduced the Advancing 
Tech Startups Act to promote a national strategy for 
encouraging more tech-focused startups and small businesses in 
all parts of the United States, not just out west in Silicon 
Valley. This legislation would direct the Commerce Department 
to identify any federal rules or regulations acting as barriers 
to creation, development, and growth of technology startup 
companies.
    You know, America's innovation base starts with R&D, and 
Congress should continue supporting federal investments in 
basic research and early stage applied research while 
simultaneously removing any barriers that may hinder the 
private sector's role in product development.
    So, Dr. Shih, according to the Congressional Budget Office, 
the private sector has been the primary source of funds for R&D 
in the United States since 1980. Given that the private sector 
has taken over a growing number of our nation's R&D needs over 
time, what is the proper role of the federal government, in 
your view, in research and development?
    Dr. Shih. I think the proper role of the federal government 
is to fund risky, frontier research which is beyond the 
capabilities of private firms to necessarily recognize a 
return. OK? And, historically, that is why you think of that 
kind of basic science, basic research as a public good, right?
    And the country has done this. We have done this in terms 
of audacious bets. I point to DARPA as a great example of 
funding audacious bets. You know, today, we see the private 
sector investing a lot in autonomous driving. Well, that was 
because DARPA did the proof of concept, the risky first steps, 
back in the early 2000's, 10 years before it really became as 
popular as it is now.
    So I see the role of the federal government is really that 
frontier, risky stuff where you don't have the guaranteed 
results.
    Mr. Johnson. OK.
    Well, let's flip the coin in the other direction then. In 
your opinion, are there any federal barriers that have hindered 
or could hinder future R&D efforts? In other words, are there 
places where it would be better if the federal government 
stepped aside rather than getting into the mix?
    Dr. Shih. Well, you know, I think, you know, for me--and a 
number of other speakers have talked about this--the importance 
of developing capabilities in people, OK, and that talent 
pipeline, right? We see the federal government now really 
impacting that talent pipeline.
    I am a student of history, and I go back to, you know, in 
the 1910's, if you wanted a graduate education, you had to go 
to Germany, OK? Even the early 1920's, if you wanted a graduate 
education, you would complete your work at one of the great 
land-grant--I am a great fan of the Morrill Act and the land-
grant colleges. OK. But if you wanted a graduate education, you 
went to Germany.
    OK. But what happened in the 1930's? The government there 
destroyed what they had. OK. And we had the presence of mind to 
go scoop up a lot of those people, right?
    So that would be one area where I have a lot of concerns, 
actually, because talent is what this is all about.
    Mr. Johnson. OK. Well, thanks.
    We could talk about this all day. I have got a lot of 
additional thoughts, but my time has expired.
    Mr. Chairman, I yield back.
    Chairman Yarmuth. Thanks.
    The gentleman's time has expired.
    I now recognize the gentlewoman from Illinois, Ms. 
Schakowsky, for five minutes.
    Ms. Schakowsky. Thank you very much, Mr. Chairman.
    I first just want to associate myself with the remarks of 
David Price, talking about--I have universities in my district. 
I have a very diverse district. And the fact that these 
students, who are here contributing to the kind of R&D that we 
need, are in danger now of having to leave our country, I think 
it will be a tremendous loss to innovation if they are 
expelled. I hope we change that.
    I am absolutely a firm believer in the importance of 
federal investment into research and development. Alongside 
almost all of my colleagues, we voted for three COVID-19 relief 
packages in March that provided approximately $7.5 billion for 
the ``development of necessary countermeasures and vaccines.''
    So we have put in a lot of money. And I wanted to make the 
point of who put the money in. Taxpayers have invested heavily 
in research and development in this fight against COVID-19. And 
yet, despite this substantial investment of billions of 
taxpayer dollars into COVID-19 vaccines, still we do not have 
any commitment that they will be affordable and accessible and 
available to all who need them.
    And we are already seeing that there is that kind of 
divide, the kind of price-gouging, I would say, when we have 
Gilead, who produces Remdesivir, which is not even a cure--it 
helps alleviate some of the symptoms--charging per system of--
it is, like, five, I don't know, it is five parts of a 
treatment--$3,100-plus per treatment. Now, who is going to be 
able to afford that? It is just, I think, unconscionable.
    And then we saw the government give $1.6 billion to a 
company who has never actually--Novavax--produced a drug, and 
they now have the ability to get $1.6 billion.
    So my view of this COVID issue is that, if we don't make 
this available to everyone, it is like making it available to 
no one. Because if it is not available here in this country and 
to the rest of the world, we are all at risk of continuing, 
forever, this virus. We have to make it absolutely accessible.
    And I have introduced legislation called the MAP Act, H.R. 
7296, that would actually fix that, along with Representatives 
Doggett and DeLauro and DeFazio and Rooney--bipartisan. And 
that bill would prevent price-gouging. It would prohibit 
monopolies. It would ensure transparency on taxpayer-funded 
drugs.
    So I want to ask Dr. Parikh, given the necessity of us 
finding a cure somewhere in the world, I want to ask you, do 
you believe that we can and should ensure that the benefits of 
the Federal R&D, like lifesaving drugs, aren't priced out of 
reach?
    Dr. Parikh. Thank you for the question.
    I will start by saying I am a biochemist, not an economist. 
But at the AAAS, the American Association for the Advancement 
of Science, part of our mission is to advance science and serve 
society. And so the scalability and accessibility of 
developments in science is certainly important to us, and we 
would want to see the public health of the nation, of all 
people, benefit from our research investment.
    Ms. Schakowsky. And isn't there some danger, if everybody 
doesn't have it accessible, that we could all be still 
susceptible to the virus?
    Dr. Parikh. You certainly would like a vaccine to be as 
broadly available as possible.
    Ms. Schakowsky. I have two seconds, one second, I am out of 
time, and I yield back.
    Chairman Yarmuth. The gentlewoman yields back.
    I now recognize the gentleman from Texas, Mr. Flores, for 
five minutes.
    Mr. Flores?
    Is he here?
    Make sure you are unmuted, Mr. Flores, if you are still on.
    Well, in that case, if he is on, we will come back to him, 
and I will yield five minutes to the gentleman from Tennessee, 
Mr. Burchett.
    Mr. Burchett. All right. Can you hear me, Mr. Chairman?
    Chairman Yarmuth. I hear you, sir.
    Mr. Burchett. Right on. Thank you, brother. Thank you for 
allowing me to be here.
    Is he back on?
    Chairman Yarmuth. Mr. Flores, are you on?
    Well, we will come back and get him if he is. Go ahead, Mr. 
Burchett.
    Mr. Burchett. If we need to, that is cool, Mr. Chairman. I 
understand. I am the 435th most powerful person in Congress, so 
I understand my role as a freshman. Thank you, brother.
    Everybody knows east Tennessee is home to Oak Ridge 
National Laboratory, and it is the largest of the Department of 
Energy's 17 national laboratories. Over 2,900 ORNL employees 
reside in my district that I represent. Of course, they 
contribute very much to the rich tapestry of our area.
