ITIF Responds to Recent RAND Report on U.S. Competitiveness

The most pressing question in the debate about the United States international economic competitiveness is if the U.S. is successfully pushing to maintain its competitive lead well into the future, not only the question if the U.S. is currently ahead, according to a report released today by the Information Technology and Innovation Foundation (ITIF). The latter concern, as related to comparative international science and technology prowess, and its implications for national security was the subject of a June 2008 report prepared by the RAND Corporation for the Office of the U.S. Secretary of Defense.

After examining RAND's analysis, ITIF prepared its own response and says the RAND report has serious structural and analytic flaws that misread the fundamental position of U.S. science and technology. ITIFs 18-page document deconstructs RANDs positions and presents its own case of how the U.S. lead is eroding or even disappearing in certain circumstances, while in turn provoking the debate over utilizing particular input, output and outcome indicators as well as the proper timeframes of benchmark metrics.

ITIF's report is built around countering the following arguments:

• Alarms in the past for waning U.S. S&T competitiveness have not come to fruition, so current warnings are without merit;
• Downstream innovation is more significant than upstream innovation;
• The globalization of innovation is an asset for U.S. S&T competitiveness; and,
• The U.S. is the current global leader in S&T, so change is not an immediate need.

An example of a data critique put forward by ITIF's RAND's usage of time-series data from 1993 to 2003, which ITIF contends does not sufficiently capture the rapidly changing competitive landscape, especially since 2000 and into mid-2008. ITIF points to three factors in how the landscape has changed since 2000: recent information technology innovations have made large-scale R&D offshoring possible, emerging countries such as China, India, and Brazil have altered their competitiveness strategies, and advanced economies in Europe have organized themselves to become more competitive. ITIF argues 2000 should be the baseline year for future comparisons.

Additionally, ITIF argues metrics need to incorporate comparative components, not just raw totals. Instead of promoting measures like GDP and total R&D funding, GDP per capita is a more pertinent measurement, as are trends in the R&D intensity, the ratio of R&D expenditures to GDP. Similarly, ITIF argues R&D employment in bulk is not as good of a metric when compared to employment growth trends and the share of R&D employment within the working population.

ITIF reports every single E.U.-15 country and the fastest growing Asian countries all have national science and technology plans, but the U.S. does not have a national innovation agenda. So as the rest of the world is becoming more sophisticated in its approach to S&T issues, the U.S. needs to take the steps to maintain its clear economic leadership for many years to come.

RANDs original report from June 2008 titled U.S. Competitiveness in Science and Technology can be accessed at: http://www.rand.org/pubs/monographs/MG674/

ITIFs September 2008 report titled RANDs Rose-Colored Glasses: How RANDs Report on U.S. Competitiveness in Science and Technology Gets it Wrong, can be found at: http://itif.org/