All posts by Stephen Ezell
The Patient Protection and Affordable Care Act (ACA) is in the news again, with the announcement that the White House has delayed until 2015 the employer mandate, which requires that all employers with more than 50 employees provide health coverage to their workers. While most of the attention toward the ACA has centered around debate regarding the individual and employer mandates, what’s often missed is that certain provisions in the Affordable Act Care threaten to damage two of America’s most important innovative life sciences industries: medical devices and biopharmaceuticals.
Regarding medical devices, as of January 2013 the Affordable Care Act began to impose a 2.3 percent excise tax on the sales of medical devices, in order to offset a portion of the $1 trillion cost of the Act. (Specifically, the Joint Committee on Taxation estimates the tax will collect $29 billion over the 2013-2022 period.) Beyond the fact that raising costs is not the way to control them, the provision has had a deleterious impact on the competitiveness of U.S. medical device firms and threatened employment in the U.S. medical device industry. Some, including former chief Labor Department economist Diana … Read the rest
As a number of recent press articles, including this one from Reuters, attest, the U.S. business community is increasingly taking note of Indian trade practices that impose onerous localization trade barriers and compromise the interests of foreign intellectual property rights holders. In light of this, representatives from a diverse range of business and manufacturing sectors recently sent a letter to President Obama urging him to take a more forceful stand against India’s increasing embrace of “innovation mercantilist” trade policies. For example, as the letter argues, India’s recent “Administrative and court rulings have repeatedly ignored internationally recognized rights—imposing arbitrary marketing restrictions on medical devices and denying, breaking, or revoking patents for nearly a dozen lifesaving medications.”
It’s encouraging to see more organizations raising the profile on this important issue. ITIF has been monitoring India’s trade practices for some time now. In March, we submitted testimony to the U.S. House of Representatives’ Hearing on U.S.-India Trade Relations and last month we hosted a media teleconference during which ITIF called on the U.S. government to take a harder stance with India regarding protections for foreign intellectual property rights holders. We have also commented … Read the rest
As ITIF documents in 25 Policy Recommendations for the 2013 America COMPETES Reauthorization, Congress is currently considering a wide range of options for reforming U.S. high-skill immigration policy. The Senate Gang of Eight’s immigration reform legislation would create an additional 25,000 visas for foreign students graduating from U.S. universities with a Masters or Ph.D. in science, technology, engineering, and mathematics (STEM) fields. And the Startup Act 3.0 would make it 50,000 such visas for STEM graduates and introduce a “startup visa” for qualified immigrant entrepreneurs. As the Kauffman Foundation finds in Give me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa, immigrant-entrepreneur founded startups could generate as many as 1.6 million new jobs after ten years (assuming that 75,000 visas are granted and that half the startups are technology or engineering companies).
To be sure, a startup visa could have a beneficial impact on U.S. economic and employment growth, but why limit this dynamic only to foreign entrepreneurs looking to invest in starting new businesses? Why not extend visas to foreign individuals investing substantially into ongoing federally funded research and development (R&D) activities at … Read the rest
On March 20, Congressman Bill Foster (D-IL) introduced The National Fab Lab Network Act of 2013 (H.R. 1289), which would create a federal charter for a non-profit organization called “The National Fab Lab Network” (NFLN). NFLN would act as a public-private partnership whose purpose is to facilitate the creation of a national network of fab labs and serve as a resource to assist stakeholders with their effective operation. The network would be comprised of local digital fabrication facilities providing community access to advanced manufacturing tools for learning skills, developing inventions, creating businesses, and producing personalized products. The labs would represent workshops equipped with computer-controlled machine tools and “3-D printing” additive manufacturing devices which would allow children, students, or hobbyists to build virtually anything.
The NFLN would serve as a first point of contact for communities and organizations seeking to create fab labs; link funders and sites with operational entities that can source and install fab labs; support workforce training and job creation programs; and conduct research assessing the impact of the fab labs. The NFLN would operate at no cost to taxpayers, and would be chartered to accept funds from … Read the rest
With America’s economy continuing to plod along in a sluggish recovery, policymakers are searching for ways to spur U.S. economic growth. With the U.S. running massive trade deficits, we’ve realized in recent years that in order to grow America needs to increase its exports (hence the Obama Administration’s National Export Initiative, which seeks to double U.S. exports from 2010 levels by 2015), in part by encouraging the opening of markets throughout the world to freer trade. Having real access to foreign markets is crucial—it may mean the difference between a decade of stagnation or robust growth. Right now we are poised to make this essential leap forward with the Trans-Pacific Partnership (TPP), a 12-nation trade agreement that includes Australia, Canada, Japan, and Mexico as some of the major players. If enacted, the agreement would tie nations together that comprise 40 percent of the world’s gross domestic product. But before policymakers approve the TPP, the United States needs to make sure certain critical provisions are addressed. Some of the most important issues involve intellectual property (IP) protection.
