Cuts to government funding for basic research–already at dangerously low levels–could have devastating long term economic effects nationally, locally
Our greatest responsibility is to be wise ancestors—Jonas Salk
In 1994, San Diego lost an enormous part of its identity. The city was known as an aviation haven. Its role in aviation history became cemented when it produced the Spirit of St. Louis, the first aircraft to fly across the Atlantic Ocean on one tank of fuel. Aircraft, missiles, defense related electronic systems along with the Department of Defense have practically defined San Diego. It was what made the local economy tick. Heck, it was the local economy.
That all changed when General Dynamics closed its Convair division, putting an end to the defense and aviation manufacturing giant’s presence in the city. At the peak of its influence, General Dynamics employed in excess of 18,000 San Diegans, and was an integral part of the San Diego culture. When they left, only a giant, gaping hole remained, both physically with the massive, abandoned Kearney Mesa campus, and economically.
The Department of Defense is still here, and is still the region’s largest employer. But for nearly a decade the region has struggled to redefine itself; to replace what had for so long been the heart of the local economy.
Slowly but surely a new identity started to emerge. San Diego is home to one of the premier research universities in the country, doing pioneering work in health sciences, renewable energy, and information technology. With UC San Diego at its epicenter, combined with the growing research prowess at San Diego State University, biotech and clean tech have become the economy of the future for the region. A 2004 Milken Institute study determined the San Diego metropolitan area to be the number one biotech research cluster in the country.
As research’s role in the region grew, San Diego began to strive to become the “Silicon Valley” of biotech and cleantech; to become as synonymous with biotechnology and clean energy research as the Bay Area is with computer technology, and every bit as vital as an economic engine. Those efforts to this point have been exceptionally fruitful, as new tech startups have sprouted like the algae being turned into the fuel of tomorrow.
That could change at the end of this week if the sequester is allowed to happen as currently scheduled. “Instead of calling it sequestration, we should call it an amputation, where you get to choose which of your limbs you are going to lose,” explained Dr. Geoff Wahl, a leading cancer researcher at the Salk Institute at a media availability arranged last week by Congressman Scott Peters.
There is little doubt that the sequester—indiscriminate, across the board cuts to the federal budget agreed to by Congress as an absolute last, and undesirable resort—will carry serious consequences for the national economy, and the San Diego economy in particular.
Basic research—the very foundation of the research cluster—depends heavily on federal dollars. Without it, research activity will slow to a crawl and could eventually wither away.
The sequestration (or amputation) threatens to cut $2.5 billion from the National Institute of Health’s budget (8.2%). To put that in local terms: In fiscal year 2012, San Diego research groups benefited from 1,760 grants totaling more than $130 million from the National Science Foundation and $850 million from the NIH.
Nationally, cuts to research funding could mean that 2,300 fewer grants will be funded, costing 33,000 jobs. Locally, economists believe that at least 4,500 jobs could be lost. Due to a cut in NIH funding alone San Diego stands to lose 3,100 science jobs—which includes cancer research funding—according to information provided by Dr. Lynn Reaser, the Chief Economist at Point Loma Nazarene University.
If the sequester goes into effect, NIH grant cuts would cost San Diego about 10% of its sci/tech workforce, she said. About 42,000 people work in science and biotech, equating to the loss of 3,100 life-science jobs and an additional 1,400 industry support jobs, and $290 million in funding.
According to Wahl, in the past 25% of all grant proposals were funded. “That would fund all the research you could possibly need to do.” In recent years, that has been reduced to 7%, and will suffer even further as a result of the sequester.
“The budget cuts will bring a pervasive and unforgiving ripple effect that will reach every corner of our region,” said Mark Leslie, the interim president and CEO of the San Diego Regional Chamber of Commerce in a released statement. “For every one job lost in the military, tourism or innovation sectors of San Diego, another job and a half will also be lost by way of support and administrative roles, construction projects, support for local retail outlets, and much more. Today San Diego stands tall because of our military and innovation centers but sequestration will cut the very legs that we stand on and traumatize our economy.”
From the Conservative perspective, a loss in government funding would seem to be a blessing. The argument from that end of the political spectrum says that government should not be in the business of picking winners and losers in research, and that if the research is truly valuable, then private entities will step in to cover the gap in funding.
