Post # 77: The Societal Contract & Federally-Funded Research

In my previous post I bemoaned the relative lack of focus on applied research in the federal sector. 
For most of my career, leaders in the federal research establishment typically described the research and technology development enterprise as a 1-dimensional vector similar to this:

The primary role of federally-funded research and development (R&D) in the physical sciences – that is, R&D funded with mine and your tax dollars – was to support the extreme left side of the vector – to pursue "big science" or "discovery science."   As a result of this thinking, a culture developed in which it became almost taboo for federal R&D dollars to be spent on anything with the potential for near-term applications.  (Military and defense R&D, and some biological R&D were the notable exceptions to this norm.)  This behavioral trend was strengthened by criticisms about "corporate welfare" whenever major federal applied research programs were contemplated. 

One result of the "vector view" of scientific research and technology development was the emergence of a "valley of death" separating fundamental research and applied research.

New knowledge and infant technologies of a practical variety often died there because they were deemed too mature for the federal sector to invest in their development, and too immature for the private sector to invest in their development. (Recall that Risk Aversion problem ?)  Having spent over thirty years in the federal research system, I'm all too familiar with the "valley of death" that obstructs the metamorphosis of knowledge to technology and the movement of a new technology from concept to the consumer marketplace.  

One of my major issues with the dominant federal "big science" view of R&D in the past twenty years is that it ignores the Societal Contract underlying all federally-funded research.



In my view, that Societal Contract is one in which taxpayers who fund the research have a right to expect a return on their investment.  Put another way, in my view those who lead and manage federally-funded research bear a heavy responsibility to POSITIVELY IMPACT SOCIETY in return for society's sponsorship of their research.  I can recall multiple instances in my latter years at ORNL in which we came together to answer the question, "What R&D have we done recently that has really impacted the public?"  Those were usually awkward and difficult discussions. (But not as awkward and difficult as those times when we asked ourselves the question, "What R&D have we done that has actually solved a problem the average person on the street really cares about?")

Perhaps these standards are too high and too lofty?  Is it possible the major problems the seven billion people of Planet Earth face today are so complex they cannot be solved?  Or perhaps our problems are so nebulous we cannot know when and if we have solved them?

Or, perhaps, just perhaps, science and technology aren't the solution to our greatest problems and challenges.

Just Thinking...
Sherrell

Post # 76: Innovation, Risk Aversion, and "The Maker Next Door"

Risk aversion is killing us.  Or more to the point, it's killing innovation.  Everywhere.

I remember the moment Neil Armstrong stepped on the moon.  I was a teenager watching him and Buzz Aldrin on a black and white television in our living room.  Frankly, I can't imagine the U.S. pursuing so bold an effort as the Apollo program in today's "take no risk" and "protect everyone against everything" environment – even if such a program was deemed affordable.

Many governments (including ours) have grown so risk-averse when it comes to research and development, it's becoming almost impossible to pursue the type of bold research required to solve our largest problems or pursue our grandest dreams.

Ask yourself how long it has been since you heard of any research at a federal R&D facility that actually solved a problem that really matters to the average person in your community.  You know – the "average person" who's working hard every day to shelter, feed, clothe, and educate their family.

I'm not saying our federal R&D budget isn't bearing fruit.  But overall, our federal research portfolios during the past 20-30 years have tended to focus on "basic research" and the pursuit of fundamental discoveries that often have few – if any – practical implications for the foreseeable future.  Often this is also research in which failures (conveniently) go unnoticed by the "average person."

I'm all for discovery-oriented research.  Really.  But I feel the times in which we live should compel us to invest the majority of our tax-funded-research in areas with the potential to IMPACT our daily lives in meaningful, tangible ways.  As much as I love physics, chasing the Higgs is not one of these areas.  (I suspect my viewpoint stems from the basic motivational differences between a scientist and an engineer.)  There are signs of hope, and the last few years have witnessed some improvement in the overall balance of our federal research portfolio (applied vs. basic).  In any event, we still have a long way to go to achieve appropriate balance – one that places highest priority on "Pasteur's Quadrant" research (to quote Donald Stokes).  (But more about Donald Stokes and "Pasteur's Quadrant" in a future post.)

Having spent over thirty years in the federal R&D environment, I know from experience that talented researchers in the federal R&D establishment struggle under a growing burden of well-intentioned orders and regulations that make it devilishly expensive and extremely time consuming to work with anything carrying the "hazardous" or "risky" label.  Try building a laboratory today in a federal research facility to work with liquid metals, molten salts, high voltages, high pressures, high temperatures, or (heaven forbid) anything radioactive.  It costs too much.  It takes too long.  It requires too many approvals.

The picture doesn't look much better in the private sector.

First, many of our energy industries have shockingly-low overall rates of investment in applied research.  For instance, the last number I heard quoted for the nuclear energy industry was that something under 2% of annual revenues are reinvested in product development and applied research. (I hope that's wrong.)

One would think the private sector would reward innovation.  Sometimes it does.  Apple and Google are household names.  (Heck, Google is now a verb!)  But dig a litter deeper, and things look ugly.  I just ran across a fascinating paper by Sahi Bernstein, an assistance professor at Stanford's Graduate School of Business.  Dr. Bernstein has been studying the impact of the transition from private to public ownership on a business's innovation performance.  He did this by comparing the performance (patent citations) of a large number of companies over a three-year period just prior to their initial public offering (IPO), to their performance in the five-year period following the IPO.  His analysis found a forty percent drop in innovation novelty (the degree of incremental innovation) in the post-IPO period compared to the pre-IPO period, but little change in the rate at which patents were awarded.  His conclusion? "The results suggest that the transition to public equity markets leads firms to reposition their R&D investments toward more conventional projects."  The paper goes on to say... "I find that the quality of innovation produced by inventors who remained at the firm declines following the IPO and key inventors are more likely to leave."  It appears that once a company goes public, it becomes more focused on bottom-line profits for its investors than on continuing the risky behaviors (read that bold innovations) that spawned their success in the first place.

So where will innovation occur in this poorly-regulated, bottom-line-oriented, better-is-the-enemy-of-good-enough culture we have made for ourselves?

Our best hope may the person I call "The Maker Next Door."  You know.  That guy (or gal) with the 3D printer, the Arduino, and the TIG welder.  The neighbor whose garage lights seem to stay on late at night after all the other neighbors have gone to bed.

But wait!  My garage is calling.  The soldering iron is hot, the air compressor is running, and that new dual-head 3D printer just arrived.   I'm outa here...