"Science in the National Interest: A Shared Commitment” - MIT Symposium (Session 1/3) 2/7/1995

GRAY: I'm Paul Gray, chairman of the institute's governing board, and it's my pleasure to have this opportunity to greet you and to welcome you to MIT for this conference. I bring greetings as well from Chuck Vest, who, as we speak, is testifying on the Hill concerning federally funded research and development centers and in particular the Lincoln Laboratory. He expects to be back around lunchtime and will have some things to say to you toward the end of the day.

While the timing of this colloquium is determined by the present nature of the lively debate about the nature and purposes of basic research and by the likelihood of changes in the role of the federal government in the support of research, there is a coincidence in the timing, which seems to me to be worthy of a moment's reflection.

It was just 50 years ago this spring that Vannevar Bush presented to President Harry S. Truman his report, a report commissioned by President Franklin D. Roosevelt, entitled "Science, the Endless Frontier." Van Bush was a central figure as director of the Office of Scientific Research and Development in the coordination of the wartime efforts to bring science and technology to bear on the national defense.

He was thoroughly familiar with the university scene, having served as dean of engineering here at MIT in the 1930s and as vice president at MIT at a time when, I should note, there was but one vice president. He also served later as president of the Carnegie Institution of Washington. And as an aside, I might note that Van, in the late '50s, was chairman of the MIT governing board and was, in those years, over the years of the '50s, '60s, and '70s an advisor to six MIT presidents, including this one.

President Roosevelt's charge to Bush was a challenge. I quote, "The Office of Scientific Research and Development, of which you are the director, represents a unique experiment of teamwork and cooperation in coordinating scientific research and in applying existing scientific knowledge to the solutions of the technical problems paramount in the war. There is no reason why the lessons found in this experiment cannot be profitably employed in times of peace, the information, the techniques, and the research experience developed by OSRD, and by the thousands of scientists in the universities and in private industry, should be used in the days of peace ahead for the improvement of the national health, the creation of new enterprises bringing new jobs, and the betterment of national standards of living."

Now, Van's report expressed two priorities. And I quote, "First, we must have plenty of men and women trained in science, for upon them depends both the creation of new knowledge and its application to practical purposes. Second, we must strengthen the centers of basic research, which are principally the colleges, universities, and research institutes. These institutions provide the environment which is most conducive to the creation of new scientific knowledge and least under pressure for immediate tangible results."

Van Bush's report had many of the important details right as well. For example, with respect to student aid, he said as follows. Again, I quote, "The government should provide a reasonable number of undergraduate scholarships and graduate fellowships in order to develop scientific talent in American youth. There are talented individuals in every segment of the population, but with few exceptions, those without the means of buying higher education go without it. If ability, and not the circumstances of family fortune, is made to determine who shall receive higher education in science, then we shall be assured of constantly improving quality at every level of scientific activity." Good words for 1945, good words for 1995.

"Science, the Endless Frontier" provided the basis for ongoing federal support of scientific research and for the growth and development of the research universities. It led to the establishment by the Congress of the NIH and the NSF, two agencies now in the vanguard of research and student support, and to the encouragement of continued research support by the Department of Defense and the Atomic Energy Agency. It promoted the development of policies and practices which permitted the reimbursement of institutions of higher education for the research which they undertook on behalf of the government. Bush's report set the stage for the federal patronage of research in colleges and universities and of graduate education in science and engineering, patronage which has led to the flowering of a network of research universities that are now the envy of the world.

50 years later, with the Cold War ended, under the shadow of a large federal budget deficit, all of us, university faculty and administrators, representatives of government, and industrial leaders, are seeking a new modus operandi, one which will permit and indeed encourage the continued flowering of research and of the education of the men and women who will influence the 21st century, a mode, which will, in FDR's phrase, enable the lessons found in this experiment to be used in the days of peace ahead, for the improvement of the national health, the creation of new enterprises bringing new jobs, and the betterment of national standards of living. Of course, by "experiment," the president meant World War II. But now, nearly half a century later, the phrase, it seems to me, applies equally well to the Cold War. That new mode will surely and most appropriately lead to some further evolution of relationships between universities and industry, and I'm pleased to see American industry so well represented here today. May our discussions today help generate the insights, the shared commitment, necessary to permit government, universities, and industry to work together to bring about, in these new days, these old ends.

