ITIF

Congress should repurpose transportation funds to intelligent transportation systems, in part by tying federal surface transportation funding to states’ actual improvements in transportation system performance.

Given intelligent transportation systems’ (ITS) ability to maximize the capacity of existing highway infrastructure, expanding funding for ITS is the optimal use of highway transportation funding. Yet states have significantly underinvested in ITS, preferring to fund traditional transportation investments such as new highway capacity. As one GAO study on the state of ITS deployment in the United States found, “unfortunately, information on benefits does not have a decisive impact on the final investment decisions made by state and local officials.” Repurposing transportation funds to ITS systems that have a far greater cost-benefit return would spur innovation and improve performance of the transportation system. If the federal government tied federal surface transportation funding to states’ actual improvements in transportation system performance, it would encourage states to deploy the intelligent transportation systems delivering the greatest bang for the buck.

The FAA should revisit its in-flight restrictions on the use of e-book readers and other portable electronic devices during take-off and landing.

Passenger safety must be paramount, but policymakers should also make sure that regulations such as these are justified. It is time for clearer standards and more scientific investigation to determine acceptable levels of electromagnetic emissions for portable electronic devices on aircraft and the impact of these devices on aircraft navigation and communication systems. Once an acceptable level of emissions is found, the FAA should encourage a voluntary certification for electronic device manufacturers so that passengers can use these approved devices. And rather than leaving it to individual airlines to investigate each device on their own, FAA should set some clear standards about what types of electronic devices are safe to operate during critical phases of the flight such as takeoff and landing, as well as those only safe to operate at cruising altitudes.

Congress should institute a 25 percent tax credit for company expenditures related to bringing a WTO case.

Government alone cannot fully investigate all potential WTO cases. The U.S. private sector is deeply engaged in the problems caused by unfair trade practices, while the government is a step away. Companies do not do more because they have an incentive to be “free riders”—taking advantage of cases filed by the government or prepared by other companies. Companies that do help bring cases are acting on behalf of the U.S. government. So what’s good for GM is, in this case, good for the country.

U.S. Trade Representatives create within USTR an ambassador-level U.S. trade enforcement chief and a Trade Enforcement Working Group.

Creating these new positions would send a clear signal that a key part of USTR’s job is to aggressively bring actions against other nations that are engaged in technology mercantilism.

Congress should make clear that process R&D qualifies for the R&D tax credit. This will encourage more firms to invest in improving productivity, and will also make the U.S. a more attractive place to expand manufacturing operations.

While process R&D, done to improve the process of production in firms, is technically eligible under the definition of qualified R&D, in practice it can be difficult for companies to take the credit, in part because Treasury interprets the statute very narrowly. But there are spillovers from process R&D which means that without the credit firms will do less process R&D than is economically optimal for the nation.

To increase industry R&D state governments should align state R&D tax credits with the Federal Alternative Simplified R&D tax credit.

Studies show that the research and development tax credit is an effective way of stimulating private-sector R&D. Moreover, state R&D tax credits appear to be even more effective than the federal credit. While 38 states in 2006 linked their R&D tax credits with the federal R&D tax credit, allowing firms to take a 20 percent credit on increased R&D funding, many states have not updated their tax code to link to the increased Alternative Simplified Credit, which rose from 12 to 14 percent.

Congress would spur greater workforce training if expenditures on employee training were added to qualified research expenditures under the R&D tax credit.

The competitiveness of industry depends in part on the skills of its workers. Given the rapid increase in education levels abroad, it is clear that the skills of American workers must be strengthened both pre-market—through better high school curri cula and higher college matriculation and completion rates—and through on-the-job training. Training and on-going education are critical drivers of ro bust productivity growth and rising worker incomes. And a key way workers get skills is through training provided on the job by employers. But U.S. companies invest much less in training today than they did a decade ago. Therefore, to spur greater workforce training while at the same time lowering the effective corporate tax rate, Congress should allow expenditures on employee training to be added to qualified research expenditures under the R&D tax credit.

Congress should institute a small "tax" on federal R&D budgets to support university, state and federal laboratory technology commercialization.

Allocating 0.15 percent of agency research budgets to commercialization programs would generate $110 million per year to fund technology commercialization and innovation efforts. Half the funds could go to universities and federal laboratories for a variety of initiatives, including mentoring programs for research entrepreneurs, student entrepreneurship clubs and entrepreneurship curricula, industry outreach programs, seed grants for researchers to develop commercialization programs, etc. The other half could go to match state technology-based economic development (TBED) programs. These programs, such as the Oklahoma Technology Commercialization Center, assist researchers, inventors, entrepreneurs, and companies in turning advanced technologies and high-tech startup companies into growing companies.

Create an Industry Research Alliance Challenge Grant program to match funding from consortia of businesses, businesses and universities, or businesses and national labs.

This program would resemble the current Technology Improvement Program (TIP) operated by NIST but would have an even greater focus on broad sectoral consortia and would allow large firms as well as small and mid-sized ones to participate. To be eligible for matching funding, firms would have to: form an industry-led research consortium of at least five firms; agree to develop a mid-term (three-to-ten year) technology roadmap that charts out generic science and technology needs that the firms share; and provide at least a dollar-for-dollar match of federal funds. This initiative would increase the share of federally funded university and laboratory research that is commercially relevant. In so doing it would better adjust the balance between curiosity-directed research and research more directly related to societal needs.

NSF should fund a Center of Excellence for Accessible Design in IT-enabled self service to promote self-service technology.

Accessibility, much like security or privacy, must be engineered early on in the development of products and services. For example, a self-service kiosk may not always be accessible to an individual in a wheelchair or an online application may not be compliant with accessible web standards. To ensure that as more self-service technology becomes available it does not come at the expense of any particular population, NSF should fund the creation of a Center of Excellence (COE) for Accessible Design in IT at a major U.S. university. The COE would support the development of best practices for accessible design for kiosks, online services, interactive voice response systems, and mobile applications and devices.