Solutions for Job Creation & Economic Growth

Transcription

1 Slutins fr Jb Creatin & Ecnmic Grwth The themes f President Trump s successful campaign reflect the fllwing plicy principles and slutins. His fcus n infrastructure, the lss f manufacturing jbs, the imprtance f grwing small businesses, and the need t innvate t keep America cmpetitive clearly resnated with vters. We are excited that many f the President s pririties are reflected in ideas that ur rganizatin supprts in the area f jb grwth and ecnmic prsperity. As President Trump begins t turn campaign prmises int actin, SSTI and its plicy-fcused initiative, the Innvatin Advcacy Cuncil (IAC), suggest the fllwing changes t gvernment and natinal plicy. Principles IAC s plicy agenda aims t supprt the individuals, institutins, and prcesses prducing innvatins that create jbs and imprve quality f life thrugh technlgical advancement and ecnmic prsperity. T meet this missin, IAC s plicy framewrk is structured arund seven bjectives: Advance prsperity thrugh lcally-designed strategies Mdernize ur natin s infrastructure t include and supprt new technlgies Grw gd paying jbs by increasing the velcity f innvatin int new prduct lines and businesses Supprt small businesses and increase entrepreneurship Ensure the wrkfrce is trained fr the jbs f the future Refrm natinal institutins t better supprt the innvatin ecnmy Enhance America s glbal cmpetitiveness thrugh increased funding fr targeted research and develpment Plicy Slutins Advance lcal prsperity thrugh lcally-designed strategies Every regin in the United States, large r small, pssesses assets that can be leveraged fr ecnmic benefit. These assets represent cncentratins f intellectual capital that generate inventins, discveries, innvatins, and ideas fr new prducts and services that hld the ptential t be transfrmed int new, high-grwth businesses and new jbs. In many cases, Federally-funded basic and applied research prvides the fuel fr these inventins and discveries. These new businesses and their technlgies can imprve U.S. cmpetiveness in the wrld and als prvide high paying, quality jb grwth within these regins. Fr the United States t cntinue its leadership psitin in innvatin, we must capitalize n the gegraphically-diverse surces f innvatin in ur cuntry and nt leave significant prtins f prmising creativity and innvatin untapped.

2 Acrss the cuntry, there are initiatives and netwrks f activity funded by the private sectr, philanthrpy, universities, states, and lcal gvernment with prven track recrds f creating jbs, bsting ecnmic grwth, imprving businesses efficiencies and prfits, and frming new cmpanies. These partnerships encurage the creatin and grwth f innvatin- and technlgyfcused cmpanies, in new ecnmy industries such as advanced manufacturers, agricultural and medical technlgy, and energy prductin. IAC s highest plicy pririty is t cntinue grwing the mst effective f these initiatives and netwrks, and t increase their presence thrughut the cuntry. These initiatives will be able t bring new jbs and ecnmic impact t mre Americans by using the Federal gvernment t catalyze lcal slutins. Each regin f the U.S. is unique and has its wn set f strengths and pprtunities, and als gaps t be filled. In a bipartisan pll cnducted fr IAC, 1 we asked respndents if they wuld supprt a plicy change t develp Federal gvernment partnerships with cities, states and regins and nn-prfit rganizatins t help fund lcally-designed strategies that encurage the creatin and grwth f technlgy cmpanies. This prpsal was met with verwhelming supprt frm 78 percent f participants. Rather than a ckie-cutter apprach, taxpayers prefer flexible Federal supprt fr lcally-designed prgrams, lcally-identified pririties, and lcally-identified gaps. The Reginal Innvatin (RI) Prgram shuld be expanded and the ffice administering it shuld be adequately resurced in rder t catalyze greater ecnmic grwth thrugh industry-driven lcal netwrks (U.S. Department f Cmmerce) Successful experience has demnstrated that Federal investments can catalyze meaningful and systemic change in cmmunities that have develped plans t capitalize n their wn unique innvatin and sectr strengths. The RI Prgram prvides matching funds fr private and state/lcal investment int prgrams that address reginal gaps in the cmmercializatin f innvatin. The RI Prgram helps t strengthen multifaceted, reginal ecsystems that include access t a cntinuum f investment capital, apprpriate physical infrastructure (which might include