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Fred:
I agree that this particular scientific panel's "conclusions" reflect their perception of "the recent past more than the future". However, I see there being far more to the US' "loss of scientific leadership". I see the decline as preceding the "recent past" by a large margin!
Sure, dispersions upon science by US leadership can affect perception across the world (including here at home). Sure, lack of public funding slows progress. Sure, a ban on certain kinds of research, or, rather, the use of certain materials for certain kinds of research, can at least, on the surface, appear to slow progress (of some kind or other). Unfortunately, I see the real problem as running far deeper than these more superficial issues.
What of the move away from corporate funded fundamental science research toward public funded research with the advent of the Cold War? Sure, it had some benefits (and I certainly wouldn't want to see an abolition of institutions such as NASA, and I believe the National Labs have a significant role to play), but now that the Cold War "threat" is gone, it is much more difficult for the federal government to justify as large a public expenditure (even as small as it really is compared to so many other governmental programs). But has the corporate sector taken up the slack? Have they even returned to near prior levels? Hardly!
After so many years of simply being able to sup at the table of science lain out by government labs (why spend the money when you can get so much for free?) they have become complacently dependent. It's a corporate form of the "dependence mentality" that the federal government has sewn for decades.
Besides, corporations have moved from a recognition that science creates the foundation for new products, services, markets, etc.; to a belief that all such comes through engineering and technology. After all, that's what they have been engaged in almost exclusively for oh these many decades. The problem is they (and I would say the majority of the US people) have lost sight of the fact that engineering and technology sup at the table of science, and unless one invests in the fundamental science the table will not be so readily stocked in the future.
A parallel, and possibly dependent, issue is the perception that Ph.D.'s belong in academia, and not the corporate environment. Look at how issues of "oversupply" of Ph.D.'s is framed: It's almost invariably framed in terms of how many Ph.D.'s are being produced relative to academic positions. After all, isn't that the sole place for Ph.D.'s? (There also appears to be corporate fear of any Ph.D.'s that aren't "home grown" [brought up within the company culture, indoctrinated in the corporate way].)
No, Fred, I fear the real issues run far deeper, and are more fundamental. Unfortunately, this leads me to be less hopeful that this "U.S. loss of scientific leadership" is to be but a "short-term phenomenon", let alone that "we are already seeing signs of a turnaround."
David