Not so, says Wahl. “Basically, basic research is typically longer term and quite risky, just the type of work that industry CANNOT typically do. Generally, industry takes the late stage highly developed ideas and then applies them to the clinic,” he wrote in an email. “The risk and investment as well as time to product are all lower. Thus, it is critical that the government support research so that discoveries can be converted to products. This is what Industry does very well. By contrast, basic researchers have little knowledge of how to make products.”
In an interview on PBS’s “NewsHour” discussing President Obama’s State of the Union proposal to fund a decade’s worth of research into mapping the human brain, Dr. Francis Collins, the Director if the NIH, noted the importance of government funding in the area of brain research and mapping:
The kind of science we’re talking about with this brain activity map, this would not happen in the private sector alone. There’s no direct product here that anybody would see as a reason to invest if you’re a stockholder. But it will be something that industry will want to follow closely and build upon.
Asked why private dollars alone would not be enough to fund the kind of activity that public entities such as the NIH and National Science Foundation supports, he said the turnaround is too long:
“The time it takes for that return on investment is unpredictable, and it’s probably not short. And the private sector understandably—they have stockholders to answer to—is not going to put hundreds of millions of dollars into something where the return is somewhat uncertain and may not happen for years to come. This is the natural place for the government to invest, just like the genome project (mentioned by President Obama in his State of the Union speech), where all that effort was funded by the taxpayer, but then resulted in this enormous proliferation of private sector activity that’s transforming medicine.”
Wahl noted that the government invested $3.8 billion in the Human Genome Project in the 90’s, which resulted in a $786 billion return to the U.S. economy. Without adequate government investment, that research and those results would never have happened. Intellectual property generated by the Salk Institute, he said, has led to the formation of 33 different companies in San Diego; intellectual property that originated through funding from the National Cancer Institute and NIH.
“When you provide money for scientific research, it is an investment. There is a return on that investment,” said Wahl.
“San Diego’s life sciences community, like San Diego’s defense community, is beholden significantly to investment from Washington, D.C,” said Mark Cafferty, the president and CEO of the San Diego Economic Development Corp. “There are many biotech and life sciences communities that are not. They don’t attract the same sort of research and development grants. They’re not built around research and development the way that San Diego is.”
If the sequester hits and funding is slashed “we face the prospect that the next Google or Facebook or the next great cure for cancer will be developed by someone who is educated at UCSD, but then moved to China, or Israel or Europe because those places are the ones that support science,” said Peters.
“Let me put it to you in school terms,” said Dr. Wahl. With only seven percent of grants being funded, “you take the hardest class with the most brilliant students, and you get a 93% on your final exam and you fail, because you didn’t get a high enough score. Which brilliant student is going to choose a career in this area when they have a 93% chance of failing? None.”
The Salk Institute tagline is “Where cures begin.” It takes a lot of work and a large investment of time and money to find these cures. You have to start somewhere, and researchers at Salk have made great progress—slow, painstaking progress, but progress nonetheless—in the area of cancer research. That research is particularly critical Bianca Kennedy, a patient advocate who works on outreach with the Salk Institute and Dr. Wahl’s team.
Kennedy was diagnosed with breast cancer at the age of 35. She underwent a bilateral mastectomy and six months of chemotherapy. A year ago she was diagnosed with breast cancer for the second time and has started another round of chemotherapy treatments. “It’s been an exceptional opportunity for the scientists in the lab to be able to see someone that’s not a stranger to them, but someone they’ve gotten to know on a personal and a professional level going through breast cancer. They’ve seen me go through some disfiguring surgeries. They’ve seen me go through treatments where I come in one day bald. And they’ve seen me go through a lot of the effects of chemotherapy, like a red steroid mass the day after my infusions.”
She says it helps to put a human face on the disease for the scientists. She also says that she has been able to remain in high spirits because she sees the work that they are doing, “working around the clock” to find a cure “with the kind of drive and dedication I’ve never seen before in any other community.”
“That gives me great hope and I’m very privileged to see those efforts,” she says.
Best case scenario, funding cuts as a result of the sequester will cause that research to be slowed even further. Worst case scenario: That research could come to an end.
Remember that Jonas Salk quote at the top of this story? “Making decisions today will have a profound impact on future generations,” says Geoff Wahl. For someone like Bianca Kennedy, funding for cancer research is the difference between hope and a death sentence.