Will the CHIPS and Science Act be an inflection point for the U.S. scientific enterprise?  

The often overlooked “science” portion of the new bill is the culmination of one of the core legislative priorities of Senators Chuck Schumer (D-NY) and Todd Young (R-IN): the Endless Frontier Act (EFA)—an attempt to jumpstart American science and innovation by dramatically increasing federal funding.  

Yet, despite hopes that the bill will “unleash a new era of STEM in America through research and technology,” as the director of the National Science Foundation (NSF) recently put it, there are reasons for skepticism.  

Introduced by Schumer and Young in May 2020, the EFA’s hallmark provision was a $100 billion for a new technology directorate within the NSF and a regional “tech hub” program that would facilitate geographically diverse technology development and innovation capacity. But in the midst of COVID-19, the EFA took a backseat to pandemic policy, and the bill stalled out.   

But the 117th Congress brought the legislation back to life. In 2021, Schumer and Young reintroduced the bill as the more sprawling United States Innovation and Competition Act (USICA). In the interim, a series of bipartisan science reform bills had been advancing, driven in part by Rep. Lucas’s Securing American Leadership in Science and Technology Act (SALSTA)—which emphasized the role of basic science over technology-oriented research.   

In response to a competition with China and a semiconductor shortage, USICA passed in the Senate in June 2021. Following months of negotiation, the House amended USICA and sent it back to the Senate as the America COMPETES Act, an even larger bill including provisions on myriad issues both related and unrelated to innovation and competition.  

Since then, the House and the Senate have been negotiating through the conference process to reconcile these rival bills. But under threat and at impasse, a standalone bill seeking to drive investment in semiconductors was resurrected, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act.  

The hallmark of this bill—including $80 billion of its $270 billion in funding—is promoting domestic semiconductor manufacturing. But the bill also includes some of the most important pieces of science agency funding and reform, chiefly a scaled back version of Schumer’s technology directorate at the NSF and the tech hubs program—combined with the House’s reauthorizations of the Department of Energy’s Office of Science, the NSF, the National Institutes of Standards and Technology (NIST), and NASA. Now called the CHIPS and Science Act, Biden signed this bill into law on Tuesday.  

The bill is a victory for the federal research establishment. It contains important provisions likely to improve federal R&D and stimulate innovation. But, by itself, it will not fundamentally transform U.S. R&D. 

While the bill includes significant funding increases for federal R&D, these are considerably less ambitious than the original proposal. The EFA included $100 billion over five years for a new technology directorate within the NSF alone, $20 billion to Commerce for the regional tech hubs program, and billions more for other science and technology initiatives. By contrast, CHIPS and Science authorizes a comparatively modest $20 billion and $10 billion for each of these programs, respectively, and $83 billion over the baseline funding for federal science agencies spread out over five years. 

Still, the new bill provides a substantial funding boost to federal R&D—with more than $100 billion going to just three agencies (the NSF, NIST, and Commerce). This is a welcome increase for federal science agencies at a moment when inflation is driving down the value of research funding. But it is not a radical change in the larger picture of U.S. R&D.  

According the American Association for the Advancement of Science, industry accounted for 71 percent of all R&D spending in 2019, with federal spending covering 21 percent. A major goal of science and technology policy advocates in recent years has been to reverse or at least reduce this disparity between public and private funding. But, however significant, the increases from the CHIPS and Science bill are only a small fraction of U.S. R&D investments, totaling less than half of what the federal government spends on R&D in a year.  

Nor will this bill significantly affect the kinds of research funded by the public and private sectors. As it stands, the U.S. spends roughly $550 billion on applied research and development—roughly 84 percent of total U.S. R&D—as compared to $108 billion on basic research. 

Compared to the private sector, the government spends considerably more on basic research relative to its overall R&D budget, with 34 percent going to basic versus industry’s 7 percent. Although the CHIPS and Science bill does earmark $20 billion of its NSF funding increases for technological research—rather than the NSF’s traditional focus on basic research—it does not substantially alter the distribution of funding between basic, applied, and development research either within the federal government or the U.S. R&D system overall. 

To be sure, funding is not the only way to improve the federal research establishment. Unfortunately, however, the CHIPS and Science bill does not do enough to reform the federal research establishment. While it supports important research initiatives, geographic diversity, and a diverse talent pipeline, the bill leaves the present architecture of federal research funding basically untouched, ignoring key obstacles to innovation. 

Scholars in recent years have documented a range of issues that beset the U.S. R&D system, including the replication crisis, declining research productivity, bureaucratization of research, and the concentration of research dollars at a relatively small number of elite institutions. Various factors have been identified as potential causes, from tighter competition for funding, “grantsmanship,” perverse incentives, misuse of statistical techniques, “publish or perish” culture, overregulation, to outright discrimination. None of these problems will be solved simply by increasing federal funding. As I have written elsewhere, we need to fix science and not just fund it.  

Congress missed an opportunity to address these issues head on with the bipartisan momentum behind the CHIPS and Science Act. But it has clearly signaled that revitalizing federal R&D is a priority. Now, with new funding in hand, the science agencies should do their part, building on existing programs to improve research productivity, experimenting with new methods of distributing and evaluating research grants, gathering more evidence about what works, and coordinating across agencies to tackle common problems. Here the executive branch, including the White House Office of Science and Technology Policy—arguably the only governmental department with a bird’s eye view on the sprawling federal research establishment—can play a vital role. 

If we want to “unleash a new era of STEM in America through research and technology,” we need to think creatively—beyond just dollar signs—about new ways to organize and support American science and innovation. Increased federal funding is a good start. Now the hard work begins.