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The Contenders for “Innovator-in-Chief”: Obama v Romney

Will it be President Obama or former Massachusetts Governor Mitt Romney who will offer the best strategy and leadership for helping the U.S. to increase the innovation needed to rebuild its economy?  For those who fully comprehend the direct link between America's economic survival and the role of innovation, this is a question of monumental significance.

To attempt to provide some answers to this question, the Washington, DC-based Information Technology and Innovation Foundation (ITIF) recently released a 33-page report.  The report provides a comparison of the two men’s approaches in ten policy areas. The ITIF based their analysis on a variety of the candidates' documents and policy statements gathered from a ten-year period.  

According to the ITIF, “the United States is engaged in a fierce race for innovation-based economic growth” that will require the future President to place science, technology, innovation and entrepreneurship at the center of economic policymaking.  The ITIF describes itself as "a nonpartisan think-tank" that does not take a position on which candidate will likely do a better job with innovation. 

However, the report did conclude that neither candidate nor political party is correct on every issue and, therefore, encouraged the creation of a “bipartisan Washington Innovation Consensus." It states that a partisan approach to creating technology policy will only hamper the nation. “Each side has to bend if we are to restore U.S. economic greatness.” 

An article in the Business Journals provides a helpful side-by-side summary of that report:

FEDERAL RESEARCH & DEVELOPMENT FUNDING:

  • In 2008, Obama pledged to double federal funding for basic research, focusing on physical and life sciences, over the next ten years.  He’s falling short of that goal, even though he did increase funding for the National Science Foundation.
  • Romney has called for an immediate 5% cut in non-security discretionary spending. Non-defense R&D programs presumably would be subject to this cut — Romney hasn’t said they’d be exempt.

TAXES:

On corporate taxes:

Both Obama and Romney favor revenue-neutral corporate tax reform that would lower the tax rate while eliminating many business tax breaks. They both also favor making the research and development tax credit permanent.

  • Obama, however, wants to collect more U.S. taxes from multinational corporations.
  • Romney wants to move to a territorial tax system, where income is taxed where it is earned with no additional U.S. taxes if companies move this money back [to America] from foreign countries.

On individual income taxes:

  • Obama would raise the tax rate for households making more than $250,000.
  • Romney proposes a 20% across-the-board cut in tax rates, accompanied by the elimination of many tax deductions.
     
  • Obama also has proposed raising the capital gains tax rate from 15% to 20%.
  • Romney would maintain the 15% rate.

BROADBAND/INTERNET POLICY:

Both candidates propose making more spectrum available for commercial use, and both oppose efforts by the International Telecommunications Union to take over the pricing on Internet interconnections and technical standards.

Their biggest difference is on net neutrality — whether the government should prohibit Internet service providers from favoring some web sites over others.

  • Obama favors net neutrality regulations, while exempting wireless networks from most of them.
  • Romney opposes net neutrality rules, instead relying on market forces to ensure an open Internet.
     
  • Obama also would rely more on regulations to address issues such as online privacy and cybersecurity. The president also favors a more robust government role in expanding broadband access.
  • Romney would leave broadband demand creation to local governments and the private sector.

ENERGY INNOVATION:

This is one of the biggest areas of disagreement between the two candidates:

  • Obama is promoting a national energy strategy to transition from fossil fuels to renewable energy sources.  That includes government investments in energy innovation, including deployment as well as basic science.
  • Romney wants to achieve North American energy independence primarily by significantly expanding domestic oil and natural gas production.  He would limit government investment in energy innovation to basic research and demonstration projects of new energy technologies.
     
  • Obama wants to continue tax breaks for renewable energy while eliminating subsidies for oil, natural gas and coal production.
  • Romney wants to scale down or eliminate subsidies, grants and tax incentives for clean energy commercialization and deployment.

MANUFACTURING POLICY:

  • Obama has proposed investing $1 billion to create a National Network for Manufacturing Innovation and $2.2 billion in advanced manufacturing R&D.
  • Romney is silent on these issues.

IMMIGRATION:

  • Obama has called for “fixing the immigration system for America’s 21st century economy,” but he hasn’t offered many specifics yet.
  • Romney has proposed raising the limit on visas for holders of advanced degrees in technological fields and giving green cards to foreigners who graduate from U.S. universities in these fields.

TRADE:

Both Obama and Romney support completing the Trans-Pacific Partnership trade agreement, and working to expand exports.

  • Obama, however, places more of an emphasis on putting environmental and labor provisions in trade agreements.
  • Romney also has promised to be tougher on China when it violates trade agreements, particularly when it comes to currency manipulation.

Some Conclusions:

According to ITIF:

  • The Obama-Biden platform is more willing to have government serve as an active partner with industry, such as in helping fund early-stage technology.  They propose keeping the private sector as the main source of innovation while creating government collaborations and intervening in the event of market failures.
  • "Romney would take a lighter touch role for government and have the private sector take the lead" in many areas.  

In general, Romney tends to stress tax and regulatory reform.

Obama emphasizes the need to improve the nation's digital infrastructure and worker skills.

  • The Obama-Biden platform also supports the creation of stronger rules governing the Internet and telecommunications, and fostering the growth of the alternative energy industry.
  • The Romney-Ryan conservative platform also favors eliminating any government policy that steers investment in any particular direction, such as government policy that would assist the alternative energy industry.

A Huffington Post article concludes:

"…the vast majority of the literature that the 2012 Obama-Biden campaign has made available on its science, technology, and innovation policies points to the Administration's past achievements …In general, more specificity is needed regarding the Obama Administration's science, technology, and innovation goals should it win a second term."

The report does give the Administration credit, however, for coming up with a detailed plan for reinvigorating high-tech manufacturing.

The Romney campaign is taken to task for issuing plans that "only addresses energy innovation and not the broader role of federal R&D investment in stimulating innovation in other areas, including life sciences, nanotechnology, or advanced manufacturing."

http://www.bizjournals.com/bizjournals/washingtonbureau/2012/09/12/obama-vs-romney-on-7-innovation.html.

http://www.huffingtonpost.com/2012/09/14/obama-romney-science-federal-government-role-report_n_1881786.html

http://www.govtech.com/policy-management/Obama-Romney-Do-Their-Tech-Policies-Differ.html

To see the full ITIF Report, "Comparing the 2012 Presidential Candidates’ Technology and Innovation Policies": http://www2.itif.org/2012-obama-romney-comparison.pdf

 

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