It's now my pleasure to introduce the key figure in the organization of this conference, Robert Birgeneau, dean of science at MIT. Bob came to the institute nearly 20 years ago via the University of Toronto, Yale, Oxford, and the Bell Laboratories. His research is primarily concerned with the phases and phase transition behavior of novel states of matter, such as one- and two-dimensional magnets, liquid crystals, surface monolayers, and metal and semiconductor surfaces. He and his collaborators are pioneering in the use of synchrotron X-ray light for high-resolution studies of condensed matter. Bob?

BIRGENEAU: Thank you, Paul. First of all, I'd like, of course, to welcome all of the speakers to our symposium today, Science in the National Interest: A Shared Commitment. We're very fortunate to have as speakers distinguished representatives of the federal government, industry, and academia. I also want to welcome all of the attendees. And in fact, many of you probably looked over the list, and it's an equally distinguished group.

We have here in the audience today representatives of 58 corporations, 48 universities, many national laboratories, most of the MIT research and academic leadership, and many governmental officials. Our purpose here today, as you know, is to discuss science and its role in our national enterprise, and, especially today, with emphasis on industry and the industry university partnership. Separate, equally important component in this is, of course, the National Laboratories, which will be reviewed in a future symposium like this one.

Our inspiration for the session today is, of course, this document, which you're all familiar with, a Clinton-Gore document, Science in the National Interest. I'd like to quote two sections from it. The first section reads as follows: "The challenges of the 21st century will place a high premium on sustained excellence in scientific research and education. We approach the future with a strong foundation built by the wise and successful stewardship of this enterprise over many decades," as we just heard from Paul, beginning with Vannevar Bush, "and with an investment strategy that was framed during this administration's first month as three interconnected strategic goals. First, long term economic growth that creates jobs and protects the environment. Second, a government that is more productive and more responsive to the needs of its citizens. Third," and manifestly from our parochial point of view and most importantly, "rural leadership in basic science, mathematics, and engineering." The Clinton-Gore document then proceeds to say, "Therefore, we set the following goals for our stewardship of science in the national interest. First, maintain leadership across the frontiers of scientific knowledge. Secondly, enhance connections between fundamental research and national goals. Third, stimulate partnerships that promote investments in fundamental science and engineering and effective use of physical human and financial resources." And we will undoubtedly today hear a particular emphasis on this partnership aspect of our relationships. "Fourth, produce the finest scientists and engineers for the 21st century." Of course, that's a very special responsibility of our research universities. "Fifth, raise scientific and technological literacy of all Americans." Equally important goal.

The document then proceeds to say, "While we perceive these go, pursue these goals amidst rapid change, we must not lose sight of the core values that have enabled our nation to achieve so much. Over the last 50 years, the United States developed a unique and highly successful system for advancing scientific research in universities, medical schools, and independent research centers and in federal and industrial laboratories. Our system rests on a strong commitment to investigator-initiated research and merit review based on evaluation by scientific peers. This system maintains the emphasis on excellence and brings new people and new ideas into the research enterprise." It's manifestly an inspiring, almost brilliant statement. And of course our purpose here today is to discuss collectively how we're going to achieve the goals which are stated so eloquently here.

I'd now like to proceed to introduce Mark Wrighton. This will be a flattering introduction for two reasons. First of all, he's my boss and determines my salary, and secondly, I got an email at about 9:30 this morning from, which had to be email rather than telephone, from George Whitesides, who is one of the afternoon's speakers, who informs us that he has extreme limit laryngitis. In fact, I don't see George in the audience. And so I had a moment of panic, and then I thought, "Now, who's the best extemporaneous speaker that I know, who can talk on any subject, including the daunting task of responding to John McPeg?" Then, of course, I thought of none other than Mark Wrighton, so I picked up the phone at 9:30 and said, "Mark, can you substitute for George Whitesides in the limit that his voice really doesn't work?" And Mark demurred for about 30 seconds, and then he said, "Sure, I'll do it." So, anyway, so we really appreciate Mark for his agreement to step in.

Mark was an undergraduate student at Florida State University and a graduate student at Caltech, came here to MIT as a faculty member at an extraordinarily young age of 22, and by age 28 was already a full professor. He proceeded to become head of the department. Actually, Mark was head of chemistry while I was head of physics. And then, four years ago, Mark moved up into the position of provost. During this meteoric rise in our system, Mark has simultaneously had a truly brilliant research career, in which he's maintained a large and extraordinarily productive research effort in chemistry, and photochemistry in particular, in electrochemistry, has been broadly honored for that, the Lawrence Award. He was, I think, one of the very first, if not the first, scientist officially declared a genius by the MacArthur Foundation, a burden which he perhaps still carries and why we expect so much of him as provost, and then has gone on, besides these scientific contributions, really to provide outstanding leadership for us in academic and, actually, also in financial matters here at MIT. Mark?

