Recognizing that, in the information economy, the hopes of US workers and enterprises hinges on our ability to innovate, at the beginning of the 110th Congress Speaker of the House Nancy Pelosi put forth what she called the House Democrat's "Innovation Agenda."
The innovation agenda promised to "create new thriving industries that will produce millions of good jobs here at home and a better future for the next generation." Among its goals were:
- to "achieve energy independence by developing emerging technologies for clean and sustainable alternatives";
- immigration reform so that "the best and brightest around the world are able to contribute to innovation here";
- modernize and extend "a globally competitive R&D tax credit to increase investment and create more high-quality American jobs";
- strengthen the patent system and "end the diversion of patent fees";
- encourage the FCC to adopt rules that will "lead to the development and rapid deployment of new wireless broadband technologies".
And all of this was going to be subject to "pay as you go budgeting to ensure that new spending does not add to the deficit."
But has the 110th Congress been a boon to innovation?
Well, patent reform never happened. And Congress did not end the diversion of fees paid to the Patent Office by applicants and still reserves the right to spend those fees on spending entirely unrelated to anything having to do with innovation.
The promised tax credit for research and development also didn't happen.
We didn't get much needed changes to our immigration system, and the best and brightest still face absurdly low immigration quotas, depriving American companies of their talents and resulting in jobs created overseas rather than in the United States.
The administration cancelled the Constellation manned flight program, resulting in the loss of thousands of high-skilled, high-tech jobs and an almost certain retrenchment of the US space program, in light of advancements in space being made by China, India, Russia, and Japan.
And, instead of encouraging the rapid deployment of new wireless technologies, the FCC has embarked on a multi-front attempt to force decades-old regulations on new broadband networks, including wireless networks.
What new spending did go into government-funded research was not subjected to PAYGO, and simply added to the budget deficit and the national debt.
Finally, taxes on innovators are going up, not down. It's going to be harder, not easier, to raise the capital necessary to fund innovation, and innovators are going to reap less, not more, of the rewards of their hard work and creativity.
What innovators really need is the assurance that, if they invent something useful, they will be able to own and protect the fruits of their creativity, and an assurance that they will be able to profit from their invention. This requires property rights (in this case, intellectual property rights), the ability to amass sufficient capital to invest in the innovation process, and a tax code that doesn't punish innovation. And consistent, predictable tax and regulatory policies, rather than never knowing from one year to the next what regulations, taxes and immigration policies they will have to deal with.
In that light, the 110th Congress has been an enormous disappointment. Let's hope the 111th Congress does a much better job.