Kelly Lewis, JD/MBA
President & CEO, TECHQuest Pennsylvania
Don't you cringe when you read or hear the political word, "reform?" Simply put, "reform" carries a tinge of protectionism, wrapped with an elitist stigma of fiercely defending an old status quo. Many reformists fervently wave their magic wand at a bad person or poor legislation, playing Clockwork Orange to erase and will-away all things bad. Ah, the world of good intentions. Spotlight the banking "reform!" Here, the reformers/protectionists tweaked their original legislative reform language; permitted bank leaders to keep their cushy gigs and then funded a trillion good dollars after bad. Pinch me! Then the protected bank leaders rewarded their rotten performance with gigantic bonuses. In some circles, that's called the dog wagging the tail. In parts of Pennsylvania, that's called plain, old dumb.
Flash-back last ten years: our so-called reformers enabled a hand-full of banks and Freddie/Fannie to get Gigantic. But now we better understand being bigger isn't always better. Being better is better.
Our economic transformation has to move away from government protectionism for the Gigantics and instead foster a fair and level playing field for all. Further, we need to jumpstart Innovation Economics.
When examining how the economy creates wealth, innovation economics is focused on a different set of questions:
* Are entrepreneurs taking risks to start new ventures?
* Are companies investing in technological breakthroughs and is government supporting the technology base (e.g., funding research and the training of scientists and engineers)?
* Are regional clusters of firms and supporting institutions fostering innovation?
* Are research institutions transferring knowledge to companies?
* Are our trade policies working to ensure a level playing field for American companies?
* Are workers getting skilled and are companies organizing production in ways that utilize those skills?
* Are policymakers avoiding erecting protections for companies against more innovative competitors?
* And perhaps most importantly, are policies supporting the ubiquitous adoption of advanced information technologies and the broader digital transformation of society and the economy?
To create an innovation economy, the United States should adopt and implement eight key recommendations outlined be¬low:
1. Significantly Expand the Federal Re¬search and Development Tax Credit
2. Create a National Innovation Foundation
3. Allow Foreign Students Receiving a Graduate Degree to Receive a Green Card
4. Reform the Patent System to Drive Innovation
5. Let Companies Expense New Invest¬ments in Information Technology in the First Year
6. Establish a Federal Chief Information Officer
7. Implement a National Broadband Strategy
8. Implement an Innovation-Based Na¬tional Trade Policy
To create an innovation economy in Pennsylvania, we should adopt and implement the Innovation Agenda for Pennsylvania as follows:
1. Significantly expand the PA Research and Development Tax Credit - be best in nation!
2. Expand R&D tax credit to include "Knowledge Credits" for workforce training
3. Create a Pennsylvania Innovation Foundation
4. Welcome foreign higher-education students and encourage them to work here.
5. Provide 25% match to every PA-based company receiving federal research funds
6. Let Companies Expense New Investment in Information Technology in the First Year
7. Create and Fund a Pennsylvania Health IT Foundation to match 25% of all Health IT investment made by Pennsylvania hospitals, physicians and healthcare providers
8. Establish a Pennsylvania Chief Information Officer, cabinet-level position
9. Implement a Pennsylvania Broadband Strategy. Let companies expense New Investment in Broadband in the First Year. We must be best in nation
10. Implement an Innovation-Based Pennsylvania Trade Policy with supporting institutions
For more information: www.itif.org, www.techquestpa.com. Pennsylvania, like every state and nation, can transform itself into an innovation economy. The alternative is to keep reforming and protecting the old-line economy that's clearly broken. It is time to spring forward.