During the lame duck session the Congress has a small window of time to take meaningful action – action that should include reauthorization of the R&D Tax Credit.  It appears that some kind of compromise is achievable to extend President Bush’s tax cuts; as part of that deal, the R&D Tax Credit should be included without other corporate tax hikes.  Democrats, Republicans, the president and American business all agree that the credit has a profoundly positive effect supporting this country’s technological innovation and competitiveness.

At Intel, innovation is our lifeblood.  The company’s founder forty years ago, Robert Noyce, once said that “Innovation is everything.”  That simple observation is more true today than ever.

We employ engineers with some of the brightest minds in the world developing ground-breaking solutions.  Intel applies for a thousand patents a year and 80 percent of our R&D annual research funds – just under $6 billion – is spent domestically.  A lynchpin for our company, that helps us lead the global semiconductor industry, is the annual R&D credit we receive from the federal government.

Let me cite just one example of research dramatically impacting consumers around the world. Intel is making enormous strides in the area of silicon photonics.  That process involves using   light instead of electricity to move data at incredibly high speeds – fast enough to transfer either an HD movie or 1,000 high-resolution photos in less than one second.  Anyone who has downloaded a movie knows that there is room for improvement. But just imagine what else is possible at these breathtaking download and upload speeds.

Intel and other high-tech companies can offer numerous other examples, many of which involve collaboration with universities and government agencies, which create educational opportunities for U.S. students and the potential for high-wage research jobs.  Two recent examples are the Focus Center Research Program (FCRP) and the Nanoelectronics Research Initiative (NRI).  Both programs will help deliver on the promise of the next generation of computing technology and both are fueled by the federal R&D tax credit.   

Since this tax provision expired in December 2009, U.S. companies have faced significant financial uncertainties that have undermined their ability to adequately plan multi-year R&D projects. At Intel, these projects are often a departure from our core business, presenting great risk and, possibly, great reward.  But if we can’t count on receiving the R&D credit, then our ability to innovate is harmed.

When President Obama outlined his innovation agenda last year, he said, "When we fail to invest in research, we fail to invest in the future.”  In an April 2009 speech to the National Academy of Sciences, he astutely remarked that “this is a tax credit that returns two dollars to the economy for every dollar we spend, by helping companies afford the often high costs of developing new ideas, new technologies, and new products.”

Failure to reauthorize the R&D Tax Credit just puts future U.S. economic growth and investment at risk.  It jeopardizes this country’s ability to invent the next life-changing technology. Lawmakers passed the R&D Tax Credit in 1981 to create an incentive for U.S. companies to keep jobs and capital in America, rather than invest abroad.  The reality is even with the reauthorization of the current R&D Tax Credit, the United States is not competitive with many other countries that offer generous research incentives.

Not long ago, Silicon Photonics was just an idea in an American laboratory.  Our company is brimming with other great, new concepts; funding the research, though, is critical and can be extraordinarily expensive.  We need our federal government to partner with us to make these experiments a reality for tomorrow, and the R&D credit is crucial in that process going forward.

If lawmakers and the president want to protect the American legacy of innovation, then they have no time to waste.  They ought to permanently pass the R&D credit – now.

Peter Cleveland is vice president of Global Public Policy at the Intel Corporation.