The American Research University and the Global Agenda

President Richard C. Levin
April 16, 2008
Foreign Policy Association

It is a great pleasure to be with you this evening, and an honor to address members and guests of an association that leads the way in promoting international understanding. I thank you for the opportunity.

I am an economist by training and profession. Years ago, in addition to teaching survey courses in microeconomics and industrial organization, I also taught courses on such subjects as The Political Economy of Oil and The International Competitiveness of U.S. Manufacturing, reflecting a longstanding interest in the politics and economics of world affairs. Now I see these issues from the dual perspective of international economist and university president.

I suspect that you are not often inclined to put universities and foreign policy into the same sentence. So let me offer you a provocative hypothesis: namely, that the American research university is a highly effective instrument of U.S. foreign policy. It would be an even more effective instrument if our political leaders understood fully what a unique and powerful asset our country has in its great universities. I am going to state the case in six parts.

First, America's power, both hard and soft, derives from the strength of its economy, the current credit crunch notwithstanding. The strength of our economy depends in large part on our leadership in science, which in turn depends upon the strength of our research universities.

Second, the strength of our economy also derives from our capacity to innovate, which in turn depends upon the kind of education that America's top universities and liberal arts colleges provide.

Third, U.S. research universities are magnets for the most outstanding students from around the world. Those students either stay here or they go home. America wins either way. If foreign graduates stay, they strengthen the productive capacity of the U.S. economy. If they go home, they increase the capacity of their home economies, but they also serve as ambassadors for America and as advocates for openness, freedom of expression, and democracy.

Fourth, our nation's great universities are increasingly ensuring that American students gain exposure to the culture and values of another nation as a part of their educational experience. This offers the hope that our future leaders and engaged citizens will have greater global awareness in the future than in the past.

Fifth, our universities have broadened the conception of what constitutes a "student." Today, we provide leadership education to specialized audiences around the world, to help them address challenges to global political and economic stability, public health, and the environment.

Finally, with respect to at least one important item on the global agenda - how to respond to the threat of global warming - our universities have become laboratories to demonstrate that solutions are technically possible and economically feasible.

Let me discuss each of these points in turn.

Leadership in Science

For decades, America's competitive advantage in global markets has derived from its capacity to innovate - to introduce and develop new products, processes, and services. That capacity depends in large part on America's leadership in science, and the principle locus of scientific advance has been our research universities.

The emergence of universities as America's primary machine for scientific advance did not come about by accident. Rather, it was the product of a wise and farsighted national science policy, set forth in an important 1946 report that established the framework for an unprecedented and heavily subsidized system in support of scientific research that has propelled the American economy. The system rested upon three principles that remain largely intact today. First, the federal government shoulders the principal responsibility for financing basic science. Second, universities - rather than government laboratories, non-teaching research institutes, or private industry - are the primary institutions in which this government-funded research is undertaken. This ensures that scientists-in-training, even those who choose industrial rather than academic careers, are exposed to the most advanced methods and results of research. And, third, although the federal budgetary process determines the total funding available for each of the various fields of science, most funds are allocated, not according to commercial or political considerations, but through an intensely competitive process of review conducted by independent scientific experts who judge proposals on their scientific merit alone. This system of organizing science has been an extraordinary success, scientifically and economically.

Oddly enough, for political and cultural reasons, no other nation has successfully imitated the U.S. system of supporting basic science, the source from which all commercially oriented applied research and development ultimately flows. In Europe, too much research has been concentrated in national institutes rather than universities, divorcing cutting-edge research from training the next generation of industrial scientists and engineers. And, in the U.K. as well as continental Europe and Japan, most research funding has been allocated by block grants to universities or departments, rather than by the intensely competitive process of peer-reviewed grants to individuals and research groups. As a result, our lead in science has been maintained. Even today, more than 30% of scientific publications worldwide are authored in the U.S., and nearly half the world's Nobel prizes in science go to Americans.