    And I am concerned, I guess, more than anything else--and 
maybe Dr. Parikh or Ms. Wince-Smith could answer this. Has the 
overall federal response to COVID-19 adequately employed the 
expertise and tools we have at our national laboratories?
    Dr. Parikh. Thank you for the question----
    Ms. Wince-Smith. on that----
    Dr. Parikh. Oh, go ahead, Deborah.
    Ms. Wince-Smith. I will jump on that, because--first of 
all, thank you for everything you do to support Oak Ridge 
National Laboratory and the whole ecosystem of universities and 
companies that are there. It really is one of our national 
treasures.
    I had the opportunity to be there for the dedication of the 
carbon composite manufacturing facility that is very, very 
important in our manufacturing infrastructure.
    I do think that one area where the national labs are 
playing a huge role--and let's not forget that the whole 
research that led to the Human Genome Project came out of work 
at Los Alamos years ago.
    But one area where they are really leading the way is 
bringing together their huge, state-of-the-art, world-class 
assets in high-performance computing, exoscale computing, 
artificial intelligence, in both, you know, working with the 
private sector in a new consortium to both understand 
mitigation, transmutation, all the things that are happening to 
the virus itself using these computational capabilities.
    And also, of course, linking that to their tremendous 
capabilities in materials research. And another lab that is 
very much involved in this in the biopharmaceutical space is 
Argonne National Lab.
    So these laboratories have these very powerful user 
facilities that universities and companies can come and use. 
And no one, quite frankly, in the world has them on the scale 
that we do.
    Mr. Burchett. But are we utilizing--I appreciate all that. 
I don't want to run out of time, and I want Dr. Parikh to be 
able to answer that. Do you think we are utilizing that, 
though?
    Ms. Wince-Smith. I think we can use them more.
    Mr. Burchett. OK. OK. I agree with you, ma'am.
    And I appreciate Oak Ridge National Laboratory. If you go 
there, you really should go by Big Ed's Pizza. I just want to 
leave it at that. Make sure you go there.
    Doc, thank you so much. We have a huge Indian community 
here in Knoxville, in my area, and they are great folks. The 
longest withstanding democracy in the world, and they make 
Enfield motorcycles, so I am a big fan of India. And a lot of 
their folks--you know, we laugh about it, but I have a big time 
when they have the IndiaFest.
    But go ahead. I wanted to hear what you had to say too, 
brother.
    Dr. Parikh. Yes.
    Look, Oak Ridge National Lab is a national treasure. We 
could be doing more. Even the materials science work going on, 
in terms of making PPE in slightly different ways and making it 
more quickly, is just fantastic work.
    What it speaks to, though, is that the sciences, they all 
cross-pollinate. Just because you are working in physics or you 
are working in materials science doesn't mean that you are not 
involved in healthcare and vice versa and the computing as 
well.
    So this really speaks to the fact that, you know, this 
linear model of Vannevar Bush, it is outdated, because all 
these things mesh together. And they mesh together in a 
coordinated way, like with COVID, where we have basically 
looked at this entire virus over the course of three months and 
know everything about it at the atomic level.
    All that has changed over the last 20 years, and we have to 
update how we use the national labs and how we use basic 
research.
    Mr. Burchett. Well, what barriers do you all think that we 
could eliminate at our laboratories so we can better get to the 
answers?
    Ms. Wince-Smith.
    [Inaudible.]
    Dr. Parikh. I think you are on mute, Deborah.
    Ms. Wince-Smith. I was trying to say, the mission really 
needs to include economic competitiveness and enhanced 
collaboration with industry, in addition to the core national-
security and energy missions.
    Dr. Parikh. And, just quickly, getting intellectual 
property out of the laboratories should be as easy as possible, 
particularly for things that aren't related to security and 
national defense.
    Mr. Burchett. OK. Thank you all so much.
    Thank you, Mr. Chairman. And I see that I woke up Dan 
Crenshaw, and I will anxiously wait for his rebuttal to 
everything I have said today. But thanks. I really miss seeing 
you guys in real life. I wish this thing would get over before 
too long. But I really dig our relationship and our friendship, 
so thank you all.
    Chairman Yarmuth. I think we all do that. I thank the 
gentleman.
    His time has expired.
    I now recognize the gentleman from Michigan, Mr. Kildee, 
for five minutes.
    Mr. Kildee. Well, thank you, Mr. Chairman, for holding this 
really important hearing.
    It comes at an important time. Obviously, we are in a 
pretty unprecedented moment right now. And it does give us an 
opportunity and I think the necessity to think through the 
basic elements of our economy and what the future is going to 
look like. We have the time and I think the real necessity to 
think that through.
    In Michigan, you know, we are the center of the automotive 
industry. I am from Flint, which is the birthplace of General 
Motors. I might have mentioned that I am from Flint a time or 
two.
    But the auto industry is in a transitional phase. And, in 
fact, there is a movement toward electrification. The market is 
heading in that direction. And we will benefit from that. We 
will benefit in terms of the environmental impact of autos, but 
we will also benefit in terms of safety and ultimately in terms 
of savings for consumers.
    Right now, China is the number-one manufacturer of electric 
vehicles in the world, so we have to do more, I believe, to get 
in front of our competition.
    I am a hockey player. I like to go where the puck is going, 
not chasing it all the time. And I think the market is taking 
us there. And we need to think about the incentives that we 
need to put in place in order to win the future when it comes 
to vehicles, particularly around electric vehicles.
    My act, the Driving America Forward Act, would expand the 
electric vehicle tax credit. That is one way to incentivize 
investment in electric vehicles, and I think it is an important 
way on the demand side to create some incentives. But it is not 
all we need to do. The movement toward this technology will 
require significant new research and development.
    And I am particularly concerned that some of the auto 
manufacturers, the OEMs, are burning a lot of their cash that 
normally would be devoted to R&D right now just to maintain 
operations. They are burning their reserves. That is a problem.
    But I am wondering, perhaps, Ms. Wince-Smith, if you might 
comment on how we can continue to make the investments, given 
the fact, as you reference, that China is significantly ramping 
up, catching us, will pass us, in terms of their investment in 
R&D.
    How can we continue to lean in, be competitive, invest, 
given the fact that we respect openness, we respect and embrace 
collaboration and the synergy that comes from that, given the 
fact that China engages in all of these practices that we know 
are destructive and actually, you know, counter-competitive, 
you know, their acquisition of trade secrets, all the things 
that they do?
    We live in a world of openness. We live in a world where we 
like to see that synergy. Can you talk a little bit about how 
we can continue to advance ourselves in terms of the R&D we do 
in this space, given the fact that, culturally, we have a 
different approach?
    Ms. Wince-Smith. One thing I think we need to consider in 
this new game plan for the future is to look at some of the 
legislation that was very timely when it was passed but it 
needs updating.
