Budget Cuts to Spark American Brain Drain?

Given the crucial, though not well understood role that the US government has played in providing seed money for innovation, there is growing concern that proposed budget cuts could cause an American brain drain. Despite the pull of home and hearth, this is not as far-fetched as it may sound: manufacturing and some service work has been technologically outsourced, quite successfully, and recent regulatory moves in Europe have caused hedge funds to explore relocation to such previously undiscovered financial entrepots at Malta.

Andrew de los Reyes explains the situation and its implications in HuffPost:

"Our country needs the federal government to invest in innovative science --support that may be seriously cut in budgetary wrangling. It's not simply that other nations may make competitive gains; the greater concern is that young scientists may lose confidence in the United States as the best place to establish their careers. The country cannot afford such a "brain drain."

Indeed, key trend lines are moving our country in the wrong direction. For example, the continuing resolution bill passed by the House of Representatives to fund the federal government for the remainder of fiscal year 2011 includes a rollback of federal science spending to 2008 levels. Specifically, the National Institutes of Health would see cuts totaling $1.6 billion and the National Science Foundation would see cuts that Senate Appropriations Committee Chairman Daniel Inouye (D-HI) stated would translate into the awarding of 2,000 fewer grants. These grants fund thousands of American science jobs that would be lost. Yet, the House budget bill leaves intact federal subsidies for industries with substantial private market viability including oil and agriculture.

Federal support has become critical in launching research. This is because the risk and uncertainty inherent in innovative science often precludes private market investments. In fact, private companies often refrain from supporting cutting edge research until there is initial evidence that any investments they make will bear fruit. As a practical matter, high-risk/high-gain research does not get off the ground in America without federal investment.

A reduction in federal investments in innovative research severely undercuts the ability of American scientists to compete with their peers in other countries. This is because other nations are making large research commitments in science and technology, and the growing "investment gaps" with the United States are already having an impact. For instance, in 2010 China purchased more wind turbines and solar panels than any other country and laid over 11,000 miles of high-speed rail. Importantly, Americans invented both wind turbines and solar panels and now China will likely make competitive gains in these technologies. Stated another way, we may essentially have to buy back technological advances in products that Americans invented.

A lack of funding in innovative science disproportionately affects young scientists. They often need to begin their careers conducting this kind of research in order to land American science jobs. Thus, if the federal government reduces investments in innovative scientific research, fewer young scientists will be able to get and keep American science jobs, and this makes the global marketplace a more viable alternative.

All this puts the country at risk. America's ability to compete with other counties rises and falls on its ability to raise the young scientists who conduct innovative scientific research. If the nation can't offer young scientists a good chance to launch their careers, we're encouraging them to leave for countries that in recent years have made heavy science investments, particularly in health research, such as Singapore and China.

If you think young American scientists leaving to work overseas is a far-fetched notion, consider the reductions in the private sector workforce that our country has suffered in recent years. In part, this is the result of American companies' business decisions to move operations overseas to countries with tax and regulatory structures that allow them to reduce their costs.

I fear we are on the road toward a profound "American Brain Drain" in which young scientists may begin to ask themselves, "If I cannot begin my career at home, what is keeping me from moving elsewhere where I know the government will invest in my work?"

Cutting federal support for innovative science, and thus investments in the young scientists who often conduct this work, constitutes short-range thinking. Whatever savings the federal government seeks to make by cutting these investments will only lead to substantial costs in future years.