By Agam Shah
The U.S. government has publicized its investments in whiz-bang fields such as quantum technology and artificial intelligence. But to help companies remain competitive in an increasingly automated and digitized landscape, it should boost tech spending aimed at boosting productivity, researchers say.
Redirecting more research-and-development funds to areas including robotics, 3-D printing and autonomous vehicles could juice productivity growth rates and increase federal revenue, said Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington-based think tank.
"A national R&D agenda around productivity would have the salutary effects of helping us be more globally competitive, " Mr. Atkinson said.
In a report published this month, ITIF called for Congress to increase federal R&D funding bt $40 billion a year and focus that spending on increasing worker productivity. Federal funding for R&D totaled $125 billion in 2018, according to Mr. Atkinson, who said boosting it would make up for lost time. As a share of gross domestic product, federal R&D spending averaged 1.5% from 1960 to 1980 but had fallen to 0.71% of GDP by 2018, the report noted.
ITIF proposes raising spending by $4 billion a year for 10 years until total additional funding is $40 billion a year above the baseline. That would give science and technology labor markets time to adjust to a greater supply of scientists and engineers.
According to the Congressional Budget Office, the U.S. spent $114 billion on R&D projects in 2018, down from $116 billion in 2017. ITIF and the CBO use different measurements to calculate the federal R&D budget.
ITIF said boosting R&D spending could increase the productivity rate to 3.4% a year, a rate similar to what it was in the 1960s. The CBO projects a labor productivity growth rate of 1.4% over the next decade.
Federal spending on technology research traditionally has been associated with big moonshot-type ideas -- think of the projects that led to microchips and the internet -- that were later adopted and improved by the marketplace. But Mr. Atkinson and other experts say the government needs to invest more in existing technologies if U.S. businesses want to remain globally competitive.
Take robotics. The National Science Foundation, a federal agency that funds basic research -- meaning it is focused on expanding knowledge, not necessarily on inventing something -- has a national robotics initiative with a budget of about $40 million to $50 million.
"It's a drop in the bucket compared to what the Chinese are probably spending -- certainly in the billions of dollars," Mr. Atkinson said.
The government should fund more basic research in the development of collaborative robots, which will be important in improving productivity, said Srinivasa Narasimhan, interim director and professor at Carnegie Mellon University's Robotics Institute. The institute receives research funding from the National Science Foundation and other government agencies.
"The research might take...20 years to create robots that work hand-in-hand with humans in a safe, predictable, trustworthy environment, " Mr. Narasimhan said. U.S. universities are making great inventions in robotics, but "there is a gap between when the government stops funding and when industry starts funding or taking it up," he added.
Mario Harik, chief information officer at XPO Logistics Inc., said robots have helped the Greenwich, Conn., transportation and logistics services company boost productivity at warehouses, including in picking, packing and sorting tasks. Average fulfillment time, from receiving an order to moving the goods out of the warehouse, has been cut to under 40 minutes from several hours, he said.
A redesigned workflow focused on robotic technology has increased employee productivity by four to five times and has eliminated employees' walking time by nearly 80%, he added.
"We expect these benefits to increase as the public and private sectors invest more. Just as importantly, it makes our employees' jobs safer and easier," Mr. Harik said.
In robotics, the U.S. should follow the example of Germany, which funds R&D but also develops standards and certification bodies that promote the use of robots, said David Autor, professor of economics at the Massachusetts Institute of Technology.
Germany, like China, identified a need for robotics to improve worker productivity, particularly in factories. "Investments in human capital, having proper incentives, and having good institutions that kindle productivity are incredibly important," Mr. Autor said.
Write to Agam Shah at email@example.com
(END) Dow Jones Newswires
September 18, 2019 18:43 ET (22:43 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.