Thank you for inviting me to your Forum. Today’s discussion is extremely important to the future course of our country. Global industrial competitiveness continues to be one our greatest and most complex national challenges.
Thank you, Sam Allen, for leading the Council on Competitiveness from your perch atop Deere & Co., one of our most iconic and innovative American companies. We all know that busy people seem to take it upon themselves to be even busier.
Thank you, also, Deborah Wince-Smith, for leading the Council, and for your prior service to the country when you were in charge of the Technology Administration at the Commerce Department. Back then, our country was concerned about critical and strategic technologies and industries. But that interest later dissipated and, for too long, we failed to invest in our technology infrastructure and pursue the interests of American industries in global markets.
Today, we continue to deal with “Global Competition and The New Reality.” That, in fact, is the title of the January 1985 report issued by Hewlett-Packard CEO John Young that was the genesis of the Council on Competitiveness. It’s a collector’s item.
And when you read it, it’s Déjà vu all over again. We almost don’t have to produce a new report describing our global competitiveness challenges. We can use some white out on the date, 1985, and type in a new date, 2018, using an IBM Selectric Typewriter —remember those? — and we’re back in business!
This 1985 report concludes, and, I quote: “Americans must take on the challenges of competitiveness as the economic agenda for the next decade. . . It is not our goal to compete by decreasing the real incomes of our people.” It notes that the United States needs to tackle the challenges of unfair trade, an uncompetitive tax code, an overvalued dollar, workforce training and education, and burdensome regulations.
Since 1985 so little has changed, and yet, so much has changed. Today, we confront a competitive challenge as big as — or bigger — than the one we faced in the mid-1980s. Now it is personified by China. Then, it was Japan.
We in the Trump Administration have embraced that challenge, and we are working to address our shortfalls. We are looking at the recommendations your Council has provided in its recent analysis titled, “Turbocharging the Manufacturing Renaissance in an Era of Energy Abundance.”
Thank you for taking the time and devoting the resources to engaging with us in adopting, as your report states: “Bold and collaborative policy solutions that leverage America’s total innovation ecosystem – industry, academia, labor and the national laboratories.”
We already have taken initial specific actions to implement some of your recommendations. And we are trying to develop strategies for making others happen.
Our corporate tax code has been modernized and is now competitive with our global trading partners.
We are easing the burden of regulations on domestic producers who have been at a competitive disadvantage for decades.
Regulatory reform and new technologies have been particularly helpful to the extraction of hydrocarbons and has contributed to America’s energy abundance.
We are fully engaged in reforming our workforce development programs. We are striving to inculcate the skills that will lead to higher workforce participation ratios.
We are trying to improve the productivity of federal R&D, and bring it at least up to the level of university research. Universities are about twice as productive as federal research. I will talk in a minute about our new initiative aimed at improving the return on investment on federal R&D.
But first, there are two areas that we are emphasizing more than what was discussed in the Council’s report on “Turbocharging the Manufacturing Renaissance.”
The first is space. We have reconstituted the National Space Council and are promoting the development of the commercial space industry. Space could soon became a trillion-dollar a year industry in the United States, creating thousands of excellent new jobs for Americans and resulting in major scientific advances.
Because materials act so differently in a low-gravity environment, there is active R&D in space involving 3D printing, and the creation of new pharmaceuticals, to name just a few. These programs, along with the excitement generated by the commercial space launch industry, may stimulate young people to pursue once again studies in STEM subjects.
Everyone gawked as that red Tesla convertible was launched into outer space and, again — just this week — as the InSight Lander arrived on Mars. With the new generation of illustrious role models in the private sector, this fresh interest in the sciences among students could happen in a similar manner to when JFK sparked interest with the Moon Shot. We need it — because our schools are not properly preparing young people with the skills required in an increasingly technological world.
Equally important is the protection of IPR, which forms the basis for our economic growth. The President and I recently signed our 10 millionth patent, an unparalleled achievement. We issued as many patents in the last 30 years than in all of the prior history of our country. The pace of innovation is accelerating.
Our Patent and Trademark system works well with one major exception: China. We must resolve: China’s forced transfers of technology; their institutionalization of cyber theft; their deliberate infiltration of our companies, our universities, and our national laboratories; their state-sponsored venture capital investments at uneconomical prices to gain access to breakthrough technologies; their subsidies; and literally hundreds of trade and market access barriers that they erect against our most innovative companies.
But there are American limits to the role of government. Unlike China, our government cannot simply dictate industrial policy. In some ways, it would make it easier to compete against China if we could. But it would be antithetical to our concept of a free-market economy. No other country created the colossal industries that are driving global growth, such as the Internet, smart phones, and medical science.
Many of these innovations got their start with the help of federal R&D funding. But it was the private sector that spun these technologies out of the laboratories and into the economy.
With this in mind, we are undertaking a major new initiative aimed at maximizing the impact of our $150 billion annual federal investment in research and development. We also need the U.S. private sector — and not our overseas rivals — to benefit from taxpayer-funded R&D.
Last April, we launched the “Return on Investment Initiative for Unleashing American Innovation.” This program improves upon the two landmark pieces of legislation that guide most activities involving federal technology transfer: the Stevenson-Wydler Technology Innovation Act, and the Bayh-Dole Patent and Trademark Amendments Act.
Both Acts passed in 1980 — almost 40 years ago — and they need to be updated. These laws do not fully protect the intellectual property of private-sector partners that sign Cooperative Research and Development Agreements — or CRADAS — with federal agencies.
They limit the ability of researchers funded by the federal government to become entrepreneurs, curbing the potential for the commercialization of inventions. They prohibit the rapid transfer of technology from our national labs and universities due to red tape and regulatory burdens.
The new initiative is a whole-of-government effort. It involves all agencies engaged in federal R&D, from NIST, to the NIH, DOE, DOD, USDA, NSF and NASA. We will modernize the U.S. Technology Transfer system for the 21st Century to make it easier for companies large and small to engage with the federal research enterprise.
Earlier this year, we issued a Request for Information, and we have received advice from hundreds of individuals and organizations. In December, we will have specific time-tables for regulatory changes and new legislation.
We invite your assistance in bringing these efforts to fruition. It is essential for the United States to maintain its technological leadership in the face of increasing levels of investment in science and technology by governments and industries around the world.
Economic security determines national security, and technology will determine future economic security. We must all work at this together: the public and private sectors, academia, and workers — in effect, all of the members of the Council on Competitiveness.
Please continue your work toward the advancement of our great nation. The country depends on your continued civic engagement, now more than ever.
Thank you for your long-term devotion to improving the prospects for everyone in our nation. I look forward to working with the Council in the future.