Universities, the US High Tech Advantage, and the Process of Globalization

Universities, the US High Tech Advantage, and the Process of Globalization by John Aubrey Douglass. CSHE.8.2008 (May 2008)

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Research universities throughout the world are part of a larger effort by nation-states to bolster science and technological innovation and compete economically. The US remains highly competitive as a source of High Tech (HT) innovation because of a number of market positions, many the result of long term investments in institutions such as research universities and in R&D funding, and more broadly influenced by a political culture that has tended to support entrepreneurs and risk taking. In essence, the US was the first mover in pursuing the nexus of science and economic policy. The following essay places universities within this larger political and policy environment by discussing market factors that have influenced knowledge accumulation and HT innovation in the US, their current saliency in the face of globalization, and the growing market position of competitors, such as the EU. The paper also provides observations on major US state-based HT initiatives intended to create or sustain Knowledge Based Economic Areas (KBEA’s). Thirteen variables are used to assess the overall comparative ability for creating KBEA’s, including the vitality of regional and national research universities, patterns of R&D investment, access to venture capital, intellectual property laws, educational attainment levels of the workforce, access and retention of global labor force, and political interest and forms of government support for promoting science and technology.

Among the papers conclusions: There is a large disconnect in US policy related to promoting KBEA’s and national competitiveness. Few policymakers, or even the higher education community are aware of stagnant and, in some states, real declines in higher education access and graduation rates relative to economic competitors, that the US is no longer a net importer of high tech goods, or that the US is no longer the number one destination for international students. Combined with global changes in the market for S&T talent, and the significant and increasingly successful effort of competitors to increase the educational attainment of their population, the US’s HT advantage is eroding – although there remain a number of strengths, chiefly related to an entrepreneurial culture, more conducive tax advantages for business, a cadre of elite research universities, and the highest concentration of venture capital in the world. But even here, these advantages may wane over the next decade as the world becomes more economically, and educationally, competitive. The US generally lacks a broadly conceived strategy for retaining America’s high tech advantage.