Our competitive advantage in emerging industries based on science - such as computers in the 1960s, software in the 1990s, and biotechnology today - should not be taken for granted. Yet federal funding in support of basic research has waxed and waned. The budget of the National Institutes of Health was doubled between 1998 and 2003, a 14% annual rate of growth. For the past five years, the NIH budget has grown at annual rate of less than 2%, failing to keep up with inflation. This means that much of the young talent we trained during the boom cannot get funding today. What we need to succeed as a nation is a steady, predictable growth in basic research, at the rate of long-term average growth in GDP. If we don't do this, we are likely to lose our wide lead in biomedical technology, and we will fail to establish ourselves as the world leader in the other major area of emerging importance - alternative energy technologies.

Leadership in Innovation

Our hard and soft power in foreign affairs depends on the strength of our economy. And the strength of our economy depends not only on having scientific leadership, as I have just argued, but also on our national capacity to translate cutting-edge science into commercially viable technologies. This capacity depends in turn on two principal factors: the availability of financial capital and an abundance of innovative, entrepreneurial human capital. Our highly decentralized financial system, despite its endemic cyclicality of which we are today painfully aware, has unique advantages in encouraging investment in innovation. Funding for start-up companies in the U.S. is more easily available, and more adequately supported by value-added services, than anywhere else in the world.

And, thanks to the kind of higher education we provide, the human capital required for innovation is more abundant and more effective in the U.S. than anywhere else in the world. Why? Because, at our best colleges and universities, we educate students to be creative, flexible, and adaptive problem-solvers, capable of innovation and leadership in science, business, and the professions. We are told constantly that China and India are training more engineers than we are. And it is true that we could and should invest more heavily in science, math, and engineering education at all levels to ensure that our graduates have the technical capacity to succeed. But if you look closely at China and India, you will see that their aspiration is to educate students who are more like ours - students with the capacity to think creatively and independently.

In the modern economy, many successful companies produce products or services based on technology or marketing strategies that didn't exist a decade or two ago. New scientific discoveries are made every day, and new theories displace old ones with relentless regularity. The radical changes in communications technology that we have experienced over the past two decades have opened up whole new industries and destroyed others. In such a world, knowledge of a given body of information is not enough to survive, much less thrive; scientists, business leaders, and government officials alike must have the ability to think critically and creatively, and to draw upon and adapt ideas to new environments.

The methods of undergraduate education used by America's most selective universities and liberal arts colleges are particularly well suited to prepare students for a changing world. These institutions are committed to the "liberal education" of undergraduates. The premise underlying the philosophy of liberal education is that students will be best prepared for life if they can assimilate new information and reason through to new conclusions. Since any particular body of knowledge is bound to become obsolete, the object of a contemporary liberal education is not primarily to convey content, but to develop certain qualities of mind: the ability to think independently, to regard the world with curiosity and ask interesting questions, to subject the world to sustained and rigorous analysis, to use where needed the perspectives of more than one discipline, and to arrive at fresh, creative answers. While many other cultures favor passive education and technical mastery, we in America gain from a pedagogy that enlarges the power of students to reason, to think creatively, and to respond adaptively.

The elements of that pedagogy are undoubtedly well known to this audience: small classes with ample opportunity for student participation, exams and homework assignments that ask students to weigh conflicting points of view or to solve problems actively, rather than merely reciting facts or the opinions of authorities. For the past four summers, I have led a workshop for the leadership teams of China's top universities. The number one topic on their agenda is how to reform curriculum and pedagogy to reflect the best practices of American universities. Why? Because they see in the products of U.S. education, including those U.S.-educated Chinese who are coming to dominate their own faculties, greater creativity and an enlarged capacity for innovation. China's political leaders are encouraging this effort at university reform, because they recognize that creativity and the capacity to innovate are characteristics that China will need in order to compete when they can no longer rely on a steady stream of low cost labor migrating from the countryside to industrial employment. It is a sad fact that China's leaders have a more sophisticated understanding of the decisive advantages of U.S. universities than our own political leaders.

