Today's CEO summit

This morning, President Obama is meeting with a number of business leaders to discuss the economy. Billed as a “CEO Summit” I suspect the agenda will be the standard rhetoric of cut taxes and cut regulations. There will be the obligatory mention of education and “promoting innovation.” All of which will probably be a great hand-waving exercise — until and unless we get serious about fostering and managing our intangible assets.
I doubt a proposal to create a knowledge tax credit (let alone make the R&D tax credit permanent) will be on the table. Or the proposal to double the Federal R&D budget. Or a proposal to make the investment and spend the money to create a real worker training system (as opposed to the current throw-money-at-the-unemployed-and-hope-they-can-find-a-job system).
And while the phrase “strengthening intellectual property protection” will likely be tossed around, I doubt that the summit will say much about confronting China’s forced transfer of intangible assets (technology and know-how). Yesterday’s New York Times had a detailed story on the issue — China in Push to Dominate in Wind Power. The story outlines exactly how local content requirements can be used in a catch up economic strategy to build a world-class, globally competitive industry. And, no, it has nothing to do with lack of enforcement of patent rights — these are not cases of patent infringement but forced technology transfer. It has everything to do with industrial policy.
So while I’m glad the President and the business leaders are talking, I am doubtful much meaningful will come out of it. That is too bad – since there will be a number of real leaders in the group. Maybe it will be the start of a true dialog on solving our competitiveness problems. But to do so, it needs to get beyond the macro-economy obsession and dig into the weeds of how our economic structure is changing and what to do about it. And I’m not sure this group is ready to do that.

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