HONDA: Strengthening American tech industry

Recovery requires national commitment to business

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One of the reasons that our economic recovery from the worst downturn since the Great Depression has been slower than previous recoveries is the overwhelming pressure placed on American entrepreneurs and industry by international competitors in an increasingly global economy. Vital U.S. technologies and advanced manufacturing have been losing ground for a number of years. As the European Union, China, Brazil and India continue to invest in new technologies and venture into research and development, the United States will fall further and further behind unless we act.

As Silicon Valley’s representative in Congress, I believe that big challenges deserve bold solutions. America must lead in high technology and renewable energy, and federal support is crucial in making this happen. There is an urgent need for investment in new technologies in America. There is an urgent need for venture risk in America and the federal government must be involved.

For example, solar technology in the United States faces stiff competition from foreign firms that have easy access to capital and inexpensive labor. The cost of building manufacturing plants for solar cells is in the billions of dollars. That kind of investment cannot be delivered with venture capital or even bank money. Uncle Sam has to be involved, and because solar is still a developing technology, it will continue to be a high-risk venture.

Big questions deserve bold answers. To the question of whether a man could reach the moon, America answered with the Apollo program. To the question of whether a revolution in global technology and communication was possible, America answered with the Internet. These high-risk projects were transformed into world-changing innovations because of investment from Uncle Sam.

Fifty years ago, the Apollo program invested heavily in a new, risky technology called integrated circuits. Metal-oxide semiconductor technology allowed the American space industry to compete with and ultimately surpass the Soviets. The U.S. semiconductor industry was built on the Apollo investment.

Years later, Uncle Sam helped Sematech develop large-scale integrated devices to compete with Japan. This allowed the United States to become the world leader in information technology.

To forge the technological leaps necessary to keep America exceptional in the 21st century, Uncle Sam must partner with the private sector now. The federal sector is uniquely positioned to help underwrite risky ventures. Unfortunately, some of these ventures won’t pan out, but we must not let political opportunists use these failures to stifle progress. Science and technology is a risky business, but it is an essential investment for job creation and economic growth — today, tomorrow and for decades to come.

In the past, policymakers have failed to focus on developing advanced manufacturing capabilities in the United States to capitalize on these technological breakthroughs, and our economy has paid the price. Over the past decade, we have seen iPads, lithium batteries, LEDs, solar panels and flat screens invented and designed in America, but ultimately built overseas.

To change this trend, I introduced the Market Based Manufacturing Incentives Act. This legislation will encourage U.S.-based and foreign companies to manufacture in the United States by providing some federal support in the form of tax incentives. This legislation will guarantee that the next generation of advanced manufacturing and world-changing technologies will be stamped “Made in the USA.”

The federal sector also can help domestic manufacturers retool so they can stay in the United States. For example, the looming transition to larger, 450-mm diameter wafers will be costly for the semiconductor equipment manufacturing industry. Today, other nations are offering incentives to lure the makers of the next generation of high-tech tools overseas. To prevent this from happening, the United States must partner with risk-taking companies to win the global competitiveness race.

We must learn a lesson from Steve Jobs, who not only had the vision to succeed but who also had the guts to take risks and fail. The creator of world-changing technology like the iPad once designed a computer so flawed that he was forced to advise owners to pick it up and drop it whenever it froze. But Jobs didn’t stop. He drew inspiration from his missteps. He kept trying, kept innovating and finally succeeded. America, too, must be bold and take risks. It has worked for America before, and it must work for us again.

Rep. Michael M. Honda, California Democrat, is vice chairman of the Democratic National Committee and a member of the House Budget and Appropriations committees.

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