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Research and development drives innovation and innovation drives long-run economic growth, creating jobs and improving living standards in the process. University-based research is of particular importance to innovation, as the early-stage research that is typically performed at universities serves to expand the knowledge pool from which the private sector draws ideas and innovation. As such, it is troubling that in 2008 the United States ranked 22nd out of 30 countries in government-funded university research and 21st in business-funded university research. Moreover, the nation is falling even farther behind. From 2000 to 2008, the United States ranked 18th in the growth of government-funded university research, with countries like China, Korea and the United Kingdom significantly outperforming the United States. Worse still, the United States ranked 23rd in the growth of business-funded research, with it actually declining as a share of GDP. In contrast, collaboration between universities and business grew dramatically in nations like Austria, China, Israel and Taiwan. Given the importance of university research to the U.S. innovation system, and the primary role that innovation plays in economic growth, competitiveness, and job creation, the data presented in this report should serve as a wakeup call for U.S. policymakers. The United States can no longer rest on its laurels and assume that its universities will continue to lead the world, just because they once did. It is up to policymakers to recognize the existence of the problem, and then to implement policies that target the specific areas of deficiency, such as the underfunding of university research. Then, and only then, will the United States be able to restore its position as the global innovation leader. (Contains 4 figures, 7 tables, and 42 endnotes.)

Innovation has powered America's economy, creating good jobs and a high standard of living. Yet, the U.S. share of innovation-based industries is in decline, jeopardizing our status as the world's innovation leader. And one reason is that the United States has been unable to produce enough of its own workers with sufficient skills in science, technology, engineering and math (STEM). However, while there is increasing concern over how to increase STEM graduates, the prevailing approaches to solving the STEM challenge have not worked and are not likely to work. It is time for new approaches based on driving innovation in STEM education. This report discusses the limits of the prevailing approaches and outlines fresh approaches and specific policy recommendations to address America's STEM challenge. [For the full report, "Refueling the U.S. Innovation Economy: Fresh Approaches to Science, Technology, Engineering and Mathematics (STEM) Education," see ED521735.]