But USA Inc. Has Steadily Scaled Back Investment in Technology R&D Since the 1960s...the Good News is That Private Industry Has Picked Up Lots of
Slack, So Far
Total USA Technology Research & Development Spending as % of GDP by Funding Source, 1953 — 2008
= Other (Non-Profit / University / Other Government)
= Private Industry
= Federal Government
1%
Total Technology R&D Spending as % of GDP
QV
1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005
KI Source: National Science Foundation, Science and Engineering Indicators, 2008. www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 371
For GDP Growth & Job Creation, It’s Key for Private Industry to Remain
Incentivized to Invest in R&D
As we contemplate our future, we must accept the fact that many of the assumptions under which business operated for the past 50 years no longer hold true...If we are committed to investing in ideas to improve — not just maintain — what we have and what we know, the United States will do more than just recover from this recession. We will emerge, once again, as a competitive, global powerhouse...lnnovation...accrues to countries in proportion to the quality and rigor of their educational systems...The future of every nation will be shaped by new ideas and creativity. These are the engines of future prosperity.
— Paul Otellini, CEO, Intel Corporation, 2/10/09
Government targeted and ‘blue sky’ investment in technology (and defense) has led to crucial technology inventions for America — such as ARPANET / Internet (1970s) and Global Positioning System (1980s)..., which, on a net basis, have created jobs, wealth and related tax revenue.
Government investment in technology remains important, but, perhaps more important, government must help incentivize private industry (via tax policies such as allowing companies to repatriate overseas cash at lower tax rates’ and other tools) to invest in domestic research & development and to create jobs...and create a stable environment in which to operate.
KP Note: 1) See John Chambers and Safra Catz, “The Overseas Profits Elephant in the Room,” The Wall Street Journal, 10/20/10. www.kpcb.com ne. at Might a Turnaround Expert Consider? B kpeb USA Inc. | What Might a T dE Consider? 372
HOUSE_OVERSIGHT_021027