affrdable lab space, c-wrking envirnments, r science and research districts), a system f mentring that matches industry-seasned talent with emerging technlgies and entrepreneurs, and a diverse and well-trained wrkfrce. IAC recmmends authrizing this successful prgram at $100 millin, as intended in the riginal legislatin. This increase will facilitate awards that prvide fr award timelines f up t 5 years and larger awards t establish strnger initiatives with the stability necessary t establish lng-term sustainability. Increased funding will further enable the RI Prgram t supprt cmplementary innvatin activities permitted in the riginal legislatin but nt yet funded, such as startup challenges cnnecting crpratins with entrepreneurs and brader gegraphic effrts t cmbine rural and metr assets t jintly unlck greater ecnmic prsperity fr entire regins. Expand the U.S. Small Business Administratin s (SBA s) Reginal Innvatin Clusters prgram t supprt mre industry-cmmunity partnerships The SBA Reginal Innvatin Clusters (RIC) prgram is unique in recgnizing the need fr reginal ecnmies t leverage and cnnect centers f innvatin, supply chains, and talent 1 Pll f 1,000 likely vters cnducted by Greenberg Quinlan Rsner Research and TargetPint n behalf f SSTI s Innvatin Advcacy Cuncil in fall

3 pls frm academic centers t startups t multinatinal crpratins in clusters f industry-fcused strengths unique t each regin. Frm wd prducts in rural Appalachia Ohi and advanced manufacturing in inner-city Detrit t bisciences in St. Luis t unmanned aerial vehicles in Oklahma and energy in Flrida, the prgram has helped regins cnnect their mature industry strengths with newly created cmpanies and latent pls f talent fr new jbs. Further, a number f the clusters have helped cmmunities and, imprtantly, the U.S. military pivt frm ld line technlgies and manufacturing capabilities t new, innvative technlgies. IAC recmmends fully authrizing this prgram as a $25 millin annual initiative t supprt innvatin-based industry clusters acrss the cuntry. Use the cnvening functin f the Federal gvernment thrugh entities such as the Natinal Advisry Cuncil n Innvatin and Entrepreneurship (NACIE) t prvide a strnger vice fr manufacturing and ther advanced industries in directing Federal innvatin plicy Wrking grups, like NACIE, prvide critical rm fr private sectr vices with firsthand experience n hw t grw the ecnmy and jbs in Federal plicy discussin and agency peratins, bringing new ideas t gvernment. Utilizing these utside advisrs t prvide substantive review and guidance brings the unique perspective f entrepreneurs, investrs, CEOs, and innvatin leaders int the design and disseminatin f Federal prgrams. IAC recmmends cntinuing supprt fr NACIE. Mdernize ur natin s infrastructure t include and supprt new technlgies Strng infrastructure is the backbne f the ecnmy, but America s infrastructure needs t be revitalized in rder t enable rbust ecnmic grwth. Strategic investments in traditinal infrastructure can nt nly imprve the quality and safety f bridges, airprts, and utilities, but als prvide pprtunities fr innvative entrepreneurs and crpratins t cntribute t a mdern infrastructure thrugh the next wave f manufactured gds and smart technlgies. Imprve the cuntry s bradband and wireless internet infrastructure t prvide greater access fr all citizens t infrmatin and pprtunities (Federal Cmmunicatins Cmmissin [FCC]) As a facilitatr f custmer identificatin, brand management, emplyee crdinatin, and direct sales, internet access is critical t present-day business peratin. Bradband access in rural areas is just 61 percent 1.5 times wrse than in metr areas and 47 percent f students fail t meet the FCC standards fr schl cnnectivity. 2 In the interest f facilitating rural business and quality f life, IAC recmmends that the Federal gvernment incentivize internet service prviders t build ut bradband and wireless netwrks in rural and ther lw-access areas. Bring new technlgies t traditinal infrastructure investments, such as mre efficient and prductive energy generatin, imprved cst-efficiency f airprts and ther facilities, and smart technlgies that make cmmunities safer 2 Federal Cmmunicatins Cmmissin. (2016, Jan. 29) Bradband Prgress Reprt. 3

