The Converging Forces of the Quiet Crisis
Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute
Securities and Exchange Commission
African American Council
Tuesday, February 7, 2006
Good afternoon. Thank you for inviting me to speak with you.
I feel a certain kinship among those whose mission is regulation for the protection of the investing public, and in so doing, insuring a robust equities market for national and global investors and businesses. I played a similar protective role, albeit in the public health and safety arena, during my tenure as Chairman of the U.S. Nuclear Regulatory Commission, and, I expect, I shared similar challenges. The regulator’s road is both satisfying to travel and, occasionally, strewn with large boulders!
And, in that commonality, lies a convergence.
I speak frequently of convergences the coming together of seemingly disparate forces from which emerges something new.
There exists convergence in securities regulation, epitomized by changes at the New York Stock Exchange. As you may know, I sit on the Board of Directors of the New York Stock Exchange.
The New York Stock Exchange sits at a point of convergence, as it transforms into a public company. In the process, the New York Stock Exchange is moving from a heavily human-mediated auction market, which provides best price and huge liquidity to investors, to a hybrid market which intends to merge the best aspects of an auction market with the speed of greater automation.
These changes are driving, at the New York Stock Exchange, major institutional transformation at the nexus of risk management, technology, and regulation.
Because of this, New York Stock Exchange Regulation has a number of initiatives underway focused on risk assessment in all aspects of regulatory oversight from market surveillance to member firm regulation, on deploying and optimizing uses of technology in the New York Stock Exchange regulatory program, and on lessening the burden of duplicative regulation, especially as it relates to the rulebook and member firm regulation. This is being done in a way to ensure the greatest investor confidence. All I can say is, “stay tuned.”
In a broader context, we see convergence in technologies which combine micro-processors, telecommunications, integrated sensors, organic light emitting diodes (OLEDs), and other elements, to create new “smart” products. Examples range from automobile navigation systems to your PDAs.
We see convergence in science. Some of the most promising discoveries are made where disciplines intersect. An example is nanotechnology, which involves the ability to study and manipulate inorganic and biological materials on the molecular level. Nanotechnology creates new materials with novel properties such as carbon nanotubes with extraordinary strength, flexibility, and low weight; or membranes for gas separation, or damage- and failure-resistant materials, or protein gels for wound treatment. Nanotechnology ranges across biology, chemistry, physics, materials science, polymer science, biomedical engineering, chemical engineering and other fields.
We see convergence where the tools of disparate disciplines are employed to create new approaches to old questions. For example, Econophysics employs the tools of physics especially the study of large complex systems comprising their own statistical logic to study wealth distribution and economic markets.
And, we see convergences borne out in our lives and careers. My own life was dramatically impacted by two convergences: I was born and raised here in Washington, and began kindergarten when public schools were segregated. The 1954 Supreme Court Brown versus the Board of Education decision changed that and I attended schools with advanced academic programs and received an excellent education.
The second was the impact on our nation of the Soviet launch of Sputnik, which spurred the nation to encourage an entire generation of young people to study science, mathematics, and engineering. I was among them, and my academic life and career unfolded accordingly.
An extraordinary convergence launched the civil rights movement a chapter of Black history which we honor this month.
We remember, of course, the late Rosa Parks, whose arrest on December 1, 1955 for refusing to give up her seat on a public bus sparked the Montgomery, Alabama, bus boycott. Her simple action was so powerful and world-changing, that when she died last October, she became the first woman to lie in honor in the Rotunda of the U.S. Capitol.
Remarkably, her life converged with that of the late Rev. Dr. Martin Luther King. A year before Mrs. Park’s historic act, Dr. King had accepted his first pastorate at the Dexter Avenue Baptist Church, in Montgomery, having completed his doctoral degree in systematic theology, at Boston University. Though new to Montgomery, Dr. King was chosen to be president of the Montgomery Improvement Association the organization which led the bus boycott.
The boycott lasted more than a year and media images of incidents of violence against protestors, and the bombing of Dr. King’s home, galvanized the nation around civil rights, and propelled Dr. King to national prominence.
The bus boycott ended when the United States Supreme Court upheld a lower court ruling to desegregate the Montgomery buses. The success of the boycott was a watershed event in the history of the American Civil Rights Movement, and it began a new, more vigorous phase in the struggle for desegregation. Dr. King went on, in 1957, to help create, and to become president of, the influential Southern Christian Leadership Conference, which brought together black churches and ministers to challenge segregation.
And, of course, we remember Dr. King’s widow, Coretta Scott King, who passed last week, and her devotion to maintaining his legacy, keeping the torch he lit for us burning pure and bright, sustaining the “stories of the past.”
The theme of this event “Educate To Impact: Using Stories From The Past To Write Chapters For The Future" expresses a convergence the power of the lessons of history to affect the future which is why it is so important to keep history alive.
Convergences are potent, creating opportunities or sometimes challenges.
A contemporary convergence is a growing disquiet over the ability of the United States to sustain its competitive edge in an increasingly competitive global marketplace.