Educating International Students

Nearly one-quarter of all students who leave their home countries for higher education abroad come to the United States, and our nation's share of the very best students is much larger. Only the finest universities in the United Kingdom offer serious competition to the best institutions in the United States, although in recent years Australia and Singapore have made significant efforts to compete for strong international students. These countries made substantial gains in the first years after the passage of the Patriot Act, when failure of the Departments of State and Homeland Security to adjust rapidly to new requirements rendered many thousands of students unable to secure visas in time for the start of the academic year.

The problem with student visas has now largely been fixed, thanks to a felicitous high-level intervention. But it is seldom appreciated in policy circles how much America gains from this inflow of international students. Nearly half of America's Nobel Prize winners in science have been foreign born. In the current debate about immigration policy, almost all the public attention focuses on the inflow of low-income immigrants from Mexico and the Caribbean. Outside Silicon Valley, Seattle, and Route 128, we hear too little about the difficulty our most technologically sophisticated companies are having in attracting sufficient highly skilled scientists and engineers. Much of the outsourcing of R&D undertaken by high tech firms is not driven by cost considerations, as is the outsourcing in manufacturing, back office work, and call centers. Instead, much R&D outsourcing is forced by the absence of qualified, highly skilled engineers and scientists with graduate degrees.

The annual quota for H-1B visas, covering foreign students who seek to remain and work in the U.S. after graduation, has been fixed for years at 85,000, and the annual allocation is typically exhausted within days at the start of each year. Recently, a new rule has extended the period of stay under an H-1B to 29 instead of 12 months. But the number of visas to be allocated has not increased. The demands of high tech industry have been lost in the contentious debate about the illegal aliens and the immigration of unskilled workers.

There is no doubt that our nation would benefit from retaining more graduate engineers and scientists, and for them there's a simple solution: scrap the H-1B visa and staple a green card to the diploma!

As I mentioned before, our universities serve the nation well not only by educating those who stay in our country, but also by educating those who return to their home country. It's true that in some cases, we would gain even more by retaining highly skilled graduates. But it's also true that those who return home typically serve as ambassadors for American values, or at least they understand them. I have already cited one example: the pressures for curriculum reform and critical thinking in China, along with pressures for greater freedom of expression on university campuses, are coming in large measure from those educated in the United States. Again and again, I encounter international students at Yale who tell me that they have been astounded by the degree of openness and intellectual freedom they find in America. And when I travel abroad, I see senior leaders in influential positions whose views of the world have been transformed by their educational experience in the United States.

Sending Our Students Abroad

Increasingly, American universities are also encouraging domestic undergraduates to spend time in another country. Traditional junior-year abroad study programs remain widely available. They attract a large fraction of students at institutions like Dartmouth and Middlebury, but only a modest fraction of undergraduates at Yale. We have responded by offering every undergraduate at least one international study or internship opportunity either during the academic year or during the summer. And we provide the financial resources to make it possible. By mobilizing our alumni around the world, we have created a superb infrastructure of serious summer work internships in seventeen cities: Shanghai, Hong Kong, Singapore, Delhi, Accra, Cape Town, Kampala, Athens, Brussels, Budapest, Istanbul, London, Madrid, Buenos Aires, Joao Pessoa, Montreal, and Monterrey. In addition we send hundreds abroad every summer for immersion language courses or Yale summer school courses taught at partner institutions. We expect that an increasing number of institutions will follow our lead in making an overseas experience available to every student, and eventually in making an overseas experience a requirement for the bachelor's degree.

I believe that a twenty-first century liberal education requires not simply the capacity to think critically and independently, but also the capacity to understand how people of different cultures and values think and behave. The world has grown smaller and nations have become more interdependent. Whatever profession they choose, today's students are likely to have global careers and deal regularly with collaborators or competitors who see the world differently. To be adequately prepared for such careers, exposure to another culture is necessary. And a single meaningful encounter with cross-cultural differences in one's formative years will typically make it possible to learn easily from subsequent encounters with other cultures later in life.

I also believe that providing American students with a meaningful overseas experience is the best way to escape the insularity and parochialism that has too often influenced American foreign policy. With international exposure, our students will not only become better professionals, but better citizens. By getting more U.S. students abroad, our colleges and universities will create a more informed citizenry and one capable of thinking about foreign policy issues with greater sensitivity and intelligence.

