by Ryan Kelly

Recently outsourcing and off-shoring has moved to higher skilled jobs-particularly in research and development (R&D). A recent study sponsored by the US Ewing Marion Kauffman Foundation stated that “emerging countries such as China and India will continue to be major beneficiaries of R&D expansion over the next three years as companies seek new market opportunities, access to top scientists and engineers, and collaborative research relationships with leading universities.” The study concluded that the quality of R&D talent and collaboration with universities will continue to be strong factors in the future. Surprisingly, cost (including labor cost) did not factor high on the list.

One important aspect of the study was that while many US companies either have or are intending to relocate R&D in developing countries, the majority intend to keep new and innovative research in the United States . According to the study, only 22 percent of R&D work in developing countries is for new science. The reason is the lack of IP (Intellectual Property) protection. Lesa Mitchell, vice president of Advancing Innovation at the Kauffman Foundation, stated that in cutting-edge research the United States has a comparative advantage because of greater IP protection.

Some think that even this comparative advantage is at risk. The government of Singapore has recently created a new Genome Institute. In 2001, the institute was able to lure away Edison Liu (director of the division of clinical sciences at the National Cancer Institute). Husband and wife cancer researchers Neal Copeland and Nancy Jenkins are leaving the National Cancer Institute after two decades to also reside in Singapore. The top reasons for leaving were less bureaucracy and more available funding (both lead to more freedom of research).

There are positive developments within the United States . The mayor of South Bend, Indiana, recently announced that the city is moving ahead with Notre Dame to establish a research and technology Park near the university’s campus. The Charlotte Research Institute at the University of North Carolina will also begin work on a new facility that will enable scientists and students to work on the most cutting-edge technology available. Both are examples of a broader effort by universities to become more effective agents of regional economic development.

Throughout the United States, governments and universities are realizing that more needs to be done to keep a comparative advantage in new and innovative research. For R&D to continue to thrive in the United States into the 21 st century, the United States will have to solidify its comparative advantage and give corporations a reason to not only keep current R&D facilities in the United States, but also to expand R&D facilities within US borders (creating more jobs in the process).

To accomplish this goal, adequately funded universities with close and effective relationships to the private sector will have to lead the way. In the words of Marie Thursby, an author of the Kauffman study and a faculty member at Georgia Tech’s college of management, you need “an environment that fosters the development of a high quality workforce and productive collaboration between corporations and universities if America wants to maintain a competitive advantage in research and development.”


Finfacts Team: