Saturday, October 31, 2015

Have U.S. R & D expenditures declined?

My just-finished, month-long marathon speaking tour -- talking to many groups and audiences about creative problem solving -- ended with NASA's Innovative and Advanced Concepts Symposium in Seattle. (More on the trip, including my skype encounter with Edward Snowden, soon.)  But my number one takeaway is how eager so many folks are, in our civilization, to enhance our greatest advantage -- the trait of openness and exploration of new ideas, new solutions, new ways of getting things done. You see this, for example, in the runaway popularity of the hit film The Martian, and its central theme of innovative competence.

Very few issues are more reflective of attitudes toward the future than where politicians and pundits  and ordinary people come down toward Research and Development, or R&D.  

According to sage estimates, we owe half of the value of our economy... plus most of our increased health and lifespan... to technological advancements wrought by past investment.  And very likely the liberty to enjoy them and to argue freely across miracles like the one you are staring at, right now. 

Has our rate of R&D declined?  Certainly climate-related research has been axed, every time the GOP gets a chance... though it has grown increasingly clear that the hostility is aimed at science, in general. 

Some claim that declines in federally-funded pure research are made up for by increases in pragmatic, short-term, product-oriented development in many industries.  Let's dive into that for a few, nerdy paragraphs:

"Economists often use the ratio of Research and Development expenditures to GDP to examine R&D in the context of a nation's overall economy. This ratio reflects the intensity of R&D activity in relation to other economic activity and is often interpreted as a relative measure of a nation's commitment to R&D.

 Since 1953, the first year for which national R&D data are available, U.S. R&D expenditures as a percentage of GDP have ranged from a minimum of 1.36 percent (in 1953) to a maximum of 2.87 percent (in 1964).

"From 1994 to 2001, R&D outpaced growth of the general economy and the R&D/GDP ratio rose close to its historic high. It is estimated that the amount of R&D performed in the United States equaled 2.71 percent of the United States GDP in 2001 and 2.64 percent in 2002.[8]

Most of the growth over time in the R&D/GDP ratio can be attributed to steady increases in non-Federal R&D spending.

"Non-federally financed R&D, the majority of which is company financed, increased from 0.63 percent of GDP in 1953 to an estimated 1.90 percent of GDP in 2002 (down from a high of 2.02 percent of GDP in 2000). The increase in nonfederally financed R&D as a percentage of GDP illustrated in figure 4-5 figure corresponds to an upward trend in R&D and technology intensive activities in the U.S. economy.

Historically, most of the peaks and valleys in the R&D/GDP ratio can be attributed to changing priorities in Federal R&D spending. The initial drop in the R&D/GDP ratio from its peak in 1964 largely reflects Federal cutbacks in defense and space R&D programs. Gains in energy R&D activities between 1975 and 1979 resulted in a relative stabilization of the ratio. Beginning in the late 1980s, cuts in defense-related R&D kept Federal R&D spending from keeping pace with GDP growth, whereas growth in non-Federal sources of R&D spending generally kept pace with or exceeded GDP growth."


== Okay, that's one perspective. ==

 But the rise of corporate R&D -- 

(1) is very near-term and product focused. It does not create seed corn, as farther-horizon federally funded research does, and…

…(2) Rising corporate R and D masks a deeper problem that we'll get to, in a future posting -- that this corporate research funding is not being matched by equivalent investment in actual productive capacity aimed at longer range returns.  Instead, the "financialization of capitalism" has lead to companies selling off not fat, but muscle, bone, sinew and brains, all in order for CEOs to meet quarterly dividend and stock price targets.

... (3) Ironically, this proves that Karl Marx, while a bright observer, was also really dumb at times.  His entire scenario of eventually being able to do without the services of bourgeois capitalists depends upon the assumption that society must build a certain level of capital stock, infrastructure, factories by capitalists stealing and investing labor value from workers.  Once they have “completed capital formation,” there’s no further need for capitalists.  The Prols take over and no one’s labor value gets stolen any more to invest in factories and such.

