Prioritizing education, research is key to driving U.S. innovation

Last month, the CEOs of HP and other top technology companies joined together in a visit to Washington to promote an enhanced American innovation agenda. More recently, the Senate majority leader and minority leader jointly introduced the America COMPETES Act to strengthen our nation’s workforce and allow American businesses to innovate and succeed.
Clearly, a consensus is emerging across traditional boundaries that a strong innovation agenda is the only way for the U.S. to maintain its economic position in the world.

People might be surprised by the striking similarities between President Bush’s American Competitiveness Initiative and the Innovation Agenda of Speaker Pelosi and the Democrats. But in reality, it makes perfect sense. America’s future as a world leader depends directly on the state of our competitiveness, which is driven by innovation.

Our nation’s ability to thrive in the global marketplace will determine our strength and prosperity for decades to come and determine the kind of country we leave to our children and grandchildren. When America helps encourage innovation here at home, people all over the world benefit from increased productivity, efficiency and convenience that new breakthroughs can provide.

A transcendent idea such as this is not a Republican issue or a Democratic issue, but an American one. In fact, it has been a bipartisan idea throughout most of our nation’s history. Most people would agree on the need to foster the innovation and scientific breakthroughs that sustain American industry, enhance American knowledge and create American jobs. And most people agree that when our economy is innovative and healthy, other countries benefit through our approach to free trade and our commitment to helped underserved global communities grow and prosper. The hard part is agreeing on the best way to achieve that goal.

Congress should support and advance public policies that maximize our nation’s ability to innovate. The business sector, in turn, must support the development and implementation of these policies, holding both government and corporations accountable. Here are a few ideas to get things started.

•Invest in education and research funding. So much comes down to the education of our children. We must support improvements in the fields of math and science, and expand incentives for students to study science, technology, engineering and mathematics. Increased funding for basic research in the physical sciences, mathematics and engineering is also crucial.

•Promote international trade.  Like many U.S.-based firms, more than half of Hewlett Packard’s revenue results from sales outside the United States, indicating the importance of obtaining and maintaining access to foreign markets. As global companies, we must support favorable trade agreements (including free trade agreements) as a means of ensuring market access and enhancing our competitiveness in the international marketplace.

•Simplify, strengthen and make permanent the research and development tax credit. Kudos to the policy-makers who recently enacted an enhanced R&D tax credit into law, which helps restore some of its effectiveness. However, more needs to be done. The R&D credit simply does not do a good job of providing incentives for increased R&D investments in the U.S., and it continues to lag far behind our major competitor countries. An expanded, permanent R&D tax credit will provide the assurance businesses need to make long-term investments in innovation and the critical incentive to ramp up research in the United States.

•Enact balanced patent reform. Congress must act to ensure the patent system fosters innovation. Congress should level the playing field so that patent speculators cannot hold innovative companies hostage, preventing them from offering breakthrough technologies and products. Meaningful patent reform can both foster innovation and ensure fair value to innovators, while keeping the U.S. economy strong and globally competitive.

•Act on immigration reform. In the IT industry, where innovation is constant, delays in obtaining qualified workers can erode competitiveness and stall profitability in the short and long term.  That’s why thoughtful immigration reform — reform that takes the needs and realities of all sectors into consideration — is vital.

Republicans and Democrats alike have an interest in showing their constituents that they can act to preserve America’s history of excellence in innovation during this session of Congress. That’s why I have no doubt that the United States can not only remain competitive, but can continue to be a driving force in the new global economy. To get there, the business community must work with our leaders quickly, thoughtfully and creatively. More than that, we must all work collaboratively. Innovation is, after all, an American issue.

Fazzino is vice president of government affairs for Hewlett-Packard.