    So one, of course, is the research and development tax 
credits, but also the Cooperative Research and Development Act, 
which gave some limited relief from collaboration with fear of 
treble damages and antitrust. And we really need to have more 
clarity on how, for instance, the U.S. automakers could come 
together without fear of antitrust actions coming to them to 
work collaboratively and pool their resources around the next-
generation advanced battery technology. Because that is really 
a holy grail for all of this.
    So that is one thing that I would highly recommend, but 
also, you know, looking at the tax credit on the research and 
development. But instead of everybody competing on the battery 
side--and there is the Advanced Battery Consortium that Argonne 
Lab and the universities participate in, and some of the 
companies, but I think that needs to be accelerated in a big 
way.
    The second thing is really the state regulations and 
certainly the energy regulatory commissions state-by-state that 
set a patchwork of regulation, and the extent to which there 
could be some national imperative to look at the 
electrification as a national goal and need, back to Dr. Shih's 
comments about demand. Because, right now, we have a patchwork 
of state-by-state regulation that acts as a barrier.
    One thing that is an example from COVID is that we were 
able to bust through a lot of the regulatory impediments that 
have inhibited telemedicine. You know, state-by-state was 
regulating it, and there was preemption because of the need to 
have telemedicine.
    So I think there is a lot could be done on the tax, fiscal, 
regulatory environment, but to enable the pooling together of 
assets among these companies. And another area would be in the 
critical materials, too, that they need.
    Mr. Kildee. Thank you.
    My time has expired. I really appreciate the testimony of 
the witnesses.
    Mr. Chairman, I yield back.
    Chairman Yarmuth. The gentleman's time has expired.
    I now recognize the gentleman from Texas, Mr. Crenshaw, for 
five minutes.
    Mr. Crenshaw. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    America really is the greatest nation in the world, best 
equipped to answer the world's challenges. We have the finest 
institutions, the brightest thinkers, and the structure of our 
country is set up so private citizens are able to change the 
world with their innovations.
    In fact, it is in one of our duties in the Constitution, 
Article I, Section 8, Clause 8 of the Constitution, ``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.'' Such an 
important line. Patent protection, personal property rights, 
the ability to sell your invention.
    And it is because of these protections of personal property 
rights and private property and our willingness to invest in 
the big problems and a governing system that allows the testing 
and marketing of new products that have brought millions of 
people out of poverty and allowed for higher standards of 
living, not just in the U.S. but around those globe.
    A lot of those innovators are here in Houston, solving 
problems of zero-emissions electricity through natural gas at 
NET Power, which I have talked about a lot; curing childhood 
cancer at the Texas Medical Center; and, of course, our very 
own Rice University, which is really a standalone powerhouse in 
innovation.
    I think we can all agree, American dominance in finding a 
cure for coronavirus is important. And the fact that we are 
dominating that search reminds us that we still are No. 1. We 
have 321 companies researching a novel vaccine or treatment for 
the virus. This is in contrast to the next-closest country, 
China, which has only 39. The whole of Europe has just under 
100.
    This hearing is important because we should be looking 
forward at the next set of challenges, and we should be 
working--as we work toward this. And I know there is a 
narrative out there that we are falling very far behind, but 
the U.N. has us ranked No. 3 in the Innovation Index, behind 
Switzerland and Sweden.
    The same report by the U.N. highlights something really 
important: that we need to push resources and global R&D toward 
biomedical innovation. Alzheimer's, ALS, cancer, diabetes--all 
of these are listed as crucial needs for innovation, according 
to this Innovation Index by the U.N.
    Well, let's remember, it is not just R&D spending that 
matters. That doesn't mean you are going to create the next big 
thing. There also has to be a free market, demand for it, and 
patent protection. Otherwise, we never get that next cure.
    Take, for example, Taiwan. It has very high R&D investment, 
No. 8 in the world actually, but their biotech market is 
extremely small. They produce very few new drugs, if any. Why? 
Price controls. So it is not a surprise that no one will take 
on risky investments if there is no payoff. Why would any life 
sciences company want to operate in Taiwan and sell to Taiwan 
when they have to deal with burdensome price-control 
regulations?
    OK. So my first question for Dr. Shih.
    With that in mind, what would be the impact on American 
medical innovation if we reverted to a Taiwanese model of drug 
pricing?
    Dr. Shih. Well, Taiwan has been more successful in, you 
know, other sectors than bio-med. I have looked at some of the 
bio-med things. I think the ability to recoup a return on 
investment to fund further R&D is important, right, and that is 
why patent protection is very important.
    Now, when we talk about the pandemic, OK, we also have 
instances, for example, where you really have a global health 
problem, right, which I think was pointed out earlier, right. 
And those call for maybe--you know, you almost have a market 
failure, because the companies aren't incented to work on low-
cost vaccines, for example, for poor regions, where, in fact, 
the poor regions, if you don't get the infection under control 
there, it is going to come back to us.
    But I do believe it is important to provide incentives. 
And, by the way, part of the patent bargain which is disclosed 
in the Constitution is, it only gives it to you for a limited 
period of time, right, which is, in exchange for making that 
R&D investment, then, you know, you get to reap the returns for 
some period. So I think it is important.
    Mr. Crenshaw. Absolutely. And we don't want to lose that. 
And I think that is the point of maintaining American 
innovation. Because if we weren't a biomedical powerhouse, what 
country do you think would be next in line to provide the world 
with that next ALS cure, the next Alzheimer's cure, et cetera?
    Dr. Shih. It would probably be the Europeans, right, who 
are investing very heavily in Germany, in Denmark, you know, 
in--for example, I went to one company in Denmark that provides 
70 percent of the world's allergy immunotherapies, OK, and I 
visited the factory there that provides 50 percent of the 
world's insulin, OK.
    And so the Europeans are taking these long-term views. They 
are also, to the point that was raised earlier, funding 
collaborative, precompetitive research in many areas. You see 
this in batteries most recently, OK, and you see it in 
electrification and things like that.
    Mr. Crenshaw. Well, I am out of time. That went fast. Thank 
you.
    Chairman Yarmuth. The gentleman's time has expired.
    I now recognize the gentleman from California, Mr. Panetta, 
for five minutes.
    Mr. Panetta. Thank you, Mr. Chairman.
    And thank you, Ranking Member Womack. Good to hear about 
the investment at the University of Arkansas, not just in the 
new football coach but in the research that is going on there. 
Pig Sooie.
    Let me also just comment, if I can, and echo the sentiments 
by Dr. Parikh and Professor Price, Congressmember Price, in 
regards to the new policy that has been put out about removing 
visas for students who are legally here, studying at colleges 
that have chosen to go remote-only.
    Basically, making that decision to protect the health and 
safety of their students unfortunately has led to a senseless 
decision by this Administration to remove those students that 
contribute so much not just to our educational systems but 
ultimately to our economy and to the research and diversity of 
this great nation. So I appreciate those comments.
    And that is exactly why I am leading a letter to the 
Honorable Chad Wolf, Acting Secretary of the Department of 
Homeland Security, asking Secretary Wolf to revisit this 
decision and hopefully answer some significant questions as to 
why they would implement, or try to implement, such a divisive 
policy, especially now during this pandemic. So I hope other 
Members take a look at that letter and sign on, if interested.
