American science may be under threat. Last week, the Financial Times looked at the potential impacts of the Trump administration’s cuts to science funding. As the FT reported:
Last month, almost 2,000 researchers including dozens of Nobel Prize winners issued an open letter raising the alarm. “We see real danger in this moment,” said the appeal. “We are sending this SOS to sound a clear warning: the nation’s scientific enterprise is being decimated.”
Several budgets are under threat. The new administration is seeking a 40% savings from the $47B National Institutes of Health budget. Both the $10.2B National Science Foundation and $9.7B Centers for Disease Control and Prevention budgets are reportedly being considered for the chop. In addition, more than $20B of research funding currently provided by the Food and Drug Administration, the National Aeronautics and Space Administration, and the National Oceanic and Atmospheric Administration are being called into question.
What is more, billions of dollars to universities and colleges such as Columbia, Brown, Harvard, Princeton, and UPenn have either been delayed or cancelled in an escalating dispute between many colleges and the White House.
Nor is the threat just coming in the form of budgetary cutbacks. Tighter immigration policy and tougher border enforcement could well lead to fewer scientists and researchers being able to relocate to America. Horror stories from the border are already leading to many foreign academic visitors displaying a wariness about attending conferences in the United States.
Federal funding for basic scientific research delivers demonstrable returns on investment. A recent economic impact study found that every dollar invested in federal biomedical research funding generated nearly $2.56 in economic impact, supporting more than 400,000 jobs and catalyzing nearly $95 billion in new economic activity nationwide in 2024. Economists have also found that government investments in scientific research and development have provided returns of 150% to 300% since World War II.
Recent empirical evidence by Fieldhouse and Mertens (2024) points to a strong causal link between federal nondefense R&D funding and private-sector productivity growth, and large implied social returns to public R&D investment. We show that these high social return estimates broadly align with existing evidence on the social returns to private or total R&D spending. If the R&D increases authorized under the CHIPS and Science Act were fully appropriated, our modeling indicates a boost in U.S. productivity within a few years, reaching gains of 0.2–0.4% after seven years or more. At their peak, the direct productivity effects of the implied expansion in nondefense R&D alone would raise output by over $40 billion in a single year—exceeding total outlays from the CHIPS Act R&D provisions over a decade. The potential productivity impact of fiscal consolidations changing R&D spending is not clear ex ante. We show that in recent fiscal consolidations, cuts to federal R&D funding were largely borne by defense R&D, whereas funding for nondefense R&D was largely spared or was increased. Our evidence suggests that future deficit reduction efforts that instead emphasize cuts to nondefense R&D funding could have a larger adverse impact on productivity and economic growth than previous fiscal consolidations.
But if America’s cuts to science funding – and the harsher climate in general for universities – represent an economic blow, does it perhaps herald an opportunity for Europe?
This is the question to which the Clark Center’s European Experts Panel turned last week. Asked whether “New funding and immigration schemes to attract top scientific talent from abroad to EU universities would have a measurable impact on European innovation over a five-year horizon”, the response was strongly positive.
Weighted by confidence, 34% of respondents strongly agreed, and another 53% agreed. Only 3% disagreed.
Of course, as many respondents noted, much would depend on the level of funding made available in the European Union. Franklin Allen, of Imperial College, London noted that “I think it depends on the level of funding available. European academic salaries are significantly behind US academic salaries. For scientists and engineers, there is also the issue of labs and hiring the rest of the teams”. Whilst Olivier Blanchard of the Petersen Institute argued that it “obviously depends on the funds the countries will be willing to spend. Not obvious that it will be enough”.
That is indeed the key question. The situation in America does present Europe with an ideal opportunity to ramp up science funding, ease immigration restrictions on scientists, and attract top global talent to the continent. In the view of the experts, such a programme would lead to tangible economic gains in the form of higher innovation over a five-year period. But whether or not Europe is prepared to seize that opportunity is another question entirely.
