Stop The Madness

If no deficit-reduction deal emerges at year’s end, across-the-board budget cuts will take effect on Jan. 2, 2013. The story on page 30 says the cuts will drive R&D budgets at federal agencies to their lowest levels in decades. The U.S. government should reduce the deficit systematically and stop flirting with the prospect of choking innovation.

The figure above is one reason why. It is the centerpiece of a National Research Council report about information technology (IT) published in July, which came to my attention via Steve Lohr’s Oct. 8 column in the International Herald Tribune.

The figure conveys how decades-long inter­play (gray arrows) between IT research in academia (red track) and in industry (blue track) and concurrent advances in multiple fields gave rise to a rich knowledge base from which emerged the high-profile companies in various IT market segments. IT subfields, the development of which spurred the growth of a market segment, are listed at the bottom. Black dots indicate the launch of commercial products; green lines represent markets of at least $1 billion (thin) or at least $10 billion (thick).

Even though the data are for the IT industry, the conclusions can apply to others. Clearly, the gestation period from basic research to product is unpredictable. Industry investment in critical areas came years after consistent academic research funded primarily by federal agencies. Commercialization occurred decades later. Now, the total estimated annual revenues of the companies listed in the figure are about $500 billion, the report says. Those revenues would not exist if the U.S. government did not invest in basic IT research back in 1965.

What billion-dollar companies might never start because of indiscriminate cuts in 2013? This madness should stop.