WRIGHTON: Thank you very much, Bob. That was relatively generous. Maybe a 2% raise? What do you think?

I'm grateful that so many of you would plan to spend the day with us talking about science in the national interest. And as Bob has indicated, you'll hear more from me a little bit later this afternoon. My role now is to coordinate our opening session, which will involve three speakers, three presenters. And the procedure will be that I'm going to invite each of the presenters to make their remarks, and afterwards, we will have an opportunity to have a debate with them, questions and answers. So I'd like you to hold your questions until the conclusion of all three presentations.

The first speaker is Dr. John H. Gibbons, Jack Gibbons. He is the chief architect of this policy, which Bob has referred to, as President Clinton's advisor on science and technology. Dr. Gibbons, of course, has played a great role in the formulation of the document that some of you will have reviewed. You may have also had an opportunity, as I have had, to quickly review the president's budget request, which was announced yesterday, and I think you can see some strong elements there that suggest that there is strong support toward achieving the goals that have been set out in this policy statement.

Dr. Gibbons in his own right is an internationally recognized scientist. He started his distinguished career after receiving a PhD In physics from Duke University. He joined Oak Ridge National Laboratory, where he spent approximately 15 years working on the structure of atomic nuclei with emphasis on the role of neutron capture. Dr. Gibbons ultimately made most distinguished contributions in his leadership of the Office of Technology Assessment. He spent two six-year terms in that capacity prior to becoming appointed as the presidential science advisor on February 2nd, 1993. Dr. Gibbons is a fellow of the American Physical Society and a fellow of the American Association for the Advancement of Science and has been elected to the National Academy of Engineering. Dr. Gibbons will now tell us about science in the national interest. I will make only one quote from this document. It says, "This country must sustain world leadership in science, mathematics, and engineering if we are to meet the challenges of today and of tomorrow." That summary statement was made by President Clinton on November 23rd, 1993. The nation's chief scientist will now tell us how we are to achieve that world leadership. Dr. Gibbons.

GIBBONS: Thank you, Mark. I was reminded when you rose that my distinguished colleague Marcy Greenwood, who left a deanship post at Cal Davis to join us at OSTP, described university management in somewhat biblical terms. She described the president as a shepherd of the flock and the provost as the crook of his staff. So, I'm not sure that's true, but I thought you ought to hear that, Mark.

And I do want to start out by saying how much I and my associates have appreciated the many contributions that MIT team has played in the work that we've been trying to do at OSTP. Chuck Vest, for example, typically is back in Washington today. I'm not sure whether you add or dock his salary for this public service he's given, but he was absolutely instrumental in the revolution that has now well underway at NASA and the redesign of the space station and its internationalization, and drawing Russia into that orbit very much stems from Chuck. And I recall one night near the end of a marathon work that the committee that Chuck chaired, the last night, Chuck literally, the last closing moment, stayed up 27 hours working steadily. He said he felt like a graduate student again.

And Ernie Moniz, who's, I think, Ernie, are you in the room? Over here in the corner, spent a good deal of time with us in our office and was instrumental in helping shape this document that we are focusing on today. And Ernie, we really appreciate the time you spent with us. I'm not sure how the physics department is faring, but you certainly made enormous contributions. And I'm also pleased that we're having this session here in New England, in Cambridge, today because, of all parts of the country, this is in the very forefront of its dependence and commitment to the pushing of the frontiers of knowledge as a means not only to lift our spirits but also to provide for our future. And here, in a city that is so deeply committed both to research and graduate education, is the perfect place to be to try this, to begin this dialogue.

We are certainly here gathered to, in a sense, celebrate 50 years of extraordinary endurance of the document that Vannevar Bush developed in a very different time of our nation's history. But the underlying message of that report was and remains that fundamental research is essentially an investment, the finest kind of investment, because it both provides knowledge that is ultimately needed to respond to our nation's technological requirements and opportunities, but also to educate innovative scientists and engineers that will drive that engine of economic growth, the technology, and supply the fuel to that growth, to that engine, which is science itself. So I'm particularly pleased to be here at this time. And it gives me a great personal happiness to be here at the site of the university from whence cometh Jim Killian, Jerry Wiesner, and Frank Press as some of my predecessors in the office of advisor to the president.