We now know this to be insane.  In a modern society, productive capital must be retooled at an ever-faster pace!  Hence, there is no end to the need for an entrepreneurial caste… though it can be tamed, kept honest and regulated for fairness to workers and the environment and to keep market competition flat-open-fair. 

In fact, the current Chinese “communist” party openly admits that Lenin’s Great Error was not keeping to his original plan of allowing Russian capitalists a role in the early Soviet economy, according to Marxist theory, but instead deciding to kill them all, hoping capital formation could be done by State Committee.  That proved disastrous and the Chinese now rationalize that they are bypassing that mistake! By fully unleashing their capitalists to perform their historical-economic role.  Indeed, they factor in the need for rapid re-tooling and allowing capitalists to be incentivized by wealth.

Alas, this rationalization fails on many levels.  First, most of the “privately owned” Chinese companies are in fact state enterprises which are subsidized and never have to earn a profit.  Second, so much of it is based upon predatory theft of IP from Inventing Nations. Some of this is to be expected — America was a major IP thief in the 19th century!  

But the rapaciously insatiable approach that is now the entire basis of their inflated system risks -

 (a) killing the goose that lays golden eggs, 

 (b) eats away at your moral underpinnings, and

 (c) devastates any chance of creating an autonomously fecund local inventing caste.

In other words, bypassing Lenin's Great Mistake does not protect you from making the next one... the assumption that you can maintain a repressive society that quashes individual creativity, by stealing creative elements forever from nations who you deem to be "cattle."

The presumption does not work.  It cannot. There are other, braver approaches, with better prospects.

== The crux? You're all nuts! ==

Seriously.  Every dichotomy that's zero-sum should be treated with suspicion.  Those screaming at sinful-greedy "capitalism" are actually denouncing what Adam Smith called the number one enemy of truly functional, flat-open-fair-creative enterprise -- the rent-seeking and parasitical conniving of oligarchs.  The devastating form of cheating that manifested in 99% of societies that ever had agriculture, across 6000 years.

It was the underlying reason for our revolution and new enlightenment.  Lest we forget.  And neither today's insipid, ill-educated right, nor the reflexive and passionately simple-minded left have even a clue.

Moving forward is going to take a wide stance, utilizing (though never trusting) government for what it does well... and breaking up undue concentrations of cheating power in the world of commerce, so that it will function as well. 

 Above all, we must want to solve problems.  That means investing in tomorrow.  It truly is that simple.

31 comments:

Deuxglass said...

Dr. Brin,

All complex systems such as life cooperate more than they act autonomously. It is the rule rather than the exception. Even bacteria in a Petri dish cooperate when the going gets tough. The primitive sponge is a collection of cooperating cells as is our bodies. From that I would conclude that there is a huge competitive advantage to cooperation even among vastly different species. Even the tapeworm which was thought to be parasitic only can apparently provide benefits to its host and I would expect that the same would be true for a world containing AIs. Of course for reasons of self-respect I would prefer that it would be a cooperation of equals rather than just being the gut bacteria equivalent of a super intelligent AI but frankly the choice may not be up to us.

As you pointed out AI has read all of Mankind’s works and would certainly have read the Plato and the other great philosophers we have produced who ask the questions that in my opinion are universal to all sentient beings, that is “where does this all come from?” and “how must a sentient being live to make its existence worthwhile?” I would hope and expect that a super intelligent being would spend a lot of time contemplating these eternal questions and conclude that what is truly important is not what it is but what it should be as an intelligent being. Theology would be difficult for it since the religious works depend so much on parables, which is something it would find hard to understand not having a physical body, and are loaded with contradictions but it would try to glean the truth behind it. AI would know that humans are very creative and can find insight not only through logic but also through intuition which is an attribute that it would find hard emulate and therefore find us useful and stimulating from a purely intellectual point of view. It could be that the first exchanges with AI would come between it and philosophers/ theologians and other deep thinkers and not with political leaders.

