U.S. should fund high-tech research, not states
In a post last week, I was critical of the Connecticut Stem Cell Program, a 4-year-old fund for research grants that was cut out of the current budget proposal. My main criticism was that $10 million/year and an ad-hoc oversight board are not sufficient to justify the praise and hopes directed towards the program by state politicians–such programs are a distraction from the task of rebuilding the Connecticut economy. The larger issue, however, is whether states competing against each other to offer research incentives is really the best use of tax revenue in general. A new essay in the Chronicle of Higher Education argues that investing in technology research is a risky game for states, and that the federal government should step in and increase research funding in their place.
The article, written by three professors from the University of Michigan, describes the declining state-funding of research universities, and the need to return to a more centralized model for expanding education and innovation. States, originally the beneficiaries of the federal land used to build the great “land-grant” universities (including UConn and the Connecticut Agricultural Experiment Station), are currently slashing costs like student aid and capital investments.
Why is state funding for higher education disappearing? The shocking budgetary situation in most states has resulted in cost-cutting throughout public programs. The authors point out, however, that local investment in research is also inherently risky:
The model of state-based support of graduate training made sense when university expertise was closely tied to local natural-resource bases like agriculture, manufacturing, and mining. But today’s university expertise has implications far beyond state boundaries. Highly trained and skilled labor has become more mobile and innovation more globally distributed. Many of the benefits from graduate training—like the benefits of research—are public goods that provide only limited returns to the states in which they are located. The bulk of the benefits is realized beyond state boundaries.
Any state politician claiming that high-tech research incentives will resurrect our local economy is in denial about the risks of these investments. It takes much more imagination to devise state programs to improve less tangible things like infrastructure and lifestyle–investments that will stick around and attract the high-earning employers and employees that the Nutmeg State so desperately wants.
