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Jonathan Gruber and Simon Johnson: We need new research hubs — but not on the coasts. Here’s how we get them.
Our geographic opportunity gap is stark and growing wider by the day. At one extreme are large West and East coast megacities, which have become world-leading hubs for technology development. At the other extreme are small towns and more rural areas with demographic decline — by one estimate, 80 percent of counties experienced a fall in working-age population between 2007 and 2017.
This pattern is a direct result of how we have chosen, commercially, socially and geographically, to develop technology. The best way to resist the underlying centrifugal force is simple: invent much more technology, as a top national priority.
The United States needed to ramp up its technology-creation machinery with great urgency once before. At the start of World War II, the U.S. government funded massive breakthroughs — including radar, pharmaceuticals, aircraft, computers and atomic energy — which became enormous private industries. This investment continued during the Cold War, and by the mid-1960s, taxpayer spending on research and development reached nearly 2 percent of gross domestic product.
Today, we spend less than 0.7 percent of GDP for public support of science.
As a result, innovation (and growth) has slowed in the United States. Children of rich parents living in successful tech hubs still do well, but everyone else struggles to acquire the technical and managerial skills necessary for prosperity. Consequently, our national innovation machinery continues to slip relative to our increasingly well-trained international competitors.
To boost economic growth, we should strengthen scientific fields where breakthroughs are imminent and where any other country — China in particular — threatens to forge ahead. But just throwing money at the problem is not enough. We need to think strategically about where exactly we have people able to learn skills, work on innovation and consequently increase our national scientific efforts.
Fortunately, America’s got talent — and, what’s more, incredible amounts of underutilized technical talent. Our research has identified more than 100 places across 36 states with 80 million residents that are plausible next-generation tech development hubs, including seven potential locations each in Florida, Michigan and Ohio; six each in Alabama and Indiana; five each in New York, Pennsylvania, Tennessee and Texas; four in Georgia; and three each in Iowa, South Carolina and Wisconsin. Prioritizing these places would draw on latent skills throughout our nation and catalyze a geographically diverse set of dynamic metropolitan areas where millions of Americans can be productive without having to move far from their families and existing social networks.
Our proposed approach has three components. First, scale up public spending on science — emphasizing the need to swing for the fences. Increasing public R&D funding by 0.5 percent of GDP (about $100 billion per year) would return us to the front of the international pack while also creating 4 million good jobs in the United States. Educational opportunities should be expanded, as was done through the National Defense Education Act of 1958 — including by providing essentially free college where that would make a difference. Increasing both the demand for skilled labor and the supply of appropriate skills is the best way to strengthen and expand the ranks of the middle class.
Second, run a transparent competition to determine where to place new technology hubs. By generating a frenzy of bidding for its HQ2, Amazon recently demonstrated how many communities desperately want more good jobs. (Amazon founder Jeff Bezos also owns The Post.) In contrast to that kind of race to the bottom, which costs taxpayers about $50 billion per year in self-destructive aggregate subsidies, our proposed competition would encourage federal-state-local co-investments in education, infrastructure and housing. Where the government invests, businesses quickly follow. (A strategy for affordable housing will also be needed — the goal is to create opportunities for local people, not to price existing residents out of the local market.)
Third, we aim to ensure that some of the consequent created value is captured, in terms of higher property tax revenues in new tech hubs, and then shared with all Americans. Alaska does this with oil revenues, creating a flat annual cash dividend for all residents. We should do the same with the proceeds of our next great tech boom. Create a National Innovation Dividend, paid in cash to all legal residents. This would serve as a tangible demonstration that our collective efforts can, will and should create massively valuable new scientific breakthroughs.
The private sector creates new products today, including in information technology and social media, but this is not enough to sustain prosperity. Only the public sector will take a shot at reaching the moon or mapping the human genome or creating dramatically cleaner sources of energy.
Jonathan Gruber and Simon Johnson are professors at MIT, in the Economics Department and Sloan School of Management, respectively; and co-authors of “Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream.” This is the third in a series of On Common Ground essays, a partnership between the Niskanen Center, a moderate think tank in Washington, and the Post Opinions section. Read Part 1 and Part 2.
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Posted: December 6, 2019 Friday 04:36 PM