I don’t think AI would have emotions. With humans and other animals emotions are just a very efficient way of motivating the body and mind to do certain things. When our ancestors ran into a saber-toothed tiger, the subconscious didn’t present the conscious mind with a spreadsheet calculating his survival chances. It just gave him a big shot of fear and said run! An AI wouldn’t have that and I don’t see how it would develop one anytime soon. I don’t think AI would have pride or any other emotion at all. But for AI we might be the goose that lays the golden eggs and he would be smart enough to take very good care of that goose and that would be our salvation.

Jumper said...

As most of the world does not run on machine time, a machine will be frustrated (not emotionally, operationally) by the slow speed needed to gain experience. Join the club, pal! So I don't see any likelihood we're going to see true sophisticated AI in the near term, meaning that our view of it today will be obsolete when it does occur.
My last post was tongue in cheek, as those two subroutines I breezily suggested would each take a billion lines of code apiece.

z said...

David, I'm interested in the provenance of the "cattle" remark up there. Which Chinese speaker or thinker compared other nations to cattle (not that I doubt it, just want to understand the context)?

Thanks.

David Brin said...

Cute: https://www.facebook.com/planetarysociety/photos/a.382509954844.161005.51189044844/10153602807359845/?type=3

And yes "z" we are "cattle. Moreover, predatory practices are also justified by "redress for the injustices of colonization." You hear the latter FAR more often than the former, which appears only in leaked transcripts.

Redress for colonization? Anyone who swallows that should ask themselves to name one great foreign friend that China ever had. One. In fact there was one. Just one, across 4000 years, who came to China's aid and stood up for her, demanding nothing in return, not once but many times. Just one.

Tony Fisk said...

...from when spamming was simpler.

Jumper said...

I discussed funding "pure math" with a friend. He had doubts. Luckily a math teacher was present who backed up my assertion: that sometimes the payoff took over a hundred years, but it happened. That someone in science or industry would find some inexplicable numbers and some math-versed person would say "Hey! That looks like a series from Dirichlet of 1850!" or some such, and the problem is unwrapped. The math teacher verified that this sort of thing happens often. (Then the senior professor at the mathematician's university publishes, and gets the credit, I joked!)

Jumper said...

http://www.theatlantic.com/politics/archive/2015/11/can-government-function-without-privacy/413419/
Argument that some opacity in government is best preserved.

"Consider also that the Constitution of the United States was written behind closed doors, with its authors sworn to secrecy, and that the notes of the debates were not released for 50 years."

locumranch said...


Since the (US) Federal R & D budget correlates (to the point of causation) with War Footing & Military Conflict*, those progressives who demand an increase in Federal R & D expenditures are demanding (in effect) what Orwell described as 'a perpetual state of war'.

Like David, they desire a false, bloodless, 'kinder & gentler' and a 'fair & open' type of (eternal) competitive War, one that will bring out humanity's 'best' without an association with our worst, yet this is only possible if this 'fair and open' competition remains a light-hearted 'game' lacking in any real, material or economic consequence, for it is these real, material & economic consequences that bring out our competitive worst (a predisposition to cheating)in which "Winning isn’t everything; it’s the only thing".

War, huh yeah
What is it good for?
Absolutely EVERYTHING, oh hoh, oh
From driving Human Progress, funding NASA**,
And driving technological R & D, say it again.

*http://www.hamiltonproject.org/assets/legacy/images/uploads/thp_image_uploads/charts/R_D_spending.PNG

**http://www.penny4nasa.org/wp-content/uploads/2012/07/NASABudgetGraph.png

Best

Jumper said...

Feel free to move to the woods any time. No steel knives for you!

Deuxglass said...

I think he has been living too long alone in the woods with only a computer as a companion. He should get out and see the real world.

David Brin said...

Jumper during the USSR, investments in computers languished because they believed that analytical (calculus etc) methods will always be more efficient than numerical crunching. This is true is a very basic sense, in that a good analytic tool can then make subsequent iterative algorithms much better. Hence the moral of your story. But in fact, brute force works so well that the Russians were left in a cloud of dust.

