Professor Romer
Goes to Washington

Wall Street Journal, January 25, 2001 (page A1)

PAUL ROMER is a big-name Stanford University economist who holds the refreshingly naive view that if you explain a good idea to enough important people, they'll do something. So he came to Washington last week, not for black-tie inaugural receptions, but to talk up a scheme to ensure that life is better for future generations.

The problem, as Mr. Romer sees it, is that the U.S. isn't turning out enough scientists and engineers to make discoveries that will pay off in 50 years. (see further discussion in his May 2000 SIEPR Discussion paper # 99-20 Should the Government Subsidize Supply or Demand in the Market for Scientists and Engineers)

While U.S. colleges awarded 18% more bachelor's degrees in 1997 than in 1987, they awarded 37% fewer degrees in computer science, 24% fewer in math, 16% fewer in engineering and 2% fewer in physical sciences, the National Science Foundation says. Graduate enrollments in science are up but only because so many foreign students are coming to the U.S. "We're fishing the pond. We're not restocking it," says NASA administrator Daniel Goldin.

Mr. Romer's diagnosis is arresting since it comes from a lifelong academic. U.S. colleges and universities, so often celebrated for contributing to America's economic successes, are a bottleneck. Colleges discourage undergraduates from majoring in science, he says. They make science courses much harder than other fields. They relegate undergraduate teaching to graduate students. Why? Partly because science majors need costly laboratories and history majors don't; partly because professors, who influence graduate students by controlling their funding, are preoccupied with cloning themselves. The result a glut of would-be professors and a shortage of industrial researchers.

Mr. Romer's prescription is a federal program to change the incentives, dangle $1 billion in bounties, perhaps $10,000 a head, to colleges that increase their output of undergraduate science majors. And offer 100,000 promising high-school students $20,000-a-year fellowships only if they go on to graduate study in science.

His critique makes university presidents squirm. Some challenge him. When pressed, others say he may be on to something. Columbia University's George Rupp says his scientists would welcome more majors but acknowledges "a tendency to screen out all except the most gifted." Joe Wyatt, Vanderbilt University's retired chancellor, doubts that colleges overtly discourage science majors but concedes that "it is more costly to offer science courses."

Mr. Romer is hard to dismiss. He overturned the prevailing view in economics by arguing that discoveries don't simply appear when inspiration strikes but reflect the effort put into innovating. Conventional economics teaches that resources are scarce. Mr. Romer teaches that ideas aren't -- we'll never run out of them -- and that ideas matter more. It may sound obvious, but Nobel Prizes go to those who make arguments that seem obvious -- after they have had the smarts to make them first.

Mr. Romer's theory is profoundly optimistic. We can take steps to make the economy grow faster over time. Only an optimist could think that a man armed with an idea could accomplish something in Washington, a city clogged with special-interest agendas financed by campaign contributions. It was a short hop from Mr. Romer's ideas to his current quest. "If you believe that ideas drive prosperity, you ask where do ideas come from? The answer is skilled people," he says. "The more people you have prospecting, the more you will be stumbling on rich veins of gold."

To encourage innovation, government spends heavily on research. This diverts prospectors to favored spots but doesn't necessarily increase the number of prospectors. Government is trying to get more young people interested in science. Good idea, but it won't work unless colleges increase the number of science majors.

Until recently, Mr. Romer shunned the political arena. He didn't want to follow his dad, a former Colorado governor. And he wasn't willing to be a team player on a politician's squad, preferring to dispense blunt advice from the sidelines.

But now he is flying east regularly to see congressional staffers, whose bosses are eager for alternatives to special visas for foreign scientists. He meets with forums such as the Council on Competitiveness, the Committee for Economic Development and the Government Industry University Research Roundtable, which shape consensus in Washington. Hungry for scientists, business executives applaud. "There is a very serious bottleneck, and it's the kind of problem that can be approached by government policy," says William Haseltine, chairman of Human Genome Sciences Inc.

So now the professor has become a pupil, learning the ways of Washington. Don't knock federal technology subsidies to business, counsels one veteran. Doing so is divisive. Mr. Romer, a critic of such subsidies, is trying.

But he remains the professor. "What could we do if we thought very big about doing something that is going to have an impact on economic growth in the 21st century?" he asks. What would rival the 1862 Morrill Act, which financed land-grant universities? The G.I. Bill of Rights, which drew World War II veterans to college? The founding of computer science as an academic discipline? These are the right questions.