The race for global innovation leadership is on, with nations increasingly recognizing the importance of innovation and R&D strategies in driving growth and spurring competitiveness. USA’s long standing leadership in these areas is becoming more and more challenged. In absolute terms USA continues to be the largest investor in scientific research, although its research intensity as measured by total investment in R&D as a percentage of gross domestic product (GDP) has fallen. This is especially the case for the federally funded part of R&D, which has since long been surpassed by the industry funded part of R&D.
Given the increasing importance of research, development and innovation, let´s look at what the presidential candidates have stated about their positions regarding technology and innovation. For the last few elections, the Innovation Technology and Innovation Foundation (ITIF) has examined the candidates´ positions in a number of areas related to technology and innovation policy using open sources. The information in this blog comes to a large extent from this year’s ITIF report “Trump vs. Biden: Comparing the Candidates´ Positions on Technology and Innovation”.
The Trump administration has proposed budget cuts to federal R&D during his presidency. Congress, who sets the budget , has increased the federal R&D budget to its highest levels. The administration has prioritized critical areas with increased funding and initiatives. The identified five key “industries of the future” are AI, quantum computing/quantum information sciences, advanced communications networks, advanced manufacturing and biotechnology.
During the Trump presidency, innovation policy has been increasingly linked to the national security agenda, and in October the White House presented its “National Strategy for Critical and Emerging Technologies”. The pillars of success in this strategy are based on “promote and protect” the National Security Innovation Base (NSIB), i.e. the American network of knowledge, capabilities and people. The strategy’s market-oriented approach aims to incentivize innovation while protecting NSIB and the US technology advantage from unfair competition and to prevent the misuse of American technology.
Components in Trump’s market driven approach includes reducing government barriers limiting innovation such as taxes and regulation. An aspect of the Trump-administration’s “Buy America” agenda is to use the government as a vehicle, for example by encouraging both federal and local government agencies to research, develop and buy more emerging technologies.
Vice President Biden supports a more conventional state-directed model with focus on expanding health care and investing in physical infrastructure, but also proposes new federal R&D investments. A Biden administration would have the government taking a more active role as a tougher regulator, and by increasing corporate taxes. The Biden team regularly emphasizes achieving social goals as part of their agenda, for example revitalizing distressed communities and expanding economic opportunities for disadvantaged groups. They also refer to increased funding for “breakthrough technologies”, among those identified are AI and quantum computing.
In other areas the candidates’ rhetoric follows along similar lines:
- a tougher stance on China, where Trump prefers a more unilateral approach versus Biden’s more multilateral approach.
- increased investment in rural broadband.
- attention to (tech) skill development and vocational training
- manufacturing as an essential part for a healthy American economy
The following table illustrates the stated position of the candidates in some key areas:
|Overall policy||Market driven approach with government reducing economic barriers such as taxes and regulations to foster innovation. Critical and emerging technologies considered essential to national security.||State driven approach with government as an active partner setting a technology and innovation agenda jointly with industry. Support for innovation policy linked to social policy goals.|
|Education and training||STEM prioritized, favoring of career and technical education. Supportive of skill development programs like apprenticeship. Has signed an executive order requiring the federal government to hire based on capabilities, not degrees. Supports funding and programs for school choice. Has signed a bill providing over 250 MUSD a year to minority serving institutions.||Increased focus on access to computer sciences courses. Investment in vocational training and partnerships already in high school. Increased focus on programs and support to low income and minority communities and institutions serving these groups. Proposes tuition free higher education for families with incomes below 125,000 USD.|
|Immigration||Has worked to limit immigration, in particular high skilled workers on H1-B visa. Temporary banned new immigrants on employment-based visas during Covid-19.||Would work to reform visas to ensure alignment with labor market and not undermining wages. Would expand the number of high skilled visas.|
|Technology focus||5 key areas identified for initiatives and increased funding; AI, quantum computing/quantum information sciences, advanced communications networks, advanced manufacturing and biotechnology.||“Breakthrough technologies” in line for significant increased R&D. This includes AI, quantum computing.|
|Taxes & Regulation||Supports low corporate tax rate stimulating more investment. The Tax Cuts and Jobs Act of 2017 reduced corporate tax rate from 35% to 21%. It did not increase R&D tax credit, where USA ranks low in an international comparison. Has significantly reduced the number of regulatory actions from active status.||Would increase the corporate tax rate to 28%. Supports policies to make it more favorable to keep, or bring back, jobs to the USA, and less favorable to move production overseas.|
|Advanced manufacturing||Released “Strategy for American Leadership in Advanced Manufacturing” in 2018. Department of Energy has established a 15th Manufacturing USA Institute, the flagship program for next generation manufacturing.||Wants to develop a comprehensive “manufacturing and innovation strategy”. Supports keeping Manufacturing USA Institutes to 15, and proposes over 50 technology hubs building on Manufacturing USA.|
|Clean energy innovation||Promotes a strategy of “energy dominance”, support includes policies aiding carbon intensive technologies (like coal plants), while proposing reduced federal funding for clean energy R&D. Has proposed eliminating Advanced Research Projects Agency-Energy (ARPA-E).||Calls for a strategy achieving net-zero US emissions by 2050 supported by major investments in clean energy and green infrastructure. Has proposed creating ARPA-C (C for climate) for game-changing technologies to help achieve clean energy targets. Among suggested emission-reduction goals are decarbonizing the electric grid by 2035.|
As always, we welcome you to contact our office if you would like to discuss technology and innovation policy.