Government-Funded Research Enhances Our Quality of Life and Promotes Economic Growth

While remaining vigilant against the possible excesses of government, Democrats have recognized that government makes a unique and indispensable contribution to our economic strength, public health, and quality of life. This report will discuss one significant way the federal government improves lives and promotes economic growth: funding scientific and medical research.

Although the Bush Administration has taken a dismissive attitude over the past three years to science and technology policy, federally-funded research conducted over the years by both federal agencies and non-governmental institutions has helped make the United States the world leader in research, placing it at the forefront of scientific, medical, and technological advance. Federal investments in research have fueled the most powerful economy in the world, creating jobs, increasing tax revenue, improving agricultural and industrial productivity, and delivering tangible products to save and improve the lives of Americans.

Federal research dollars support long-term, basic and applied research that the private sector often cannot sustain because returns on investment can take years to realize. Many inventions and technological innovations are the result of combining basic findings whose connection were not anticipated at the outset. While industry does invest in long-range research, there are strong disincentives to do so because the benefits of basic research are often slow to develop and very broad, making it difficult for any one firm to capture those benefits and to prevent competitors from doing so.

Federal Research Funding Promotes Economic Growth
and Employment

Fully half of our economic productivity in the last 50 years is attributable to technological innovation and the scientific research that supported it. Economists estimate that the private rates of return on research and development spending average about 24 percent, but that the economic benefits that accrue to society at-large are more than twice as great. (White House Office of Science and Technology Policy, 2000) Much of the capacity for that innovation has come from federal funding of research.

Mark Heeson, President of the National Venture Capital Association, noted the indispensable role of the government in advancing technology when he said, "As everyone knows, Venture Capitalists (VCs) don't invest in basic R&D; they invest in applied R&D. But it is critical to realize that applied R&D is a product of years of seeding of basic R&D across the gamut of sciences. And, it is the federal government that has been a critical investor in those seeds. Decreases in basic R&D in the long run mean fewer new ideas for VCs to look at down the road, which translates to less innovation, fewer new high-tech jobs and fewer lives saved from new drugs and defense-related items."

Products and industries that have benefitted from federal research dollars include:

• Computers. Computers have revolutionized the way we live, facilitating communication, improving productivity, creating new opportunities for commerce and leisure, and furthering scientific and technological progress itself. In 1946, the Department of Defense, in conjunction with University of Pennsylvania School of Electrical Engineering, created ENIAC, the world's first all-electronic computer. ENIAC was monstrous, weighing over thirty tons and requiring 1,000 square feet of space, and yet it was this prototype from which most other modern computers evolved. It embodied almost all the components and concepts of today's high-speed, electronic digital computers.
  
  The computer sector is now a $63 billion industry in the United States, and accounts for an estimated 250,000 manufacturing jobs. In 2002, employment in the computer and software industries accounted for about a half a million jobs. (Bureau of Labor Statistics, Bureau of Economic Analysis, and the National Income and Products Account) It is estimated that the personal computer industry will contribute $16 billion to the U.S. economy in 2003. (Consumer Electronics Association)
  
  
• The Internet. In 1969, the Department of Defense developed the Internet as a way to interconnect government computers at different sites in order to share information and data. It initially consisted of just four nodes at different locations, but was subsequently augmented with funding from the National Science Foundation (NSF). Following the development of the World Wide Web in Europe in 1988, NSF's National Center for Supercomputing Applications introduced a graphical user interface called Mosaic in 1993.

The Internet is now an integral part of the U.S. economy. According to a January 2001 University of Texas study, the internet economy (made up of infrastructure and applications firms, electronic intermediaries, and online sellers) supported more than three million workers in 2000. In the same period, the internet economy generated an estimated $830 billion in revenues, a 58 percent increase over the preceding year (Center for Research in Electronic Commerce, University of Texas).

• Semiconductors. The federal government has played a significant role in supporting the growth of the semiconductor industry since its inception. Many of the engineers who have played pivotal roles in the development and improvement of semiconductors were trained with federal research grants. Moreover, in the mid-1980s, the federal government and the U.S. semiconductor industry formed SEMATECH, a public-private consortium to redress the industry's competitive decline at that time. As a result, the U.S. chip industry saw a major resurgence in the 1990s.
  
