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Brain Drain: Funds drying up in the idea war

Less money for scientific innovations in the United States may push scientists to head to other countries.

By Madhusmita Bora, Times Staff Writer
Published January 27, 2008

ADVERTISEMENT Brain Drain Part 2: Fertile grounds fear a drought America needs more money for science [James Borchuck | Times] David Fries, University of South Florida's director of ecosystems technology group in Tampa, says that increased competition and diminished federal funding have made it harder for scientists to rely on grant money to fund their research.

Five years ago, when David Fries submitted research proposals for federal grants, his chances of winning one were similar to predicting a sunny day in Florida.

"I would get approvals for one in every three proposals I wrote," Fries said.

These days, Fries, University of South Florida's director of ecosystems technology group in Tampa, and his team are lucky to win one in seven requests.

Increased competition and diminished federal funding have made it tougher for scientists to rely on the grants that once generously supported labs, research and training of future scientists. The shortage comes at a time when corporate research facilities, such as Bell Labs, have largely disappeared. The stagnant, and in some cases, dwindling money pool has forced many scientists to bid the profession goodbye. Growing numbers are joining the flight overseas to more "research-friendly" countries such as China, South Korea, Singapore and India.

One-quarter of the 700,000 students who left China between 1978 and 2003 - in many cases to study in the United States - have returned home. In India, about 60,000 high skilled workers have returned home since 2003.

The brain-drain trend threatens not only America's dominance as the research and innovation mecca, academicians say. It also jeopardizes U.S. businesses seeking cutting-edge products to sell. Less innovation in universities means fewer startups and less commercialization of products.

"All great things, such as the Internet, Doppler radar and laser technology, have been built on government investment," said Matthew Kazmierczak, vice president of research and industry analyses at AeA, a trade group for the high-tech industry.

"Other countries are trying to unseat us as the technology leader and we need to work hard and compete."

Between 1999 and 2003, research and development performed by U.S. companies abroad jumped 72 percent, according to Josh James, senior research analyst at AeA.

"Main reason is companies are following the talent," James said. "There's also the incentives from foreign governments luring these companies."

Last year, Microsoft chairman Bill Gates addressed a congressional hearing and stressed the need for increased federal funding in basic scientific research at a time when other countries are outpacing U.S. investment.

"The challenges confronting America's competitiveness and technological leadership are among the greatest we have faced in our lifetime," Gates said.

In 2005, the most recent data available, the United States invested 2.6 percent of its gross domestic product in research and development, down from 2.8 percent in 2001. Meanwhile, countries such as Japan and China increased their spending in that same period.

"It never has been this bad and people are getting fed up here," said Rudolph Jaenisch, a biology professor at the Massachusetts Institute of Technology. "The present administration has been the best recruiting tool for other countries."

While the United States continues to lead the world in total dollars spent on research, the current furor is over the flattening of federal support that began in 2004. From 1998 to 2003, for example, funds for the National Institutes of Health doubled each year.

"Which means if you factor inflation, the buying power of NIH is below what it used to be in 2003," said Norka Ruiz Bravo, NIH deputy director for extramural research.

While the dollars available remained stagnant, the number of applicants has increased.

"More and more people are out for a slice of the same pie and so it's much more competitive and researchers are feeling the pain," Bravo said.

The dip came at a time when countries such as Israel were devoting 4.9 percent of its GDP to research and development, far ahead of the United States' 0.8 percent contribution in 2004. Last year, China announced a 15-year plan to bolster its universities and boost science, technology and innovation. The United States, considered the most attractive location in the 1980s, is now the 17th most competitive country for research and development tax incentives, according to AeA.

"Since the early 1990s, the tax credit for R&D faced a series of annual renewals and budgetary problems," said AeA's Kazmierczak.

Meanwhile, other countries copied the incentives and offered better deals, he said. China today has a permanent 150 percent tax deduction for R&D expenditures. The tax incentives in the United States expired in December.

The ripple effect of diminished funding is felt across all scientific disciplines.

Already, the United States' domination in high-energy physics was compromised when projects such as the superconducting super collider were scrapped in the 1990s. A machine similar to the super collider is now being built by the European Organization for Nuclear Research near Geneva.

In the biomedical field, estimates of real funding rates are below 10 percent. This is less than half what it was five years ago, said Junhyong Kim, co-director of the Genomics Institute at the University of Pennsylvania. Funding agencies are concentrating on larger grants for teams and groups, he said.

"But that does come at the cost of individual research projects," Kim said. "For the more senior scientists, Europe, and more recently, Asia, has more stable funding environments."

But a brain drain in America isn't necessarily bad, some say.

"I think, as is the case with so much flatworlding, we are looking at a future where levels of economic development are closer together," said Richard Bookman, vice provost for research and executive dean of research and research training at the University of Miami.

It will take other countries a while to catch up with the United States, Bookman said.

"But the world, I believe, would be well-served by having a robust global research enterprise."

Madhusmita Bora can be reached at 813 225-3112 or mbora@sptimes.com.

Trends in R&D funding

$729-billion
Global research and development expenditure in 2000, half of it from the U.S. and Japan

72%
Increase in R&D performed by U.S. companies abroad, between 1999 and 2003

17th
Ranking of the U.S. as an attractive location to perform R&D because of tax incentives.

0
The number of tax incentives in the U.S. for R&D expenditures; China now offers a 150 percent tax deduction for those costs

Source: National Science Foundation's 2006 report on science and engineering indicators, and AeA

What the experts say

Viewpoints from academia, the industry and analysts:

"Funding levels are down because of the war. What no one is saying is there is less money now for discretionary programs, such as NIH. There is some cushion for people like me who've been doing this for a while. I know quite a few people, especially clinicians, who have gotten frustrated and moved out of research."Joel H. Greenberg, research professor of neurology, University of Pennsylvania.

"We really believe, even in times of tight budgets, you have to put resources where there will be a higher payoff. You have countries very competitive like India, Russia and China who are moving ahead and investing in research and hiring high-caliber people. This really hurts American companies and our ability to compete at a global level." Ginny Terzano, Microsoft spokeswoman.

"The fact is, right now, there is a threat from the entire world and the U.S. hasn't figured out how to keep its head up. What we need to do is focus investment on commercialization of research. The gap between the university and the private industry is quite wide now." Vivek Wadhwa, entrepreneur and executive-in-residence at Duke University and Wertheim Fellow at the Labor and Worklife Program at Harvard Law School.

[Last modified January 25, 2008, 21:39:44]