Educating Leaders to Advance the Global Agenda

Our universities serve not only those students who enroll full-time in courses of study leading to undergraduate, graduate, and professional degrees, they are also increasingly engaged in the provision of short-term executive education. Many institutions, notably the Kennedy School at Harvard, make a substantive contribution to U.S. foreign policy by running short-term and even semester-length courses for foreign government officials. Recently, Yale has initiated a series of multi-disciplinary programs for senior governmental officials from China, India, and Japan. To cover effectively the complexity of the most important global issues, we draw upon faculty from throughout the university - from our professional schools of law, management, forestry and environmental studies, and public health as well as our departments of economics, political science, and history. The "students" in these programs typically have the rank of vice minister or, in the case of India and Japan, member of parliament.

Education programs such as these have very high impact, because we are working with students who already occupy positions of significant power and influence. Even at America's finest universities, only a small fraction of our regularly enrolled students turn out to have a significant influence on the affairs of the nation and the world.

Such high-level programs have an effect similar to that of "track two" diplomacy, informal interaction among senior government officials. Only here the contact is not government-to-government, but U.S. experts-to-foreign governments. Even if the views of our academic experts do not always align with the position of our government, the foreign ministers and parliamentarians who attend these programs leave with a deeper understanding of American perspectives.

Leading by Example

Let me point to one final, idiosyncratic way in which American universities can assist our nation in addressing the global agenda. The problem of global warming cries out for a multinational solution: reducing carbon emissions in a way that is equitable and efficient. Developing nations like China and India fear that serious limits on greenhouse gas emissions will unfairly constrain their future growth. Skeptics in the U.S. fear that controlling carbon will impose a large cost on our economy as well. And yet all recognize that, if we collectively fail to take action, future generations will likely face much larger costs from economic dislocation and environmental destruction.

Universities have an important role in the effort to curtail global warming. Much of the work on climate science that has led to the detection and understanding of climate change was done within our walls, and we have been at the forefront of modeling the economic, social, and environmental impact of rising global temperatures and sea levels. We will also participate in developing carbon-free technologies such as solar, wind, and geothermal power, as well as in finding more efficient ways to use carbon-based fuels.

More recently, universities have begun to play a different role, taking the lead in setting standards for carbon emissions that are substantially more restrictive than those adopted by national governments. In 2005, Yale made a commitment to reduce carbon emissions to 10% below the 1990 level by 2020, which translates to a 43% reduction in our 2005 carbon footprint. This is a reduction in the range of what will be needed to keep global temperatures from rising more than 2 degrees centigrade by the end of the century. It is an ambitious goal. If the nations of the world were to negotiate a reduction of this magnitude in Copenhagen in 2009, we would be taking a giant step toward saving the planet.

And here's the good news. We believe that a reduction of this magnitude is not only possible but also relatively inexpensive. We estimate that we can achieve this goal at cost of less than 1% of our annual operating budget, perhaps no more than one-half of 1%.

We have made this commitment because we believe that in so doing we are being faithful to our mission as a teaching institution. We are leading by example. We have encouraged our sister institutions in the Ivy League to join us in setting a specific goal for reducing carbon emissions. And we are working on eliciting similar commitments from our nine partners in the International Alliance of Research Universities and from the 34 Chinese universities with which we have been working on curriculum reform and other issues over the past four years.

We have no illusion that the collective action of universities will have a measurable impact on global carbon emissions. But we do hope that our action will inspire others to believe that significant carbon reduction is feasible and not exceedingly costly. In leading by example, we hope to make a global carbon compact more likely.

Conclusion

Let me recapitulate. I have argued that America's universities are a highly effective instrument of U.S. foreign policy, because they:

• Have given America decisive leadership in science
• Educate students with the capacity to innovate
• Educate international students who strengthen our nation by staying here or serving as ambassadors when they return home
• Give U.S. students a deeper understanding of foreign nations and cultures
• Prepare international leaders to tackle the global agenda, and
• Demonstrate solutions to global problems.

I hope that I have convinced you. Thanks for listening.