"Unfortunately, the U.S.'s ability to adapt, compete and innovate
alongside emerging workforces in countries such as China and India is
threatened by a systematically weak education system, a dearth of R&D
funding, visa policy that discourages the brightest foreign minds and
a business climate heavy with regulatory and tax burdens." This
is the conclusion of a new report by the Electronic Industries Alliance
(EIA), an alliance of approximately 2,500 electronic and high-tech companies
and associations. "The best hope for the U.S. to maintain its edge
against rising global competition is by fostering and expanding our
most prized intellectual asset: innovation," the report says. "If
we want to ensure that successive waves of innovation begin in the U.S.,
and that U.S. workers are first to benefit from ‘the next big things,'
we have to have the necessary innovation infrastructure in place."
"Our biggest concern," according to top EIA officials, "is
not offshore outsourcing, but that demagoguery and political overreaction
to this business practice...will lead to protectionist policies."
Calling for "positive policy solutions, rather than isolationist
or protectionist measures," the EIA report offers a series of recommendations
to strengthen the nation's policies in six major areas: the trading
environment; visas and immigration; the business, tax and regulatory
environment; worker education and training; the K-12 education system;
and R&D funding. The report, entitled "The Technology Industry
at an Innovation Crossroads," is available on the EIA website at
www.eia.org/docs/innovation_playbook.pdf.
Ensuring adequate federal funding for basic research is one of the
report's key recommendations. An entire chapter is devoted to the importance
of basic and applied R&D. "The U.S.'s leadership in facilitating
and capturing the economic benefits of innovation has two cornerstones:
fostering broad R&D activity and creating an environment that facilitates
commercial innovation of R&D results," the report says. "Structural
changes in the U.S. and world economies are raising challenges to the
robustness and sustainability of the American system to foster the R&D
and related commercial innovation...[and] federal policies and funding
have been slow to adapt." The report warns that "Japan, the
European Union (EU) and, more recently, China have made considerable
progress in successfully adapting features of the U.S. innovation model
in an attempt to gain parity with or even challenge the U.S. competitive
edge in innovation."
The EIA report includes the following recommendations:
INTERNATIONAL BUSINESS AND TRADE ENVIRONMENT: Use the WTO legal system
more aggressively; encourage trading partners to more aggressively enforce
intellectual property protections; support policies for voluntary, open
standards, including international standards on product design; and
bring cases of improper trade practices to the attention of high-ranking
government officials.
VISA AND IMMIGRATION POLICY: Provide adequate funding and resources
to the relevant departments to streamline the visa processes and maintain
appropriate statistics; strengthen enforcement of existing visa regulations;
and tighten restrictions on the L-1 visa category for foreign workers
with "specialized knowledge."
WORKFORCE ASSISTANCE AND TRAINING: Implement a "human capital
investment tax credit" to encourage worker training by industry;
revise the Trade Adjustment Assistance program to provide workforce
assistance for all displaced workers regardless of business sector;
subsidize high-tech workers who choose to work in K-12 science and math
education; and establish industry-community college partnerships to
train workers for technology careers.
BUSINESS ENVIRONMENT: Seek greater congressional review and oversight
of new regulations; develop a national broadband policy with tax credits
for upgrading networks; simplify U.S. tax policy; implement a tax credit
for new full-time hires of U.S. workers; and eliminate state environmental
design requirements and piecemeal state-by-state recycling regulations.
K-12 MATH AND SCIENCE EDUCATION: Require industry involvement in the
Education Department's Math and Science Partnerships and industry input
to relevant school district policies; encourage students to pursue teaching
careers in math and science through tax credit, loan forgiveness, and
professional development programs; support school choice policies; and
revise the "No Child Left Behind" Act to ensure testing requirements
do not lead to a "race to the bottom."
RESEARCH AND DEVELOPMENT: Strengthen and make permanent the R&D
tax credit; increase funding and speed the award process for the Small
Business Innovation Research (SBIR) program; enhance industries' ability
to collaborate with and commercialize federally funded research; improve
technology transfer practices; and support longer-term funding of a
more balanced federal portfolio of basic research. For the 2005 fiscal
year, this would include funding DOD S&T at three percent of the
total defense budget; increasing the NSF budget by 15 percent over FY
2004 levels; increasing DOE Office of Science funding to levels consistent
with the House-passed energy bill (H.R. 6); supporting NASA's FY 2005
budget request and the national vision for space exploration; and restoring
funding levels for NIST's laboratory and extramural programs.
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