Bush's insightful and enduring vision brought us to an unmatched capability in terms of research and education, and it of course built on the triumphs of science and technology and the fighting of World War II and came at a time in which we were embarking on a seemingly interminable era of Cold War in which our survival depended on our cunning, our technological ingenuity, in providing the kind of defense that this nation was going to have to provide not only for itself but for the free world. But a host of sea changes occurring at an ever-increasing rate today require us to view science policy from a different vantage point than Bush did in those years. Thanks to his work and those that followed, we no longer have to create a science and technology infrastructure, but rather, we have the necessity to preserve, to enhance, and to extend this extraordinary strength that we now possess that has been created over this past half century. The driver for much of this buildup has been the fearful concern for our national security. And happily, much of that concern now has been at least dissipated, but we are now faced with a much more complex task of marshaling the science and technology enterprise to contribute even more effectively to improving the quality of life for all Americans and laying in place a knowledge heritage for our descendants.

We now face surging international economic competition as other nations are able to harness science and technology and communications and also their highly educated workforces. We face new social challenges such as changing US demographics that stem from income, employment, and immigration patterns, and we face educational challenges both in the reexamination of our education of scientists, engineers, but also in advancing a broader science and math literacy to the level that will be required for literacy and citizenship and economic capabilities in the 21st century.

Now, these changes and other issues, such as the compelling need to control the federal budget, have led us over the past two years to revisit that vision for a national investment in science and technology and to reassess our plans for encouraging a high rate of return on the investment. So today, I'd like to spend a few minutes talking about three things. One, the investment strategy of the Clinton-Gore administration for science and technology, the progress we've been making, we believe, in achieving or at least pursuing those goals, and what we might expect as we proceed.

The administration starting point was a commitment to many of the same general precepts that have been held by successive administrations, both Democratic and Republican over, I would say, a half a century, at least. Our broad investment strategy was put forward in the administration's first months as three coupled goals. First, a long-term economic growth that both creates jobs and protects the environment, a challenge to the old notion that somehow environment and economic growth were antagonistic or at least orthogonally related. We offered the substitute paradigm that if you're smart about the way you do things, you can create both economic growth and environmental protection at the same time.

Secondly, a government that is more productive and more responsive to the needs of its citizens. In a sense, reinventing itself much as American industry has done over the past decade or two. And third, world leadership in science, math, and engineering as a fundamental underpinning to these ideas. And the administration elaborated its perspectives on the role of technology in achieving the first of these goals in the release called "Technology for America's Economic Growth" that we released in San Jose in February 1993. We believe that the government is a vital partner in promoting technologies that are critical to economic growth, the creation of good jobs, and the meeting of common needs of our nation, such as environmental education, but needs that cannot attract adequate private investment because of the inability to capture sufficient returns. In our partnerships with business for precommercial technology development, our cardinal rule is to use government resources only where they are essential and where the payoff to society as a whole is likely to be quite large.

Furthermore, we make sure that the private sector puts up half or more of the resources for these partnerships, a quasi-market test indeed, in order to make sure that the technological risk is worth taking. We undoubtedly will be discussing the structure and the purposes and the successes of these programs led at NIST and at the Department of Defense with the new Congress in the coming months. And I'm pleased that Anita Jones is with us today as we'll get into these matters.

The second goal of the administration was described in the National Performance Review, which came out at first in the fall of 1993. Vice President Gore, I think, as you know, is actively leading that effort to reinvent government from top to bottom for now and for the future, eliminating programs that no longer serve our national purpose, replacing them with invigorated activities that are responsive to both present and future needs and the aspirations of our citizens. Effective utilization of technology is a key and a common thread that runs through these efforts to reinvent ourselves.

The third goal focuses on the foundation of technological development, that is, basic science, math, and engineering. And a year ago, we started that reassessment of science policies by convening a forum at the Academy titled "Science in the National Interest" and following several months of discussion after that forum and many excellent statements made by participants, including the vice president, the president we got together and worked hard and received a lot of input from the private sector, both academia and industry, and created the document which you have before you today. And five basic goals for our stewardship of science in the national interest were put forward: maintaining leadership across the frontiers of scientific knowledge, enhancing connections between fundamental research and national goals, stimulate partnerships that promote investments in fundamental science and engineering, and effective use of physical human and financial resources, producing the finest scientists and engineers for the 21st century, and, finally, raising the scientific literacy of all Americans.

