Science and the economy, both are usual topics in today's news, but what effect does one have on the other? Well, a great example of that is that in the late 80s, the US federal government created a three-billion-dollar, 15-year project to sequence the human genome. Not only did the project advance science, it hit the economic payload. In 2012, human genome sequencing was directly responsible for creating an estimated 280,000 jobs, 19 billion dollars in personal income, 3.9 billion dollars in federal taxes, and 2.1 billion dollars in state and local taxes. And all for the very low price of about two dollars per year per U.S. resident.
"It's an incredible rate of return," says MIT economist Simon Johnson.
However, it's not just genomics that pays off. Every additional 10 million dollars in public funding granted to the National Institutes of Health can produce an average of nearly three patents and an additional 30 million dollars in value for the private-sector firms that own those patents. When considering military technology, each dollar in publicly funded R&D leads to another three to six dollars in private-sector investment.
In general, "Public investment in science has very big economic returns," says Johnson, who is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management. Yet after a surge in science funding spurred by World War II, the U.S. has lowered its relative level of public investment in research and development-from about 2 percent of GDP in 1964 to less than half of that today.
Reviving U.S. support of science and technology is one of the best ways we can generate economic growth, according to Johnson and his MIT economist colleague Jonathan Gruber, who is the Ford Professor of Economics in MIT's Department of Economics. And now Johnson and Gruber make that case in a new book, "Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream," published earlier this month.
In the book, the two professors argue that public investments in science would create not only overall growth but also better jobs throughout the economy, in an era when idling incomes have caused stress for a large percentage of Americans.
"Good jobs are for MIT graduates, but they're also for people who don't finish college. They're for people who drop out of high school," says Johnson. "There's a tremendous amount of anxiety across the country."
Actually, stimulating growth across the country is a key theme of "Jump-Starting America." Technology-based growth in the US has been focused in a few "superstar" cities, where high-end tech jobs have been accompanied by increased congestion and sky-high housing prices, forcing out the less fortunate.
"The prosperity has been concentrated in some places where it's become incredibly expensive to live and work," Johnson says. That includes Silicon Valley, San Francisco, New York, Los Angeles, Seattle, the Washington area, and the Boston metro area.
And yet, Johnson and Gruber believe, the U.S. has a number of cities where the presence of universities combined with industrial know-how could produce more technology-based growth. Some already have: As the authors discuss in the book, Orlando, Florida, is a center for high-tech computer modeling and simulation, thanks to the convergence of federal investment, the growth of the University of Central Florida, and local backing of an adjacent research park that supports dozens of thriving enterprises.
"Jump-Starting America" contains a list of 102 metropolitan areas the authors think are suitable for investment and growth, thanks to well-educated work forces and affordability, among other factors. At the top of the list are Pittsburgh, Rochester, and three cities in Ohio: Cincinnati, Columbus, and Cleveland.