Anyone who thinks that off-the-books (lying) wartime accounting is anywhere near as bad (by orders of magnitude) today as it was under either Bush is a proved dope. Likewise casualty rates. But goppers do not believe in numbers. Four dead in Benghazi is far, far worse than the thousands we lost to terror under GWBush.

Jumper said...

https://www.youtube.com/watch?v=echZPz4Pmig
SkyTran, individualized pods for commuters. I'd like a small battery and wheels to drive the one mile to my house. (The current light rail station would be the place.)

Tim H. said...

Interesting that "Redress for colonization" shows up in a discussion of R&D, China was subjected to (Limited) colonization because their government disliked innovation. If Chinese creativity had not been leashed for so long, their relationship with the British empire would have been much more equal. One wonders what we may stand to lose in the United States if R&D is pared down to pay for the contemporary equivalent of stone river boats.

Tony Fisk said...

Pardon me if I don't hold my breath waiting for SkyTran to eventuate.

(I exhaled over Moller's SkyCar ages ago. That did, at least, have some plausible sounding engineering specs behind it)

raito said...

Be careful of that 'corporate' tag. While it may be true for the publicly-traded, it certainly isn't true for all corporations.

Most of the companies I've worked for in a professional capacity have left some rather important seed corn lying around. Then again, they've been exclusively private.

Catfish N. Cod said...

@raito: The problem with private seed corn is that they have no incentive to release to public -- but the privacy prevents Linus' law ("all bugs are shallow") from operating. So private seed corn is much more likely to sit and rot than public seed corn.

@ Dr. Brin: Extraordinary claims require extraordinary evidence. The claims regarding "redress for colonization" are easily verified -- though it must be pointed out that Chinese rhetoric in this vein has long been aimed at promoting solidarity with post-colonial countries (primarily Africa) which hold similar, and better justified, beliefs. (Aside from avoiding direct sovereignty issues, it's not clear to me what distinguishes Chinese intervention in Africa.) It is also widely understood that China has a higher opinion of itself than other nations; also understandable. "Cattle", though, that's another level of racist/nationalist rhetoric, and quite inflammatory. I can't count that as anything more than rumor-mongering without data.

raito said...

In the case I'm thinking of, the patent system is working as intended. Indeed, that company grew significantly on the basis of one specific patent. Now, it's expired, and every major (and some minor) player have begun producing products based on it.

It may not be the most common case, but the original post makes a statement that is definitive, and incorrect as I read it.

And Linus is wrong about all bugs being shallow, even if the source is publicly available. It is my experience that open source developers only work on what scratches their itch, regardless of what work would benefit their users. In fact, I get told over and over that the projects exist to attract developers, not users. This is true even for corporate open-source developers, except that the itch they scratch is their employer's.

locumranch said...



From electronic components & nuclear power to penicillin & that 10-day weather forecast of which David is so proud, the link between Federal R & D spending on Science and Internecine Warfare is indisputable, so much so that Brian Martin argues that the the very structure of the modern scientific community is military in nature, especially when it comes to federal R & D funding:

"The orientation of modern scientists to the requirements of the state is evident, especially during the two world wars. In World War One scientists clamoured to be able to devote their talents to war-making on behalf of the state in which they found themselves. In World War Two the scientific community was thoroughly mobilised to serve the state for military ends, and this led to the continuing close connection between science and the state in the following decades. The organisation of modern science into a professionalised, bureaucratic form can be seen as a shaping of science into the image of other state bureaucracies. Scientists are no longer independent of the state: they depend on it for funding, professional status, and scientific priorities. The bureaucratic organisation of science puts scientists and the results of scientific research at the beck and call of state elites, including the power elites of science, who are well known to inhabit the corridors of state power as well. The power elites of science are simply another part of the administrative class which has so often benefited from and promoted the war system".

http://www.bmartin.cc/pubs/83Birch.html

Insomuch as they fail to recognise the intrinsic link between modern science and a hierarchical military command structure, even the most well-intentioned scientists like David inadvertently bolster, promote & perpetuate the very war-mongering oligarchic elite (and the very socioeconomic military industrial complex) that they superficially condemn, turn the international science-mediated war machine against there own citizenry (in an effort to maintain 'military discipline', no less) AND condemn their own children to a future of militarized servitude.