These are highly interconnected goals. As you know, they start with our uncompromising need to work across scientific disciplines and frontiers. It is seldom possible to anticipate which areas of fundamental science are going to bring forth surprising and important breakthroughs, and therefore we can't afford to limit our future by narrowing our range of inquiry.

You know, I recall from graduate school, and I was working in a nuclear structure, and there were still a few students hanging on with James Frank and others on optical spectroscopy, and I thought of them as kind of people that were lost in the sands of time. And lo and behold, look how tables flip when we get to the modern day science. So you just have to be awfully careful when you try to think that you know which is the most important frontier of knowledge to be working in.

We've also recognized explicitly the deep connection between frontier research and education and the need for raising the standards of public literacy in science and technology for our citizens to remain competitive and prosperous in the new global economy. And I'll return to that in a little bit. In a departure from the Bush canon of what has been called a linear model of science, in which it flows unidirectionally, from fundamental science toward technological application, the Clinton-Gore administration's science and technology initiatives are based on a recognition that science and technology are intertwined in a multitude of ways, each building constantly on the gains in the other's domain.

It is certainly true that technological advance ultimately depends on fundamental science and on the highly trained people that are educated at our colleges and universities. But advances in fundamental science are often made possible by technological advances and old distinctions between basic and applied science really, if they ever made sense, no longer makes sense in today's labs. For instance, newly derived fundamental understanding of molecular biology, you'll notice I brought along a restriction enzyme-clipped DNA today, quickly yields ideas for new products and manufacturing processes, which in turn not only raise questions for further fundamental research but also give rise to new technologies that further enable research at the frontier.

Supercomputers, which is obviously an American-led technology that was ultimately made possible by basic research in quantum mechanics and solid state physics and other fundamental areas, have opened up new fields of commerce and science, including new insights into solid state physics. So progress in such fundamental fields as astronomy or subatomic physics depend and often drive technological breakthroughs in optics, computing, or superconductors.

And sometimes applied research itself provides a fundamental breakthrough, as with Arno Penzias and Wilson's discovery of the cosmic microwave background that they found when they were working on improving antennas and radio communications. The fundamental point is that basic science, applied science and technology, though different in approach and motivation and scale, are profoundly interdependent. We therefore need a science and technology policy that factors in and captures these enhanced connections. Sustained support for fundamental science is not at odds with our programs for stimulating precompetitive technology development. On the contrary, a vibrant applied research and development enterprise enriches the conduct of fundamental science. This interdependence calls for new kinds of partnerships so that the fruits of our R&D investments can better serve our nation.

Science in the national interest also emphasize the strong links between basic research and education. Progress toward our goals most importantly depends on our human resource base. Our country needs the best scientists and engineers. Nature yields her secrets to those who are best prepared and persistent in their work. We must draw upon our full human resource, meaning that we have great potential through increased participation of women and underrepresented minorities in the scientific enterprise. We also need to raise substantially overall scientific and technical literacy so that all of our citizens can not only maintain the quality of their life and participate in the great national adventure, but also share in new employment opportunities that arise from advancing science and technology and sustain the national interest in science. Because they, after all, are the benefactors, the purchasers of these kinds of activities.

Our companies, our universities, our government all rely on a well-trained and versatile workforce. While these are some of the challenges that are laid out in the little blue document, they are formidable and will require both the resources of the government and active participation of industry and academia. All of us share responsibilities here, and that's why I'm so pleased to see, in this and further plan meetings across the country, so many of our science and technology leaders from academia, industry, government engaged in this further assessment. Clearly, we're living in times of severe fiscal constraints on our federal budget, trying to bring a deficit down and attempting to ensure at the same time that all Americans are brought along with our improving economy.

Nevertheless, prudent planning requires that our investment strategies be sustained for the long-term health of our economy, our defense, our environment, and our personal health. Thus, we've made a policy commitment in the report. And I quote, "Our investment budget in fundamental science will be improved in the short term as we examine existing resources and to match the growing importance of science as a foundation of modern society increased with future improvements in the federal government's fiscal condition." And, of course, I haven't seen a lot of improvements in our fiscal condition except that we're getting this deficit down, which is a sine qua non for moving toward the future. The essential truths which underlie this commitment that I just quoted are widely endorsed by leading economist Laura Tyson, who chairs the Council of Economic Advisers, has noticed, and I quote, that "the fastest growing economies around the world are those that remain at the forefront of scientific discovery and technological innovation. It is clear that advances in knowledge coming from basic science and science-based technology and moving through to product and process applications are a major determinant of our living standards." End quotes there.

