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U.S. may be falling behind in researching tech's next big thing

Patrick Thibodeau | Oct. 3, 2014
Is the U.S. serious about the Internet of Things?

internet of things iot stock

The White House has identified cyber-physical system research and development as a "national priority" that could boost U.S. productivity. But federal spending is telling a different story.

One of the government's strongest roles in economic development is funding basic research. This is research that can takes years, and is so risky few private companies will fund it.  

A major source of research dollars is the National Science Foundation (NSF). It will fund more than $40 million in cyber-physical systems research in the 2014 fiscal year, which ended Tuesday. This amounts to about 0.5% of the approximately $7 billion the U.S. spends on basic research through this agency. It has spent, in total, $200 million in this area since 2009, including $35 million in 2013.

Separately, the National Institute of Standards and Technology (NIST), which is deeply involved in standards and data formats, is running its cyber-physical program on $4.3 million. It is seeking a $7.5 million increase in the 2015 fiscal year budget.

What is the right amount of government spending?

Cyber-physical systems is an all-encompassing term that includes the Internet of Things. An IoT device is a sensor and wireless radio connected to a broader network. A cyber-physical system goes further and seeks to take action to resolve a problem, and could involve robotics. These systems will find a role in every aspect of life, including transportation, manufacturing, health care, intelligent buildings and health. The automation, sensing, communication and actuation or action capabilities are expected to deliver enormous cost savings.

John Stankovic, a computer science professor at the University of Virginia, co-authored a Computing Community Consortium paper in 2008 that argued the NSF should spend $75 million a year on "new systems science and engineering foundations" related to cyber-physical systems -- in other words, almost twice the level of this year's NSF budget.

In total, the consortium's paper argued for an investment of $375 million a year across all federal agencies, including $100 million annually by the Defense Dept. It said private investment could bring that $500 million.

That paper's call to action isn't far from what the European Union is now spending. A NIST report last year found that the European Union "is already investing $343 million per year for 10 years to pursue 'world leadership' through advanced strategic research and technology development related to CPS" (cyber-physical systems). That includes $199 million in public funds and $144 million in private funds.

The pace of federal research spending, overall, has raised broader concerns. President Barack Obama sought a 1.2% increase for 2015 in federal R&D to about $135.3 billion overall. These incremental increases, assuming Congress approves, will keep China on track to surpass the government-funded basic research as early as 2022.


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