President Bush’s promise on Tuesday evening to spend $136bn during the next decade to boost engineering research and math and science education, among other tech-facing initiatives, was widely welcomed by Silicon Valley.
During his broad-ranging State of the Union address, his fifth, Bush announced an American Competitiveness Initiative. The plan includes an $86bn permanent extension and enhancement of the R&D tax credit, and a $380bn pledge to improve math, science and tech education for students from kindergarten through grade 12.
The administration has a poor reputation for supporting the sciences. A couple of years ago it was accused by 20 Nobel laureates and others for disregarding or manipulating science for political purposes.
But Bush has now also proposed to double federal funding for basic research in engineering and physical sciences during the next decade, at a cost of $50bn.
The Semiconductor Industry Association president George Scalise said Bush’s speech was a home run for the US tech industry. It’s an outstanding start. This is a major step forward, he told ComputerWire.
Scalise and others also applauded the president’s bid to streamline the US immigration process, which they said would help attract more tech talent to the country.
This is the first sweeping tech proposal the US industry has seen since Bush came into office in early 2001, but Scalise and others industry leaders did not characterize it as being overdue.
The issues we’re dealing with here are what it will take to maintain this leadership in the industry . . . what will be required to establish the next generation of technology, Scalise said.
Doubling the basic research funding over 10 years is a huge move because that’s what needs to get done to get the pump primed, Scalise said.
The research money would flow to educational institutions, from which tech startups often spring.
While there could never be enough spending on tech-oriented education in the US, the proposed boost will only benefit IT professionals, said Eric Hawkinson, executive director of the 7,500-strong Association of Information Technology Professionals.
However, the President’s Council of Advisors on Science and Technology, or PCAST, which helped shape the proposed initiatives, initially asked for the basic research funding to be doubled over just 7 years, said Scalise, who is one of the 23 PCAST members.
It’s a minor difference, he said. I don’t think it changes the overall ability to deal with the issues that are out there ahead of us.
Since it was established in 2001, PCAST’s has also pushed to create an investment-friendly climate in the country, which includes a more sustainable R&D tax credit, Scalise said. Previously, the credit had been renewed every one to two years on average. Bush’s pledge to make it permanent was widely viewed as an industry win.
However, the US continues to lag the investment incentives in countries overseas, which lure US tech enterprises with tax benefits, grants and subsidies, Scalise said. In the absence of these initiatives, operating a semiconductor manufacturing plant in the US is not that difference than in China or India, Scalise said.
It’s these incentives that will skew the overseas investment. This needs to be addressed, he said.
Hawkinson said Bush’s latest proposal would help reduce offshoring and outsourcing to lower-cost overseas regions.
Leaders at major Silicon Valley companies, including Cisco Systems, Intel, Sun Microsystems and VeriSign, released statements supporting Bush’s plan. Notably, Intel and Sun stressed the importance of the need for bipartisanship in seeing the proposals to fruition, as promised by Bush.
We have full confidence they will be implemented and we will be very successful. This is going to be a bipartisan effort, Scalise said.
However, Bush has a history of not following through on funding of proposals come budget time, said Silicon Valley-based Democratic Representative Anna Eshoo, in interviews with local media. She cited funding shortfalls from Bush’s No Child Left Behind plan for education, as an example.
TechNet, a national bipartisan political group of 150 CEOs, including many of the tech industry’s heavyweights, was thrilled with Bush’s tech proposals, which exceeded expectations, said TechNet chief executive Lezlee Westine.
She expects Congress will pass the spending proposals for sure this year, pointing out that it was an election year.
Westine, who until six month’s ago worked for the past four and a half years as the Bush administration’s director of office liaison, said she was confident Bush would make good on his promises. She cited his No Child Left Behind initiative as an example of success.