On the basis of many studies, the return to science-based investments is quite high. The average rate of return on investment in the US economy is, if my numbers are right, around 8% to 14%. The average private rate of return on research and development investments runs 20% to 30%. The average social rate of return on investments in R&D is about 50%, although this number varies quite widely. And it ranges from over 100% to perhaps 25%. It depends on the industry and the circumstance. But with rare exception, the social rate of return on fundamental science is exceptionally high and can only be evaluated, however, retrospectively.

Sometimes it takes decades after the work has been carried out for its importance to be recognized. One of the recent Nobel prizes was based on work that was actually carried out over 20 years ago. Therefore, the administration's strategy is to give the highest priority in federal support to areas for which the private sector is likely to significantly underinvest in terms of a national optimum, that is, the social rate of return being substantially higher than the rate of return that can be captured by the individual firm. Industry, though, has a major role to play in science and technology investments. While the federal government supports most of our fundamental research, industry supports a little over half of the nation's total R&D investment. Although many companies have decreased their in-house basic research, many continue to increase their university research funding.

Our challenge is to further stimulate such private investment in basic research as well as to provide the fiscal and regulatory conditions to foster increased applied research and development. It is the only way we might achieve our goal of higher national investment in research and development as a percent of our GDP, which is the most direct measure of our national economic activity, from its present level of investment of about 2 1/2%, including defense-related research to perhaps 3% of GDP, which is closer to the target of some of our most competitive nations in our international trade. And that would mean an increase of 15% from where we began in fiscal year '93. And I think the hopes of achieving that upward movement in the near term is slim unless we develop these new kinds of partnerships and policies that will foster them in the years ahead.

Well, where have we come in two years? Sometimes it seems like 10 years, and sometimes it seems like only a few months. I tell you, we're halfway through a four-year term, and I can hardly believe it at this point. My wife can, but I. But I think we have made a lot of progress. So thanks to the active participation of virtually everybody in this room, if not everyone in this room, and many more besides. Of course, in terms of the administration, the overriding issue that we can never get far away from has to do with the budget and deficit reduction. The president has delivered on his commitments in this regard during this period by cutting our overall federal spending to shrink the projected annual deficit by about half over the five years from 1992 to 1998 and approving plans to reduce the size of federal employment to its lowest level since the Kennedy administration, which is our present target for the end of 1997, and we're on target.

While people have talked about reducing employment in the federal government for years and years and years, we've actually done something about it. We have over 100,000 fewer positions now than we did two years ago it is critical, though, that the budget deficit continue to be brought down, because only then can the capital formation be applied to things other than handling and increased public debt, and therefore hopefully more capital is able to flow into the private sector, it keeps interest rates down, it encourages investment. The president's plan is to further reduce the deficit mostly through spending cuts as a percent of our GDP from about 4%, which is where we started two years ago, to 2.7% of GDP, which would be the outcome of our proposed '96 budget, and on down to about 2.1% of GDP by 1997.

Discretionary funding will be highly strained under those conditions, even for science, until the deficit spending monster is tamed. And we would now have a balanced budget, I would remind you, if it weren't for the devastating mortgaging of our future that was undertaken during the '80s. The interest payments on the increase of our debt during the '80s is now equal to about $200 billion a year, which is our present deficit, annual deficit. And this is a terribly important lesson, I think, to all of us.

On the other hand, if those borrowings that we made had been applied as true investments in our future, education, research, infrastructure that leads to higher productivity rather than in consumption, we might be a lot better off, then, today. In other words, borrowing itself is not bad. It depends on what you borrow for. As a homemaker, I think we all understand this, and as university presidents, I think we understand this, but somehow we need to recapture the notion of why it is we're trying to reduce our deficit. It's a means to some ends, and we keep thinking about the means more, perhaps, than we're thinking about the ends.

In the '96 budget, the president targets about half of the savings to a reduction in income tax for middle Americans where the income tax is not across the board but is targeted toward encouragement of investments on the part of the individuals, investments in savings, in a first home, and an education for their children. The other half of the savings goes to deficit reduction.

