U.S. competitive position has further declined

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http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12999



FOR IMMEDIATE RELEASE

U.S. COMPETITIVE POSITION HAS FURTHER DECLINED IN PAST FIVE YEARS, REPORT SAYS;
NATION NEEDS SUSTAINED COMMITMENT TO INVESTMENT IN INNOVATION

Sept. 23, 2010 — The outlook for America's ability to compete for quality jobs in the global economy has continued to deteriorate in the last five years, and the nation needs a sustained investment in education and basic research to keep from slipping further, says a new report requested by the presidents of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, and authored by members of the committee that wrote the influential 2005 report Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.

What progress has been made in addressing America's competitiveness challenges came largely as the result of the America COMPETES Act and stimulus package spending advancing its provisions, but both are due to expire soon, warned authors of the new report, Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5.

"The Gathering Storm effort once again finds itself at a tipping point," said Norman R. Augustine, one of the new report's authors and chair of the original Gathering Storm committee. "Addressing America's competitiveness challenge is an undertaking that will require many years, if not decades." The new report assesses changes in America's competitive status since the release of Gathering Storm and the degree to which its recommendations have been implemented.

The report's authors concluded that the nation's competitive outlook has worsened since 2005, when Gathering Storm issued its call to strengthen K-12 education and double the federal basic-research budget. While progress has been made in certain areas, the latitude to fix the problems being confronted has been severely diminished by the economic recession and the growth of the national debt over this period from $8 trillion to $13 trillion, the report says. Moreover, other nations have been markedly progressing, thereby affecting America's relative ability to compete for new factories, research laboratories, and jobs.

The report notes many indications that the United States' competitive capacity is slipping, including the following:

In 2009, 51 percent of U.S. patents were awarded to non-U.S. companies.
China has replaced the U.S. as the world's number one high-technology exporter and is now second in the world in publication of biomedical research articles.
Between 1996 and 1999, 157 new drugs were approved in the United States. In a corresponding period 10 years later, the number dropped to 74.
Almost one-third of U.S. manufacturing companies responding to a recent survey say they are suffering from some level of skills shortage.
In addition, in spite of occasional bright spots, the nation's education system has shown little sign of improvement, particularly in math and science, the report says. According to the ACT College Readiness Report, 78 percent of U.S. high school graduates in 2008 did not meet readiness benchmark levels for one or more entry-level college courses in mathematics, science, reading, and English, the report notes. And the World Economic Forum ranks the U.S. 48th in the quality of its math and science education.

In 2007 Congress passed the America COMPETES Act, which authorized many recommendations from the Gathering Storm report. But most of the Act's measures went unfunded until the stimulus package was passed early in 2009, a package that increased total federal funding for K-12 education, provided scholarships for future math and science teachers, and funded the Advanced Research Projects Agency-Energy, which is dedicated to supporting transformational basic research on energy.

However, the America COMPETES Act is set to expire this year, and its funding -- which came from the stimulus package, presumed to be a one-time initiative -- is also nearing expiration. In order to sustain the progress that has begun, the report says, it will be necessary to both reauthorize the America COMPETES Act and "institutionalize" oversight and funding of Gathering Storm recommendations -- or others that accomplish the same purpose -- so that funding and policy changes will routinely be considered in future years' legislative processes.

The report's authors acknowledged the difficulty of carrying out the Gathering Storm recommendations, such as doubling the research budget, in the current fiscal environment. But such investments will need to be made if the nation is to maintain the economic strength to provide health care, social security, national security, and other basic services to its citizens, they said.

The study was funded by the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. These three organizations, together with the National Research Council, make up the National Academies. They are private, nonprofit institutions that provide science, technology, and health policy advice under a congressional charter. The Research Council is the principal operating agency of the National Academy of Sciences and the National Academy of Engineering. A roster of report authors follows.
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Copies of Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5 are available from the National Academies Press; tel. [phone] or 1-800-624-6242 or on the Internet at http://www.nap.edu. Reporters may obtain a copy from the Office of News and Public Information (contacts listed below).

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