Can technology innovation – coupled with the boldest kind of leadership – work together to start fixing the most intractable problems facing America? On July 21 – we’re going to find out. The countdown to MerITocracy 2022: American Innovation Forum is on.
In the lead-up to the July 21 forum, we are table-setting a host of big issues that will get serious attention at MerITocracy 2022.
Chief among them is global competitiveness, the U.S.’ fading claim on undisputed economic leadership, unchecked technology competition from China and elsewhere and – most importantly – what U.S. policymakers and business leaders are doing to fight back.
In today’s edition of Countdown to MerITocracy, we’re taking a look at what may change for the better in the near-term U.S. outlook – how about having the government help recreate the U.S. semiconductor sector that mostly drifted overseas a generation ago – plus billions in Federal R&D funding that stands ready to be put to work in pending legislation in Congress. That money would flow through the National Science Foundation – whose director Dr. Sethuraman Panchanathan is a featured speaker at MerITocracy.
The in-person MerITocracy forum – at the Marriott Marquis in Washington, D.C., from 8:00 a.m. to 6:00 p.m. – will host bipartisan leaders from Congress, the Biden administration, and America’s tech industry to examine the most pressing problems facing citizens in our democracy, and map out creative solutions from the nexus of policy and technology. Register today.
Here’s a brief issue tracker on U.S. global competitiveness, and what may be due to change soon:
State of Play
Either the U.S. or China may now be the world’s largest economy, depending on the measurements used. And what used to be a glaring gap between the two governments 20 years ago on R&D investing has narrowed considerably since then, although at least one expert reckoned that as of last year, U.S. total R&D including private-sector spending may still be higher. The bottom line: China has at least caught up with the U.S. in major global competitiveness measures, and isn’t taking its foot off the gas.
Legislative Spearheads
Buoyed by a favorable pandemic big-spending environment, and calls by President Biden to double U.S. R&D spending – to two percent of GDP from about one percent currently – Senate Majority Leader Chuck Schumer, D-N.Y., last year introduced the United States Innovation and Competition Act (USICA). With the bill flying a prominent “out-compete China” flag, and promising to spread Federal research and innovation funding across the country, the measure passed the Senate earlier this year with bipartisan support.
At the same time, the House worked through several iterations of similar legislation before finally passing by a narrower majority the America Creating Opportunity, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act in February. We’ll skip the intervening legislative gymnastics, but fast-forward to today, and a House-Senate conference committee appears to be a few weeks away from agreeing to a unified bill, which just may have the votes to make it to the President’s desk.
Innovation Payoff
The results of the ongoing legislative conference have outsized potential for jumpstarting the U.S. competitive position in two ways.
First, the legislation would deliver $52 billion of Federal money to private-sector partners to reinvigorate the U.S. semiconductor sector that still operates very well at the higher end of the market, but long ago ceded market share to overseas producers who could do it more cheaply. According to President Biden, U.S. semiconductor giants like Intel Corp. are ready to invest many billions more in the industry’s new wave.
Second, the legislation would create a new technology directorate at NSF, which farms out the lion’s share of non-defense Federal government R&D investments. The directorate would be given up to an additional $9 billion (under the Senate measure) to spend through FY2026.
In March, NSF announced that it stood up the new Directorate for Technology, Innovation, and Partnerships, which Director Panchanathan said will aim to “rapidly bring new technologies to market and address the most pressing societal and economic challenges of our time.”
Supply Chains, Among Other Motivations
Among all of its other miseries, the COVID-19 pandemic served to take a well-running, just-in-time-delivery global supply chain, and expose how much business and consumers can suffer when the system falters. From baby formula, to a slew of imported goods, to the semiconductors that increasingly make up the guts of consumer and industrial goods, a creaky supply chain means everyone can take a number and wait.
Add in the further trade and political turmoil caused by Russia’s invasion of Ukraine – with no let-up in sight – and a global economy that looked smooth just three years ago now offers little but choppy waters.
De facto rationing, price increases, resulting inflationary pressures – those are far from the hallmarks of an invigorated global competitive position. But their specter may be enough motivation for lawmakers to push USICA/COMPETES R&D stimulus measures over the line – and start to make a real difference in the U.S. global competition equation.