No Matter Who Wins, Can the U.S. Maintain Its Technological Edge?

The Wall Street Journal The Wall Street Journal

The new administration faces cybersecurity fears, but also opportunities to reshape the economy

“The key going forward is to maintain innovation so that the nation remains on the cutting edge of new products,” said Darrell West, vice president of governance studies and director of the Center for Technology Innovation at Brookings Institution. “The biggest challenge is increasing investment in R&D and supporting the scientists and engineers to devise new digital products.”

President Barack Obama leaves a sizable technology footprint. In 2009, he appointed the first U.S. chief technology officer to work with the first U.S. CIO. In July, he issued an executive order calling for the creation of a new strategic computing initiative focused on building a supercomputer that can deliver 100 times the performance of current 10 petaflop systems.

Tech has also marred Mr. Obama’s administration, including a fight between the Federal Bureau of Investigation and Apple Inc. about privacy and massive cyberattacks at the U.S. Office of Personnel Management.

While the U.S. remains home to some of the world’s most renowned academic institutions and leading technology companies, federal investment in research and development has declined as a percentage of gross domestic product, from just more than 1% in 2010 to about 0.7% this year, according to the American Association for the Advancement of Science, which analyzes the annual U.S. budget.

The U.S. has lost some standing as a global technology powerhouse in recent years. China is becoming a supercomputing powerhouse. South Korea has upped its investment in research and development. Estonia has installed digital infrastructure for electronic governance and identity cards to facilitate online voting, banking, and social services for example. Private companies, such as Amazon.com Inc. and Space Exploration Technologies Corp., have rushed to fill gaps in space exploration left open by budget cuts that have diminished the National Aeronautics and Space Administration.

Within this maelstrom, a number of technologies, from self-driving cars to artificial intelligence, continue to make inroads. The next administration could play a significant role shepherding high-impact innovation through its efforts in regulation, supporting digital infrastructure and creating opportunities for employee education.

One such technology is robotics, which some experts see as a way for the U.S. to become a formidable competitor in the manufacturing industry.

“The rise of robotic technology is going to be an important enabler for us to get over a pretty serious productivity slump that we’ve been seeing for the last nine years,” said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, an independent nonprofit think-tank based in Washington, D.C.

Possible federal programs to close the technology talent gap also will also need to be a priority for the next president, said Dr. Atkinson, who holds a Ph.D. in city and regional planning.

Regulators also will have to address broader concerns over how new technologies might impact jobs and the economy. The White House, in its October report on the future of artificial intelligence, said low- and medium-skill jobs could be particularly at risk.

Much of the new administration’s job will be to encourage private companies to invest in digital infrastructure across the country, Mr. West at Brookings said, particularly as more people live on their smartphones and expect better services through technology. As CIO Journal has reported, juggling the needs of government and industry in big technology projects has the potential to spark tension between the two parties.

The U.S. needs to embed digital technologies into roads, cars and other infrastructure to take advantage of new economic opportunities, the ITIF noted in a report earlier this year. But progress has been slow, hampered by outdated regulations, security concerns, a lack of public funding and a too-small pool of tech-savvy workers.

One example: Google parent Alphabet Inc., after spending hundreds of millions of dollars to dig up streets and lay fiber-optic cables, began rethinking its high-speed internet business after initial rollouts proved more expensive and time consuming than anticipated, The Wall Street Journal’s Jack Nicas reported in August.

Ultimately, continuing U.S. technological competitiveness may depend upon an issue central to many presidential elections: tax reform.

In 2015, Mr. Obama signed into law a measure that included a permanent R&D tax credit for businesses. Previous R&D credits were often retroactively renewed. ITIF has previously contended that existing federal tax incentives are still less generous than incentives offered by other countries.

The new administration could also work to expand R&D tax credits, ITIF’s Dr. Atkinson said. “Regardless of who gets elected, there will be an opportunity to do more for tax reform, and that will have an impact on innovation.”