IP is fundamental to America’s economy. With 40 million workers, or 30 percent … Read the rest
Global competition in export credit financing has become increasingly formidable, with foreign competitors enjoying substantial support from their countries’ export credit agencies, as ITIF explains in Understanding the Importance of Export Credit Financing to U.S. Competitiveness. The United States’ Export-Import Bank (Ex-Im Bank) fills an important role in leveling the playing field for U.S. exporters by matching credit support that other nations provide to their exporters, thus preventing foreign exporters from enjoying undue advantage. This ensures that U.S. exporters are able to compete against foreign competitors based on the quality and price of their products and services, and not lose sales because a foreign government has helped a foreign competitor by providing superior financing terms to a potential buyer.
Unfortunately, other countries—and principally America’s top economic competitors in Europe and China—continue to invest significantly more than the United States does in export credit financing, both as a share of GDP and, in China’s and Germany’s case, even current dollars.
In fact, from 2007 to 2011, China invested $227.6 billion in cumulative new medium and long-term official export credit volumes compared to the United States’ $70.6 billion, according to data … Read the rest
On Capitol Hill yesterday, ITIF hosted an event making the social and economic case for autonomous vehicles. The event featured presenters from Toyota, Google, and Texas Instruments, as well as DC Councilmember Mary Cheh, who introduced the Autonomous Vehicles Act of 2012, which authorizes autonomous vehicles to operate on the District’s roadways. (Similar legislation has also been enacted in California, Florida, and Nevada and introduced in nine other states.) Collectively, the panelists made the case that the advent of automated driving (i.e. driver assistance) technologies—and ultimately fully autonomous vehicles—is poised to deliver tremendous safety, personal mobility, environmental, productivity and efficiency, and economic benefits.
Regarding safety, with human error the definite or probable cause of 93 percent of traffic accidents, autonomous vehicles could dramatically reduce accident incidence because they will obey all traffic laws, won’t speed, and won’t drive while distracted, tired, texting, or inebriated. This could significantly ameliorate the over 4 million traffic accidents which occur annually on U.S. roadways and which cause more than 35,000 traffic fatalities (almost 100/day) and an estimated $450 billion in economic losses. In the meantime, a range of automated driver assistance technologies, … Read the rest
Innovation is one of America’s most prized assets. If our country is going to successfully compete on the global stage over the course of the next several decades, we must develop the new technologies, businesses and industries that will allow us to keep pace. President Obama’s just-released budget for 2014 contains several key components that further this goal.
ITIF applauds the President’s $1 billion request to create a series of manufacturing innovation institutes that will help propel advanced manufacturing and rejuvenate a sector of our economy that has been hit especially hard over the past decade. The National Network for Manufacturing Innovation will create 15 advanced manufacturing centers across the country that will spur research, development and deployment of next generation technologies, products and processes. As ITIF has shown, improving manufacturing innovation is central to enhancing American competitiveness and furthering economic development and business creation.
On energy innovation, the President’s budget request continues to push for greater public investment in the development of new clean energy technologies. The budget proposes boosting clean energy research to nearly $5 billion, a 15 percent increase compared to the FY2013 Continuing Resolution (CR) … Read the rest
The 2013 Aviation Summit, held on Thursday, March 28 at the U.S. Chamber of Commerce, showcased the critical contributions the U.S. aerospace and airline industries make to the U.S. economy, while highlighting policy issues that must be addressed if these industries are to remain globally competitive. This matters because, as ITIF explains in Fifty Ways to Leave Your Competitiveness Woes Behind: A National Traded Sector Competitiveness Strategy, the health of U.S. traded sector enterprises in industries such as aerospace, automobiles, and airlines—all far more exposed to global competition than local-serving firms and industries—simply can’t be taken for granted. For example, while we can know there will be a certain number of jobs in domestic-serving industries like grocery retail based solely on local demand, we can’t be certain there will be aviation industry jobs in the United States, since this depends on the United States winning in global competition in this industry.
Boeing CEO James McNerney, who gave the keynote address, emphasized the vital importance of the U.S. aerospace industry to America’s economy, noting that it contributes $325 billion annually to U.S. GDP while also contributing $86 billion in … Read the rest
On Wednesday, March 13, the House Ways and Means Trade Subcommittee held a hearing on the turbulent state of U.S.-India trade relations. The Subcommittee’s hearing reflects growing attention and concern related to India’s recent embrace of a wide slate of “innovation mercantilist” policies that seek to bolster Indian economic and employment growth by distorting global trade rules and forcing investment and production to occur in India. India has erected these policies in a diverse range of sectors from information and communications technology (ICT) to life sciences, clean energy, and retail.
For instance, in February 2012, the Indian Ministry of Communications and Information Technology announced a Preferential Market Access mandate for electronic goods (the PMA Mandate) which imposes local content requirements on procurement of electronic products by government and private sector entities with “security implications for the country.” A specified share of each product’s market—anywhere from 30 to possibly even up to 100 percent—would have to be filled by India-based manufacturers, with the local content share for each product rising over time. The policy’s coverage is so broad it could easily capture half of India’s ICT market. In fact, on … Read the rest