Investments in research and development enable the innovation that build and strengthen the U.S. economy and our national competitiveness. Bolstering R&D investment and protecting those investments from foreign competitors seeking an unfair advantage must serve as a priority among policymakers. Last week, the House Science Subcommittee on Investigations and Oversight held a hearing on “The Impact of International Technology Transfer on American Research and Development.” Presenting testimony at the hearing, Information Technology and Innovation Foundation (ITIF) President and Founder, Robert Atkinson gave compelling testimony on the threat innovation mercantilist nations pose to U.S. competitiveness, and outlined a strategy for policymakers to meet this challenge to the integrity of the global marketplace.
Historically, the United States led the world in innovation, but changes in the global marketplace threaten this leadership. As Atkinson noted, “A nation’s investments in research and development (R&D) are vital to its ability to develop the next-generation technologies, products, and services that keep a country and its firms competitive in global markets.” Across the globe, nations are recognizing the importance of R&D and innovation and have taken coordinated efforts to prioritize innovation. Countries like China and South Korea have developed national innovation strategies, adopting policies that expand the capabilities for innovative industry.
Atkison’s testimony distinguished between “good” and “bad” policies that other nations have undertaken to expand their innovation potential. By expanding government funding, STEM training, increased R&D tax incentives, many nations utilize legitimate mechanisms for increasing their attractiveness for global R&D investment. In contrast, a number of “innovation mercantilist” countries have sought to gain an unfair advantage through intellectual property theft, and forced joint ventures and technology transfers. These kinds of policies seriously disadvantage countries like the U.S. that play by the rules. Atkinson highlights the role of trade agreements and international cooperation in ensuring that all countries can play on a level playing field.
In our own backyard, Atkinson argues that failures in domestic policy speed the decline of the U.S. competitive advantage in R&D. For U.S. innovation to continue to thrive, policymakers must continue to provide an environment that sustains its innovative industries. The creation of a permanent, expanded R&D tax credit can help keep innovative companies and investments from moving abroad, and bring in more foreign investments. A policy environment that supports innovation holds the potential to bring incalculable ripple benefits to the U.S. economy, protecting American competitiveness in an ever-changing global marketplace.