Laying the Foundation for a High-tech, Pro-Growth Economy
Against the backdrop of stagnant unemployment and a market still struggling to recover from the worst economic downturn since the Great Depression, it's hard to credit any one industry with delivering the momentum necessary to bring about sustained growth. However, as evidenced by recent earnings reports out of AMD, Apple, eBay, Google, IBM, and Intel -- and the ripple effect each has had across markets in the U.S., Europe and Asia -- it goes without saying that the high-tech sector is playing a lead role in laying the foundation for a new pro-growth economy.
As I wrote in a Politico piece earlier this year, history shows us that high-tech is a proven economic catalyst. In the early 1980s, following a prolonged period of unemployment, the proliferation of the personal computer and individual content creation helped usher in a new industry and the digital age.
The same can be said of the early 1990s, when the Internet revolutionized (practically overnight) global commerce and transformed the way we conduct our daily lives.
That trend continues today, in recent years, we've witnessed the explosion of mobile and collaborative technologies and platforms, which spurred the likes of the Google, Twitter, Facebook and Foursquare, and continue to create new levels of productivity and efficiency.
It's easy to view information and communications technology (ICT) as one of many industries. Yet, as is clear by the news of recent days, we simply are not a silo industry. Our footprint -- from employment and new occupations to productivity and cost efficiencies -- runs across all industries. And in aggregate, I would argue the economic benefits far outweigh an industry-specific snapshot.
Stated simply, if ICT solutions and services make enterprises more efficient, those enterprises become more successful. As those enterprises grow, they employ more people and engage in more transactions with customers, suppliers and vendors, who in turn continue the ripple effect seeded by the technologies that help run them.
An example is our shift in focus to the longer term -- from a focus on "make-work" to "work-wireless." By taking this approach, we will strengthen our workforce, create new opportunities and drive long-term solutions that will only strengthen our economy.
Yet despite the recent momentum brought about by the high-tech sector, we cannot make this transition without taking a few essential near-term steps:
Nowhere is there a better idea on the table than the R&D tax credit, which expired last December and has been sitting somewhat idle in Congress ever since. With the pro-growth roadmap provided by the high-tech sector, Congress should heed the advice of countless economists who identify the tax credit's potential to encourage new discoveries, increase overall tax revenue and create jobs.
According to a new report by the Information Technology and Innovation Foundation, between 1999 and 2008, more than 688,000 new ICT jobs were created. ICT employment has grown more than four times faster than employment as a whole. Without question, the R&D tax credit has played a significant role in this.
Second, let's keep America's innovators working within our borders and set aside any preconceived notion that smart immigration reform will adversely impact the U.S. economy. Highly educated workers add direct value to the labor force by increasing productivity, strengthening research capabilities, and developing innovative products. One example, eight of the nine Nobel Prize winners in 2009 in chemistry, physics, and medicine, are U.S. citizens, but four of the American winners are naturalized citizens. Intel, Google, eBay and Yahoo -- companies that directly contribute billions of dollars to the U.S. economy and provide products and services that generate billions more -- were all founded by immigrants. As Thomas Friedman wrote in a recent column, it's "nuts" to require skilled workers in the U.S. on H-1B temporary visas to return home when their visas expire.
Finally, we will not continue to grow innovation-based sectors if we treat science, technology, education and math (STEM) education as a secondary priority. Rather, it's critical that we provide students with the tools and technologies they need to build the next Apple, HP or Microsoft. Without a sense of common purpose around this issue, we will fall further behind. The Obama administration is headed in the right direction, but it's going to require taking a broad and honest look at how far our educational system is failing us -- from graduate programs for tomorrow's innovators and scientists, to K-12 classrooms. Through initiatives like "Change the Equation" the tech-sector is proving our willingness to step up and provide private sector leadership in this area.
If this week's earnings reports from industry bellwethers are any indication, our economy is set to emerge from the recent downturn stronger, more efficient and more competitive. This is certainly worth celebrating. But in many respects, the major policies we have in the place in the areas that matter most to economic growth -- education, immigration, trade, taxes -- are the same policies we had in place for the last 50 years.
It's time we focus on the next 50.