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Close the Innovation Deficit

APLU is helping to lead the effort to close the innovation deficit -- the widening gap between actual and needed federal investments in research and higher education. Recent budget battles in Washington, including sequestration, have left U.S. research funding relatively flat at a time when other nations such as China, India, and Singapore are dramatically boosting research funding to develop the next great technological and medical breakthroughs to power their economies forward.

Working to close the innovation deficit has been the centerpiece of APLU's work, along with the Association of American Universities and The Science Coalition, to increase federal funding for research.  The effort has steadily grown to now include more than 130 business, university, scientific, and patient organizations working together to increase federal funding for research and higher education to power the economy forward, improve health, strengthen national security, and enhance the overall quality of life through innovation. 

Watch: Learn Why We Need to Close the Innovation Deficit in 4 Minutes


  • Major Efforts
    • The innovation defict effort began with an open letter on July 31, 2013 from more than 200 leading university presidents and chancellors to President Obama and Congress, urging that they support increased investments in research and higher education to close the innovation deficit.
    • The movement expanded to include the business, scientific, and patient groups all urging Congress to close the innovation deficit.  A budget deal was eventually struck that temporarily repealed part of the budget sequester.
    • Behind the creative talent of Colorado State University, the Close the Innovation Deficit effort launched a four-minute video that creatively describes that innovation deficit and why we need to close it.
    • Drawing on the talent at the University of Arizona, the Close the Innovation Deficit effort unveiled an infographic in April 2014 that uniquely illustrates the innovation deficit.
    • The U.S. Senate Appropriations Committee held a hearing with the heads of the nation's major research agencies (OSTP, NIH, NSF, DOE, and DARPA) on the need for federal research investments to drive innovation and economic growth.  The innovation deficit theme was woven into several of the questions from senators.
    • On November 12, 2014, 133 national business, higher education (including APLU), scientific, patient, and other organizations sent letters to each member of Congress urging that they pass an omnibus FY15 appropriations bill that increased investments in scientific research and higher education to close the innovation deficit.
    • Science agencies subsequently emerged as relative winners in the final FY15 appropriations bill.  While some agencies saw only modest gains, others enjoyed more robust increases.  And in a year when the federal discretionary budget grew by only one-tenth of a percent, science increases of a half percent to more than 5 percent were welcome.
  • Key Stats
    • Over the last ten years, R&D expenditures as a share of economic output have remained nearly constant in the U.S., but have increased by nearly 50% in South Korea and nearly 90% in China. (Source: NSF S&E Indicators 2012, Figure O-3)
    • From 1996 to 2007, R&D expenditures in the U.S. grew by an average of 5.8% annually.  During the same time period, China’s average annual growth was 21.9%.  During the first year of the economic slowdown (2008-09), U.S. expenditures decreased slightly while China’s increased by 27%.  (Source: NSF Indicators Figure O-4 and Overview)
    • Between 2000 and 2008, the number of engineering doctorates awarded in China more than tripled to 15,000.  This compared to a total of 8,100 in the United States, of which only about 3,200 went to U.S. citizens and permanent residents.  (Source: NSF Indicators Figure O-10)
    • According to the OECD, government R&D spending between 2000 and 2009 increased by 250% in Korea and 330% in China; U.S. government R&D spending increased by about 45% during the same period.
    • The United States spent up to 17 percent of discretionary spending on R&D during the 1960’s, in part due to the space program, which resulted in a great deal of spinoff innovation; in recent years, outlays have fallen to around 9 percent of the federal discretionary budget. (Source:
    • The proportion of U.S. Patent and Trademark Office patent grants given to U.S. entities declined from 55% in 1995 to less than half in 2010. (Source: NSF S&E Indicators 2012, Appendix Table 6-45)
    • The percentage of U.S. gross domestic expenditures on R&D funded by the government declined from  47.1% in 1981 to 33.4% in 2011. The U.S. trails nine OECD nations in this percentage. (Source: OECD)
    • While the United States remains the single largest R&D performing country, with an R&D expenditure of $400 billion in 2009, for the first time the Asian region’s total of $399 billion matched the U.S. total. (Source: NSF Indicators Overview p. O-4. Ten years earlier, in 1999, the Asian region performed only 62% of the U.S. total in that year.)
    • In 2009, the U.S. government’s investment in medical-science R&D, as a share of GDP, was unchanged from 1995.  The U.S. now trails nations including Finland, Australia, Austria, Denmark, Norway, Finland, and Sweden in government investment in medical-science R&D as a share of GDP. (Source:
    • The percentage of the population of 25-34 year olds that have attained college-level education in the U.S. trails that of 11 other nations, including Canada, the UK, Norway, Ireland, New Zealand, and Australia. (Source: OECD Education at a Glance 2013.)

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