  The semiconductor industry is one of U.S. manufacturing's star performers. On the strength of a 17 percent annual growth rate, its output climbed from 1.5 percent of manufacturing GDP in 1987 to 6.5 percent in 2000. In 1999, when it posted $102 billion in sales, it accounted for not only half the world market in its product but also for over 5 percent of manufacturing value-added in the U.S. economy, making it the manufacturing sector's leader. It boasted 284,000 employees as of August 2001 and paid them an average hourly wage 50 percent higher in real terms than it had 30 years before. It also provides the core of the $425 billion U.S. electronics industry. (National Academy of Sciences)
  
  
• Advances in biotechnology. Federal funding in biology, food science, agriculture, genetics, and drugs has enabled the development and expansion of America's world-class biotechnology industry. The most visible contribution of the federal government over the past decade is the just-completed, 13-year U.S. Human Genome Project coordinated by the Department of Energy and the National Institutes of Health. The project promises to further catalyze the U.S. biotechnology industry by licensing technologies to private companies and awarding grants for innovative biomedical research.
  
  In 2001, the American biotechnology industry supported $28.5 billion in annual sales and 535,000 American jobs. (Biotechnology Industry Association)
  
  
• Energy saving technologies. Today, energy efficiency is led by entrepreneurial private-sector firms and utilities, but many of the products sold and installed by this industry are the product of partnerships between the federal government and private industry. In the mid-1970s, the Department of Energy (DOE) began a program to establish energy conservation standards for certain household appliances. In the late 1970s, scientists at DOE's Lawrence Berkeley National Laboratory spearheaded the development of electronic ballasts for flourescent lights, reducing lighting energy use by up to 30 percent in a typical building environment. Similarly, in 1976, DOE began a program at the Lawrence Berkeley lab that led to the commercialization of "low-emissivity" windows, which reduced wintertime energy losses through normal, double-glazed windows by 35 percent.
  
  According to DOE, current appliance standards have already saved consumers $1.9 billion in energy costs, and ultimately will save consumers $58 billion over the lifetimes of appliances installed between 1990 and 2015. Between 1988 and 1995, electronic ballasts had saved American consumers $1 billion in energy costs. The U.S. lighting industry continues to enjoy growth in sales of $430 million each year, corresponding to the extra retail value of efficient ballasts. As of 1995, the new designs and materials for windows had saved consumers $2.1 billion in energy costs, and U.S. businesses and consumer are expected to save $17 billion from advanced window technologies installed through the year 2015. According to the Lawrence Berkeley lab, the U.S. window industry continues to enjoy growth in sales of $650 million each year, corresponding to the higher value of efficient windows.
  
  
• Fuel cell development. Fuel cells combine hydrogen and oxygen to produce electricity and water, and promise to efficiently deliver energy while producing virtually no pollution. Research performed through NASA's Small Business Innovation Research (SBIR) program has been instrumental in advancing the development and commercialization of fuel cells. The research stemmed from NASA's need for high-power, long-durational electric generation systems for use on high-altitude science platforms. It has since resulted in a number of new commercial fuel cell products.
  
  As the technology matures, fuel cells promise to provide abundant electricity and propulsion power without harming the environment. The technology's scalability also makes fuel cells ideal for supplying power to stand-alone operations and in remote locations. Recent industry estimates project that the fuel cell market will reach $19 to $35 billion by 2013 (Chemical Week, 10/15/2003).
  
  
• Global Positioning System. In 1973, the Department of Defense was looking for a foolproof method of satellite navigation. Based on previous department experience with satellites, the concept of a Global Positioning System (GPS) was developed. The first operational GPS satellite was launched in 1978, and the system reached full 24-satellite capability in 1993. GPS can now be used to rescue soldiers stranded behind enemy lines, and to help backpackers, firefighters, sailors, and drivers locate their exact position.
  
  The current worldwide market for GPS receivers and technology is estimated at over $2 billion. Within the next decade, this market is expected to surpass $30 billion (National Academy of Sciences).
  
  

Federal Research Funding Supports Advances in Medical Research

The National Institutes of Health (NIH) is one of the world's foremost medical research centers, and the federal focal point for medical research in the U.S. It provides grants and contracts to support research in over 2,000 research institutions in the U.S. and abroad, and conducts more than 2,000 research projects in its own laboratories. NIH grants have also trained a host of scientists in its intramural programs and supported the training of hundreds of thousands of scientists at universities and medical schools around the country through research grants. The list of those scientists who have received NIH support over the years includes 106 Nobel Laureates, five of whom made their prize-winning discoveries in NIH laboratories. NIH reports a number of scientific advances supported by its research dollars, including:

• Improved understanding of heart disease. In 1948, NIH inaugurated the Framingham Heart Study, a project to identify the common factors or characteristics that contribute to cardiovascular disease (CVD). At the time, little was known about the general causes of heart disease and stroke, but the death rates for CVD had been increasing steadily since the beginning of the century and had become an American epidemic. Over the years, careful monitoring of the Framingham Study population has led to the identification of the major CVD risk factors - high blood pressure, high blood cholesterol, smoking, obesity, diabetes, and physical inactivity. Since its inception, the study has produced approximately 1,200 articles, making the concept of CVD risk factors integral to the medical curriculum. This has led to the development of effective treatment and preventive strategies in clinical practice.
  
