Deputy Secretary's Speech

Deputy Commerce Secretary David A. Sampson
North Carolina Technology Association (NCTA)
Washington, D.C.

Thank you Joan (Myers, president and CEO, NCTA) for the very kind introduction. And on behalf of President Bush, welcome to Washington! I'm honored to join you today to talk about keeping the U.S. economy competitive in today's global marketplace.

I've visited the "The Triangle" in North Carolina a number of times over the years. Every time I go, I'm always impressed by the innovative culture and the new ideas that are being generated there--from the latest in nanotechnology and public infrastructure to new life-saving medicines. America is the most innovative nation in the world, and North Carolina's 5,300 tech companies and leading universities are making a significant contribution.

The reason we're the best innovators is because of our free enterprise system. For over two centuries, since the founding of our Republic, our free markets have been unleashing the creativity and the talent of our people.

President Bush remains committed to fostering a climate that encourages this innovation, and creates the opportunities that are vital to our economy, producing jobs, growth, and wealth for the American people.

He wants to make certain that businesses and workers have the tools to achieve results. After all, what good is a bright idea if it never gets off the drawing board?

This is more important to our competitiveness than ever. Today some 75 percent of the value of publicly traded U.S. companies is derived from "intangible" assets, namely ideas and innovation. That's up from just 40 percent in the 1980s.

Innovation responds to need. And if properly nurtured, research and technology will respond to the biomedical, energy, and environmental imperatives we face in the 21st century. Not only will this innovation solve problems and improve quality of life, but it will also bring economic opportunities we can barely imagine today.

The Context for American Competitiveness
We start with a tremendous advantage: a very strong economy. Thanks to the private sector and President Bush's low-tax, pro-growth policies, the U.S. economy is the strongest in the world. We're growing twice as fast as the European Union.

The tax relief the President proposed, and Congress passed, has spurred the economy by keeping $880 billion in the hands of American businesses and workers. And now it's time for Congress to lock in those gains by making the tax cuts permanent.

Our economy has been growing at a healthy 3.6 percent rate over the past 12 months. Private forecasters expect solid growth to continue both this year and next.

More than 5.7 million jobs have been created over the last three years, 128,000 in August alone. The national unemployment rate remains a low 4.7 percent--below the average rate in each of the past four decades.

Our workers are more productive today than they have been in a generation. Productivity improved a strong 2.5 percent from a year ago, well ahead of average gains during the past three decades.

This increase in worker productivity is in large measure the result of the new technologies that companies like yours are developing and manufacturing. We're all working smarter and more efficiently because of it.

The bottom line, quite simply, is we're competing with the rest of the world, and we're doing it successfully.

But I don't think any of us is ready to rest on our laurels. I think most of us are looking for what we can improve. President Bush is always asking: How can we create a better business environment? How can we innovate more, trade more, and create more jobs?

Let me share a few specifics on the approach the President is taking.

American Competitiveness Initiative
His American Competitiveness Initiative will encourage more aggressive investment by businesses in research and development, increase federal support for vital basic research, and improve math and science education.

The goal of the President's American Competitiveness Initiative is to create the right enabling conditions, the nurturing environment in which a new golden age of innovation can flourish in the United States.

R&D Investments
He wants to increase federal R&D spending from $132 billion per year to $137 billion. That would be a huge increase, especially compared to the $91 billion we were spending in 2001.

At the Department of Commerce, for example, The President has proposed a 24 percent increase in funding for our world-renowned research lab, the National Institute of Standards and Technology (or NIST). This will allow scientists at NIST--who have won three Nobel Prizes in recent years--to advance research in promising fields, such as nanotechnology, hydrogen fuels, and quantum information.

Another critical area is education. We've been graduating fewer engineers and scientists in recent years. And our middle and high school students continue to fare poorly on international science tests.

The President's plan would improve math and science education by hiring more teachers and instructors. This will help give us the highly skilled people we need to keep creating and developing the newest and the best technologies.

R&D Tax Credit
The President is also calling on Congress to renew the R&D tax credit, which encourages companies to invest in cutting-edge research. It remains before the Congress and we hope it will pass later this year.

Private innovation is absolutely critical, accounting for two-thirds of total R&D. High-tech companies invest billions of dollars every year in R&D, and we ought to be encouraging them to continue doing so.

Fight Against IP Piracy
A final area I want to highlight is protecting intellectual property. Our leading industries depend on their technologies, trademarks, software and brands. It's their lifeblood.

And pirates know what a gold mine this is. Intellectual property theft is costing U.S. companies $250 billion a year in lost sales and hundreds of thousands of lost jobs. That's why we've been very aggressive about enforcing patent and copyright laws both here and overseas, in China, India, Russia, Latin America, and the Middle East.

In 2004 the Bush Administration launched the Strategy Targeting Organized Piracy (STOP!) initiative. STOP is a comprehensive IP enforcement strategy that brings together key federal assets to strengthen criminal enforcement, stop fake goods at our borders, coordinate with industry and actively engage our trading partners.

This commitment is delivering results:

• From 2004 to 2005 federal IP-related prosecutions were up 45%
• Customs seizures of counterfeit goods have doubled since 2001.

Secretary Gutierrez and other Administration leaders have delivered a strong message around the world that we have high expectations for IP protection and that we will hold our trading partners accountable.

Our competitive advantage is only as good as our ability to protect our ideas. And I can assure you that IP protection will remain a significant priority throughout the Administration.

Closing
The key to our continued success is leadership. President Bush has read the compass and set a clear direction. We have an incredibly strong and resilient economy, the greatest in the world.

But we need a lot of hard work on these issues: comprehensive immigration reform, keeping America competitive and innovating, closing the skills gap in math and science, winning the war on terrorism.

Looking at our history, there is every reason to be optimistic about our future. Optimists take risks. And they see the "opportunity in every difficulty," as Winston Churchill said.

So w e need to have everyone realize that what we have in front of us are tremendous opportunities to make this a stronger country, an even better country, a more prosperous country, a country that can continue to be a shining example to the world of innovation and opportunity that comes with freedom and liberty.

So I ask that you commit to being a part of that bright future, to be part of solution to the challenges we face.

I thank you very much for your leadership. And with that, I'll take any questions you have.