    Obviously, being from the central coast of California, 
immigration is very important to us for a number of reasons. It 
contributes to our economy, our communities, and ultimately our 
culture. I wholeheartedly believe in that.
    As my good friend Dan Kildee knows well, I come from the 
``salad bowl of the world,'' so we have a lot of agriculture 
here. We have a lot of specialty crops here. And we also know 
that, in order to sustain those types of crops, the most 
important thing--immigration is a big issue, but it is also 
research into those types of crops.
    And we are lucky to have the universities that we do here, 
that do invest in that type of research. We also have a USDA 
agricultural research station that makes those sort of 
investments. But, ultimately, what it comes down to is, we need 
more federal funding for that.
    Now, I think, historically, the United States has been on 
the forefront of agricultural research and innovation, but we 
are being outspent by our competitors. And now we are seeing a 
40-percent return on investment. Despite that, the U.S. public-
sector funding for agriculture research is declining. And, 
obviously, I am concerned about those types of implications, 
those types of trends, when it comes to our food security as 
well as our food sustainability.
    Now, in Congress, I am trying to do my part in more ways 
than one, than to just talk about the ``salad bowl of the 
world,'' but making sure that we actually get other Members 
involved. And Rodney Davis, a Republican, and myself have 
started the Ag Research Caucus to highlight the importance of 
federal investments in agriculture research.
    But if I can direct a couple questions to Dr. Parikh and 
Dr. Romer.
    Can you comment on the decline in U.S. investments in Ag 
research and the potential implications of this trend in both 
our domestic and global food security, as well as any sort of 
solutions, especially when it comes to partnering with private 
companies as well?
    Dr. Parikh. Thank you.
    Yes, you know, the decrease over time is probably a result 
of the success of the programs. The U.S. has become the--you 
know, it is the bread basket of the world, and our farmers have 
done a wonderful job of feeding the world. And a lot of that 
has come because of the work of the ARS and the USDA in 
transmitting the best information about how to make yields 
better, how to make crops better, and how to supply a product 
that the market wants.
    In terms of--you know, I actually think this is a perfect 
example of what Dr. Romer talked about--so I will stop talking 
and let him talk, because he is the expert in this--of this 
move to, you know, useful, useful research at a grand scale 
locally.
    Dr. Romer?
    Dr. Romer. Yes. Agriculture research was one of the real 
successes in the pre-World War II systems in the United States. 
And it was research that was spread throughout the country that 
was focused on practical benefits. It is very important to the 
future of the world, because we have to keep raising 
productivity to keep up with growing population and growing 
demand for meat.
    And it is the kind of thing which, frankly, has been 
squeezed out because professors in the top universities want to 
work on the cutting-edge issues, like genomics, which was very 
important basic science, but the bread and butter of 
agricultural research is being neglected.
    And so, when I called for a return to what worked before 
World War II, it is not to take away from the new things in 
basic research we do, but to go back to supporting those 
things.
    Let me just say, there are also potential funding 
mechanisms that could guarantee this. The commodity producers 
can levy a tax on themselves to, for example, pay for ads. If 
you remember the dancing raisins and so forth. I think we 
should be looking for ways for agricultural groups to tax 
themselves so that they are the ones who are actually 
allocating the research dollars.
    And they can use those dollars both to get practical 
research done in universities throughout the country but also 
to encourage students to get trained in the kinds of skills and 
habits of mind that will lead to productivity increase in 
agriculture.
    Mr. Panetta. Great. Thank you for those answers.
    I am out of time. I yield back. Thank you, Mr. Chairman, 
again.
    Chairman Yarmuth. Absolutely.
    The gentleman's time has expired.
    I now recognize the gentleman from Texas, Mr. Flores, for 
five minutes.
    Unmute your mic.
    Mr. Flores. That is two times today I have done that. Sorry 
about that.
    I appreciate the testimony that we have had today, and I 
appreciate the value of the hearing.
    I have always referred to basic research as the seed corn 
for future economic growth and human opportunity. And, in this 
regard, I appreciated Dr. Shih's opening comments, where he 
said that government support of basic and applied research can 
fertilize the soil, but it takes private companies willing to 
make a long-term investment in risky R&D to build that, and 
that the role of the federal government should be to enable and 
support, not hinder, the private sector to lead the way in 
restoring U.S. manufacturing capabilities and competitiveness.
    I represent two of the largest Tier 1 public research 
universities in the country. One of them, my alma mater, is the 
largest land-grant university in the United States, and it 
educates nearly 70,000 students annually, preparing them for 
cutting-edge jobs in Texas, the U.S., and, actually, all over 
the world. And with almost $340 million in annual research 
expenditures, Texas A&M University provides solutions to 
challenging national problems ranging from hypersonics to 
vaccine development to vaccine manufacturing. And this research 
serves as a cornerstone to the regional economy, and it is 
critical to the future economic growth of this country.
    Like many sectors of the economy, research universities 
like Texas A&M have been hit hard by the impacts of COVID-19. 
And, during the past few weeks, only essential research has 
continued on campus, and, as a result of that, the university 
has experienced over $30 million in research losses. And worse 
than that, the cumulative impact of the delayed research is 
going to have a huge economic impact for the country. And so 
those numbers continue to grow.
    So, given the importance of research for our present and 
future competitiveness, I support the bipartisan RISE Act, 
which includes additional resources to help offset those losses 
that are being experienced by the research institutions. I 
would urge my colleagues to support the inclusion of these RISE 
Act provisions in the next relief package.
    Ms. Wince-Smith, a couple of questions for you, if you 
don't mind.
    The first one is, during the COVID-19 pandemic, what do you 
think are the most effective ways to assist universities with 
their vital research efforts? Do you think funding research 
shortfalls created by lab shutdowns, like we envision in the 
RISE Act, is a wise public investment?
    Ms. Wince-Smith. Thank you, Congressman. Well, first of 
all, congratulations on the leadership and contribution of 
Texas A&M University. They are a very active member of the 
Council on Competitiveness. Tremendous engineering and ag 
capability. They really are a star in our firmament of 
universities in the United States.
    I do think the RISE Act really is very important at this 
time, because if we allow the atrophying of a lot of these 
ongoing research activities, we will potentially lose the 
people. It is back to the people issue.
    And, of course, it also links to the immigration challenge 
that we are facing right now that others have mentioned, in 
terms of ensuring the continuity of research. Because the speed 
and scope of what we need to do across the board really cannot 
be interrupted without damaging, you know, that infrastructure.
    So the RISE Act, I think, is a very important initiative 
for Congress to consider in the next phase of COVID relief.
    Having said that, I do think we are seeing tremendous 
innovation now coming out of universities in looking at their 
business models. And many universities are really still 
structured sort of on a 19th-century model, and we have seen 
others that have moved very quickly to embrace lots of 
innovations in how they are delivering education, involving 
young people and designing programs and things.
    Mr. Flores. Yes.
    Ms. Wince-Smith. So I would project that in the years ahead 
our university system is going to look very different than it 
does right now.
