In an earlier column, I talked of some ways for President Obama could supercharge the economy: settle the fiscal cliff, embrace the Simpson-Bowles proposal, allow the Keystone Pipeline to be built, and join the Trans-Pacific Partnership program.
Now, I have some ways for him to develop and enhance the role of innovation in our economy. Adopting them will help us in many ways, since many of us (manufacturers) know that making commodity products is not the key to success. Only innovation will distinguish us from our competitors.
1. Speed up the patent approval process. It takes, on average, a year to get a patent. This slow pace is unacceptable for nimble companies to turn ideas into commercial products quickly. The federal government should hire more patent examiners, so patents are approved more quickly. Uncle Sam makes a profit on each patent, so this will reduce the nation's deficit. Plus, it helps the private sector.
2. Protect intellectual property with more vigorous enforcement of patent, copyright, and trademark rules. Chinese, Indian, and Russian companies are pirating our DVDs, copying drawings from our websites, and cyber-invading our computer systems. American companies can’t fight against these actions. Our government is supposed to protect our security; in the 21st century, that includes our intellectual property.
3. Make it easier for foreign scientists and engineers who are trained in the U.S. to stay here after they graduate. We are giving the best education in the world to people whom we then ignore, post-degree. Then they return home, to build competitors to American companies! We should staple a Green Card to the diplomas of these graduates, encouraging them to stay here and build their companies in the USA. Twenty-five percent of startups in Silicon Valley are founded by Indian and Chinese graduates of our schools.
4. The R&D Tax Credit is a wonderful tool for American companies to recoup the cost of their research efforts. However, the credit is never assured and it is small. Sure, it has been renewed annually for many years. But research programs are often multi-year efforts and American companies need the certainty of the credit when planning how much to spend on research. Would it be so much trouble for Congress and the President to agree to a five-year credit, with a rolling renewal every year for the sixth year out? The result would be more certainty, and thus more research. We need to expand it so that our R&D Credit matches our economic rivals. Who is against that?
5. We have short-changed our education system for long enough. We should embrace tools proposed by Washington DC's former education visionary, Michelle Rhee. She wanted to give the best public school teachers salaries of $100,000/year as well as the ability to cull out under-performers. We have to attract the top college grads to teaching and treat them like professionals, with higher salaries and with no room for those who cannot teach well.
Each of these ideas would require change in how we do things. But we cannot keep the status quo. Our competitors are on the move. When we are not the lead dog pulling the sled, the view is not so good.