Now, while taking these disciplined fiscal steps, the federal investment in basic research will be maintained as a national priority, a fundamental national investment priority, and I would hope that our recovering economy further will provide for even more stimulation for R&D in the private sector. But in order to confront the budgetary scientific and technological challenges of the 21st century, the administration recognized that significant changes were going to be needed in the way we plan and carry out federal R&D. The traditional single-agency, single-discipline approach to problem solving must be supplanted by some better way, by a coordinated multiagency, interdisciplinary approach, as it were, a virtual agency within the federal family. So at the end of November '93, the president established the National Science and Technology Council, which he chairs, and members of the council are the cabinet secretaries and heads of agencies concerned with science and technology. And at the same time, he reestablished as the president's Committee of Advisors on Science and Technology. I would note that three of the, about, I think, 17 members of that committee happened to come from MIT: Chuck Vest, Mario Molina, and Phil Sharp, and that committee helps provide an external oversight to the processes we're working on in the Science and Technology Council. The purpose of the council is to identify national goals that require concerted R&D investments, to identify the high-priority research needed to meet those goals, and to coordinate R&D government-wide to make sure that adequate attention is given to high-priority areas and to avoid unnecessary duplication. Although each agency, to accomplish its missions, must have R&D directed toward those particular needs, there are many commonalities in the science and technology needs of all of the agencies.

To meet the nation's goals in the years ahead and to continue meeting them as the goals themselves evolve requires that we set broad priorities for research and development now, with a far-sighted vision of the future, because most of the S&T enterprise is inherently a multi-decade process. It's out of sync with the so-called political time constants of change. The NSTC provides the mechanism for providing that vision and deriving priorities, which in turn affect the way budgets are put together and decisions are made. By creating this virtual organization, we enable the administration to maintain a productive research and development activity in each of the science and technology-dependent agencies while simultaneously achieving the efficiencies that we must gain through a cross-linked system.

I think it demonstrated some of its utility, however, being only a year old, by assisting in developing a healthy budget proposal for science in F1 '96. There are some other things that the council has done, but we can talk about those later. The budget request that was released yesterday by the president reflects our continued commitment to science, even as we made many exceedingly difficult priorities, decisions during the last six months or so. Our efforts to sustain the investment in fundamental science were greatly assisted, I would say, with pride, not only by the active participation of senior officials of the executive agencies but also with the strong support of the president and vice president, the Office of Management and Budget, and the President's Council of Economic Advisors.

In summary, let me give you just a few points about the budget. First, it is a strong commitment to fundamental science as a priority national investment. Second, basic research shows the largest percentage increase in the budgets for science and technology. Third, academic research is proposed to receive an increase of 7%, more than twice the rate of inflation, while at the same time, the discretionary budget is actually falling. So we're playing a negative-sum game overall, slightly negative, and yet at the same time, this kind of support of science is evident. And it's being therefore done by eating other things in the overall budget. A few specific items: funding for NSF research would increase about 8%. An administration initiative to increase substantially the operation of the DLE user facilities would have a unique forefront, research tools, and serve thousands of university and industrial scientists. This is to receive $100 million appropriation, which will help fund the researchers. There's a very large backlog of researchers and highly meritorious research available, and it will also help pay for some of the magnet costs, the electricity costs of some of these facilities, which have a large embedded capital investment but are grossly underutilized. Some of these facilities are being presently utilized at only about a 50% to 60% utilization rate, and we feel this is an extremely high leverage investment. The budget for NIH would increase 4%, slightly above inflation, and NASA and DOD would maintain their basic science programs even in the face of very substantial overall budget reductions, which wasn't an easy thing to do.

Beyond the very important budgetary initiatives across the frontiers of basic research, we also have the goals of enhancing our connections to national goals and to stimulate new partnerships. A key aspect of this and a major focus of this meeting today is the nurturing of areas of basic science and engineering, which pretty clearly are needed as foundations for our 21st century industrial enterprises. We're working hard to establish better mechanisms for industrial input to the federal basic research portfolio. Indeed, Neil Lane and I met last week with a group of industrial leaders in research, two of whom I think share the program today. Neil and I greatly profited from that dialogue as well as another meeting with Ron Brown and leaders from the biotechnology industry community.