    Mr. Flores. Yes.
    Ms. Wince-Smith. Having said that, we can't disrupt our 
research, and we need to make sure we have the talented people 
to keep that going.
    Mr. Flores. OK. If I can get one more----
    Dr. Romer. If I could just weigh in here, there is a very 
important issue here. The way to get research going again in 
universities is to do what Stanford Medical Center did, which 
was test every person in the medical center who is patient-
facing and to test patients as they come back in. So they have 
reopened Stanford Medical Center, and it is operating just the 
way it did before.
    We could do this in every university if we used the testing 
resources that universities have available to them to test 
everybody, and test everybody frequently, but to get back to 
the work on university campuses. And the bottleneck here is the 
CDC and the FDA, who are impeding our ability to do this kind 
of testing.
    Mr. Flores. OK. Thank you.
    Chairman Yarmuth, I have one more question, but you will 
probably shut me down, so I will submit it for the record.
    Chairman Yarmuth. No, go ahead. Since Dr. Romer wanted to 
add to that. Go right ahead.
    Mr. Flores. OK. Thank you for your forbearance.
    This question is also for Ms. Wince-Smith.
    You know, you brought up the people resources, which are, 
of course, our most important resource. As the pandemic 
continues, universities like A&M have made a commitment to 
continue paying those researchers, including graduate students 
and principal investigators. And I applaud the effort that the 
universities are making to ensure that our research work force 
pipeline continues.
    How can the federal government support the training and 
education of this future work force during this challenging 
time?
    Ms. Wince-Smith. A very, very important question. I would 
like to expand it, if I may, a little bit to look at parts of 
the country where we have, you know, tremendous unemployment, 
we have tremendous hardship underway, including lots of social 
issues. And the extent to which the universities can link--the 
big research universities--with community colleges and some of 
the other work force boards to train and pool their resources 
to ensure that we can continue the upskilling of our work 
force.
    I know there are controversial issues around the H-1B visas 
and, you know, the numbers of these and how this impacts U.S. 
jobs, et cetera. But, at the same time--and I think my 
colleagues have said this as well--we need to have a balance 
between attracting, keeping, retaining the best and brightest 
around the world in this research enterprise but double down on 
educating and training our own citizens, particularly women, 
minorities, underrepresented racial groups. And that is part of 
the equity of our democracy. And this is an opportunity to 
really focus on that right now.
    Mr. Flores. I agree.
    Thank you, Mr. Chairman, for the forbearance.
    And, Jimmy Panetta, I would like to join your Ag Research 
Caucus, if that is OK.
    I yield back.
    Chairman Yarmuth. The gentleman's time has expired.
    I now recognize the gentleman from New York, Mr. Morelle, 
for five minutes.
    Mr. Morelle. Good afternoon. Thank you first, Mr. Chairman, 
for holding this what I think is a critically important 
hearing.
    And when I was--I just finished 26, 28 years in the state 
legislature in New York representing Rochester, New York, 
which, you know, we spent a lot of time on innovation and 
technology as a way to revitalize our old, industrial cities.
    And I know, Dr. Romer, we miss you at the University of 
Rochester. I know you spent part of your career there, so we 
claim you as part of our own, but you know well the challenge 
that we face.
    In fact, I was just looking at--I have been reading ``Jump-
Starting America,'' which you may be familiar with, all the 
panelists, written by John Gruber and Simon Johnson, who I had 
a chance to spend some time with both on the phone and at 
dinner recently. It actually talks about innovation as federal 
investment and why it is important. It also just happens to 
rank Rochester, New York, as No. 1 in the country if we make 
major investments. So we are very proud of that.
    But all of this is really premised on the notion that more 
than 85 percent, I believe, of our nation's economic growth 
since World War II--so we are now approaching, you know, 75 
years where all of our success, or a substantial part of our 
success, has been attributed to scientific/technological 
research, innovation, and progress. It is alarming to me when 
we talk about reducing that investment and reducing federal 
investment in those activities.
    I just want to--since I bragged on about Rochester, I am 
going to brag a little more, if I can, and just use this as a 
case in point. Our district is lucky. At the University of 
Rochester's Medical Center, we are part of the New York 
Influenza Center of Excellence, one of the five international 
centers in the centers of excellence in influenza research and 
surveillance network. And we are one of only nine of the 
National Institutes of Health vaccine and treatment evaluation 
units--particularly appropriate given where we are with the 
pandemic.
    But this has been made possible for the past five years 
because the U of R has attracted more than $1.93 billion in 
sponsored research funding to the region and is a national 
leader in translating discoveries into new technology. We have 
a brand-new clinical translational sciences cluster that we 
have created.
    We are doing this around technologies, applications, 
companies that treat and cure disease, improve national 
security, help our nation move toward sustainable, clean 
energy.
    If we as a Congress continue to invest in federal research, 
institutions across our country, just like the University of 
Rochester, probably like Texas A&M, and all of the amazing 
universities we have in the United States, we can do so much 
more to harness innovation and discoveries into commercially 
viable technologies and companies.
    So I am proud to say that many of our U of R scientists are 
working right now on conducting clinical trials of vaccines, 
treatments, and diagnostics for COVID-19.
    But I do want to--and I apologize for the long intro, but I 
did want to ask Dr. Romer, what specific policies or general 
thoughts do you have about approaches that we should consider 
to help ensure that the immense scientific understanding and 
capacity of the United States is actually transitioned into use 
into the broader economy and into society at large? How do we 
make that transition? What should we be doing as a Congress and 
as a country to help that transition?
    Dr. Romer. I think there are two things.
    One is invest in people and then try and be the place where 
people want to stay and work. That means we can keep attracting 
well-trained people from the rest of the world, but we are 
really underinvesting in our own U.S. talent. And this is why I 
think fellowship programs and an attempt to redo what we did 
with, like, electrical engineering, chemical engineering could 
be so important now. So invest in people, and use all of our 
universities to carry out that mission.
    The second is, you know, I talked about having agricultural 
producers influence what happens on university campuses. I 
think in Rochester you see a good example of this in optics, 
where Kodak and then Bausch & Lomb encouraged work on 
particular questions and then encouraged training of students 
on questions related to optics, which turned out to be very 
important for lasers and a number of other kinds of 
applications.
    Mr. Morelle. I couldn't agree more.
    I will say this, that we in the state and the federal 
government have both created a big optics and imaging 
manufacturing institute. The United States invested; the state 
of New York has invested. I think we invested $250 million on 
optics and photonics, exactly what you are saying, to make that 
investment in photonics. You know, photons move faster than 
electrons.
    Dr. Romer. Yes. And I guess the way to say what I am saying 
is that professors are a huge asset, a huge resource, but we 
need some other voices that are contributing to the decisions 
about where universities go. And if we gave fellowships, we 
could empower students to have a little bit more say. And if we 
put industry groups in a position to spend their own money on 
either research or training, that would bring their voices to 
the table too.
    Mr. Morelle. Very good. Thank you, Doctor.
