Corporate Science's Wish List For The Next President

The votes have all been counted, and a president-elect of the United States is now celebrating his victory. However, the future president’s well-grounded enthusiasm over his victory will necessarily be tempered by his realization that his administration has a tough road ahead in tackling the difficult issues facing the country. And some of the key issues concern science and technology policy. What should the new president do? Some quarters of the research community despair that there is not currently a consensus on the best paths to follow. But in fact, the corporate community has been able to agree on what needs to be done to ensure that the nation retains its scientific and technological edge. This consensus is coalescing around six important principles, some of which the new administration should actively foster. Improving the scientific and technical workforce: Corporate America is recognizing that the deterioration of the American educational system, especially at the kindergarten through 12 levels, is a threat to the future of United States companies. Stimulating cooperative research: In today’s fast-moving world, a company will be left behind unless it can tap into research being conducted at universities, research institutes, government laboratories, and other companies. Developing advanced manufacturing processes: U.S. industry is second to none in creating innovative new ideas and products. But other countries have proved better at mass producing those ideas and products, because they put more effort into the manufacturing process. U.S. companies need to focus more on enhancing their production efficiency so that excellent product ideas are not repeatedly lost on the shop floor. Boosting quality and speed: In addition to developing advanced manufacturing processes, companies need to bring products to the market faster—and ensure that products are of high quality. Improving communications within companies: Too often one branch of a company doesn’t know what another branch is doing. “Our company just discovered our own researchers about two years ago,” one corporate officer recently told me. The management of technology is now recognized as being as important as the technology itself Working on incremental im provements: U.S. companies have placed too much emphasis on creating entirely new products. This has allowed competitors in other countries to eventually dominate markets for such products as video cassette recorders and color televisions by making steady improvements on existing products. The U.S. needs to become more profecient at incremental product improvement, rather than focusing solely on major scientific breakthroughs. The U.S. corporate research community agrees on these six goals. But agreeing on these objectives is much easier than reaching a consensus on how to implement them. The country’s companies and universities—including the business and engineering schools— should work together with the new administration to design a set of concrete government policies that address these needs. What might these policies be? For some objectives, it is not clear what the government can do. For example, it may be difficult to support “incremental research” when such research is dependent on a knowledge of the products and processes of an individual corporation. In addition, with all due respect to government labs, the concepts of “speed” and “government research” have not traditionally been synonymous. But for the other consensus items, the government can clearly help. We need policies that support the research enterprise, increase incentives for research, and bolster the commercialization of research. The work of the House Science and Technology Committee and the Senate Commerce Committee has already resulted in trade bill provisions that provide additional government support for some aspects of education, cooperative research, and manufacturing processes. It contains, for example, an authorization for a new research facilities program that will respond to the current shortfall of facilities in universities. The new administration should recommend full funding of this new legislation. The new president should also foster cooperative research and improved manufacturing processes with a combination of direct funding, and, especially, tax incentives, The need for research and development increases each year, yet those portions of the tax code that promote R&D have been systematically dismantled. The new administration should send clear, strong signals of support by removing existing tax disincentives, such as section 861.8 of the Treasury Department regulations, which requires U.S. companies with foreign operations to allocate a portion of their domestic R&D expenditures to income earned abroad. This penalizes research in the U.S. and encourages companies to move investments abroad. The administration also needs to strongly endorse a permanent R&D tax credit that promotes innovation by offering a 25% tax credit for a company's increases in R&D spending over its previous levels of R&D spending. In particular, the new administration should focus attention on legislation proposed by Senator John Danforth (R-Mo.) and Senator Max Baucus (D-Mont.), which would apply the R&D tax credit to startups and to a broader base of U.S. companies. Furthermore, the new administration must devote special attention to reinvigorating our nation’s interest in scientific and technical training. Finally, to enhance the impor- tance of technology policy within the federal government, there should be a cabinet level adviser to the president on science and technology. In addition to recommend- ing policy; this adviser should establish a forum to consider issues such as the development of a semi-conductor research consortium or the importance of high-definition television. Glamorous Projects When the new president turns his attention to science and technology policy in the coming weeks, he will probably focus first on the glamorous megascience projects like the superconducting supercollider and the space station. These projects clearly have their place in the nation’s R&D landscape. However, It will be critical for the transition team and the new administration to marry these exciting aspects of science policy with the more subtle, complicated, and equally essential components of a thoughtful long-term technology strategy. The corporate and academic community knows what the goals of the strategy should be— and can identify the key first steps toward it. Now the research and development community is eager to work with the new administration to transform this consensus into effective public policy. Kenneth R. Kay is the executive director of the Council on Research and Technology, a consortium of 49 companies, 79 universities, 17 trade associations, and seven institutes.

Corporate Science's Wish List For The Next President

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