Federally funded research and development is a third of its peak in 1964

A quiet crisis is brewing in the laboratories and research universities of the United States, one that threatens to cede our nation’s technological crown and undermine our economic future.

Federally funded research and development (R&D) accounted for 0.63% of U.S. GDP in 2022, a significant decline from its peak of 1.86% of GDP in 1964

It is a crisis of understanding in Washington, a failure to recognize a fundamental truth confirmed by decades of evidence: every dollar invested in federal research and development yields a return of prosperity and security that far outweighs its cost.

The very architecture of our modern world, from the internet that connects us to the medical breakthroughs that save us, stands as a monument to this principle. Yet today, our lawmakers are operating with an outdated calculator, dangerously underestimating the value of the seeds from which our future grows.

Consider the genesis of the digital age. Fifty-six years ago, from a basement laboratory at the University of California, Los Angeles, the first message was sent between two computers. That historic connection, funded by a federal agency and led by Professor Leonard Kleinrock, was the birth cry of the internet. It was not the product of corporate research and development, but of visionary public investment in fundamental science.

At that time, at the height of the Space Race, the United States government understood that reaching for the moon began with funding the basic research that made the journey possible. Federal spending on science then approached two percent of our nation’s gross domestic product, an investment that secured American technological superiority for a generation.

The returns on such investments are not abstract. Economists have calculated that every single dollar invested in research and development generates approximately five dollars in benefits, fueling productivity gains, creating new industries, and improving our health and living standards. These are the building blocks of national wealth.

Yet a new and profound analysis reveals that federal agencies, the very entities that advise Congress, are using flawed models that treat funding for a new semiconductor the same as funding for a new road. They fail to capture the unique, multiplicative effect of research.

This critical miscalculation means our representatives are making multi-billion dollar decisions in the dark, blind to the true economic and budgetary windfall they are leaving on the table.

The consequences of this failure are no longer theoretical. They are visible in the widening gap between America’s ambitions and its actions. The CHIPS and Science Act, a bipartisan pledge to reclaim leadership in critical technologies, authorized a bold investment in our scientific infrastructure. But the promised funding has not materialized.

Appropriations for key research agencies have fallen catastrophically short, creating a deficit of over seven billion dollars. This is not fiscal responsibility; it is fiscal myopia. While Congress hesitates, our global competitors, recognizing the immense value we are dismissing, are racing ahead.

They are investing heavily in the very research ecosystems we are neglecting. The message from that UCLA lab in 1969 was a simple “LO.” Today, the message from Washington is equally brief, and far more ominous: stop. The question now is whether we will listen to the lessons of history or consign our future to a diminished chapter in it.