4 Infrastructure is n lnger necessarily a dumb bject, planned and built nce and then left t sit silently while it decays. Tday s technlgy enables infrastructure t be a prving grund fr new materials, adaptable t changing cnditins, and a surce fr sensrs revealing custmer patterns and alerting wners t actual nt prjected maintenance needs. Investments in public infrastructure must be made in cnjunctin with the research centers, startups, and manufacturers that are actively develping these innvatins. IAC recmmends that Federal investments in infrastructure bth include a set-aside t cver additinal csts f incrprating smart technlgies and include pints in prpsal- and cntract-scring fr prjects that prpse specific cnstructin f smart infrastructure. Invest in the infrastructure needed t grw a 21 st Century ecnmy, such as the develpment f medical and scientific research parks, labs, and incubatrs The prcess f making scientific and medical research prgress and cnverting these innvatins int real slutins and businesses is an infrastructure-intensive prcess. A cmmn cncern f cities thrughut the cuntry is a lack f sufficient labratry space t investigate new drugs, rbtics, and ther innvatins, and new prducts ften thrive when cultivated in a scalable site c-lcated with cllabratrs and cmpetitrs. IAC prpses that Federal infrastructure spending plans include a three percent set-aside fr technlgy parks, labs, incubatrs, and ther research-related infrastructure. Grw gd-paying jbs by increasing the velcity f innvatin int new prduct lines and businesses Meaningful gains in jb grwth and sales pprtunities ccur when research reveals slutins t prblems r leads t the creatin f new small businesses, prducts, r manufacturing prcesses. Billins f dllars per year f private and public investment in R&D yields thusands f discveries and technlgies that have the ptential t be brught t market and t help slve prblems r advance new benefits in healthcare, energy, defense, and many ther fields. Cnverting a research discvery in a lab t a successful prduct r service requires numerus steps and vercming many challenges and barriers, including understanding specific custmer needs, develping prttypes, running pilts r trials, securing regulatry apprval, meeting necessary prduct cst targets, and ther activities, depending n the technlgy and industry. There is an pprtunity fr the Federal gvernment t reduce sme f the barriers faced by innvatrs and entrepreneurs and t prvide assistance in bringing these imprtant innvatins t market. Ntably, many f the prducts emerging frm research transfrmatin effrts are hard gds that have the ptential t create new manufacturing jbs, an especially imprtant pprtunity fr the American ecnmy in the cming decades. T increase jb grwth, IAC encurages the adptin f plicies that will imprve the rate f research-t-prduct cnversin. Implement a new research transfrmatin capacity grant prgram t blster reginal strategies t cnvert research int new prducts and services thrughut the cuntry (Natinal Institute f Standards and Technlgy [NIST]) Cmpanies seeking t transfrm scientific research int technlgical innvatins and new businesses face a variety f challenges, such as market segmentatin and custmer 4

5 develpment. Experienced nnprfit, venture develpment rganizatins can help cmpanies vercme these barriers and accelerate their grwth. A bill intrduced by Senatrs Jerry Mran and Mark Warner in a prir Cngress suggested supprting these activities thrugh a Federal grant prgram funded by setting aside 0.35 percent f the extramural R&D budgets f Federal agencies with extramural R&D budgets ver $100 millin. IAC recmmends implementing a new research transfrmatin capacity prgram that leverages rganizatins wrking effectively at the reginal r lcal level t supprt prf-f-cncept and ther activities needed t demnstrate new technlgies at a sufficient level t attract private investment. Mdernize the Small Business Innvatin Research (SBIR) prgram t make permanent its authrizatin and t allw fr cmmercializatin activities (SBA) Billed as America s Seed Fund, the SBIR prgram prvides ver $2 billin annually t small businesses t fund research and develpment activities thrugh eleven Federal agencies. Currently, Federal rules prhibit awardees frm using award funds fr technlgy transfrmatin activities like custmer discvery, market research, intellectual prperty prtectin, and pursuing private investment. These are critical activities at an early stage, but mst private investrs are nt willing t supprt cmpanies until mre f the R&D activities (the primary purpse f the SBIR funding) are cmplete. Allwing transfrmatin activities t be included as a mdest prtin f the SBIR budget wuld bth accelerate the ability f the cmpanies t mve their innvatins t market and increase the likelihd that the applied R&D utcmes funded by SBIR will be well aligned with custmer needs. 