The Conference Board’s 2022 C-Suite Outlook survey finds that U.S. CEOs are most concerned about labor shortages, rising inflation, supply chain disruptions, Covid-19-related disruptions, and cybersecurity. What’s not on that list, but probably should be, is government support for, and funding of, basic research.
That will likely strike most readers as an odd concern, so let me explain. The government funds basic research that most businesses wouldn’t pursue because the path to commercialization is too unpredictable or not immediately obvious.
“Private-sector investors, understandably, don’t have infinite patience. They’re unlikely to invest in basic and fundamental research because the timelines and deliverables are too unpredictable.” Nobel laureate William G. Kaelin Jr. shared those thoughts with me in a recent conversation. The Sidney Farber Professor of Medicine at Harvard Medical School and Dana-Farber Cancer Institute also told me, “Every company I’ve spoken to tells me that they rely on the public sector to do the early fundamental research because they’re the harvesters. They wait till enough knowledge has been accumulated before they say, ‘ah, now we can go apply this knowledge.’ But for the truly disruptive discoveries, anticipating the discoveries and their later applications would have been nearly impossible.”
Most people know that the Defense Advanced Research Projects Agency (DARPA) invented the digital protocols that gave birth to the Internet. Fewer people know that the National Science Foundation led the multi-agency Digital Library Initiative to index websites that funded Google founders Larry Page and Sergey Brin. Or that DARPA gave millions to SRI International to develop a cognitive assistant, technology that would become Siri. And those examples don’t even scratch the surface of the untold businesses that have benefited from government-funded research.
While businesses have been increasing their research investments, as noted by the American Association for the Advancement of Science, there’s some evidence that federal and academic extramural investments may result in more novel discoveries. And even if businesses increase their research spending, the Committee for Economic Development of The Conference Board notes that “The U.S. represents a steadily declining share of global R&D, and if current rates hold, it will fall behind. This is not because the U.S. is reducing its spending, but because the rest of the world, especially China, is increasing its spending at a faster pace.” Further evidence of this comes from the Bloomberg Innovation Index, which the U.S. topped in 2013 and didn’t crack the top ten in 2021.
The government can make longer-term, riskier, and potentially more innovative investments that could benefit companies across multiple sectors. And perhaps more importantly, government funding can offer scientists the ability and time to make monumental discoveries. As Dr. Kaelin told me, “In science, if you’re actually doing in five years what you thought you were going to be doing in five years, you’re either doing something pedestrian or you have such blinders on that you’re not following the leads that might have led you to something far more important than you could have initially anticipated.”
Companies should, of course, continue to invest in research and make great discoveries. But as companies like Google, Apple, and virtually every pharmaceutical can attest, that government-funded basic research is vital to corporate innovation.
And, notes Dr. Kaelin, “The bad news is that you can’t always predict the deliverables from basic and fundamental research. But I can point to many examples where the outcome was beyond my wildest imagination.”