Science and R&D

In an economy powered by innovation and technology, more proactive R&D policies are key to success.

India leads the world in R&D tax generosity for both small- and medium-sized enterprises (SMEs).

India leads the world in R&D tax generosity for both small- and medium-sized enterprises (SMEs) and large firms by allowing a 200 percent super deduction for in-house R&D expenditures, a super deduction of 125 percent to 200 percent for payments made to contractors carrying out R&D in India, and a 100 percent deduction for R&D expenses that do not otherwise qualify for the other deductions. The United States, meanwhile, has allowed to the R&D tax credit expire with uncertain chances for renewal. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012 - 9:00am - 10:30am
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At a time when Washington is desperate to find ways to spur economic growth and job creation, somehow one of the best tools at policymakers' disposal, the R&D tax credit, has been allowed to expire and its fate is far from certain. Against this backdrop, ITIF's forthcoming report ranks the United States 27th in terms of generosity in comparison with competing countries. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012
| Reports

With the U.S. unemployment rate stuck at over eight percent, one would expect a laser-like focus in Washington on simple tools that would increase growth. One key tool is the federal R&D tax credit: increasing the rate of the Alternative Simplified Credit (ASC) from 14 to 20 percent would increase annual GDP growth by $66 billion and create at least 162,000 jobs. Yet despite its efficacy, the United States continues to fall behind other nations in the generosity of its R&D tax incentive. Other countries, including Brazil, Canada, China, France, and India, have implemented R&D tax incentive schemes that far exceed that of the United States in generosity. In fact, in 2012, ITIF estimates that the United States ranks just 27th out of 42 countries studied in terms of R&D tax incentive generosity, down from 23rd just five years ago.

This statistic is unmistakable and troubling. The United States was first nation to realize the importance of spurring R&D through the tax code, putting in place the R&D credit in 1981. As a result, the United States experienced an R&D stimulus that helped drive robust economic growth through the 1980s and 1990s. Yet, while proposals for increasing the R&D tax credit have come and gone—including most recently President Obama’s call for a slight increase of the ASC to 17 percent—what was once the most generous R&D tax incentive in the world has now become one of the least generous. This means that when firms look for countries in which to invest in R&D, many other nations have a distinct, and in many cases, large tax advantage over the United States.

In a globalized world where innovation is the key to competitive advantage, firms within United States are less able to gain global market share in technology-based industries and new areas of growth. The result: stagnant economic growth and persistent unemployment—precisely the symptoms we see today. Without R&D tax incentives, companies will not conduct enough R&D, and thus society is worse off without R&D tax incentives.

U.S. Drops to 27th in ITIF Survey of Global R&D Tax Incentives

WASHINGTON - The United States is continuing to fall behind other countries in providing tax incentives for companies to undertake research and development, putting U.S. firms at a disadvantage in the global innovation race, according to a report released today by the Information Technology and Innovation Foundation. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012
The U.S. needs to retain the R&D tax credit for innovation-based global competitiveness.

At a time when Washington is desperate to find ways to spur economic growth and job creation, somehow one of the best tools at policymakers' disposal, the R&D tax credit, has been allowed to expire and its fate is far from certain. Against this backdrop, ITIF's forthcoming report ranks the United States 27th in terms of generosity in comparison with competing countries. This is putting U.S. firms at a major disadvantage in the global innovation race. Read more »

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Losing Ground on Science Research? Experts Point to Ominous Signs

The Star-Ledger
The idea of cutting federal R&D and NIH spending relative to the economy poses a threat to the New Jersey innovation economy.

Why Aren’t the Jobs There for U.S. Scientists?

July 9, 2012
| Blogs & Op-eds

The United States needs to enact a far more sophisticated set of policies regarding regulations, public investment, taxes, trade, education, and others if we want to create an environment in which U.S. life sciences firms—and those in other science- and engineering-based sectors—can remain globally competitive and thus produce sufficient employment opportunities to fully leverage the high-skilled scientific and engineering talent being produced in the United States.

Federal Funding for R&D: Further Evidence That it is Needed More Than Ever Before

June 18, 2012
| Blogs & Op-eds

In an era of ever tightening budget constraints, some, especially some conservatives now argue that federal funding for research is not critical for innovation. They claim that the private sector will make up for any losses in innovation resulting from a reduction in federal funding of R&D. In the latest edition of the Journal of Policy Analysis and Management (devoted to the examination of science policy and innovation), two scholarly articles clearly rebut this view.

Genius Loves Company

June 11, 2012
| Blogs & Op-eds

When Congress takes up corporate tax reform, lawmakers should consider a few ideas from ITIF. First, make clear that process R&D qualifies for the R&D tax credit. Second, Congress should use the tax code to promote more collaboration between companies as well as non-corporate entities.

Taking Stock Podcast - Bloomberg Radio

April 23, 2012
Rob Atkinson appears on "Taking Stock" to discuss innovation and competitiveness.

Rob Atkinson and Vinny Catalano appear on "Taking Stock" to discuss innovation and competitiveness. After ITIF's Innovation Consensus Conference, they reflect on the evident need for policies that advance R&D efforts, reform STEM education, and provide considerable investments for start-ups.

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