3 The previus reauthrizatin f SBIR included an ability fr Federal agencies t accmmdate sme f these activities thrugh a pilt prgram allwing flexibility in the use f administrative funds, but this prgram will expire in IAC recmmends making SBIR permanent, fully authrizing the administrative funds pilt and expanding the regular prgram s use f funds t include transfrmatin activities. Encurage universities and American cmpanies t wrk tgether t slve America s manufacturing prblems by creating incentives fr cllabratin (NIST and Natinal Science Fundatin [NSF]) Industry-university cllabratins can be very fruitful, but require either experienced cllabratrs n bth sides r an effective intermediary rganizatin t help navigate the cultural, legal, and structural challenges that need t be addressed t yield the mst effective utcmes frm wrking tgether. Incentives n bth sides can help encurage the initial wrk leading t lng-standing relatinships that address thrny technical and manufacturing difficulties that cmpanies face when bringing new prducts t market r in trying t meet aggressive cst targets needed t keep their manufacturing in America. Incentives fr industry can include an R&D tax credit fr industry payments t universities r university research cnsrtia. The U.S. has such a 20 percent credit fr energy research, but nt in ther industries. IAC suggests establishing a tax credit fr businesses fr 20 percent f the expenses related t industry-university research cllabratin. 3 Natinal Advisry Cuncil n Innvatin and Entrepreneurship (2016, Mar. 4). Imprving Cmmercializatin Outcmes f the SBIR/STTR Prgrams. U.S. Department f Cmmerce. Ratified recmmendatin t Secretary f Cmmerce Penny Pritzker. 5

6 IAC recmmends increasing Federal funding fr prgrams that create industryuniversity cllabrative research centers, particularly NSF s Engineering Research Centers and Industry/University Cperative Research Centers and NIST s Manufacturing USA natinal netwrk. This funding wuld encurage universities t seek ut mre f these partnerships. 4 Streamline regulatins and initiatives t facilitate the cnversin f research frm Federal labratries int new jbs and businesses (Office f Science and Technlgy Plicy [OSTP]) America s natinal labratries are hme t thusands f researchers and a huge array f labratry equipment prducing numerus scientific, medical, and technlgical innvatins each year. Hwever, the systemic changes needed t priritize the efficient transfrmatin f these innvatins int new prducts, services, and businesses have nt ccurred. High-impact slutins include the fllwing: T effect a real change in technlgy transfer utputs, the management f the labs needs t be measured based n these utcmes and sufficient funding fr cmmercializatin activities needs t be available. The reprt card used t evaluate the cntractrs managing many f the natinal labs, the Perfrmance Evaluatin and Management Plan, treats successful transfers f technlgy t market as an afterthught. 5 IAC recmmends adding technlgy impact r transfrmatin utputs as a majr categry f measurement t increase the fcus f lab managers n the needed activities t bring abut change. 6 IAC prpses setting aside a prtin f Federal funding t the natinal labs fr research activities t fund technlgy transfer effrts, bth within the labs and with rganizatins arund the cuntry that prvide technlgy transfer and entrepreneurship assistance, mentring, and acceleratr prgrams. IAC recmmends the permanent adptin f the U.S. Department f Energy s (DOE) Agreements fr Cmmercializing Technlgy pilt, which establishes a lwer barrier fr cntracts with businesses seeking t develp natinal lab research int new prducts and services. IAC supprts the cntinuatin and implementatin f pilt prgrams at the natinal labs t test new mdels and incentives t facilitate research transfrmatin. An example f a prmising initiative is DOE s Small Business Vucher prgram, which facilitates small business access t natinal lab facilities and equipment fr prduct testing and develpment. Pilt a prgram under the U.S. Department f Defense (DOD) t turn military research int prducts and services fr bth the public and private sectrs 4 Ezell, S. & Andes, S. (2016, Dec.). Lcalizing the ecnmic impact f research and develpment: Plicy prpsals fr the Trump administratin and Cngress. Washingtn: Infrmatin Technlgy and Innvatin Fundatin and Bass Initiative n Innvatin and Placemaking at Brkings: p. 27, 5 Stepp, M. et al. (2013). Turning the Page: Reimagining the Federal Labs in the 21st Century Innvatin Ecnmy. Washingtn: Infrmatin Technlgy and Innvatin Fundatin, Center fr American Prgress and Heritage Fundatin: pp. 48, 6 Ibid., p

