- The Washington Times - Monday, June 2, 2008


Recently, there has been a lot of talk about investing in our nation’s infrastructure. But too often that focus tends to be strictly on building new roads, bridges or sewer lines. While those are all necessary and important, I’ve watched with dismay as the Bush administration and Congress devote less and less attention to an ever more vital segment of our infrastructure: our Innovation Infrastructure.

By this I’m referring to a broad category of needs vital to the critical high-tech sector - the often-neglected areas of research funding, tax credits and trade that are essential if we are to continue to thrive and be a world leader. These issues are even more important now, as policy-makers in Washington engage in a new round of discussions about a second “stimulus package” to jumpstart the economy, get more Americans back to work and put money in their pockets.

This new stimulus package - as envisioned by some members of Congress - would emphasize rebuilding our physical infrastructure. Such a plan is aimed at complementing the stimulus legislation from earlier this year that recently sent government checks to millions of American families.

As an alternative, I’d like to suggest the following as an outline for a new and more far-reaching stimulus package that is certain to strengthen our economy. Our “innovation infrastructure” stimulus plan could offer a bipartisan solution to the immediate needs of our sagging economy. It could also provide a roadmap for bringing our country back to the forefront of the high-tech economy.

Our plan would include:

* R&D funding: Research and development funding has been basically flat for more than a decade. We should immediately invest more in support for research and development. We should look for new ways to fund the National Science Foundation and the National Institutes of Standards and Technology.

* Education: Our schools are not turning out enough students capable of meeting the needs of our top companies. We need more programmers, engineers, researchers and people able to work in new and innovative “green jobs.” We should fund increases in all aspects of higher-education spending.

* Tax Policy: Our tax policies are driving away investment. Global companies have unlimited options for where they locate their jobs and we must do more to bring them back to the United States. Our tax rate of 39.3 percent is 12 points higher than the OECD average of 26.9 percent and well above Britain (30 percent), Finland (26 percent), Canada (22.1 percent), Ireland (12.5 percent), China (25 percent), Singapore (18 percent) and Hong Kong (17 percent). Even France is working to lower its rate. In order to remain competitive, members of Congress and the administration should bring our rates in line with those of other OECD nations.

* R&D tax credit: Originally enacted in 1981, the R&D credit encourages companies to keep their important research and development activities - and any associated jobs here in the United States. Unfortunately, the R&D credit expired in December. Congress must immediately enact a seamless and permanent extension of a strengthened R&D tax credit.

* Trade: Opening foreign markets to U.S. goods and services is crucial to our prosperity, yet lawmakers on both sides have sabotaged efforts to push free trade. Foreign markets present American companies with huge opportunities that can lead to more jobs here at home. We should immediately enact free-trade deals with Colombia, Panama and Korea.

* High-skilled immigration: American students must be encouraged to pursue careers in science, technology, engineering or math and should receive necessary grant and loan incentives to graduate and enter the workforce. We should also approve immigration-reform legislation that allows additional U.S.-educated, foreign-born students in these essential fields to stay in the United States and contribute to our economy.

* Energy grid: Some of our best high-tech companies are struggling because in parts of the country they literally can’t get enough electricity. We must change that. Advances in electricity delivery can improve the efficiency in our electrical grid, reducing the need for greater production capacity. Allowing for telecommuting and other workforce improvements can also reduce overall energy consumption and help strengthen our energy grid.

This plan is only a starting point. It will need to be tailored to fit into the realities of a Congress and administration consumed by the upcoming election and by the limitations of our treasury. But sound investments in our innovation infrastructure today will pay off today and tomorrow for our economy as a whole and for the workers who drive it.

Rhett Dawson is president of the Information Technology Industry Council.

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