  
• Chemotherapy as a standard treatment for cancer. Work done during the 1950's and 1960's by NIH researchers led to the development of the first successful cures for a leukemia. This played a major role in establishing chemotherapy as a standard cancer treatment.
  
  
• Cigarette - lung cancer link. In the late 1990's, researchers supported by NIH found the first direct biological link between cigarette smoking and lung cancer. Scientists had long associated cigarette smoking with lung cancer, but this discovery uncovered the molecular basis for how smoking leads to lung cancer.
  
  
• Breast cancer treatment validation. In the mid-1990's, researchers supported by NIH showed that women at high risk of developing breast cancer who took tamoxifen had 49 percent fewer cases of breast cancer than those who did not. Tamoxifen has been hailed as the first drug to prevent breast cancer in women at high-risk for the disease.
  
  
• Anti-cancer drug. In 2001, NIH funded the lion's share of the basic research that eventually led to the discovery and development by the drug company Novartis of a new drug known as Gleevec. It is the first anti-cancer drug specifically developed to target a molecular problem that causes a particular type of cancer, in this case, chronic myelogenous leukemia (CML).
  
  
• Searching for a diabetes treatment. In 2002, scientists at NIH and the University of Texas Southwestern Medical Center successfully used the hormone leptin to treat patients suffering from lipodystrophy, a rare and difficult to treat disorder that shares some of the characteristics of typical type 2 diabetes. Diabetes is the sixth leading cause of death in the U.S. and is responsible for $92 billion in direct medical costs per year.
  
  
• Epilepsy treatment. In the early 1990's, NIH scientists helped to develop a major new drug for epilepsy, felbamate, that is safe at high doses and does not have side effects commonly associated with other antiepileptic drugs.
  
  
• Decrease in Sudden Infant Death Syndrome. Between 1992 and 1996, the rate of Sudden Infant Death Syndrome (SIDS) dropped by 38 percent. Much of that drop was likely due to a 66 percent decrease during the same period in the number of U.S. infants being placed to sleep on their stomachs. The Back to Sleep Campaign, a national campaign that encourages infants to be placed to sleep on their backs, was launched by the National Institute of Child Health and Human Development (NICHD) in partnership with several other organizations in 1994.
  
  
• Advances in rubella detection and prevention. In the 1960's, NIH researchers developed the first licensed rubella vaccine and the first test for rubella antibodies that was practical for large scale testing (rubella hemagglutination inhibition test). Deaths from rubella have decreased 99 percent since the vaccine became available.
  
  
• Juvenile typhoid vaccine. In 2001, NIH researchers and others supported by NIH developed and tested the first vaccine capable of protecting children ages 2 to 5 against typhoid fever. Seemingly the most effective typhoid vaccine ever developed, it is also virtually free of side effects. About 16 million people worldwide develop typhoid each year, and 600,000 die from the disease.
  
  
• Mother-infant HIV transmission treatment. In the late 1990's, researchers supported by NIH demonstrated an affordable and practical strategy for preventing transmission of the HIV virus from mother to infant. A single oral dose of the antiretroviral drug nevirapine given to an HIV-infected woman in labor and another to her baby within three days of birth reduced the transmission of virus by half compared with a similar short course of AZT.
  
  
• Smallpox vaccine dilution trial. In 2002, an NIH-supported clinical trial demonstrated that the existing U.S. supply of smallpox vaccine - 15.4 million doses - could successfully be diluted up to five times and retain its potency, greatly expanding the number of people it could protect from the contagious disease.
  
  
• Staph bacteria vaccine. In 2002, NIH scientists and the company Nabi developed the first successful vaccine against Staphylococcus aureus, a major cause of infection and death among hospital patients. Recently, researchers have discovered strains of the bacteria that are resistant to the antibiotics used to treat them, making a preventive vaccine critical.
  
  
• Urinary incontinence treatment. In 2002, researchers supported by NIH showed that rural older women with urinary incontinence (UI) could use behavioral changes, such as bladder training, and pelvic muscle exercises with biofeedback, to reduce their UI severity by 61 percent. UI is a leading reason for people in rural areas to move to a nursing home, and controlling it leads to a better quality of life and allows people to remain in their homes longer.
  
  

The National Institutes of Health is not the only source of federally-funded advances in medical technology. A number of other federal agencies, including the National Aeronautics and Space Administration (NASA) and the National Institute of Standards and Technology (NIST), have supported research that has improved public health in the United States and around the world.

