BusinessWeek Online Technology Editor Alex Salkever interviewed Marburger on Mar. 10 about America's place in the world technology pecking order. Here are edited excerpts of their conversation:
Q: Everyone is talking about outsourcing in the software field undermining U.S. superiority in that key area. Is the threat overblown?
A: I think it is somewhat overblown. We have fairly complicated markets in software. When it comes to new products and software that's at the edge of capabilities, the U.S. is a major player. We still are a leader, and it's going to be a long time before we lose that position.
The Administration continues to invest heavily. We spend $2 billion year on research and development in information technology, with a lot of that going to software. There's a lot of investment in ideas for new architectures and ways to solve problems.
Q: What can America do to make sure foreign grad students continue to come to the U.S. to study?
A: U.S. institutions of higher education are the gold standard around the world. You have a higher-value-added degree from a U.S. institution than from anywhere else. It's true that China is producing many more students with advanced degrees, but the U.S. continues to attract the best talent.
I've participated in a number of conferences with other countries, and Europe is concerned about its brain drain to the U.S. Even China sends students to us. There has been a fall-off in foreign student applications, which isn't surprising in view of the changes in the visa process. But the numbers are still high, and there's every indication we will continue to attract large numbers of foreign graduate students.
Q: How to strike a balance to ensure that the U.S. doesn't lose out in the research race as more R&D centers pop up outside the country?
A: It's not surprising that companies place R&D centers close to their markets. And emerging markets are very different from U.S. and European markets, so I don't think that will undermine our strength. The opportunities in the U.S. for entrepreneurial development are much better than anywhere else. And the quality of life here continues to be a major draw. That's not going to change for a long time.
We do invest more in R&D than all other members of the G-8 combined. That's a lot of money -- $130 billion from the U.S. government. There's about $30 billion going into university-based R&D, which is linked strongly to graduate training and increasingly to undergraduate training. Continued investment in university research is a key to maintaining our competitiveness and the quality of life that attracts talent. This Administration has strongly supported increasing National Science Foundation fellowship stipends.
Q: There has been a real drop in the number of undergraduates entering the hard sciences. Isn't that a problem?
A: There has been, and this Administration is trying to invest selectively in areas that are most likely to be relevant to future economic development. The undergraduate situation is interesting. We lose a lot of students who aspire to science and engineering degrees between when they enter [college] and when they leave. I think there's something universities could do to change curriculums. And we can leverage our investments in university research to help those students, too.
Q: An increasing percentage of breakthroughs are coming from research institutions outside the U.S. Does this indicate the U.S. is losing ground?
A: We see rates of publication in journals and patents filed increasing for other countries, but I don't see significant weakness in our numbers. We still are the world leader in innovation. Basic science has always been an international phenomenon. The trick is to take advantage of the basic research done around the world and turn it into products that keep us on the leading edge.Q: People are starting to get concerned that the U.S. is losing out in some areas of innovation -- including aerospace and mobile communications.
A: The U.S. still dominates in R&D and technological development. But there's no question that other countries are becoming more capable, and we expect them to compete with us. That increases the pool of talented people we can draw from. All the areas you mentioned are in applied research and development. It's basic R&D that's the foundation for new technologies, and that I think is very strong in the U.S. We're also training a lot of the people who are doing that work in other countries.Q: There's some fear in the research community that there will be a strong Mars funding bias going forward. What about that?
A: The interesting thing about the President's vision for space exploration is the balance between robotics and human exploration and this concept of sustainability. As the President said, this isn't a race, it's a journey, and the key is funding steps one at a time that will accumulate into an infrastructure in space that will reduce the costs of future missions. I read that as being an effort to protect other areas.
Rather than setting a goal where there's a tremendous national commitment to achieve some spectacular event in space, the President would like to see space exploration carried out within an affordable envelope of funding for NASA. Remember, too, that space exploration has important implications for spin-offs in applied science. So I think we're on a healthy track.
Q: A lot of the most important figures in the technology business are concerned that the percentage of U.S. gross domestic product going to fund basic science research has fallen significantly over time.
A: For 40 years, the percentage of the domestic discretionary budget devoted to nondefense R&D has been about 11%. It's at 13.7% right now, and that's about a 20-year high. For the total budget including military R&D, we're at the highest level in 37 years as a percentage of the domestic discretionary budget.
Q: Others are concerned that after 9/11 the emphasis on research has shifted so strongly to security that other types of science aren't getting the same treatment. Do you agree?
A: I don't think that's true. It is true that new science programs have been initiated that are related to homeland security. There are two things to say about that. First, there's still an enormous investment and an increasing one in nonsecurity-related science.
The second point is that in homeland security, which is the most recent new pot for science and technology money, most research could turn out to be dual use [applicable to both military and consumer goods]. In this year's Presidential budget request, the nonsecurity part of the domestic discretionary budget is limited to a 0.5% increase.
From 2004 to 2005, the science part of that budget is significantly greater. For example, the National Science Foundation has a 3.5% increase, which is six times the average increase for everybody else. There are efforts to selectively increase funding for nontech centers of research and certain areas of physical science that are deemed to be important for competitiveness.
So we're going to continue to invest in the basic sciences that are relevant to our economic strength. From the first Bush budget in 2001 to the current request for 2005, there has been a 44% increase in the total R&D budget. That's much greater than any comparable period for the last 10 years. Even in the nondefense portion of the budget there has been a substantial increase. Not every agency has enjoyed the same level of increases. But I think that we have a good story in this Administration as far as R&D is concerned.