History has amply demonstrated that innovation in the public and private sectors is the most important key to long-term U.S. prosperity and economic competitiveness. Yet in the United States today, innovation is at risk of stalling just at a time when rising international competition is on the upswing and the U.S. economy is still reeling from a deep recession.
Priorities for action start with turning three deficits—budget, investment/savings and trade—into surpluses.
This will require action by the public sector—to provide tax credits for innovation and more forward-thinking trade policies, for example—and the private sector, including businesses, universities and private research firms that reward education and job skills.
To achieve solid, sustainable economic growth, government agencies at all levels must integrate and coordinate their activities with each other and with the private sector, rowers pulling in the same direction in a sea of economic uncertainty.
||SUMMARY & POLICY RECOMMENDATIONS
A number of immediate actions to jump-start progress toward healthy economic growth are possible, but much long-term heavy lifting will remain. Aligning those long-term needs with clear overall growth goals provides focus for federal, state and local policymakers, and the opportunity to build support within government, in the private sector and with the public:
PUT THE FEDERAL BUDGET ON A SOUND FOOTING:
Fiscal, investment and trade deficits are unsustainable weights on our economy.
- Short term: Cap or eliminate tax expenditures, such as the mortgage interest deduction
- Long term: Implement the recommendations of the Bipartisan Commission on Fiscal Responsibility and Reform, including significant tax reform
PRIORITIZE ECONOMIC DRIVERS:
Innovation Fueled: Taking advantage of technology
- Short term: Support basic scientific research by extending the R&D tax credit
- Long term: Create a better system for commercializing research from universities
- Long term: Streamline the process for approving patents
- Long term: Step up the enforcement of intellectual property protection, especially overseas
Export Oriented: Seizing the opportunities of world markets
- Short term: Ratify new trade agreements in Asia and Latin America
- Long term: Consolidate federal support for manufacturing research into a single Manufacturing Innovation Fund
Opportunity Rich: Investing in intellectual capital
- Short term: Double the number of H-1B Visas
- Long term: Establish national postsecondary goals and create a performance measurement system to support the effective use of federal resources
- Long term: Double federal support for community colleges, using metrics to award additional money
Low Carbon: Helping promote energy security and sustainability
- Short term: Create and fund a network of energy discovery institutes at leading research universities
- Short term: Authorize a National Infrastructure Bank to promote investment
- Long term: Authorize a Green Bank; Fully fund and implement the Green Bank and Infrastructure Bank
EMPHASIZE EFFECTIVE GOVERNMENT:
Integrate policy action
- Short term: Achieve cost savings through the use of digital technology by public-sector agencies
- Short term: Use social networking technologies to increase communication between citizens and government
- Short term: Pass congressional legislation improving privacy and security designed to safeguard innovation in health care, education, energy efficiency and public sector performance
- Long term: Create regional business plans to guide policies across different levels of government