7 The military relies upn the effective cnversin f research int field-ready prducts t facilitate the efficient cmpletin f its missin. Innvatins have led t unmanned aerial vehicles, better bdy armr, and life-saving medicine. In rder t accelerate this cnversin, the DOD shuld implement a pilt prgram t fund the develpment and prductin f new technlgies. IAC prpses a $100 millin pilt prgram funding reginal cllabratins f DOD installatins, research institutins, and manufacturing centers aimed at prviding the next wave f military technlgy. Awards shuld be made n a cmpetitive basis t nnprfit rganizatins that will prvide the crdinating service. Each award culd fcus n a different DOD need that already has research beynd the earliest stages f develpment (e.g. cyber security) and culd be evaluated n the apprpriateness f the prpsed research, testing, and prductin partners in the cllabratin. Agreements shuld be fr a minimum f three years, r preferably as lng as five, in rder t accmmdate a develpment and pilting cycle. Supprt small businesses and increase entrepreneurship High-grwth small businesses and startups create the majrity f new American jbs, with new cmpanies alne accunting fr 20 percent f all jb creatin. 7 Small factries are particularly imprtant t manufacturing emplyment, with establishments f fewer than 100 emplyees accunting fr mre than ne-third f all manufacturing jbs and thse under 500 accunting fr mre than tw-thirds. 8 Startups cannt grw withut access t financing and ther resurces willing t wrk with the unique needs f small and yung cmpanies, and large banks are unable r unwilling t be this resurce. Califrnia, New Yrk, and Massachusetts have cultivated investrs wh understand the pprtunities prvided by small cmpanies, but cmmunities in the rest f the cuntry need tls t help unlck capital fr entrepreneurs. T accmplish this gal, IAC supprts the fllwing plicy changes. Mdernize Treasury s small business capital prgrams t emphasize bank lans and private investments int American manufacturers and thusands f ther small businesses and startups (U.S. Department f the Treasury [Treasury]) Banking regulatins and market pressures have limited the lans available t small businesses that need capital t expand. Thrugh a small business credit prgram and the Cmmunity Develpment Financial Institutins Fund, the Treasury has facilitated numerus lans and investments t entrepreneurs and many f these transactins have included banks, funds, and ther private capital. IAC prpses a Startup Capital Investment prgram that wuld leverage private financing t make a new investment in America s manufacturers and ther grwing businesses and wuld create thusands f new emplyment and investment pprtunities thrughut the cuntry. Revise existing Federal ecnmic develpment prgrams that currently prvide traditinal lans and guarantees t allw funds t be used fr equity investments, cntract r ryalty financing, and ther early-stage capital t better supprt small businesses and startups (EDA, SBA, U.S. Department f Agriculture [USDA]) 7 Haltiwanger, J. C. et al. (2010). Wh Creates Jbs? Small vs. Large vs. Yung. Natinal Bureau f Ecnmic Research, Wrking Paper Levinsn, M. (2016). Jb Creatin in the Manufacturing Revival. Cngressinal Research Service. 7

8 Several Federal agencies prvide funds t cmmunities, nnprfits, and thers t establish revlving lan funds fcused n specific businesses and prjects. The ptential impact f these prgrams is stymied by a restrictin n the use f these funds fr basic lans r, in sme cases, lan guarantees. If the same funds and prgrams prvided capital that culd be used by the recipient t prvide a variety f debt and equity tls t private businesses and prjects, then a wider variety f businesses and prjects culd be assisted and greater verall ecnmic impact and returns fr the prgram culd be achieved. While equity investments ften carry greater risk than debt, the implicatins fr Federal funds are nt changed by this prpsal. Intermediary lending prgrams, such as the EDA Revlving Lan Fund, SBA Micrlan prgram, and USDA Intermediary Relending Prgram, prvide either grants, in which case any lss f funds is irrelevant t the Federal cst, r thrugh lans t the fund with penalties fr nn-repayment but as these repayments are nt required t be made with the riginal