    Thank you, Mr. Chairman, for another great hearing. 
Appreciate it.
    Chairman Yarmuth. The gentleman's time has expired.
    I now recognize the gentleman from Virginia, Mr. Scott, for 
five minutes.
    Mr. Scott. Thank you. Thank you, Mr. Chairman. This has 
been a very interesting hearing.
    I want to thank our witnesses for being with us today.
    I would like to ask a question to Dr. Parikh.
    You mentioned the value in getting and a need for data in 
order to make informed decisions in the criminal justice area. 
The Death in Custody Reporting Act requires the Department of 
Justice to collect data on deaths that occur in jails, prisons, 
and in the process of arrest, but the Administration has not 
followed the law and hasn't collected the data.
    If they had followed the law or would begin to follow the 
law, the information that would be collected would be 
demographic information and a brief narrative of what happened. 
If you collected that on deaths in custody all over the 
country, how could you use that data to make informed decisions 
in the criminal justice area?
    Dr. Parikh. Thank you for the question, Mr. Scott.
    You know, it is challenging. We have social scientists who 
are very interested in looking at this data, analyzing this 
data, and providing prescriptions. Sometimes you don't know 
what those prescriptions are going to be until you have seen 
the data and are able to analyze it. So I don't want to--I 
wouldn't want to presuppose. And I am a biochemist, so I want 
to represent my social scientists well.
    But what I will say is that they feel very strongly that, 
with access to data, they can provide prescriptions for 
national policy, at least inform policy. And transparency leads 
to that ability to analyze the data.
    And so they would argue very strongly that we need to have 
transparency of demographics, of data related to violence, of 
data related to incarceration. These are all points of question 
that my social scientist stakeholders within the AAAS would say 
are very important and, frankly, could do a great deal toward 
working to make the world a fairer place.
    Mr. Scott. Thank you.
    I have one other question I just would pose to all of the 
witnesses. Dr. Shih had mentioned that the basic research is 
done by government, and then when you get to proof of concept, 
the corporations come and do the--when profit is around the 
corner, they can be counted on doing the rest of the research.
    The way we fund research is a number of different ways: R&D 
tax credits, where the corporations get to decide what they 
want to do; direct cash, if you have something you want to 
research; or direct investments in NASA, Energy labs, NIH, and 
things like that.
    How could you get better coordination--wouldn't you get 
better coordination with the investments in NASA, NIH, and the 
Energy labs and wouldn't it be better coordination and more 
bang for the buck if that is where you put your federal dollars 
on research, rather than let corporations go wherever they want 
to go and they probably would have done it anyway?
    Dr. Shih. Well, let me suggest something. I think it is a 
very interesting question. I think we are actually at the 
threshold of an opportunity, OK, because I think it has 
historically been the federal government's role to fund basic 
R&D, but the government can also, especially in this pandemic 
recovery phase, when we are going to spending a lot on 
infrastructure, I think we can also create demand, right? So 
there will be push on the supply and pull from the demand, 
which would cause people to invest in particular areas, right?
    So, I mean, we are seeing a microcosm of that right now 
with vaccines and therapies for COVID-19. OK. But I think there 
are other areas, for example, where, if we want to spend on 
infrastructure--I am a big fan of grid modernization, right? 
Especially if you are from California, you know how obsolete 
our grid is, how vulnerable it is to disruption. OK.
    But if there were investments, infrastructure investments, 
on grid modernization, it would drive a whole bunch of R&D, for 
example, in silicon-carbide power devices, right, energy 
storage technologies, group III-V semiconductors, and a whole 
bunch of other areas, right?
    So I think taking a more holistic and, I would say, 
strategic view on that, we really have an opportunity coming 
out of this crisis to do that.
    Mr. Scott. Can I get Dr. Romer to comment very briefly on 
that question?
    Dr. Romer. I think it is important to remember that we get 
huge benefits from a decentralized system that can focus on 
different issues.
    For example, at the University of Minnesota, they developed 
a technology for pelletizing iron ore which was crucial for 
exploiting its iron ore reserves, and it has turned out to be 
very important in many other areas. A nationally controlled, 
centralized system might not have focused on pelletization, but 
the local forces in Minnesota encouraged that kind of research.
    So I think----
    Mr. Scott. That was federal funding, I would imagine, 
federal or state funding, not corporate----
    Dr. Romer. Well, no, it was really the federal government's 
support for the land-grant institutions. So the federal 
government provided the background resources, but the actual 
decisions about the spending and the research to pursue were 
made locally.
    So I think we should be open to a system that allows a lot 
more decentralized decisionmaking on the specific research 
projects that are pursued.
    Mr. Scott. Thank you, Mr. Chairman. The point I was making, 
if you spend a lot of money on R&D, the corporations get to do 
it. If you do things like fund the research at universities, 
fund NASA, fund Energy labs, fund NIH, it gets decentralized, 
but I think you get a much better bang for your buck. By the 
time the corporations get around, the basic research is done, 
profits are around the corner, and they probably would have 
done most of that anyway.
    So thank you. I appreciate your indulgence.
    Chairman Yarmuth. You have a man with the gavel on the 
Committee. No problem.
    The gentleman's time has expired.
    I now recognize the gentlewoman from Texas, Ms. Jackson 
Lee, for five minutes.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman. Can I 
be heard?
    Chairman Yarmuth. Yes.
    Ms. Jackson Lee. Thank you very much.
    Thank you to all the witnesses as well.
    I am glad to join this Budget Committee that is focusing on 
the necessity of research so we can save lives.
    Let me read into the record, first of all, the number of 
confirmed cases of COVID-19 in the United States, which is now 
a little bit over 3 million cases. Confirmed cases in Harris 
County, 39,311; deaths, 395; confirmed cases in Houston, 
55,122; deaths at 581.
    Those numbers have gone up from the moment that the state 
decided, as of May 1, to end the stay-at-home order and, of 
course, to begin to open up the state.
    Business and the economy are very important, but it is 
extremely important to remember that R&D is a preventative 
measure that provides the opportunity to be prepared. And one 
of the issues in fighting COVID-19 is a question of 
preparation.
    So I would like to ask Dr. Parikh, specifically, R&D as it 
relates to where we are today. The idea of working with huge 
pharmaceuticals, which obviously exist--AstraZeneca received $1 
billion to engage in vaccine research. A small company like 
Greffex, G-r-e-f-f-e-x, Incorporated, in some of the clinical 
trials that are going on here in Houston have had to struggle 
to get the attention of the federal government.
    What would have been the results of a proactive research 
R&D protocol for the United States where we would engage with 
research dealing with infectious diseases or the potential of 
diseases that, really, we have seen around the world?
    Dr. Parikh?
    Dr. Parikh. Thank you.
    I think what we are seeing is sort of a reflection of the 
investments that we have made over time. We have made a lot of 
investment in the basic research and in biomedical research. 
And so, when the virus was isolated, the fact that within three 
months we had characterized the atomic structure of the coat 
protein and we had all of the necessary information for 
starting vaccine trials is amazing. It is absolutely 
breathtaking. And that is the result of all the research and 
investment that has been made over the last 20 years in that 
infrastructure.