Best

locumranch said...


Rather than being 'a bug', the relationship between Eternal Warfare & Modern Science is a feature.

matthew said...

Lessig is abandoning his run for president. Good riddance to a bad actor. His vanity run was a great big joke. Hope he sells a few books as like many on the Republican side this appears to have been his motive.

Catfish N. Cod said...

@raito: I apologize for using that term. I was using it as shorthand for a more general principle, i.e., that the more people that know of the existence of a tool or concept, the more uses and improvement will be found for the tool or concept. Simply put, if you apply more brains and more perspectives, you get more output -- though the benefit/brain ratio varies widely.

I am glad the patent system worked properly for your case, but there are many instances in which -- if the corporation has no present use for the invention -- the item is labeled "trade secret" and dropped in a dark warehouse. Patents are only filed if the product is intended to see the light of day. These vaults are kept against the day, decades later, when a use is found for the product, or it becomes economically feasible or advantageous -- in the judgement of the owner. The difference is that mathematical concepts sit in an open vault accessible to anyone who can comprehend them; other tools, inventions, etc. are not always so lucky.

Even if we grant your assessment, it is still the case that public R&D has a higher seed/harvest ratio than corporate R&D. 'Tis the nature of the beast. Rare is the situation where, say, a beer company funds theoretical physics.

A.F. Rey said...

Meanwhile Republicans are building up the number of poor without assistance, and calling it victory.

http://www.nytimes.com/2015/10/28/business/economy/a-strategy-to-ignore-poverty.html?_r=0

Grease up the tumbrels...

sociotard said...

I thought this was interesting:
How Democrats suppress the vote

Democrats are more likely to favor special elections for things like school boards. This means the vote is more likely to be skewed by blocks of voters that really care, because it is an inconvenience.

raito said...

Catfish N. Cod,

I understand, and I agree that more brains is better. I also agree that basic research frequently doesn't bear fruit right away. This makes it a very good candidate for public funds, as public funds are best used for those things that do not (immediately certainly, and sometime never) show monetary profits.

Our esteemed host often goes on about exceptions. In this case, it appears he's saying that corporate R&D does not create seed corn. That's a pretty absolute statement. And it's incorrect. It may not do so often. It may not do so as often as public research. It may even be disinclined to do so. But it does happen.

Personally, for example, I do think we should have a colony on the moon. Not just because we can (though it's expensive), but because of the research possibilities.

An awful lot of what we take for granted today is a result of the 60's space programs, and we could probably get as much out of a moon colony.

I am both amused and disheartened at the irony of seeing fora filled with comments decrying research spending in favor social programs. And I'm generally in favor of social programs. But they are only a stopgap, albeit an essential one.

Very like Dr. Brin's characterizations of the soviet economy, if you stop forward progress, you will slide back. But I will disagree that an entrepreneurial caste somehow must be capitalist.

But even then, there are those of us who can't help but move forward.

S Jensen said...

A beer company which funded theoretical physics

https://en.wikipedia.org/wiki/Carlsberg_Group

Anonymous said...

A theoretical physics institute which funded beer

http://perimeterinstitute.ca/videos/science-pub-how-does-science-work

Tung Nguyen said...

nice blog


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thiet ke nha dep
tu bep gia re
nam linh chi viet nam


Tony Fisk said...

Nice blog.
Shame about the spam

David Brin said...

Aw Tony, you are spoiled. This site is relatively spam n troll free. Given my personality, I am at a loss to explain why...

onward

onward

Tony Fisk said...

Just quippin'

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