US Science and Technology Competitiveness: Progress and Challenges in a Global Race

  1. R&D Investment Chart: Shows how the US compares to other leading countries in research and development spending as a percentage of GDP. This visualizes how countries like South Korea and Israel are outspending the US proportionally while the US federal R&D funding stands near a 60-year low when measured as a share of the overall economy Economicstrategygroup

 

US Science and Technology Competitiveness: Progress and Challenges in a Global Race

 April 3, 2025

The United States finds itself at a critical juncture in the global race for scientific and technological supremacy. Recent legislation and executive actions have attempted to reverse decades of declining international competitiveness, but experts warn that significant challenges remain as other nations continue to aggressively invest in their STEM ecosystems.

CHIPS and Science Act Shows Early Progress

The landmark CHIPS and Science Act of 2022, which allocated $54 billion for domestic semiconductor manufacturing and authorized nearly $250 billion over five years for scientific research, has begun to show tangible results in revitalizing American technological competitiveness.

According to the Department of Commerce, over $30 billion in proposed CHIPS investments have been announced across 23 projects in 15 states as of August 2024. These initiatives are expected to create more than 115,000 manufacturing and construction jobs, with all remaining funds scheduled to be allocated by the end of 2024.

"Under the leadership of President Biden and Vice President Harris, we're creating good-paying jobs and bringing semiconductor manufacturing back to the United States," said Commerce Secretary Gina Raimondo.

Intel received the largest award in March 2024 with $8.5 billion in grants and $11 billion in loans, supporting its planned $100 billion investment in new U.S. facilities over five years. Taiwan Semiconductor Manufacturing Company (TSMC) secured $6.6 billion in grants and $5 billion in loans for three fabrication plants in Arizona, representing the largest foreign direct investment in a greenfield project in U.S. history.

The Boston Consulting Group and the Semiconductor Industry Association estimate that by 2033, the United States will produce 28 percent of the world's advanced logic chips, with its share of global fabrication facilities growing to 14 percent from a projected baseline of 8 percent without the legislation.

Trump Administration Signals Policy Shifts

The future direction of the CHIPS Act implementation may face changes under the Trump administration. According to recent reports from Reuters, the White House is reviewing conditions attached to CHIPS Act funding that may not align with President Trump's executive orders and policies.

In a February 2025 statement to Reuters, GlobalWafers spokesperson Leah Peng confirmed that "The CHIPS Program Office has told us that certain conditions that do not align with President Trump's executive orders and policies are now under review for all CHIPS Direct Funding Agreements." Taiwan's GlobalWafers is set to receive $406 million in U.S. government grants for projects in Texas and Missouri.

During Trump's 2025 speech to a joint session of Congress, the president asked House Speaker Mike Johnson to "get rid" of the CHIPS and Science Act, raising questions about the long-term future of the program.

STEM Education Challenges Persist

Despite recent investments, the U.S. continues to face significant challenges in STEM education, which forms the foundation of technological competitiveness.

Data from the National Science Foundation's State of U.S. Science and Engineering 2024 report reveals that the U.S. ranks near the middle of advanced economies in international mathematics and science assessments. This academic performance gap threatens America's future innovation pipeline.

According to the Center for Strategic and International Studies, approximately 30% of current job openings in most large metropolitan areas are in STEM fields, yet only about 11% of the U.S. population holds a STEM degree, creating a significant skills gap.

The Biden administration launched the "Raise the Bar: STEM Excellence for All Students" initiative to strengthen STEM education nationwide. The program aims to ensure all students from PreK to higher education excel in STEM learning, develop and support STEM educators, and strategically invest in STEM education using federal, state, and local funds.

Global Competition Intensifies

America's share of international students has declined by 8% since 2001, according to NAFSA: Association of International Educators, while competitor nations like the United Kingdom and Canada have seen double-digit growth in international STEM student enrollment through more welcoming visa and immigration policies.

"The U.K., for example, reached its goal of hosting 600,000 international students by the year 2030 a full decade early by creating more post-study work opportunities and establishing welcoming immigration policies for global research talent," reports NAFSA.

Meanwhile, China has made significant strides in closing the science and technology gap. As detailed in a recently uploaded file entitled "The U.S. Led the World in Science and Technology and Just Gave It Up," China's leadership has spent the last three decades investing heavily to surpass the U.S. in science, potentially ending America's 85-year dominance in the field.

Research Funding Concerns

A critical issue highlighted by experts is the February 2025 decision by the National Institute of Health (NIH) to slash indirect reimbursement rates for university research from 50-60% to just 15%. This policy change, currently being challenged in court, could severely impact the ability of American universities to maintain world-class science laboratories and attract top talent.

According to the Aspen Institute's Economic Strategy Group, business investment in R&D grew at approximately 5.8% annually between 2010 and 2020, reaching $517 billion in 2020—nearly four times the amount of federal R&D funding. However, federal R&D funding has remained relatively flat over the past decade and stands near a 60-year low when measured as a share of the overall economy.

The Path Forward

As the U.S. navigates these challenges, experts emphasize the need for sustained investment in both basic and applied research, stronger STEM education pipelines, and immigration policies that attract and retain global talent.

The CHIPS and Science Act represents an important step, but its success will depend on consistent implementation and funding across administrations, as well as complementary policies that address the full spectrum of America's science and technology ecosystem.

Sources:

  1. National Science Foundation. (2024). The State of U.S. Science and Engineering 2024. https://ncses.nsf.gov/pubs/nsb20243/talent-u-s-and-global-stem-education-and-labor-force
  2. NAFSA: Association of International Educators. (2022). International STEM Talent and U.S. Research Competitiveness. https://www.nafsa.org/blog/international-stem-talent-and-us-research-competitiveness
  3. Center for Strategic and International Studies. (2023). The U.S. Should Strengthen STEM Education to Remain Globally Competitive. https://www.csis.org/blogs/perspectives-innovation/us-should-strengthen-stem-education-remain-globally-competitive
  4. U.S. Department of Commerce. (2024). Two Years Later: Funding from CHIPS and Science Act Creating Quality Jobs, Growing Local Economies, and Bringing Semiconductor Manufacturing Back to America. https://www.commerce.gov/news/blog/2024/08/two-years-later-funding-chips-and-science-act-creating-quality-jobs-growing-local
  5. Reuters. (2025). Exclusive: Trump prepares to change US CHIPS Act conditions, sources say. https://www.reuters.com/technology/trump-prepares-change-us-chips-act-conditions-sources-say-2025-02-13/
  6. Council on Foreign Relations. (2025). What Is the CHIPS Act? https://www.cfr.org/in-brief/what-chips-act
  7. U.S. Department of Education. (2025). Science, Technology, Engineering, and Math, including Computer Science. https://www.ed.gov/stem
  8. Aspen Institute Economic Strategy Group. (2025). Seven Recent Developments in US Science Funding. https://www.economicstrategygroup.org/publication/seven-recent-developments/
  9. Blank, Steve. (2025). The U.S. Led the World in Science and Technology and Just Gave It Up. Document uploaded April 3, 2025.

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