Research Spurs and Aids Innovation and Governments Are Vital: We Need More Science & Technology, Not Less

     As Matt Ridley pointed out in his 2020 book, How Innovation Works, And Why It Flourishes in Freedom, free markets and the profit motive are often the main framework and motivation, respectively, for innovations. Indeed, as the following graph utilizing data from the National Science Foundation (NSF) shows, in 2022 78% of U.S. R&D was performed by the business sector. 

     However, the beginnings of new technologies often involve industry, academia, and government partnerships, academic papers, and engineered projects from lab scale to pilot scale. This is especially true for immature technologies further away from commercialization that need more R&D money for de-risking. As the graph below from Bloomberg shows, the U.S. leads the world in research spending relative to GDP, a metric known as R&D intensity, followed distantly by China. However, China has gained ground in recent years, narrowing the gap.

     The National Science Foundation’s Science and Engineering Indicators page has some great graphic information and data on U.S. R&D by year, by sector, by country, etc. Several graphs and tables are below. The third graph below shows that the federal government is often involved in the basic and applied research phases and the business sector especially dominates development spending, as would be expected. That model has worked for the U.S. for many years as new technologies continue to be commercialized.  

     As the current administration seeks to make government smaller, there have been mass firings, hiring freezes, funding freezes, and layoffs that have shaken up the science world. Many local and state governments, academic institutions, and contractors are dependent on federal government funding and contracts. May of those people are losing jobs and contracts as well. Farmers and businesses are waiting for the federal money they are owed as many of them have already paid for their part of jointly funded projects. It is chaotic. I went to a job interview a month ago and was told that the job start date is pending when the funding freeze ends and that the job may not be available at all. This was for a county-level position. Fiona Harrison, the chair of Caltech’s division of physics, mathematics and astronomy, noted:

 “The situation is jeopardizing our Nation’s ability to stay at the forefront of science and engineering by reducing or eliminating a generation of young technical talent.”

     Bloomberg notes that many of our best academic research universities are freezing hiring and laying off people due to federal government cuts.

“Harvard, Stanford University, the University of Pennsylvania and the Massachusetts Institute of Technology have all recently announced hiring freezes. Meanwhile, Johns Hopkins University is cutting almost 2,000 positions globally and about 250 in the US following the termination of more than $800 million in US Agency for International Development grants. The university is the top recipient of research funding and NIH money.”

Other universities have reported that offers to graduate students have been rescinded and admissions will be limited in the future as a result of the cuts. Bloomberg also noted:

“The Federal Bank of Dallas estimates that the rate of return for non-defense government research and development over the past 80 years ranges between 150% and 300%, suggesting that this federal funding effectively pays for itself over time.”

“As uncertainty grips US research institutions, other countries are trying to poach American talent. At least one French university is pitching itself as a “safe place for science.” China, too, has been ramping up recruitment.”

“We are already seeing China advertise for fired scientists to move and work there,” says California Representative Zoe Lofgren, the ranking Democrat on the House Committee on Science, Space and Technology, in an emailed statement.

“We would be utterly foolish if we decided to give up the preeminence that we have had in scientific research,” says Shirley Tilghman, a former Princeton University president and molecular biologist.

     The Trump EPA plans to axe over 1000 jobs at the EPA's Office of Research and Development (ORD). According to an article in Tag24 News:

"About 1,155 chemists, biologists, toxicologists, and other scientists will lose their jobs, about 75% of the office's workforce, as the ORD is dissolved. The remaining staff will be bled off into different parts of the EPA."

      It seems that no agencies that are composed of scientists and engineers have been unaffected by the cuts. The White House has apparently justified the cuts in some strange ways while also vowing to restore American science and technology leadership. Particularly chilling in my opinion are the following accusations.

“The pursuit of scientific truth is under threat from ideological agendas that prioritize group identity over individual merit, enforce conformity at the expense of innovative ideas, and inject politics into the heart of the scientific method.”

“These threats have not only distorted truth, but have eroded public trust, undermined the integrity of research, stifled innovation, and weakened America’s competitive edge.”

I do not think this is true regarding scientific research. I think it a dangerous assumption and is an example of “anti-woke” overreach.

     Emily Bass wrote an article in Breakthrough Journal about the importance of agricultural research and innovation. She notes the effects of the job cuts on the USDA programs, many of which are collaborative with farmers. Many programs have been affected. She notes:

“Over a matter of weeks, USAID was systematically dismantled but in a final blow, the Trump administration shuttered 21 USAID-funded Feed the Future Innovation Labs. These labs were co-located at land grant institutions, like Kansas State University, University of Illinois, and Michigan State University, and were tasked with conducting specialized research on agricultural challenges that disrupt the global food supply, including food safety, post-harvest losses, and pest and disease management.”

Lost time is a factor as well since agriculture is seasonal. Funding declines for ag research in the past have correlated with lower food yields. In conclusion she asks some important questions:

“The long-term consequences of funding and staffing cuts are clear. When agricultural research funding dries up, farmers lose access to innovations that improve yields, resilience, and profitability. Universities may be able to mitigate some of the impact by finding new private or philanthropic funding sources if federal grants stay frozen. But, the White House and USDA’s actions in the coming weeks will be consequential for the U.S. research enterprise: Will they take an inconsistent approach to U.S.-led innovation that leaves agriculture behind, allowing vital research institutions to wither? Or will they strengthen these institutions, and U.S. agricultural competitiveness in the process?”

     While Matt Ridely emphasized the importance of free markets and the profit motive for innovation, the importance of the utilitarian motive for the betterment of society should not be underestimated. Innovation simply means doing things better. Innovation is how technology improves lives. Well-placed R&D dollars have yielded great dividends. Ridley noted that the long-term impacts of innovation are often underestimated.

 

References:

 

Can ‘America First’ Succeed if We Abandon Agricultural Innovation? Funding Freezes, Budget Cuts, and Research Workforce Reductions Will Undermine U.S. Emily Bass. The Breakthrough Journal. March 12, 2025. Can ‘America First’ Succeed if We Abandon Agricultural Innovation?

How Innovation Works: And Why It Flourishes in Freedom. Matt Ridley. Harper Collins, 2020.

Trump’s Science Cuts Have Thrown the Research World Into Chaos. Zahra Hirji, Jessica Nix, Lauren Rosenthal and Janet Lorin. Bloomberg. March 14, 2025. Trump’s Science Cuts Have Thrown the Research World Into Chaos

Research and Development: U.S. Trends and International Comparisons. National Science Foundation. June 2024. Research and Development: U.S. Trends and International Comparisons | NSF - National Science Foundation

Fact Sheet: President Donald J. Trump Launches PCAST to Restore American Leadership in Science and Technology. The White House. January 23, 2025. Fact Sheet: President Donald J. Trump Launches PCAST to Restore American Leadership in Science and Technology – The White House

Trump moves to axe scientific research at EPA. Evan Williams. March 18, 2025. Tag24 News. Trump moves to axe scientific research at EPA