There is a clear consensus among these leaders that span a broad range of technologies. For instance, things that came up most frequently were computers and communications, imaging, chemicals, biotechnology, and some other areas that are seen as long-term priority areas of research, in terms of our future industrial needs and interests. We heard about significant structural change in the various industries that we talked to. For example, one company now has an average age of products in their business line of about 14 months, which is a reality which clearly shapes corporate planning in R&D and other areas. And the twin pressure of foreshortening product life cycles, which cause, as one CEO said, the company to lower its headlights in terms of its long-range planning, exacerbated by increasingly tight margins due to international competition, inherently draws the focus of industrial planning to their shorter-term futures. And that, against, gives one a notion that we're about to reenter this time of problems in which industrial interests become short-term and public interest moves back closer to the bench, and fundamental science, in what's been called "the Valley of Death" opens up again between, in which good ideas fall through and end up popping up somewhere else in the world, in someone else's economy.

We've heard about the desirability for broadening graduate education, of getting more technical talent into upper management. We heard about the pressing needs to resolve intellectual property issues in the global economy and about specific areas of basic research, which hold greatest promise. For example, a computer-assisted molecular modeling and drug design hold in store very large productivity gain opportunities. But most of all, we heard a clear signal through the discussions that this group viewed federal government's most important responsibilities in science and technology to be sustained and preferably improved funding of broad-based fundamental research and its associated graduate training.

The foundation of these companies rests in basic research, as does their long-term strength. The private sector has the admirable trait of a clear focus on priorities. In the long term, high margins require breakthrough technologies, which in turn are often rooted in discipline-based frontier research. Our industrial colleagues are also launching new partnerships with academia as well as with government. We heard about a successful venture in which competing companies have joined together in support of and participation in a joint on-campus basic research program, with students working in both the campus and the industrial laboratories as suited to the work.

It's clear that dynamic new partnership models will emerge from the resourcefulness of industrial and academic scientists with the resources of government available to leverage suitable partnerships, and we look to you for leadership and advice in this area, and I hope we'll hear about some of it today. As a next step, we agreed last week to have a group of industrial research leaders, similar to the group we met with last week, talk to the multiagency committee on fundamental science of the NSTC, which is co-chaired by Neil Lane, Harold Varmus, and Marcy Greenwood, who is here with me today. Marcy is associate director of OSTP for science.

This kind of dialogue, we believe, will help shape the federal portfolio even more across the participating agencies. And I would remind you, as my wife does for me in times of frustration, that by the time she cleans up the dishes from one dinner there's another one on the way, that our F1 '97 budget cycle basically begins in the immediate future. It's enough to make a grown person cry.

As part of the administration's response to these changing times, reviews of the appropriate role and scale of the nation's national laboratories, especially of the Department of Energy, NASA, and Defense, was initiated last spring. And in parallel, EPA is undergoing a similar detailed examination of its laboratories. The first of these studies was delivered just a week ago, when Bob Galvin's committee reported its finding on the DOE National Laboratories to the department. Their recommendations for the future of the Department of Energy Laboratories, I think, is a valuable contribution to help set the nation's scientific agenda. And I think there were four MIT professors on that committee, so it's bound to be pretty good, right?

While a report has much to say about governance and oversights of these labs, it's noteworthy that the national importance of both the basic research done at the labs and the large user facilities that they operate were stressed. That is, not stressed in terms of physical things, but were stressed in terms of being emphasized in the report. And it further emphasized that the department needs to better integrate its research activities into those of the national and international communities and to focus their research activities in areas at the heart of DOE's missions, such as energy, environmental protection, and environmental remediation.

All of these studies are a part, in a sense, of reinventing ourselves, of reinventing the way we go about doing our business in government. Not only how to generate internal sources of funds, which is what you have to do when you play a zero-sum game, but also how to refocus our lives and the way we approach our businesses. We've given particular emphasis in the first two years of this administration to a human resources development strategy that's aimed at producing the cadre of experts that are necessary for the future, for research and development, for applied fields and industries, and for competing in the global marketplace. As universities and industries are reevaluating the breadth and the nature of graduate training, recognizing that we're not training our scientists merely to work in labs and universities but for a variety of future kinds of occupations, federal agencies are assessing how they might provide supportive incentives to this kind of rethinking.

We're also projecting the workforce needs of our future economy and developing methods for fostering the basic skills required for all workers, skills and quantification, and particularly skills that are broad and enable people to be the kind of versatile workers that they're going, and lifelong learners that will be absolutely requisite as an economic citizen in the next century. And in fact we're developing plans now for a national forum on science education that we hope you'll be interested in helping us with.