I am not trying to sound the Doomsday Machine.  Our economy is picking up.  Corporations are raising their low-end employee’s wages.  (Don’t get too excited.  They are not doing this for benevolent reasons.  They are having a tough time keeping their low-end employees, because jobs are now more available.)  But, we still are not coming out with a plethora of new products.

Moreover, the number of start-ups, the entities that help fuel massive job growth, are being formed at a much lower rate than when I was younger. (I was involved in the creation of 2 or 3 new such entities every few years.  Lots of others were, too.)

In 1978, 15% of all companies had been in existence for a year or less.  A few years ago, that percentage was almost halved to 8%.  Moreover, our companies are getting older; the percentage of firms in existence for more than 15 years has risen from 20% to about 34%.  These older firms are more risk averse; however, disruptions can still force them to develop and introduce new products.  (They just haven’t done so yet..)

Part of the problem is we (read politicians- you know,  the ones that don’t believe in climate change or vaccinations) have decided  to dry up our funds for government research.  Of course, the public don’t quite see that.  But consider…. Silicon Valley.  It’s genesis was the plethora of defense companies (Intel, Fairchild Semiconductor, among others) that were located there, all grabbing a portion of the government largesse (military, NASA).   Or, the original Circumferntiael Highway (Route 128 Corridor)- those firms situated around MIT and Harvard in the 50s and 60s.  Which also included Lincoln Labs (MIT) back then. When the students demanded MIT divest the complex, it became MITRE (MIT Research and Engineering) and is now among the other Beltway (for Interstate 495) Bandits that ring around DC.

We’ve been warned a decade ago.  The National Academy of Sciences recognized that the dearth of research money meant fewer young research scientists- and fewer jobs for those in the field already.  It now feels the situation has become “arresting”.   With the shortage of funds, senior scientists are competing with young turks for the same dollars, and it is easier (i.e. safer) for the government bureaucrat to award the grant to the senior scientist.  So, more and more younger researchers continue on as post-docs, since they can’t get their own funding.  Back when I was in school, we got our first grants when we were 28; by 1980 it was at 38- and now it’s 43.  (The percentage of grants awarded to those 36 or less in age have dropped from 18% or so in 1980 down to 3%.)

These special trained folks go on to help develop new technologies and new scientific principles that our companies can convert into viable products.  Or, the scientists themselves can form entities to bring these great new ideas to the marketplace.  (Like Dr. Brown and his food innovations described here.)  But, we need our government to fund this basic research- which lets our companies employ technology and applied research to bring these innovations to market.

But, as I’ve written before, China is about to surpass the US in R&D spending.  And, Israel has now become the supreme start-up culture.  (You’d be amazed at how many innovations you think are American really come from Israel.)

It’s time our government got back into this race.  Because the future of our country- and our children’s jobs- depends upon it.

 

Note: I apologize for the delay in posting today.  But our sites were hit with a massive DDOS atack.