U.S. RISKS LOSING EDGE ON TECHNOLOGY ?

Date: Sunday March 13, 2005 10:20:00 am

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U.S. risks losing edge, tech leaders warn

Group calls for more investment in education, researchMarch , 2005

WASHINGTON -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.