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U.S. risks losing edge, tech leaders warn

Leaders of high-tech companies said Tuesday the United States risks losing its competitive edge without significant new investments in education and research.
/ Source: The Associated Press

Leaders of high-tech companies said Tuesday the United States risks losing its competitive edge without significant new investments in education, research and development and the spread of broadband technology.

"The world is changing a little bit, and frankly there is a significant amount of concern that if we don't make some adjustments, follow the right public policies, do some things that are important, we could find ourselves very quickly losing the advantage we've had for so long," Rick White, president and chief executive of high-tech lobby TechNet, said at a press conference.

The Palo Alto, Calif., group represents about 200 high-tech leaders, including Microsoft, Intel Corp., Cisco Systems and Hewlett Packard. TechNet made its annual lobbying trip to Capitol Hill on Tuesday to meet with Cabinet members and congressional leaders.

White and other TechNet officials cited some troubling indications that the United States is falling behind in high-tech development:

  • Some 7 percent of U.S. households have the fastest kind of broadband access, compared with 30 percent in Korea, 20 percent in Japan and over 10 percent in France, TechNet leaders said. Overall, 20 percent of U.S. households have some kind of high-speed connection, according to a report issued last fall by the Commerce Department.
  • U.S. investment in research and development has stayed flat for the last three decades, while it has grown significantly in competitors such as Brazil, India, China and Israel.
  • Students in the United States are behind their counterparts in other countries in math and science, and some Asian countries are graduating five times as many engineers.

The officials announced formation of a CEO Education Task Force to try to come up with solutions.

They also called on Congress to increase basic research funding and make permanent a research and development tax credit; promote broadband development, in part by minimizing regulations; enact a U.S.-Central America-Dominican Republic free trade agreement; promote cybersecurity initiatives; and continue to take steps to reduce frivolous lawsuits.

TechNet leaders also pledged to continue their opposition to a proposed Financial Accounting Standards Board rule that would require companies to deduct the value of employee stock options from their profits. Requiring some big companies to expense the popular employee incentives could dramatically reduce their profits.