Federal dllars, the intermediary culd als repay any lst investments with its private match. IAC recmmends expanding the regulatins f Federal small business-fcused intermediary lending prgrams t allw equity investments int the businesses. Implement plicies and guidance that encurage Federal ecnmic develpment prgrams t specifically facilitate grant, lan, and investment pprtunities t veteran, minrity, and wmen entrepreneurs (SBA, EDA, USDA, U.S. Department f Husing and Urban Develpment [HUD]). Despite their sacrifices, America s returning service members ften struggle t acquire the capital they need t establish their wn businesses a prblem shared by many wmen and minrities. Targeted prgrams, such as the SBA Veterans Advantage, designed t prvide cmpetitive awards and leverage private capital ffer these individuals a path t entrepreneurial success and shuld be supprted thrughut business-related agencies in rder t prvide pprtunities fr all Americans. IAC suggests that all Federal agencies supprting direct r intermediary lending and investment prgrams (e.g., SBA, EDA, USDA, HUD) shuld develp special rates r set-asides t further assist veterans and ther target ppulatins. Ensure the wrkfrce is trained fr the jbs f the future An innvatin-driven ecnmy will create jbs fr all skill sets. Individuals shuld be equipped fr the jb f their chice, and emplyers must be able t readily hire skilled wrkers t take advantage f new pprtunities. Hwever, the cmpetitin fr technlgy wrkers has becme the mst significant cnstraint t ecnmic develpment in many regins f the cuntry. Cmpanies are frging expansin plans because they cannt find the talent they require t cmpete. Furthermre, individuals wh culd be develping the next generatin f prducts are in great demand and thse with talent are earning ever higher salaries, creating a cadre f cmpanies that cannt pay the high price fr skilled wrkers. The prblem is becming particularly acute in small cities and rural areas that are lsing talent t the majr cities. T ensure that every cmmunity has access t a wrkfrce trained fr the jbs f the future, IAC supprts the fllwing prpsals. Facilitate the availability f Wrkfrce Innvatin & Opprtunity Act (WIOA) funds t supprt prgrams specifically designed t imprve entrepreneurial, advanced manufacturing, and high-technlgy skills (U.S. Department f Labr [DOL]) 8

9 Frm bard membership t reginal strategy, WIOA emphasizes emplyer engagement and ecnmic develpment as a means t establishing a system-wide fcus n in-demand skills. State and lcal bards need t ensure that innvatin-based cmpanies are represented in their pls f emplyer resurces and that eligible educatin and training allws fr STEMrelated prgrams. Because many STEM-related ccupatins are strngly in-demand by the private sectr, 9 mre is needed t ensure results are achieved. DOL shuld explicitly encurage state and lcal wrkfrce bards t assess the share f their emplyers and their placements that are being made in STEM-related industries. IAC prpses that DOL request that wrkfrce areas reprt n their placements and educatin/training prvided fr STEM-related ccupatins, new business start-ups, and in advanced manufacturing industries. Imprve immigratin laws s that American-trained STEM Ph.D. students and entrepreneurs can remain in the cuntry t strengthen and create innvatin- and technlgy-fcused businesses and startups (U.S. Citizenship and Immigratin Services) Immigrants are a critical element f America s innvatin leadership: immigrants will cmprise nearly half f U.S. STEM Ph.D. graduates by 2020, 10 are mre likely t start new businesses, 11 and are mre likely t start firms with mre than 10 emplyees. 12 Hwever, current immigratin plicy means that the U.S. is nt able t retain as much f this tp glbal talent as actively wants t cntinue cntributing t the American ecnmy. New plicies that can quickly remedy this talent drain have been prpsed by Senatr Mran and Representative Darrell Issa, amng thers, in recent sessins f Cngress and shuld be implemented. Greater flexibility fr the ptinal practical training (OPT) prgram will enable mre STEM Ph.D. graduates t remain in America, wrking fields directly tied t their academic prgrams, including fr a pst-cmpletin perid. The U.S. Department f Hmeland Security issued final rules n F-1 nnimmigrant students in March 2016, but IAC suggests that a mre transparent prcess fr these extensins wuld facilitate greater use f the new rules, unlcking mre talent fr America s innvative cmpanies. The Startup Visa is a mdel t facilitate startups that wuld enable freign entrepreneurs wh have raised a minimum f $100,000 in capital frm qualified American investrs t maintain their visas, s lng as their business cntinues t add U.S. jbs r generate a minimum level f additinal private U.S. capital investment. The Startup Visa wuld be eligible t cvert t permanent residency (green card) after tw years if certain cnditins are met. IAC prpses the adptin 9 Xue, Y. & Larsn, R. C. (2015, May). STEM Crisis r STEM Surplus? Yes and Yes. Mnthly Labr Review Han, X. & Appelbaum, R.P. (2016, July). Will They Stay r Will They G? Internatinal STEM Students Are Up fr Grabs. Marin Ewing Kauffman Fundatin. 