WASHINGTON, Jan. 6- The nation is losing its competitive edge in global innovation, according to the U.S. Department of Commerce report, "The Competitiveness and Innovative Capacity of the United States," delivered today to Congress.

”I hope this is a first step in the process of Washington waking up to the urgent innovation challenge and giving it the same attention as the budget deficit,” said Information Technology and Innovation Foundation (ITIF) President Rob Atkinson. “But we need to do more than merely wake up. We must bound out of our complacency and partisanship as if our future depends on it, because it does.”

The ITIF began working with U.S. Senators Mark R. Warner (D-Va.), Amy Klobuchar (D-Minn.) and George LeMieux (R-Flor.) to develop a national innovation and competitiveness strategy and include it in the re-authorization of the America COMPETES Reauthorization Act of 2010 (COMPETES).

According to the Department of Commerce report, “Some elements of the U.S. economy are losing their competitive edge which may mean that future generations of Americans will not enjoy a higher standard of living than is enjoyed in the United States today.”

President Barack Obama signed the COMPETES Act into law last year, which mandated that the Secretary of Commerce complete a study to address the economic competitiveness and innovative capacity of the United States.

“A country that is not innovative cannot be competitive in today's global innovation race,” said Atkinson. “The Great Recession and the stubbornly-slow recovery is a direct result of this fact and provide a sobering glimpse of our future unless we take a hard look at America's competitiveness and innovation strategy, or lack thereof.”

The report states that in order to find ways to improve competitiveness in innovation, three factors are key to helping “unleash the tremendous innovative potential of the private sector.” These factors include federal support for basic research, education, and infrastructure.

“Federally supported research laid the groundwork for the integrated circuit and the subsequent computer industry; the Internet; and advances in chemicals, agriculture, and medical science,” according to the report. 

Congress directed that this report address a diverse array of topics and policy options, including: tax policy; the general business climate in the U.S.; regional issues such as the role of state and local governments in higher education; barriers to setting up new firms; trade policy, including export promotion; the effectiveness of Federal research and development policy; intellectual property regimes in the U.S. and abroad; the health of the manufacturing sector; and science and technology education.

The report includes three key findings:

- Federal investments in research, education and infrastructure were critical building blocks for American economic competitiveness, business expansion and job creation in the last century.

- Failures to properly invest in, and have comprehensive strategies for, those areas eroded America's competitive position.

- In a constrained budgetary environment, prioritizing support for these pillars is imperative for America's economic future and provides a strong return on investment for the U.S. taxpayer.

The following policy proposals are listed in the conclusion of the Department of Commerce’s report:

1. Continue to support government funding for basic research

2. Enhance and extend the R&D tax credit

3. Speed the movement of ideas from basic science labs to commercial application

4. Address STEM shortcomings

5. Increase spectrum for wireless communications

6. Increase access to data to help spur innovation

7. Coordinate Federal support for manufacturing

8. Continue and strengthen efforts to foster regional clusters and entrepreneurship

9. Promote America’s exports and improve access to foreign markets

10. Ensure that the conditions exist in which private enterprise can thrive



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