Reaching for the Innovation Gold
Every two years, the eyes of the world are trained on the Olympics, with each participating nation hoping to take home the gold. Put simply, the games are an awe-inspiring event and, for me, a time of great national pride. This year, however, they are also a stark reminder of how America has lost sight of its competitive drive -- and edge -- when it comes to technology innovation.
The race to innovate the next Internet, renewable energy source, or GPS network is an ongoing battle that is real and one we ignore at our own peril. The global competition to capture the ideas and innovations will determine our standard of living and near-term economic stability. It is the real battleground for the future.
That is why all around the globe, governments are working hard to claim the mantle of being the next "innovation nation." China's indigenous innovation policies, which create unfair trade barriers to outside competitors, are a particularly onerous example of this phenomenon.
The fundamental question for us as a nation is whether we will get in the game. Can we, like the 1980 U.S. Men's Ice Hockey team, come from behind to rise to the challenge of the moment, or will partisan division force us to sit on the sidelines and lose by default. Our history of resilience, reinvention, and independence provides hope for the future. However, to have more than a sucker's chance, we must begin taking the policy steps necessary to put us on a course for success.
First, we must stake a solid claim to our leadership position in driving innovation. Extending and expanding the Research and Development (R&D) tax credit and delivering an ambitious national broadband plan provide two near term opportunities to do just that.
The United States was one of the first countries to establish an R&D credit in 1981. Other nations watched with envy as the private sector began to center more of their research, innovation, and high-wage jobs in America. Fast-forward thirty years and the situation has changed dramatically. The United States has fallen to 17th of the 30 most industrialized nations in the richness of its program. We should remedy that by improving the tax credit as a part of any jobs legislation. Recent research confirms that expanding the credit drives commercial investment and provides a genuine boost to job creation.
Another near term opportunity to pair job growth and continued innovation is the national broadband plan. This plan, which is expected to be unveiled in mid-March, will be a catalyst for the next generation of innovative, high-speed Internet apps, devices and services. To fully deliver, the plan's focus on broad adoption should be coupled with an ambitious timetable for implementation. Specifically, we should set a goal of the U.S. becoming one of the top 3 countries in widespread next-generation mobile and fixed wireless, as well as wireline, capabilities by 2015. As FCC Chairman Genachowski recently said, "big broadband creates big opportunities," thus the nation's plan should aim big.
Second, it is past time to place greater emphasis on American exports by supporting U.S.-based company efforts to develop new international markets. Our failure to place adequate emphasis on global trade has allowed other countries to slowly chip away at our international competitiveness. While the U.S. is a major exporter -- to the tune of over 1.8 trillion dollars in 2009 -- we are still underperforming. U.S. exports as a percentage of GDP are well below those of nearly all of our major economic competitors. Reversing this reality is key to our future economic prosperity. Exports support nearly 10 million U.S. jobs with almost seven million jobs in manufacturing. Thus, the sooner we turn the President's promise to double U.S. exports in five years into a reality, the better off we will be as a nation.
Finally, we must cultivate a tax environment that encourages U.S.-based multinational companies to grow and create jobs. Our corporate tax code is currently the second highest in the industrialized world. Forty years ago, 18 of the world's largest companies built their headquarters in America. Today, only six of the world's 20 largest non-financial, and three of the 20 largest financial companies, have chosen to make their home here. For the United States to remain competitive in an increasingly-connected economy, we need a corporate tax code that aids, not hinders, opportunities for U.S. job growth and innovation.
Soon, the Olympic torch will be extinguished and, hopefully, the United States athletes will bring home the gold. As the next generation of Olympic hopefuls begin training, it's time for us to undertake a similar caliber of commitment, energy and focus to bringing home the gold in the real international competition for innovation -- and our future.