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Remarks at Silicon Valley Leadership Group Business Climate Summit, San Jose, California

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AS PREPARED FOR DELIVERY
Tuesday, April 24, 2012
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Commerce Secretary John Bryson
Remarks at Silicon Valley Leadership Group Business Climate Summit, San Jose, California

Thank you, Bob [Brandt]. And thank you to Carl Guardino and everyone involved in the Leadership Group. And of course, thanks to our hosts here at IBM.

I heard that many of you were in D.C. last week for this group’s visit to Capitol Hill.

As much as I love Washington, it is always a treat to come back to my home state, and even more so when I get to spend time with business leaders like all of you.

Let me open by saying that I greatly respect the work that this group does–not just to promote business growth but in your broader support for the people who live in this area.

It’s clear that you believe strongly in social responsibility through your efforts to promote better housing, transportation, environmental stewardship, and more.

In my opinion, it’s a natural outgrowth of the entrepreneurial spirit and the strong sense of community that you have here.

One of my core beliefs–one I’m sure that you share–is that the U.S. is significantly different from every other advanced economy: We’re startup people. We break the norms. We’re willing to take chances on new ideas.

That’s certainly true here in Silicon Valley. You’re bringing new products and services that the whole world wants. You’re driving competitiveness and innovation. And–yes–you’re creating jobs.

In fact, in the survey you just released, I saw that over 60 percent of your companies added jobs last year while only seven percent reduced their workforce. So, you’re part of the reason that the U.S. has added nearly four million jobs over the past 25 months.

We need to do everything possible to help you keep that momentum going. And today, I’d like to touch on a few ways we are doing just that.

I haven’t had a chance to fully review your new survey results, but I did look at the response to one question in particular:  Which area deserves the most attention from the federal government for Silicon Valley?

The number one response – from over half of you–was comprehensive tax reform. 

As you and I both know, our corporate tax code is broken. The U.S. has one of the highest statutory corporate tax rates in the world. We haven’t changed it significantly since the 1980s.

That’s not sustainable. That’s why, earlier this year, the president proposed a plan that includes lowering the rate to 28 percent, and for manufacturers, an effective rate of 25 percent. That is directly in line with what many businesses have asked.

This is something that both Democrats and Republicans can agree on. It is common sense.

Now, this issue is directly related to a top priority of mine as Secretary, and that is increasing direct investment in the United States.

As the productivity of our workers continues to grow in areas such as advanced manufacturing, it’s becoming clear that investments here in the U.S. have distinct advantages.

We have the best universities, the strongest R&D, the most robust supply chains, the most powerful IP protections, and the most talented, entrepreneurial workforce in the world.

In addition, as wages in places like China continue to grow, it’s clear that several industries are seeing the clear upsides of keeping jobs here in the United States.  We want to help CEOs make the choice to keep jobs here or even bring them back.

And I look forward to talking more about SelectUSA–a Commerce Department initiative to increase the level of investment in the U.S.–during our conversation.

Of course, it’s not just about keeping jobs here. It’s about ensuring that we have the right people with the right skills to fill the job openings we already have. A globally competitive economy requires a globally competitive workforce.

Of critical importance are education and skills training in the science, technology, engineering and mathematics fields–STEM fields. As you know, STEM workers are at the forefront of inventing, applying, and producing new technologies.

Over the last decade, growth in STEM job openings climbed three times as fast as jobs in other sectors. However, in recent years, only about 13 percent of U.S. college graduates got degrees in the STEM fields. That is much lower than other countries like Korea and Germany, where about 25 percent of students graduate in these fields.

President Obama has invested heavily in STEM education. And the 2013 budget requests $3 billion in STEM programs across the federal government.

Looking forward, I think we need to focus on a few areas in particular.

First, we need to increase the share of women and minority students in STEM fields. Today, these groups are seriously underrepresented. It’s clear that if more than half of our population can’t find a path to science-related fields of study, we will be at a disadvantage in the global economy.

Second–and I know that many of you feel strongly about this–we need to support non-U.S. citizens with STEM degrees who want to work in the U.S. The administration has proposed "stapling" a green card for more foreign students who graduate from our universities in a STEM field and have a job offer from a U.S. company.

Third, we must take concrete steps to help ensure that every child has access to a world-class education, with good teachers and mentors. And in order to do this, we need to first take steps to make college more affordable. And this week, President Obama is calling on Congress to pass legislation that would do just that by preventing interest rates on student loans from doubling for seven and one-half million students starting on July 1.

Finally, I want to touch on the importance of intellectual property protection.

Two weeks ago, the Department of Commerce released a first-of-its-kind report on the role of IP in our economy. You can find it on our website at www.commerce.gov.

The IP report shows that nearly 35 percent of our GDP–more than $5 trillion–comes from about 75 IP-intensive industries. These industries support the employment of about 40 million workers throughout our country–over one-fourth of America’s workforce.

Not surprisingly, California was one of three areas around the country where we found IP-intensive jobs to be most heavily clustered.

Importantly, the report also made clear that IP protections have a ripple effect, driving innovation and competitiveness in indirect ways. Examples of these complementary industries include the computer manufacturer that uses inputs made by semiconductor firms to make the hardware that is needed to run applications made by software companies.

For all these reasons, the landmark America Invents Act–signed into law last year by President Obama–is now playing a crucial role in building a 21st-century IP system.

For example, the U.S. Patent and Trademark Office now has the ability to spend all of its fee collections. This allows the office to hire more examiners and board judges to reduce the backlog of patent applications and challenges. We are also looking to hire 1,500 patent examiners this year.

We also launched a fast-track program for those businesses that need fast action on a patent. For a higher fee, PTO will guarantee a 12-month decision, and small businesses get a discount on that service.

And, as the global gold standard in IP protection, our Patent and Trademark Office continues to work to harmonize IP laws internationally. This will help not only with economic trade and cooperation, but also in reducing counterfeiting and piracy abroad.

Overall, we are making progress in IP. In 2011, patent filing grew by five percent, but our patent backlog actually dropped by about 10 percent. 

So that’s good news for entrepreneurs and businesses–as well as the people who get good jobs working for them. But we still have work to do.

Before I turn the floor back over, I’ll close by saying one thing.

All of us in the administration–including the president and all of us at the Commerce Department–know that government doesn’t begin to have all the answers.

We know that our job is simply to help create the conditions that foster America’s entrepreneurial spirit in places like Silicon Valley.

We have never been more focused on serving as your partner and giving you the tools you need to do what you do best–which is drive innovation, increase our competitiveness, and create good jobs here at home.

Thank you, and now I’ll step down and join my fellow panelists for a few questions.