Will American innovation come in a post-pandemic environment?

Research and development in the United States never fails to amaze, and neither will the innovation to come in response to COVID-19
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There’s nothing like a pandemic to spur on discoveries that lead to the types of “high-impact, novel innovations” that Sudip Parikh, CEO of the American Association for the Advancement of Science, referred to in his testimony before the House Budget Committee on July 8, 2020.

“Science and engineering will be critical to ending the COVID-19 crisis,” he went on to say. “Federal research and development (R&D) investments contribute value to the nation” in new discoveries, technologies, knowledge, and collaboration for near-term uses and next-generation technologies.

Indeed, R&D delivers value to all of us in our economic, societal, personal and professional lives. In the United States, industry contributes the bulk of R&D investment, about 78% to the government’s 22% in 2017, according to the 2020 Science and Engineering Indicators report (Indicators). The U.S. leads the world in funding for research and development, with annual average spending of 4.3% per year from 2000 to 2017.

In my work qualifying and quantifying R&D for research credits, I’ve seen first-hand how federal investments in R&D have helped companies make our lives better, different, and more fun. I speak with smart people who spend every day immersed in clever, unusual—and often unique—work at truly inspiring companies.

These engineers and scientists are solving tough problems in the world of hard sciences that include energy, bioscience, manufacturing, software, transportation, and so much more. In the process, I get a fascinating view into some of the research going on in the United States. The companies nurturing these projects are on the cutting edge, combining different manufacturing, medical, and coding disciplines in developing and improving tools, workflows, processes, and testing protocols that bring R&D alive.

What does this federal investment in R&D look like? Years ago, a co-worker and I visited a test track for a well-known motorcycle manufacturer on a day when the engineering team was testing air forks. Clad in blue jeans, we arrived at the track to watch engineers run motorcycle trials on a “whoops” track of short, successive bumps.

By driving the motorcycle at a constant speed and at a certain RPM, the riders tested the air fork compression, strength, and other variables at high speeds without bottoming out. The test trials also assessed weight, stiffness, and overall performance. While standing in the middle of the track, the engineers running the trials explained what they were looking for and how the microsensors attached in key spots to the motorcycle were collecting the data the engineers needed to fine tune the design, and ultimately, create a better, faster ride. We even got muddy!

Listening to engineers and scientists explain what they are doing and why never gets old. I worked with a biomedical company who was pioneering next generation cancer treatments. I learned each type of chemotherapy treats different cancers and that there are twenty-something different types of cancer of the blood.

Biomed engineers created a process using a laser to treat blood in situ with different types of chemotherapies, identifying the most effective chemotherapies for specific types of cancer. The company’s research in this area has meaningfully moved the needle forward in cancer research; fewer cancer patients endure fruitless rounds of chemotherapy because of this company’s work in identifying oncology treatments that lead to better cancer patient outcomes.

In another R&D biomed project, I saw the design for a UV light treatment to decontaminate blood unfold. This treatment was a game changer in countries where blood supply is in short demand and where a high percentage of the population is infected with blood-borne diseases such as malaria. Now instead of rejecting tainted donor blood, technicians can clean all blood and place it in the blood bank for general use. Among other treatments, this company was also developing immunotherapy to train white blood cells to attack cancer cells as well as designing the devices needed to inject and infuse cell therapies.

Not all projects are on inanimate objects. Holsteins today are responsible for the majority of milk and dairy products consumed in the U.S. The bloodline of Holsteins in the U.S. can be traced to 10 breeds that generate the most productive traits. Dairy farmers need two things, female cows and a good production line: the greater the availability of female cows, the greater the production.

Roughly ninety percent of dairy breeding is through artificial insemination. During the semen collection process, scientists at Colorado State University (CSU) in Fort Collins, Colo., used a laser to separate semen so that 70% of the semen collected contained X, or female, chromosomes. After proving the concept, the technology was used by a company in Texas, where in visiting the facility, I witnessed cattle breeding. The lucky bulls were breeding naturally while the unlucky bulls (the vast majority) were subjected to—well, let’s say, less natural–semen collection procedures before the technology was used in isolating and storing female semen. That’s education on the job.

A great deal of U.S. research comes from software companies, where deploying effective technologies that change how we live and what we see in the digital space happens at hyper-speed. One company I worked with built a marketplace for online advertising. They were able to boil down market economics and efficiencies into algorithms that drive sales for some of the nation’s largest companies. I learned their secret sauce of how targeting ads show up on my browser when I search for, say, blenders.

In few other fields would I have the chance to work with so many innovative companies, engineering firms, and government entities using “off-label” designs and workflows to create new and improved products, services, and processes. While I can only share stories of products that have been in the market for some time, there are so many U.S. companies working on proprietary R&D that will help us live better, fight disease, and do all manner of things that we as bystanders can only dream about.

In upcoming years, as the pace of innovation increases and dynamic companies sidelined by COVID-19 ramp back up, we will see companies spring forward with a pipeline of innovation. It will be an inspiring world to see, first-hand.

Jamie Overberg.taxops  Jamie Overberg, a partner at TaxOps Minimization, has been observing the hard sciences at work on U.S. soil at innovative companies, engineering firms, and government entities for over 20 years as she executes, manages, and writes about all aspects of R&D credits. She can be reached at joverberg@taxops.com.

Categories: COVID-19, Economy/Politics, Industry Trends