U.S. financial health dependent on fiscal discipline

However, our leaders in Washington, D.C. will be making a terrible mistake if they simply enact across-the-board cuts — we need to make smarter decisions about spending.

As we do so, intelligent systems like Watson can help. Its combination of enormous processing power, the ability to learn and sophisticated analytics has the potential to achieve major leaps forward in how we perform in healthcare, education, law and many other fields. Already state governments such as New York and North Carolina are using sophisticated software technology to reduce fraud in government payments and tax collection. The federal government could be a major beneficiary of Watson-style advances, as well: an estimated $200 billion could be saved per year by applying advanced analytics technology to reduce fraud and errors in federal grants, food stamps, Medicare reimbursements, tax refunds and other programs.

Yet none of this would be possible without decades of investment in basic scientific research. The past two administrations have recognized the wisdom of investing for the long term. Congress passed and President Bush signed the America Competes Act of 2007, which included measures to improve science and mathematics education in elementary and secondary schools and improvements in federal scientific research funding. President Obama’s administration has supported renewal of this important program.

The United States cannot take its lead in science and technology for granted. Already, other countries are making significant advances in new fields that could be the growth industries of the future. China, for instance, is now spending more than any other nation on environmentally sustainable energy development.

Education is crucial to technology leadership, yet our schools are failing us. The crisis in education again dominated headlines a few weeks ago with news that students from Shanghai placed first among 65 countries in standardized tests in several subjects, including math, science and reading, while US students ranked 30th in average math scores. Improving our schools will require both wise reforms and smarter spending.

On a more tactical level, the federal government needs to improve its patent system – and properly fund it – to help unleash the forces of innovation. A bill now pending in the Senate would bring needed reforms to our patent system and to the U.S. Office of Patents and Trademarks. The bill would, among other things, end the practice of diverting money from the patent office—starving it of the money it needs to hire and train patent examiners to handle a massive backlog of patent applications.

The team of 25 IBM research scientists who produced Watson have filed more than 20 patent applications in connection with their discoveries. Not surprisingly, a number of the scientists were former school science fair winners. The United States needs to take the responsible steps now to assure that a steady stream of bright young science fair participants will thrive in our schools and, ultimately, will grow up to produce the kind of innovations that made our country great and are required to keep it productive and safe in the future.

Christopher Padilla is a former Under Secretary for International Trade at the U.S. Department of Commerce and currently serves as vice president of IBM Governmental Programs.