    But then you also see the lack of investment in public 
health. You see the atrophy that has taken place in our public 
health departments around the country. You see some of the 
atrophy that has taken place at CDC. And so what you didn't get 
was the immediate public health response and the powerful 
public health response that could have helped us in the initial 
stages of the pandemic.
    You know, I think we should be very careful in terms of how 
we are guiding the science. There is this research project that 
was looking at bat coronaviruses that had some fieldwork in 
China, but that work was canceled by the Administration.
    And, you know, one of the things that I really worry about 
is scientific integrity. There are lots of reasons, and 
administrations are within their rights to cancel research 
projects. But they shouldn't make the scientists the instrument 
of that cancellation----
    Ms. Jackson Lee. Thank you. Thank you very much.
    Dr. Parikh. Thank you.
    Ms. Jackson Lee. Thank you very much. My time is short.
    Let me proceed--and thank you very much for your answer--to 
Deborah Wince-Smith, the Honorable Deborah Wince-Smith, on my 
specific point about the value of competitiveness in the United 
States and the importance of building a body politic of small 
researchers to be able to engage in competitiveness.
    And, as I indicated, there are clinical trials going on 
here in Houston, Texas, dealing with COVID-19 that are not able 
to pierce the structure in the federal government, and, 
therefore, their research is languishing.
    I think the comments of Dr. Parikh were important about the 
infrastructure of health, public health, but it also is 
important that we do follow the science but that we also have 
the R&D structure, the funding for R&D, that we promote all of 
this research that is going on in the United States that may 
not be the size of AstraZeneca.
    Would you respond?
    Ms. Wince-Smith. Well, one thing I think is a very 
interesting model is how some states--and this is a leadership 
issue, but some of the leading universities are coming together 
and forming their own consortiums to identify, within their own 
respective research environments, potential innovation and 
pooling their assets together to both identify and help that.
    So we know, you know, universities have special funds for 
startups. Some of them have actually venture capability. But 
doing that at a state level more collaboratively and also 
leveraging with state resources the SBIR grants, Phase I and 
II, to get a critical mass is one path. Because I think you are 
completely right. I mean, I hear every day about, oh, somebody 
has the answer to testing; how do we get to the FDA, you know, 
for approval?
    And so I do think that, yes, there is the federal level. 
The White House Science Office really should be playing a role 
in coordinating some of this. But it would be very exciting to 
see how some of the states themselves and the universities 
within the states could pool their resources to help on 
identifying and promoting these startup capabilities coming out 
of their assets.
    And the other thing I think I will mention is, you know, we 
have talked a lot about demand and the mission focus, but 
certainly, you know, this is now a national mission to ensure 
that we have the preparedness, we have the anticipatory R&D 
investment, so the next time we have a pandemic--and there will 
be one--we can respond in a resilient, adaptive way and not be 
scurrying around the way we have had to do this time, really 
for a lack of organization, I think, not capability.
    Ms. Jackson Lee. No doubt, we shouldn't leave out the small 
competitors who have possibly a potential for vaccine, for a 
cure, for good research.
    Ms. Wince-Smith. We should make sure they are part of the 
solution. Absolutely.
    Ms. Jackson Lee. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman Yarmuth. Absolutely.
    The gentlewoman's time has expired.
    I now yield myself 10 minutes.
    Let me, at the outset, thank all of the witnesses for your 
responses, your testimony, and your candor. It has been an 
honor to have you as part of the hearing.
    You know, when I became Chairman of the Committee, one of 
the things that I decided we--in a way we could reimagine the 
Committee, was to talk about different subjects and how they 
will impact the budget either presently or going forward. So we 
have had hearings on immigration policy and climate change, 
and, Ms. Wince-Smith, I know you talked about artificial 
intelligence. We are going to have a hearing on artificial 
intelligence and how that might impact the budget.
    So the focus has always been these--there are other 
committees of jurisdiction for these subjects, these issues, 
but they all have budgetary implications. And that is what we 
are doing today.
    So I think where I would like to start is, in talking about 
R&D, we talk about its impact on so many things, but what is 
the potential impact on the budget going forward, whether it is 
through employment, whether it is through developing new 
industries and so forth? And what would be the budgetary 
implications of a reduced or even more of a maintenance level 
of investment in R&D?
    And I will start with our Nobel Prize-winning economist, 
Dr. Romer.
    Dr. Romer. So I think the investments the United States has 
made in its university system and its primary and secondary 
education system from the very beginning, those investments in 
institutions that raise our skill, that produce human capital, 
these have been the highest-return investments that we have 
ever made.
    And I think, if we continue to make those, we could have 
more growth in the future, and we would have more income, more 
tax revenue, and we would get the benefits of a self-
fulfilling, reinforcing cycle. So I think we can't 
underestimate the importance of investing in people.
    Research is one of the ways to invest in people, but it is 
not the only way. And I think we should really look very 
carefully at the National Defense Education Act from the 1950's 
and the kind of indirect support the feds provided for 
education throughout the nation.
    And, in closing, let me just reinforce this point that it 
is wonderful to be able to draw on talent from all over the 
world, it is wonderful to encourage the flows of ideas 
throughout the world, but there is something wrong that we can 
persuade so few of our citizens, when they are in school, to 
continue on in graduate school.
    And we can fix that. I think by giving the students more 
control, not making them like serfs working for professors, but 
empowering them to pursue a career that is exciting to them, we 
will actually have--we can supplement the international supply 
of talent with a much deeper, much better educated U.S. body of 
talent.
    Chairman Yarmuth. Ms. Wince-Smith, this is one of the, I 
guess, the emphases of the Council on Competitiveness. How 
would you respond to that question? What is our potential 
downfall if we don't do enough, and what is the potential 
upside?
    Ms. Wince-Smith. Well, I very much agree with what Dr. 
Romer said. So I will give a little different answer, in that 
we really are living right now in a very low-productivity era. 
And in order to jump-start our productivity, which really is 
essential in order to increase the standard of living for all 
our citizens, we have to really invest in what are going to be 
the drivers of next-generation productivity. And it really is 
going to come from not just the research and development 
investments at universities and labs but how we commercialize 
at scale all of these capabilities to drive the new industries, 
products, and services of the future that create value and 
jobs, you know, that are high-paying for all of our citizens.
    So, if we don't invest in the people and we don't invest in 
these big platform opportunities--and we know they are there; I 
mean, we don't have to identify them--we will be left behind 
economically, we will lose global influence, we will not be 
able to invest and contribute to global challenges in food, 
energy, water, climate.
    And our national security will be very, very weakened. And 
I think, today, the two come together. You can no longer divide 
the impact of our economic success from our national security 
needs as well.
    So we have to invest in the people, the platform 
capabilities, and the infrastructure to deliver it.
    Chairman Yarmuth. OK.
