Yesterday, my friends over at the Information Technology and Innovation Foundation (ITIF) released a new report on Tech Policy 2016: What Presidential Candidates Should Be Talking About. The report is written as a memo for a draft speech (a device I’ve use as well – see companion posting) and lays out a number of specific policy proposals. Not surprising the proposals focus on economic growth, productivity, innovation and the role of information technology. A summary of the proposals is provided at the beginning of the report:
1. Foster innovation.
• Increase federal funding for science and engineering research by $30 billion a year.
• Expand the R&D tax credit so it is more competitive with other countries, and tax income from innovation at a lower rate.
• Establish a National Innovation Foundation akin to the National Science Foundation (NSF).
• Increase federal support for STEM education while rewarding universities for graduating more STEM students.
• Create a national system of “manufacturing universities.”
• Expand H-1B visas, green cards, and citizenship for foreign-born scientists and engineers.
• Charge every federal agency with crafting and implementing an innovation strategy.
• Pass the Startup Act to promote entrepreneurship.
• Create a White House Office of Innovation Review.
• Ensure laws and regulations enable disruption rather than protect the status quo.
• Create an interagency taskforce to combat corporate short-termism.
• Revise the 1996 Telecommunications Act to enable broadband innovation.
• Establish a “flexicurity”system to help workers acquire skills for new jobs.
2. Boost productivity.
• Bring back the investment tax credit for new machinery and equipment and worker training.
• Accelerate IT adoption throughout the public and private sectors.
• Raise the minimum wage to $10, and index it to per-capita GDP growth.
• Close the digital divide by helping people pay for computers and broadband.
• Expand funding for surface transportation by at least $30 billion per year.
3. Compete globally.
• Lower the corporate tax rate to no more than 25 percent, and adopt a territorial system.
• Strengthen the innovative capacity of U.S. firms that do business internationally, in part by expanding financing for scaling innovations.
• Put trade enforcement at the center of U.S. foreign policy, and increase resources for it.
• Confront China by raising the cost of unfairly distorting trade investments.
• Create a National Industrial Intelligence Council to assess competitive challenges.
• Restructure the World Trade Organization (WTO) to be more effective in fighting mercantilism.
• Fight currency manipulation
Many of these I agree strongly with and have advocated for a number of years. For example, I strong support an investment tax credit for worker training (especially on-the-job training for incumbent workers). Some I don’t think go far enough. For example I would like to see funding for design (“d-schools”) in addition to “manufacturing universities.” On some, such as revising the 1996 Telecommunications Act, I have no opinion.
Some of the proposals I am skeptical of, such as a White House Office of Innovation Review with the power to review regulations. A number of years ago I worked on legislation to require Competitiveness Impact Statements as part of regulations. This became law as part of the Omnibus Trade and Competitiveness Act of 1988 (Section 5421). Back then we were very concerned that this would quickly become just a means of cutting regulations. For that reason, the provision was limited to legislative proposals, conferred no right of private action and sunsetted after 6 years. I have the same worry about this new proposed office, which seems based on a bias that regulation only “hinder innovation” (to use the ITIF report’s wording). As I have noted before, regulation can have a positive and well as negative effect on innovation.
I also think that the list leaves out important policy recommendations, such as using intangible assets to finance innovation. For this reason I am posting a companion piece laying out my version of the speech (based on previous postings).
Having said that, I believe the ITIF is a good list for the next President (and the next Congress) to consider. Enactment of even part of this agenda would push us in the right direction.
PS: as a proud alumnus of the University of Michigan I cannot support or endorse the proposed second sentence of the opening of the proposed ITIF speech.