11 Fairlie, R.W. and Lfstrm, M. (2014). "Immigratin and Entrepreneurship." In Chiswick, B.R. and Miller, P.W. (eds.) Handbk n the Ecnmics f Internatinal Migratin, Elsevier. 12 Hunt, J. (2011). "Which Immigrants are Mst Innvative and Entrepreneurial? Distinctins by Entry Visa." Jurnal f Labr Ecnmics, 29:3, ; Hunt, J. (2015). "Are Immigrants the Mst Skilled US Cmputer and Engineering Wrkers?" Jurnal f Labr Ecnmics, 33: S1, S39-S77. 9

10 f the Startup Visa as an emplyment-based visa with a dedicated number f available visas fr eligible entrepreneurs. Increase funding fr prgrams and teachers fr primary and secndary STEM educatin (U.S. Department f Educatin) Nt enugh yuth have access t quality STEM learning pprtunities, and the disparity is apparent in studies f STEM-related test scres, interest, and degrees. 13 Every child that wants t participate in the STEM ecnmy shuld be able t qualify fr pst-secndary educatinal pprtunities and fr a fast-grwing technlgy ecnmy. Yuth interest in subjects is ften driven by inspiratinal teachers, and a prmising apprach t better STEM perfrmance is therefre t develp talented primary and secndary teachers and make them available thrughut the cuntry. The bjectives f this apprach are t better engage yuth and their parents with STEM, expand pprtunities fr grups histrically underrepresented in STEM fields, and design better pstsecndary experiences fr STEM students. T begin this prcess, IAC recmmends that a natinal plan be put in place t prvide funding fr teachers in STEM, many f whm culd find higher paying jbs utside f teaching, and t fund mre interactive classrms, including resurces fr equipment, experiential learning, and incentive prgrams designed t attract yung peple and teachers alike t related studies and careers. This plan must be implemented in cllabratin with Federal agencies that emply the mst scientists and engineers and have the greatest reliance n private-sectr innvatin at a minimum DOD, DOE and the Natinal Institutes f Health (NIH). Refrm natinal institutins t better supprt the innvatin ecnmy T unlck the ecnmy s full ptential, ur natinal institutins must be able t ffer greater supprt fr the entire innvatin ecsystem. As discussed abve, lcally-designed strategies supprted in part by the Federal gvernment are a particularly effective means f strengthening innvatin and blstering jb creatin. Agencies and ffices such as the EDA, NIST, and OSTP currently prvide a fundatin fr this, but they must be strengthened and further aligned in rder t allw state and lcal entities t leverage Federal prgrams t the greatest extent pssible. T imprve the Federal gvernment s rle in supprting the innvatin ecnmy, IAC recmmends the belw plicies. Increase funding fr the Hllings Manufacturing Extensin Partnership (MEP) t reach mre small- and medium-sized manufacturers (NIST) MEP, hused under NIST, builds the cuntry s manufacturing base thrugh public-private partnerships linking small and medium manufacturers with small businesses and technical experts. Thrugh custmized assistance t help cmpanies run mre efficiently and be mre innvative, the prgram has made a strng impact since its creatin in 1988, helping tens f thusands f manufacturers create mre than 880,000 jbs and $98 billin in sales. 14 MEP plays an imprtant rle in strengthening the ecnmy and it prvides a strng value fr the gvernment s investment: fr every $1 dedicated t MEP by the Federal gvernment 13 Ck, L. et al. (2015, June 29). The 2015 U.S. News/Raythen STEM Index. U.S. News & Wrld Reprt NIST. (2017, Jan. 26). MEP: Wh We Are. Retrieved frm: 10

