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Remarks at Democratic Leadership Council, Jobs and Innovation Roundtable

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Thursday, March 25, 2010

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Secretary of Commerce Gary Locke
Remarks at Democratic Leadership Council, Jobs and Innovation Roundtable
Washington, D.C.

Hello everyone.

I’d like to thank Bruce Reed for inviting me here today, and Harold Ford for that nice introduction.

And it’s great to share the stage with Congresswoman Markey and others.

We were, of course, supposed to have this meeting in February, until Snowmageddon intervened.

But it's great to finally be here—especially just a few days after the president signed the most momentous piece of domestic reform legislation in decades

We have finally won a hard-fought battle to pass comprehensive health care legislation that brings down costs, expands coverage to millions of Americans and ends the worst practices of insurance companies. And it begins to do so this year.

This legislation is a victory for American families, for seniors, for workers and small businesses—for Americans who deserve the security of knowing that in this country, neither illness nor accident should endanger the American dream.

In short, it is a quantum leap forward for the American people and for the American economy.

And it's going to help fuel the innovation America needs to get its economy growing again.

That connection—between health care reform and innovation—might not be immediately apparent. But it is no less true.

America, more than any other country, celebrates entrepreneurial innovators and companies bringing new products and new ways of doing business to market. We venerate those willing to shake up the status quo. And President Obama and his administration seek to empower them.

Unfortunately, our health care system, as it exists today, actively works against the innovation and risk-taking we are trying to encourage.

In this 21st century economy, people should decide whether they want to start a new business or switch jobs based solely on their vision and the power of their ideas.

But that's not the way it works. We all know people who would like to switch jobs, but won’t because they can't afford to lose health care for their child or risk shopping for a plan in the individual market.

The status quo represents lost opportunity not just for would-be entrepreneurs but for our entire economy.

Who knows how many new businesses haven’t been started or new products haven’t been developed because smart people were locked in jobs just to keep their health care?

With the passage of healthcare reform, that is a question we are not going to have to ask anymore.

This event is appropriately billed as a jobs and innovation roundtable—because it is innovation, in all its forms, that will help put America back on the road to sustainable job growth.

Somewhere in the last decade, I think America lost sight of that.

The idea of investing for the future and creating new kinds of useful goods and services often took a back seat to speculation and short-term thinking.

The upshot of this has been frightening declines in security and stability for middle class families.

As President Obama said earlier this year, “Too many Americans have known their own painful recessions long before any economist declared that there was a recession.”

And I think the chief focus for economic policymakers and policy-shapers is figuring out how we fix this.

In February, the Democratic Leadership Council released two research papers that get right to the core of what has to be done.

At home, America needs to ramp up her investments in innovation and infrastructure so we can lead the world in emerging industries like clean energy, biotechnology and health IT.

Make no mistake. Our rivals in this global competition aren’t playing for second place.

And we’ve got to do a better job selling the fruits of these investments to the 95 percent of the world's consumers who live outside our borders.

The Obama administration is already moving aggressively on both of these fronts, and today I'm going to tell you how.

Let's start with innovation.

Across the Administration, and across the Commerce Department, we are taking a holistic approach.

The Administration is providing billions in additional funding for research and development through multiple agencies, reversing the decades-long decline in federal funding of basic research.

The president has announced a formal National Innovation Strategy—which among other things—calls for doubling the budgets of agencies such as the National Science Foundation, so they can better support basic research at our nation's universities.

And just recently, the president’s 2011 budget—while freezing domestic discretionary spending overall—increases funding for civilian R&D by $3.7 billion, or nearly six percent.

At the Commerce Department, we are looking at ways to accelerate the movement of ideas from federally funded labs into the hands of entrepreneurs.

Many university-based research centers do a terrific job commercializing technologies. The challenge before us is to make that high-level of performance the standard among all colleges and universities in America.

A few weeks ago, the Commerce Department's Office of Innovation and Entrepreneurship brought together academic and business leaders from across the country to begin developing a more efficient and standardized approach to moving basic and applied research into the marketplace.

Another key area is our effort to reform the U.S. patent office at home and crack down on counterfeiting and piracy of U.S. goods abroad.

When I joined the Commerce Department early last year, we had a backlog of almost 800,000 applications, and an often cumbersome process that created immense uncertainty in the marketplace.

The over three years it currently takes to grant or deny a patent application is flat-out unacceptable.

The more patent applications that languish, the more new products not going to market and the more new jobs not being created.

Without clear and ironclad ownership of a patent, it makes it:

  • harder for businesses and entrepreneurs to attract investors; and
  • more likely that patent-holders will be on the receiving end of drawn-out and possibly frivolous litigation.

It’s analogous to trying to build a house on a piece of land that you don't have clear title to.

We are on a mission to fix these problems at the patent office.

We’ve got a very capable hand leading the PTO in Dave Kappos, who is focused on granting patent applications much faster and with higher quality.

