Goldman says problem is NOT what the Chinese are doing, but we [the USA] AREN’T doing.
The U.S. government now spends just 0.7% of Gross Domestic Product on research and development, much of which funds the previous administration’s pet projects in alternative energy. Under Reagan, the US spent 1.2% of GDP on federal R&D. Today only 8% of American college degrees awarded are in engineering, vs. 31% in China. America cannot break out of its long secular stagnation and productivity slump if our high-tech industries continue to atrophy.
Spengler believes that China cannot innovate nearly as well as the United States.
1. We need to tilt incentives to STEM education, just as the Eisenhower Administration did after Sputnik in 1957.
2. We need to focus resources on game-changing technologies (quantum computing, materials science, missile defense, anti-submarine warfare, semiconductor manufacturing, and others). We can complain all day about China subsidizing its industries but we can’t really stop it from happening. What we CAN do is target innovations that will ruin China’s massive investments in existing technologies.
3. We need to FORCE the whole supply chain for sensitive defense technologies onshore. That will cost plenty. But national security is like J.P. Morgan’s proverbial yacht: If you have to ask how much it costs, you can’t afford it.
4. We need to persuade the biggest corporations to restore their R&D capacity, by a combination of sticks and carrots. That may not be good for their stock price in the short term. But General Electric is a horrible example of what happens when “shareholder value” through financial engineering replaces fundamentals.
Any STEM education revival will take ten or more years to have a major impact. It would still be good but it is a long-term plan.
Restoring R&D corporate capacity is also a long-term strategy which may not work. Many companies have tried and failed to launch R&D centers.
Focusing on game-changing technologies requires investing in all of them or picking winners. China is competing in all of these areas. The US has a five to ten-year lead in semiconductor technology but other countries narrowed the semiconductor gap.
It is not certain that the US will win with quantum computing and materials science. It is also not clear any edge or dominance would translate into a broad lead in technology or innovation.
SpaceX has Shown Massive Research Productivity
The US has not provided enough support to SpaceX. SpaceX represents a massive leap forward in rockets to fully reusable rockets. It will also enable low-earth orbit satellites that can go beyond 5G communication. China is working to emulate SpaceX but the US has not thrown its full support into SpaceX.
SpaceX rocket development has gotten more return than 20X the research return than money spent on Boeing and Lockheed SLS rockets. A lead in space technology would be useful for broad lead in communications, sensors and military technology.
Constant Factory Re-invention
Elon Musk has also identified constant innovation and re-innovation of factories as a productivity goal. This has not been achieved but would be a superior approach to innovation. Instead of just trying to ratchet up R&D to a trillion dollars.
In 2016, Elon Musk floated the idea of remaking his factories every two years. The goal was to achieve ten times the productivity within ten years. Elon had to step back from that objective with production problems with the Tesla Model 3. However, a larger national research goal should be to constantly re-invent supply chains and factory productivity.
What really matters to accelerate a sustainable future is being able to scale up production volume as quickly as possible. Elon wanted to transition to focus heavily on designing the machine that makes the machine — turning the factory itself into a product. A ten-fold improvement in efficiency is possible.
Develop the Best NASA NIAC Innovations – Advanced lithium-ion drive, Antimatter and Fusion
There are breakthrough innovations in space from NASA NIAC. The leading edge of research should have strategic development funding.
JPL (Jet Propulsion Lab) will be testing a 50000 ISP lithium ion thruster within 4 months. This is part of a NASA NIAC phase 2 study to use lasers to beam 10 megawatts of power to new ion drives. This could enable space travel all over the solar system at over 1 million mph.
There is also development of a new approach to antimatter propulsion.