20-03-2025
Will DOGE Cuts Threaten US Leadership In Innovation?
There has been a lot of discussion recently about the impact that the newly formed US Department of Government Efficiency (DOGE) will have on the federal workforce and overall US budget. Whatever your views on DOGE may be, one thing is certain: Depending on how the cuts are made, longer-term US innovation will likely suffer.
Even though we may not recognize it, US government funding continues to fuel innovations that shape our daily lives. While we give Apple credit (and it is well deserved) for creating the iPhone, one of the most ubiquitous devices we use, its creation was only possible because of research backed by various federal agencies.
Mariana Mazzucato's book The Entrepreneurial State highlights this. Almost everything that made the iPhone special (the multi-touch screen, GPS technology, the full web browser, the technology behind Siri, the Internet technology, its storage, display, and processor, and many other elements essential to the phone) were funded through the Department of Defense, the Department of Energy, the National Institutes of Health, the National Science Foundation, CERN (the European Organization for Nuclear Research) and other government agencies. Even though it took an innovative private company to create the iPhone, its invention would not have been possible without the components the US government helped build.
Even more impactful than the iPhone is the Internet itself, the creation of which would not have been possible without government funding. You can easily google the origins of the Internet to read about the role of the Department of Defense and other federal agencies in its creation. While on the subject of Google, it is relevant to note that even the algorithm that helped launch the internet giant Google originated from research funded by the National Science Foundation.
That is precisely how basic research, or research focused on expanding scientific knowledge without a specific application, is supposed to work. It is the foundation for innovation, providing ideas and opportunities to companies that build consumer applications from this research. Most of the innovations you enjoy today have their roots in scientific research that likely would not have been possible without federal funding. And beyond the innovations, this funding also helps create the vast pool of highly trained scientists and the scientific infrastructure that has led the US to be the global innovation leader for decades.
In 2022, the federal government funded approximately 40% of the basic research conducted in the US. This includes research in almost every area, such as medicine, smart cities, cybersecurity, autonomous vehicles, sustainable energy, artificial intelligence (AI), agriculture, housing, transportation, education, space exploration, etc. This basic research, which has been done over the decades, has spawned countless products that shape how we travel, communicate, fight diseases, live, and use many comforts.
For example, NASA, which is rumored to lose approximately 50% of its science budget, is responsible for countless innovations we use on Earth every day, including cordless vacuums, memory foam mattresses, enriched baby food, LEDs, artificial limbs, infrared ear thermometers, robotic surgery, and countless others. While the obvious impact of cutting NASA funding is preventing or delaying space missions, the other casualty is inhibiting the creation of innovations we could use daily in our homes.
Or take the National Science Foundation (NSF), another likely victim of significant federal budget cuts—the NSF funds scientific research programs nationwide in over 2,000 colleges, universities, and other institutions. Research funded by the NSF has helped develop 3D printing, AI, doppler radar, kidney matching, LASIK eye surgery, MRI, and countless other innovations.
Other countries have been steadily gaining ground in scientific leadership. In 2020, China had more research output than the US, with 744,000 scientific publications in English, while US scientists produced 624,000 papers, followed by the UK with 198,000, and India with 191,000 papers published. Between 2010 and 2020, China's scientific and engineering publications grew by 117% compared to the US publication growth of 11% during the same period. China also has more scientists working on AI than the US, the area most likely to impact our lives over the coming years.
While the US is in a cost-cutting mode, in 2024, the Chinese government increased its funding for science and technology by 10%, underscoring the importance of basic research and the development of top-notch innovative talent.
Cutting funding for basic research programs is easy because they don't often show immediate payback. But this work drives global economic leadership; once lost, rebuilding takes decades. As research funding moves to other countries, so will the highly trained scientists, leaving the US with a smaller and perhaps less talented pool of innovators.
To be sure, there are always inefficiencies in any organization, especially one as large as the US government, and removing inefficiencies is prudent. However, when looking for budget cuts, we need to ensure that we don't throw the baby out with the bathwater because if that happens, we will be watching the next wave of innovation from the sidelines instead of leading it.
