Every nation in the world today now understands that innovation and economic growth in a knowledge-based economy are driven by investment in research and development, education, and infrastructure, primarily information and communication infrastructures. For these reasons not only developed but also developing nations have been increasing their investments in research and development and improving the quality of their education systems, especially graduate education. These investments are where the future battle for international economic leadership will be fought and where the U.S. is faltering. There are alarming signs that America's international competitiveness is eroding relative to other nations. More than a dozen major studies have now concluded that a substantial increase in federal funding for basic scientific research is critical to ensure the preeminence of America's scientific and technological enterprise. The science and engineering community must be leaders in confronting and resolving these challenges to America's future prosperity.