11 there is a return f $17 in sales and $24 in new client investment. 15 MEP is prven and successful. IAC recmmends increasing Federal funding fr MEP in rder t strengthen U.S. manufacturers and the gd-paying jbs they prduce. Establish a Natinal Innvatin Fundatin t define, measure, and prmte innvatin (OSTP/Natinal Ecnmic Cuncil) The U.S. heavily invests in basic research; in FY2016, this investment ttaled mre than $33 billin. 16 As a cuntry, hwever, we fall shrt in turning that research int innvative prducts and services. Prgrams t cmmercialize this research, like MEP, the RI Prgram, and SBIR, are hused in agencies acrss the gvernment withut enugh crdinatin between them. Lacking a single hme fr these prgrams, gaps in the innvatin cntinuum cntinue t exist, disadvantaging the states and regins that leverage these dllars fr ecnmic grwth. IAC recmmends the creatin f a Natinal Innvatin Fundatin t crdinate these prgrams and facilitate the translatin f basic research being perfrmed at agencies like NIH and NSF t the marketplace. IAC prpses the creatin f a Natinal Innvatin Fundatin t ensure that the Federal gvernment s innvatin activity is nt duplicative and supprts lcal innvatin and entrepreneurship fr the greatest impact pssible. Reauthrize EDA t cntinue its missin f prmting innvatin and cmpetitiveness in all regins f the cuntry EDA is hme t high-quality prgrams that imprve reginal ecnmies and grw the American innvatin ecnmy. With a prtfli including the RI Prgram and NACIE, EDA is in the psitin t bring tgether manufacturers, small businesses, and reginal rganizatins t grw innvatin and manufacturing. IAC supprts a reauthrizatin f EDA that assigns greater gvernment-wide ecnmic develpment plicy setting under the agency and strengthens the Office f Innvatin and Entrepreneurship. Enhance America s glbal cmpetitiveness thrugh increased funding fr targeted research and develpment America s glbal cmpetitiveness is the direct result f targeted research and develpment funding. Innvatin and research nt nly create jbs and businesses, but als address sme f the mst serius prblems in ur natin. The natin s natinal security advantage is based n the technical prwess f the armed frces, built n the shulders f the natin s scientists and engineers wh address the mst cmplex technical issues frm cyber security t new materials t mapping cean flrs. Similarly, America s newly fund energy independence was generated by the research and develpment wrk f DOE labs, research institutins, and private sectr research. Healthcare and treatment f disease depend n the research funded and cnducted by NIH. Cntinued rbust investment in supprt f research and develpment in these key scientific and technlgy areas will be critical as ur near-peer cmpetitrs increase their investments in research and 15 Ibid. 16 American Assciatin fr the Advancement f Science. (2017, Jan. 26). Histrical Trends in Federal R&D.. Retrieved frm: 11

12 develpment, threatening American cmpetitiveness. 17 T increase scientific research and develpment that addresses American cmpetitiveness and imprves the quality f life f all Americans, IAC supprts increasing U.S. research and develpment thrugh the fllwing plicies. Greater funding fr basic research, particularly t help prvide cures fr disease, mre efficient prductin prcesses, and expanding the bundaries f human knwledge As discretinary funding is further reduced by ther cmmitments and pririties, the lngterm cmpetitiveness f the U.S. requires the prtectin f research and develpment funds. The utcmes f basic research imprve all aspects f American sciety. Fr example, GPS is the result f a lng term DOD investment and is nw is a critical ecnmic frce with an estimated ecnmic impact f ver $56 billin in 2013 alne. 18 Cchlear implants, which allw mre than 100,000 peple t hear and reduce the cst f care dramatically fr thse brn with deafness, was develped with supprt frm NIH. 19 IAC suggests expanding Federal funding fr scientific and medical R&D, particularly in cmbinatin with prgrams t leverage private R&D investment and transfrm the utputs f this research int new prducts and businesses. Incentivize private industry t fund sectr-specific research and develpment The research and develpment tax credit prvides an incentive t startup and mature businesses t invest in innvative research, prmting the cntinued cmpetitiveness f U.S. industry as well as jb grwth. IAC recmmends retaining the R&D tax credit in its current frm. 17 NSF. (2014). Chapter 4: Research and Develpment: Natinal Trends and Internatinal Cmparisns. Science and Engineering Indicatrs Arlingtn, VA (NSB 14-01). 4/c4s2.htm#s1. 18 GPS Wrld. (2015 Sep. 1). The Ecnmic Benefits f GPS. Retrieved frm: 19 NIH. (2010). Factsheet: Cchlear Implants. Retrieved frm: 12