Growth guru Paul Romer expands upon one of my "Five Ways the Next President Can Fix the Economy" via my pal The Curious Capitalist, Justin Fox. And well he should, given that the idea, to create more science grad students, came from him:
Most innovation takes place outside of universities. Most new Ph.D.s start work outside of universities. If we subsidize the supply of graduate students, more people will be doing innovative work outside the university.... The way to get this better match is to provide those subsidies to graduate education as portable fellowships that put the students in control. They could choose types of degrees (perhaps not always Ph.D.) and areas of interest (perhaps entirely new areas) that would prepare them for the many exciting lines of investigation that organizations other than universities will pursue.... From the perspective of political economy, a key practical advantage of providing these subsidies via portable fellowships is that they do not require that some government agency pick winning lines of investigation or favored firms. Nor do they create a private sector special-interest group that will capture the subsidies and direct them in ways that may not serve the public interest.... In contrast, the R&D tax credit, which also avoids the need for the government to pick winners, has created a big recurring lobbying effort, which naturally focuses first on minimizing corporate tax bills, not on maximizing innovating and the rate of growth.