Other nations have observed the elements which have created our success. As their economies have grown in the global ecosystem, they have ramped up their investments in science and engineering research and development. They are investing in their own intellectual capital. This is occurring at the same time that converging trends in the United States will have major impact on our global leadership.
What are those converging trends?
- Our own investment in research and development has declined by half, as a percentage of gross domestic product (GDP), over the past 35 years.
- U.S. immigration policies and new opportunities abroad have slowed the flow, to this country, of international students, scientists, and engineerswho have long been an important source of skilled talent for the U.S. science and engineering research enterprise.
- There are not a sufficient number of young scholars in our nation’s science and engineering “pipeline” to replace the highly skilled science and engineering professionals who will retire in the next decade.
- We have failed to excite and inspire our young people to achieve to the highest levels, as their middling scores on international science and mathematics examinations demonstrate.
- Our national demographics have shifted. Young women and ethnic and minority youth now account for more than half of the population. These youth traditionally have been underrepresented in science, mathematics, engineering and technology and today they hold only about a quarter of existing science, engineering, and technology positions. It is from this nontraditional group, this “new majority,” that the next generations of scientists and engineers must come.
And, this is our challenge: To engage, excite, inspire, encourage, mentor, foster these youth, and all of our young people, to pursue academic study in these challenging fields.
I have referred to these converging trends as the “Quiet Crisis.”
Why is it so important?
It is important because our science and engineering professionals comprise a mere 5 percent of our 140 million-person workforce. Yet, this small group has driven the powerful engine of American innovation for decades. American innovation fuels our economy, our health and security, our global leadership. It has been our wellspring of prosperity.
Yet, the converging forces are causing growing concern over our ability to compete effectively. China, as an example, builds about 200 new research centers a year. Enrollment in Chinese colleges has quadrupled to 20 million most taking so-called “hard” subjects meaning science, mathematics, and engineering.
In Germany, 36 percent of undergraduates receive degrees in science and engineering; in China, 59 percent; in Japan, 66 percent; and in America, 32 percent. On international examinations, U.S. 12th graders performed below the international average for 21 countries in mathematics and science.
And, in one year, U.S. industry spends more on lawsuits than on research and development. Some of this is attributable to the litigiousness of our society, but it, nevertheless, is a telling comparison.
The impact of the Quiet Crisis can be seen most vividly in the growing need for national energy security.
Energy is the, perhaps, most critical issue facing humanity, where 6.5 billion people are competing for the Earth’s dwindling supply of fossil fuels. By the year 2050, there will be 8 to 10 billion people, and their energy needs grow with their developing economies. Energy security may, indeed, be one of the biggest global challenges of the 21st century. The stability which true energy security would offer the world would be priceless.
I believe we understand that we can no longer merely drill our way to energy security. We will have to innovate our way to energy security. It will require major innovative advances in discovery, extractive, and transportation technologies for the remaining fossil fuel supply. It will require innovation in conservation technologies. It will require innovation and development of reliable and reasonably priced renewable energy systems. It will require innovation to develop other alternative energy technologies, including nuclear power.
These tasks, to be sure, require our highest creative and innovative capacities.
Innovation, and the development and exploitation of new technologies require peoplebright, talented, inspired, engaged, highly educated people who, of necessity, must be drawn from the complete talent pool including from our “new majority.”
Since it is a relative handful of individuals who make the breakthrough discoveries and inventions, and even fewer who make leapfrog innovations, we know that we cannot predict from where and from whom the next great ideas will emerge. Which is why innovation demands a virtual cauldron of diverse, smart, focused, disciplined, committed individuals who continually challenge each other.
And this means that we MUST draw these unique individuals from the entire talent pool, making sure that the entire new majority is educated, prepared for advanced scholarship, encouraged, and mentored.
I have been talking about the Quiet Crisis and the “New Majority” for some years now, calling for both a national conversation on the issue and the national will to take action.
That conversation has begun.
It is evidenced by a report, released a year ago, by the Council on Competitiveness, deriving from a year-long National Innovation Initiative. That report declared that “innovation will be the single most important factor in determining America’s success through the 21st century...”, and that “...over the next quarter century, we must optimize our entire society for innovation...” I serve on the Executive Council of the Council on Competitiveness, and Rensselaer Polytechnic Institute hosted, in the fall of 2004, one of the three regional summits of the National Innovation Initiative. Not mincing words, the Council report’s “Call to Action” is subtitled “Innovate or Abdicate.”
It is evidenced by a report released in July by fifteen of the nation’s most prominent corporate chief executive officers spearheaded by the Business Roundtable. The report, titled “Tapping America’s Potential: The Education for Innovation Initiative,” expressed “deep concern about the United States’ ability to sustain scientific and technological superiority through this decade and beyond. To maintain our country’s competitiveness in the 21st century, we must cultivate the skilled scientists and engineers needed to create tomorrow’s innovations.” Printed on the report’s front cover is the goal: “Double the number of science, technology, engineering, and mathematics graduates in the next ten years.”
