Smart policies, and openness to trade and new ideas, are needed to maintain America’s technological dynamism.
By Peter M. Robinson
Smart, effective policies to promote American competitiveness will be critical as we emerge from the global economic downturn. Innovation powers our economy and is essential to tackle global challenges such as climate change. In a recent survey, 78 percent of Americans said they believe innovation will be more important to the U.S. economy over the coming three decades than it was in the last three. Yet in many ways our own policies, and those of other countries, undercut our competitiveness.
American innovation is under fire from well-known threats like counterfeiting and piracy. It is also harmed by misguided attempts to avoid “shipping jobs overseas.” Take the tax code: the Obama administration’s proposal to curtail deferral of taxes on overseas income could force U.S. companies into inefficient operating structures that perversely reduce their overall employment, or even drive some to reincorporate elsewhere. Or take our “Buy American” rules, which are readily emulated by other countries, to the detriment of our exports and overall employment.
Innovation, like trade, is a two-way street: nations gain from free exchange and mutual openness to new ideas. To cite a success story, look to the Internet. The maintenance of effective Internet-related policies by many governments has created an environment that enables remarkable innovation and economic development – with tremendous benefits to America’s communications and information technology industries as well as our overall competitiveness. It will be important to maintain this sensible approach in the years ahead.
Nowhere is the need for openness and innovation more evident than in the fight against global warming. Yet in the ongoing UN climate talks, many countries are recommending policies that would inhibit, rather than promote, the availability of critical technology to address global warming, for example through the abrogation of intellectual property rights or the maintenance of high barriers to trade in environmental goods and services. This is not good for U.S. exports, and it is certainly not good for the climate.
What is USCIB doing to secure appropriate policies in these areas? Plenty. Our Taxation Committee works closely with the Executive Branch, Capitol Hill and international bodies like the OECD to promote approaches that support the dynamism of globally engaged companies. In addition, the United States Council Foundation is once again working with the Business Roundtable to sponsor an updated version of Dartmouth Professor Matthew Slaughter’s influential study, published earlier this year, demonstrating the sizeable domestic returns – in terms of employment and R&D here at home – of overseas operations by U.S. multinationals.
USCIB is working closely with the International Chamber of Commerce to promote recognition of the Internet’s sizeable power to support economic and social progress. Together with ICC, we are also rallying governments and the private sector around the world in support of stepped-up efforts to confront counterfeiting and piracy. And together, we are making the case for a wise approach to global climate change that unleashes the power of technology to help deal with, and eventually solve, this growing challenge.
We need to take a broader view of American competitiveness, which is strongly tied to the overall health of the global economy. The degree to which our country is open to trade, investment and technological innovation will determine our competitiveness for years to come.
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