A year from now, the 2016 presidential primaries will be over, and the nominees of both parties will need to focus in earnest on the broad interests of the American people, not just the parochial concerns of their respective bases. When that time comes, this memo provides the draft of a speech that we believe is critically important for the country to hear on technology and the economy. It is about how America can flourish again, and we invite anyone to borrow from it freely.
We are delivering this memo a year early because, frankly, it covers issues that partisans on both sides need to hear and understand. We realize that some of it will make some people uncomfortable, because it is candid about the shortcomings of commonly held beliefs about how the economy works and what the role of government should be. But we are policy people, not political advisers, so we will leave it to others to decide exactly how and when to deliver these out-of-the-box messages.
To be clear, we are confident that the basic ideas and proposals we outline here will appeal to most Americans. The big picture is, quite simply, that the country must embrace innovation to grow the economy for everyone. Below is an overview of the action plan we recommend to bring this agenda to life:
1. Foster innovation.
- Increase federal funding for science and engineering research by $30 billion a year.
- Expand the R&D tax credit so it is more competitive with other countries, and tax income from innovation at a lower rate.
- Establish a National Innovation Foundation akin to the National Science Foundation (NSF).
- Increase federal support for STEM education while rewarding universities for graduating more STEM students.
- Create a national system of “manufacturing universities.”
- Expand H-1B visas, green cards, and citizenship for foreign-born scientists and engineers.
- Charge every federal agency with crafting and implementing an innovation strategy.
- Pass the Startup Act to promote entrepreneurship.
- Create a White House Office of Innovation Review.
- Ensure laws and regulations enable disruption rather than protect the status quo.
- Create an interagency taskforce to combat corporate short-termism.
- Revise the 1996 Telecommunications Act to enable broadband innovation.
- Establish a “flexicurity”system to help workers acquire skills for new jobs.
2. Boost productivity.
- Bring back the investment tax credit for new machinery and equipment and worker training.
- Accelerate IT adoption throughout the public and private sectors.
- Raise the minimum wage to $10, and index it to per-capita GDP growth.
- Close the digital divide by helping people pay for computers and broadband.
- Expand funding for surface transportation by at least $30 billion per year.
3. Compete globally.
- Lower the corporate tax rate to no more than 25 percent, and adopt a territorial system.
- Strengthen the innovative capacity of U.S. firms that do business internationally, in part by expanding financing for scaling innovations.
- Put trade enforcement at the center of U.S. foreign policy, and increase resources for it.
- Confront China by raising the cost of unfairly distorting trade investments.
- Create a National Industrial Intelligence Council to assess competitive challenges.
- Restructure the World Trade Organization (WTO) to be more effective in fighting mercantilism.
- Fight currency manipulation.
Implementing any of these proposals on its own would constitute noteworthy progress, but together they would add up to more than the sum of their parts. They would form the framework for a cohesive national strategy to grow the economy and expand opportunities for all Americans by strengthening the underlying fundamentals of our economic well-being in the 21st century.