It is evidenced by concerns voiced by federal agencies whose mission relies on the science, technology, engineering, and mathematics (STEM) workforce: especially the U.S. Departments of Education, Homeland Security, Commerce, Labor, Energy, and Defense.
Last August, Michael W. Wynne, now Secretary of the Air Force, addressed “DARPA Tech,” the DARPA Systems and Technology Conference, noting that the U.S. Department of Defense (DoD), along with the vast U.S. defense industry, must fill vacant STEM positions with top secret “cleared” or “clearable” STEM professionals [i.e. U.S. citizens]. He readily acknowledged that it has become increasingly difficult to find qualified Americans. Nearly one in three DOD civilian science STEM employees is eligible to retire. In seven years, nearly 70 percent will be of retirement age. Replacing them is a real challenge.
Further confirmation comes from the Center for Strategic and International Studies (CSIS). Titled “Waiting for Sputnik! Basic Research and Strategic Competition” the report warns that there is growing evidence that the United States is not funding the right kinds of research and development. It holds that the under-funding of basic research, especially in the physical sciences, puts U.S strength at risk by failing to invest in sustaining its global competitiveness a major challenge for our future security.
And, it is evidenced by the release, last fall, of the National Academies report “Rising Above the Gathering Storm,” carrying the same basic message, and calling for significant investment in education and research. I served on the panel which wrote the report. Interestingly, the report has generated abundant media attention and prompted copious concurring commentary.
I joined corporate, academic, and federal agency leaders in Washington in December at the National Summit on Competitiveness. The Summit was designed to urge a revitalization of the United States commitment to basic research and development, and to grow the national pool of scientists and engineers.
And, so, the conversation is begun, and national dialogue ensues. The question, then, becomes, do we have the national will to take action?
In December, Senators John Ensign (R-NV) and Joseph Lieberman (D-CT) introduced the National Innovation Act of 2005 based on the recommendations of the Council on Competitiveness National Innovation Initiative report. The legislation would nearly double the National Science Foundation budget, now $5.5 billion, by 2011. It would create hundreds of new graduate fellowships, encourage all federal agencies to invest in high-risk research, and revise the tax code to promote more corporate research spending. It recommends federal investment in advanced manufacturing, regional economic development, health care, and defense technologies.
Senators Lamar Alexander, Jeff Bingaman, Pete Domenici and Barbara Mikulski introduced the Protect America's Competitive Edge (PACE) legislation late last month. The legislation will enact the 20 recommendations of the recent National Academy’s report, Rising Above the Gathering Storm, including:
- Increased authorizations for federal science funding for National Science Foundation, NASA, and the Departments of Defense and Energy;
- Additional funding for education programs and initiatives, as well as restructuring of Department of Energy science programs;
- Incentives and encouragement for math and science teacher training;
- Immigration reform, and patent and export control;
- And, research and innovation tax incentives.
And now, in his State of the Union address last week, President Bush outlined an “American Competitiveness Initiative.” This call to action along with the recent bipartisan Congressional initiatives provides critical momentum for a new emphasis on innovation.
Now, the Administration and the Congress must link the policy proposals to the budget, ensuring real investment in the components of an innovation agenda that are so critical to our nation’s economic and national security. In other words, we must link rhetoric to reality.
I believe the components of a comprehensive innovation agenda must include: support for basic research across a broad disciplinary front, investment in enhanced K-12 science and mathematics education, and direct funding for students pursuing degrees in science and engineering at the undergraduate and graduate level. It requires a permanent R & D tax credit, together with an expanded definition of R & D, which includes training, research, and internship opportunities for young people pursuing degrees in science and engineering. It requires a comprehensive review of intellectual property rights in light of global competition. It requires many things not all of which I can discuss this afternoon. I refer you to the myriad reports I referenced earlier.
This new national focus is encouraging, but we must see that it is followed by effective programs to recreate the excitement and the commitment that the nation exhibited after the launch of Sputnik.
We must remain watchful, too, of the new proposals so that every new program embraces the young women and ethnic minority youth who comprise the “new majority” of the new demographics. We must remember that the “new majority” has few role models to emulate in mathematics and science, technology and engineering and in securities, markets, and finance, too, for that matter.
Which is why the convergence of your presence, here today, your interest in and concern for the “Quiet Crisis,” and for Black History Month, and its “stories from the past”, our own American history, are so important. Your own educations, your occupations, your professional positions within the SEC indeed, all that you have achieved in your lifetimes are imbued with added value when you become role models for those who follow. Indeed, I would hold that these are the very “stories from the past” upon which we write “the chapters of the future.” By building on our strengths, by conjointly bringing along the next generations, by investing our “social capital” in our “human capital,” we create the future. This is, of course, how we “educate to impact.” History plays forward.
And so, I encourage you to add your voices to the national dialogue which is now engaged the national dialogue which turns on three intersecting elements:
- our national economic need for continued global competitiveness;
- the urgency of national, and global, energy security;
- And, on tapping the entire talent pool for the next generations of innovators in all fields.
Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.