    Dr. Parikh, I would like you to address that also, but let 
me add one question to you. In your testimony, when you were 
talking about the model needing to be adjusted, the Vannevar 
Bush model needing to be adjusted, you mentioned that the 
federal government should assume a quarterback's role. If you 
could explain what that means.
    Dr. Parikh. Yes. Yes. It is not a perfect analogy, but, you 
know, the federal government is the largest single contributor 
to that ecosystem. And the federal government can contribute in 
ways that Vannevar Bush never even imagined, right?
    Because there are many models for funding. Dr. Romer has 
talked about, you know, the need to make sure that our land-
grant universities are strong. There are so many different 
ways. You can fund investigators directly. You can fund ideas. 
You can fund students. We have to have that approach of 
creating an ecosystem, many different paths to success. Because 
those paths are now what is driving everything.
    You know, he never imagined that we would be collaborating 
with--that the pharmaceutical industry would be a global 
industry, where research that is happening here was going to be 
complementary with what is happening in Europe. We have to make 
sure that this new model takes all of that into account and 
then is really a broad-spectrum support by the federal 
government.
    But then, similarly, the platforms that we spoke about 
earlier, the federal government can identify those and point us 
in those directions. That is not to the--not so that there is 
nothing outside of that, but, certainly, coordinating roles for 
infectious disease, coordinating roles for artificial 
intelligence. We know that these are going to be important 
platforms. We have to make sure that we are investing in them.
    Chairman Yarmuth. Dr. Shih, do you want to respond to that 
question as well?
    Dr. Shih. Well, so let me respond to your original 
question.
    Chairman Yarmuth. That's what I meant, the original 
question.
    Dr. Shih. Yes. I agree with what Dr. Romer and others have 
said so far.
    OK. One of the other things I want to highlight is that, 
you know, our investments have been made over many decades, you 
know, and they have been substantial, right? And they will 
carry us for some time if we fail to invest enough, but it will 
decline. We have already seen that in some industries. OK. And 
it has a long tail. OK. And then rebuilding that is going to be 
much more expensive.
    So we just have to recognize that time lag as well. We are 
already in the decline in many areas where we can't do those 
things in the U.S. anymore. All you have to do is look at the 
source of publications in many fields, and you see it has 
already shifted to Asia. OK.
    So it is a long-term investment. OK. It is beyond one 
election cycle for sure. All right? But, you know, we need to 
think in terms of decade-type goals, right?
    I mean, when I was growing up, I used to make fun of 
China's Five-Year Plans, right? Because, you know, Mao Zedong, 
``Well, we're going to do deep tilling,'' and he causes a 
famine in China. OK? But one thing the Chinese have done well 
is this kind of long-term planning, OK? And they learn from 
their mistakes as well, right?
    And so I have become less critical of that, as, like, it 
would be nice to have kind of that longer-term vision, 
especially when it comes to our capability building and people 
development.
    And I come back to, the capabilities are embodied in 
people. The people are everything. Right? And so our university 
system has been tremendous in feeding that pipeline.
    And, you know, one other thing I will add. It is like, you 
don't think anybody in China who has, you know, seen what is in 
the U.S. and seen the opportunities that are available wouldn't 
rather live here if they had the chance? OK. And so we continue 
to be the place that is the most attractive destination in the 
world. Let's not screw that up.
    Chairman Yarmuth. I appreciate that.
    And getting to the issue of personnel and talent and so 
forth, this really is a long-term project, because we need to 
start figuring out how to get young people attracted to the 
field. Because you can't just say to somebody who is a senior 
in high school or a junior in college, ``OK, go into 
research.'' So it has to start much younger than that.
    And one of the things that--I am going to go over my own 
time, but, again, I have the gavel--is that I think about what 
we saw in the movie ``Hidden Figures'' and the Black women who 
had done extraordinary things but who nobody in the country 
knew anything about, and I am sure young Black children didn't 
know anything about that.
    Years ago, when I was writing columns, I was doing a Black-
history column, and I was doing some research, and I found 
that--I am an avid golfer--I found out that the golf tee was 
invented by a Black dentist, G.F. Grant. Who would have ever 
thought that? And then if you think about George Washington 
Carver and so many instances--Lewis Latimer, who invented the 
filament.
    And so a lot of it is exposing young people to role models, 
I would think, as to what their potential is as well. Does 
anybody want to comment on that briefly?
    Dr. Parikh. Yes, Chairman Yarmuth, if I could.
    You know, the AAAS is a gatekeeper organization, right? If 
you published in Science magazine, you are on your way to an 
academic career and a research career. You are well on your 
way. If you get a fellowship from us, you are well on your way.
    And one of the things that we noticed is representation 
matters, right? So, in our fellowship process, there is a very 
good demographic diversity in the selection committee. And, lo 
and behold, the awardees are diverse. When you look at our 
editors of our journals, it is not as diverse, and you see that 
the publications are not as diverse.
    There is something very important about representation and 
mentorship that we have to make sure that we are not letting 
this moment hurt.
    And I will just speak to this moment for a second. You 
know, with COVID-19, the disruptions to research, with these 
immigration policies, and then challenges to our K-12 
educational system, we are in danger of losing a generation of 
talent in the sciences. And that would be tragic. These are 
lagging indicators. We are living on the investments that were 
made in people 10 years ago, 20 years ago.
    Chairman Yarmuth. Well----
    Dr. Romer. If I could just echo something that Deborah 
Wince-Smith said, you know, she pointed to the military 
academies. The U.S. Government, through the military, has done 
a very good job on many issues about inclusion and diversity. 
And they show that if you commit to the principle that 
everybody can participate and contribute and you live by that 
standard, you can make that happen.
    So I think they should be a model for how the government 
requires all of our other institutions to do as well as we have 
done in the military.
    Chairman Yarmuth. All right. Thank you for that.
    Ms. Wince-Smith. Could I add one thing?
    Chairman Yarmuth. Go right ahead.
    Ms. Wince-Smith. One example of a university that has done 
an incredible job in bringing women and underrepresented 
minorities into STEM, from the graduate level all the way up 
through being graduate students, and that is the University of 
California at Santa Barbara.
    They have a completely different model. The moment these 
young people are freshmen, they are linked with advanced 
researchers doing Ph.D. work, and they get inspired. And they 
are mentored all the way through. It is not the traditional 
thing of, oh, you come into a big chemistry class and by the 
end of the year three-fourths of you are weeded out.
    We have to expand the pool of innovators in the United 
States. And, again, that doesn't mean that we don't bring 
others in, and the Council was the first organization that 
said, staple a green card, you know, for the graduates in our 
science and engineering enterprise. But we have to bring in our 
own citizens as part of the enterprise.
    Chairman Yarmuth. Well, I will let that be the last word.
    Once again, thank you all for your time and wisdom, and we 
appreciate it very much. I think we have made quite a record 
here in this hearing.
    So thank you, Mr. Flores. I guess you are sitting in as 
Ranking Member here at the end. I appreciate you being with us.
    And, with that, if there is no further business, this 
hearing is adjourned. Thank you all very much.
    [Whereupon, at 3:32 p.m., the Committee was adjourned.]
    
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