• Advances in medical laser technology. Laser technology that originated in NASA's satellite-based atmospheric studies in the mid-1980s has been applied to a variety of medical fields. NASA-developed switching technology, for instance, was used to produce a uniform controllable laser beam maintained at a low working temperature. Lasers of this type are being used to correct myopia (nearsightedness) and to perform laser angioplasty, which vaporizes blockages in coronary arteries.
  
  Laser angioplasty is helping to prevent cardiac arrest with a success rate of 85 percent at opening blocked arteries. At the same time, this procedure positively impacts patients' recovery time, costs and productivity. The same type of technology allows medical facilities, in a one-minute procedure, to correct myopia. According to NASA there are an estimated 60 million nearsighted Americans who will not need glasses if they undergo this procedure.
  
  
• Breast biopsy system. Technology developed at NASA's Goddard Space Center for the Hubble Space Telescope in 1997 has found a new application in breast biopsies. A high technology silicon chip converts light directly into electronic or digital images that can be manipulated and enhanced by computers. Known as stereotactic core needle biopsy, the procedure is performed under local anesthesia with a needle instead of a scalpel, leaving a small puncture wound rather than a large scar.
  
  Recent statistics from the American Cancer Society show that approximately one in nine women in the United States will develop breast cancer at some point in their lives. This new technique, which is replacing surgical biopsy as the method of choice in many cases, is saving women pain, scarring, time, and money. Compared to traditional surgery, the new procedure is just as effective and can be performed in a physician's office for about one-quarter the cost. NASA estimated in 1997 that this procedure would reduce national health care costs by about $1 billion a year.
  
  
• Advanced pacemaker. In 1969, NASA and the Applied Physics Laboratory of Johns Hopkins University began working with private industry to apply NASA-developed aerospace technology into pacemakers. Through this collaboration, technology originally designed for two-way communication with satellites has been used since 1997 as a means of communicating with and reprogramming pacemakers without the need for further surgery. Additionally, space microminiaturization technology and spacecraft electrical power system technology have been applied to produce the first single-chip pacemakers with rechargeable, long-life batteries.
  
  Pacemakers help people with heart rhythm disorders live longer, more productive lives. According to NASA, by the late 1990's, the U.S. pacemaker market totaled over $1 billion annually and was on a trajectory to continue growing at a rate of 8 percent annually.
  
  
• New DNA biochip technology. While working on a project to develop advanced biosensors in 1994, scientists at the Department of Energy's Oak Ridge National Laboratory developed a DNA diagnostic biochip. The hand-sized device, which uses less blood than current procedures, may eventually be used to diagnose diseases such as AIDS, cancer and tuberculosis in the doctor's office without the need for a separate testing facility.
  
  According to NASA, many drugs work on less than 50 percent of all patients and there are approximately 100,000 deaths each year in the US resulting from the adverse effects of medication. Biochip technology will support more specific diagnostics, prediction of response to drugs, and safer, individualized medication.
  
  
• Infrared Thermometer. NASA's Technology Affiliates Program seeks to improve the competitiveness of American industries by facilitating the transfer of government-developed technology to the private sector. Through this program, technology initially used to view and measure the emitted infrared radiation from planets and stars was refined in the late-1980's and early-1990's to develop the infrared thermometer. This almost instantaneous method of taking body temperatures, introduced to the commercial market in 1990, is easier and much faster (1 second as compared to 30 seconds) than previous oral or rectal methods.
  
  According to NASA, the economic potential for the thermometer worldwide for acute care hospitals is approximately $126 million a year. A roughly similar value is predicted for sales to alternate care facilities, such as clinics, physician's offices, and nursing homes as well as to individuals. Furthermore, infrared thermometers save considerable valuable time for hospital personnel and are less intrusive to the patient.
  
  
• Advances in dental technology. In the late 1920's, laboratories at the National Institute of Standards and Technology (NIST) began what continues to be a collaboration with the American Dental Association to develop, refine, and generally improve medical practice through the invention of new dental materials, tools and methods. One of the more significant advances to come out of this collaboration was the introduction in the late 1950s of new polymeric and mineral-based materials for aesthetic tooth restoration and the development of metallic alloys for amalgams.
  
  Over the past four decades, American dentists have made hundreds of millions of restorations with these dental polymers. It was estimated in 1987 that the increased durability of composite restorations, and thereby the reduction of replacement costs of previously used materials, saved Americans more than the combined appropriated budgets of NIST, the ADA, and the National Institute of Dental Research. The U.S. market for these products is now $163 million per year (American Dental Association, National Institute of Standards and Technology, and Strategic Dental Marketing Corp.).
  
  

Conclusion

The federal government has played a key role in ensuring that the United States continues to lead the world in scientific and technological progress. Senate Democrats understand that federal investments in research and development are investments in people. Democrats will continue to support investments in research to strengthen our economy, create jobs, and improve the health and well-being of all Americans.