AeA: U.S. still losing competitive advantage

By Suzanne Deffree, News Editor -- Electronic News, 3/28/2007

The AeA has once again warned that the United States is losing its competitive edge in technology.

The industry group today released its latest report, “We Are Still Losing the Competitive Advantage: Now Is the Time To Act,” a follow up to its 2005 report, “Losing the Competitive Advantage?,” which focused on how the United States is at risk of losing its preeminence in science, technology and innovation as countries across the globe became more competitive and as America neglected the factors that gave it this lead.

"We are releasing this new report today because over the past two years, while awareness of the problem has grown tremendously, action has not followed," said AeA President and CEO William T. Archey in a statement. "Now is the time for that action. In updating the data and analysis from our previous report, all indications are that the competitiveness challenges confronting the United States have only intensified."

While there has been some visible government awareness since AeA’s 2005, including President G.W. Bush’s 2006 State of the Union address where he committed to clean up the immigration policy and increase university R&D funds, the actions that followed have not been enough.

The AeA notes in its report that, among other factors, the U.S. R&D Tax Credit, which has supported so much R&D in the private sector, remains temporary, is subject to periodic expiration, and is ranked only the 17th most competitive credit in the world. AeA also notes that South Korea has passed the U.S. in engineering bachelors degrees awarded and has moved from 11th to 16th internationally in broadband diffusion.

"Two years ago, AeA called the United States the proverbial frog in the pot of water, oblivious to the slowly rising temperature of a world catching up to us. Today, the heat is still rising and we are still in the pot. There is hope that we are finally feeling the heat and are poised to do something about it. Hope, but not certainty," added Archey, calling on Democratic and Republican legislators, as well as the Bush Administration, to act with comprehensive legislation to advance American competitiveness in a global economy.

“This legislation would provide a crucial first step. But make no mistake, dealing with these challenges successfully is a long-term proposition," he said.

Among the AeA’s recommendations are that the U.S. government champion dramatic improvements in the educational system; support and increase R&D; enact high-skilled Visa reform; create a more business friendly environment in the U.S.; proactively engage in the global trade system; and promote broadband diffusion.