Science Policy
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SCIENCE POLICY Incorporating WASHINGTON NEWS and policy news from around the world.
U.S. Competitiveness in IT Depends on Innovation Innovation is the key to continued U.S. prominence in the information technology industry, according to George Scalise, president of the Semiconductor Industry Association (SIA). Speaking in late October at George Scalise the 2004 Industrial Physics Forum hosted by the IBM T.J. Watson Research Center in Yorktown Heights, N.Y., Scalise based much of his commentary on the conclusions and recommendations of a recent report from the President’s Council of Advisors on Science and Technology (PCAST) on maintaining a competitive edge in IT and manufacturing. Scalise chaired the PCAST subcommittee that produced the report. Scalise cited the critical role played by semiconductors in establishing U.S. leadership in practically every major technology developed over the last 40 years. In an era where corporate outsourcing is a cause for concern, some 70% of U.S.owned wafer fabrication facilities are located in the United States. The country also houses roughly 27% of the sales and 55% of the silicon industry’s worldwide employment. Global sales of U.S.-based semiconductor companies are expected to total more than $100 billion in 2004. Nationwide, the picture is less rosy. The PCAST report found that the manufacturing share of the U.S. gross domestic product (GDP) and employment has halved over the last 50 years, although productivity has increased and output has remained steady. Improvements in IT drive fully one-half of the U.S. GDP and two-thirds of its productivity gains. “It’s not enough for the U.S. to be good today; what’s important is how good we are going to be tomorrow,” said Scalise. “We’ve had a good run, but can we maintain that into the future?” While outsourcing has dominated recent discussions on competitiveness, PCAST is more concerned by the increasing ability of non-U.S. competitors not just to manufacture commoditized products cheaply, but also to develop their own innovative new products and industries. “U.S. high-tech leadership is not automatically assured, and we must do the right things in order to preserve its continued technological prominence,” the PCAST report said. Government subsidies are not the answer, either for the IT industry or the manufacturing sector, according to the report. Instead, the focus should be on 918
enhancing the university research and development (R&D) base in the United States, improving education in science and technology, and developing related workforce skills. Scalise spoke in support of ongoing efforts to double the budget of the National Science Foundation, pointing to the European Union’s recent decision to increase basic research funding from 2% to 3% of its GDP. “We need to keep up to compete,” he said. He favors making permanent the recently extended congressional tax cuts for R&D investment. Scalise also cited the need for even more tax incentives to “preserve the viability of stock options” and enhance the U.S. entrepreneurial cli
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