The goal I have given the PTO is to be able to grant or deny a patent application within 12 months for those applicants who desire it.

And we are going to continue to work with Congress in the months ahead as they try to pass comprehensive patent reform legislation this year.

Of course, I know that receiving clear and quality patent rights is only half the battle when it comes to intellectual property.

As American companies move ever deeper into world markets, it’s getting increasingly difficult to protect our innovations.

Every year, American companies in fields as diverse as energy, technology, entertainment and pharmaceuticals lose as much as $250 billion to counterfeiting and piracy.

That hurts American businesses. It costs American jobs. And it is flatly unacceptable. As Vice President Biden has said, violating IP laws is outright theft, and it should be treated accordingly

It is a fundamental priority of the Obama administration and the Department of Commerce to improve our protection of intellectual property worldwide.

As just one example, at last year’s U.S.-China JCCT meeting, we agreed on a range of issues, including furthering cooperation on intellectual property rights.

I have already been to countries in Asia and South America multiple times to express the Obama administration’s commitment on this issue, and I have explained to foreign audiences that as their companies move up the economic value chain, they too will depend on the protection of their intellectual property.

As we take these important steps to spur American innovation at home, Commerce is also ramping up its efforts to help our companies sell more of their products abroad.

With traditional drivers of American economic growth like consumer and business spending facing headwinds, our companies must increasingly turn to the billions of potential customers abroad.

The Commerce Department is playing a lead role in implementing President Obama’s recently announced National Export Initiative (NEI), which aims to double American exports over the next five years and support two million new jobs here at home.

Under the NEI, there is going to be more credit available for exporters, more government trade promotion and advocacy and a sharper focus on knocking down the barriers that prevent U.S. companies from getting free and open access to foreign markets.

To put it another way: Prior to the NEI, export promotion may have been a “some of the time” focus for many U.S. cabinet agencies and departments.

The NEI makes it an “all the time focus.”

Before closing, I’d like to mention two more big bets that the administration is making when it comes to innovation.

First, we all know well that in today’s flatter world, a country’s competitive advantages are not locked-in. We must constantly look to the horizon and expand the scope of our innovations.

This administration is doing just that by looking for new ways to make the entire economy, all across the country, more innovative.

You’re all familiar with the many high-tech clusters we are lucky to have in the United States—in places like Silicon Valley, the Route 128 corridor in Boston and the Research Triangle in North Carolina.

If the president’s 2011 budget is approved, the Commerce Department will be awarding grants and providing comprehensive technical assistance to create more of these clusters of innovation around the country, centered on whatever strengths a local community chooses to build on.

Of course, nowadays you cannot be an innovator, or live in an innovative community, unless you have robust access to broadband connectivity. And the Commerce Department is the lead agency in the administration's $7.2 billion effort to expand high-speed Internet access throughout the country.

We’re distributing $4.5 billion of the funding and $2.7 billion is coming from the Department of Agriculture.

By September of this year, Commerce will have made over $4 billion in grants to help integrate communities that are currently under-served or unserved.

And most of our grants are to build out the type of high-speed Internet infrastructure that private investors have been unwilling or unable to.

So, Commerce is funding what we call “middle mile” highways of high speed Internet connecting community anchor institutions like colleges, hospitals and government institutions.

The private sector will then come in with billions of dollars in additional investments to connect to the federally funded Internet backbone and provide high-speed Internet service to millions of individual homes and businesses.

Second, you should know that the Commerce Department is focused on using the tools at our disposal to improve the delivery of healthcare and to address our energy and environmental challenges.

Out at NIST—the National Institute of Standards and Technology—the team is working diligently—with industry—on interoperability standards for Health IT. And we have made phenomenal progress on interoperability standards for the smart grid.

But those are just two examples.

We also see ourselves as partners on certain cutting edge questions.

The NIST researchers are looking into tough questions, like how do you measure declines in greenhouse gases? It’s a simple question to state, but not an easy one to answer.

At the National Oceanic and Atmospheric Agency, we are developing more accurate information on climate change.

We recently announced the creation of a National Climate Service. Much like the National Weather Service or the Global Positioning System (GPS), we know that when government develops good data on hard to measure phenomena, the private sector can leverage that data to create new products and services.

As we move forward on our green initiatives, and the other agenda items I've discussed today, I look forward to input from leaders like all of you on how we continue to make America more conducive to innovation.

And let’s remember that we don't promote innovation just for its own sake. We promote innovation because it has always been, and always will be, the prime driver of job creation in America.

When we build our economy on the short-lived inflation of assets, like we did these last 10 years, we are setting ourselves up for a fall.

But when we focus on real productivity, new technology and new ways of doing business, we’re going to help put America on sound financial footing and return stability and security to American families.

We want to help facilitate that, and if you have ideas, the doors at the White House and the Commerce Department are always open.

Thank you.