Deputy Secretary's Speech

Deputy Commerce Secretary David A. Sampson
American Competitiveness at University of Evansville
Evansville, Indiana

Thank you, Dr. Clark, for the kind introduction. And on behalf of President Bush, I am honored to join you today.

I was born here in Evansville. It is great to be back here, and I am especially pleased that my family is here with me today. I am also excited to be able to present Escalade Sports with an Export Achievement Award a little later. Escalade began as the Indian Archery and Toy Company over 70 years ago, and now they sell their products to over 20 countries around the world.

Today I will focus on keeping the U.S. competitive in today's fast-paced global economy and how science, technology and innovation are driving a modern industrial economy like ours.

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

He wants to make certain that businesses, workers, and especially our students have the tools to achieve their goals.

Americans are the best innovators in the world today because of our free enterprise system. Our free flow of capital provides our entrepreneurs the ability to take risks and to be rewarded for those risks. For over two centuries, since before the founding of our Republic, our free markets have been unleashing the creativity and the talents of our people.

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

And innovation is more important to our competitiveness than ever. Some 75 percent of the value of publicly traded U.S. companies is derived from "intangible" assets, namely ideas and intellectual property. By comparison, that figure was just 40 percent in the 1980s.

The Context for American Competitiveness
At the macro level, we start with a tremendous advantage: a very strong economy. Thanks to the efforts of 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 to spend and re-invest as they see fit. Only the private sector can create wealth. The government just redistributes wealth.

Our economy has been growing at a healthy 3.6 percent 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. The national unemployment rate remains a low 4.7 percent--below the average rate in each of the past four decades.

But we cannot be satisfied with past economic accomplishments. President Bush is always asking his economic team: How can we create a better business environment? How can we innovate more, trade more, and create more jobs?

American Competitiveness Initiative
The President's 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
To stimulate new innovation, The President wants to increase federal R&D spending from $132 billion per year to $137 billion. That is 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.

Education
A challenge that we face as a nation is that we've been graduating fewer engineers and scientists in recent years. Our middle and high school students continue to fare poorly on international science tests. And this will hinder our ability to compete in the years ahead.

One way to make sure this country is competitive is to ensure that our youth have the skills to do the jobs of the future.

We need to have the talent pipeline flowing to our innovative companies so we can continue to develop and produce next-generation technologies. We have a remarkable record of turning technological breakthroughs into economic successes and advantages.

First, we're enhancing math and science skills in the early grades. Under the President's No Child Left Behind Act, schools are held accountable for student performance in reading and math.

We need more students to pursue degrees in math, science, and engineering. By the time students reach high school, too many have fallen behind most of the developed world in math and science.

And so, the President's competitiveness initiative calls for expanding AP programs in our nation's schools.

R&D Tax Credit
We're also calling on Congress to renew the R&D tax credit, which helps unlock the capacity of the private sector. Private investment is absolutely critical, accounting for two-thirds of total R&D. High-tech companies invest billions of dollars every year in R&D, and providing a tax incentive is one way to encourage them to continue to do so.

Fight Against IP Piracy
A final area I want to mention is protecting intellectual property. I do so to highlight a real-world problem that we're trying to solve and that you are likely to come up against.

Our leading industries depend on their technologies, trademarks, software and brands. It's their lifeblood. Intellectual property theft is costing U.S. companies $250 billion a year in lost sales and hundreds of thousands of lost jobs.

But there is more to it than that. Peoples' lives are at stake. I've seen studies that show up to 10 percent of the drugs on the market are counterfeit. That means they may not have the active ingredient they claim, no active ingredient at all, or possibly even toxic ingredients.

We need to put an end to this problem. We're working with many of our trading partners across Europe and Asia to stop these counterfeiters, and we're increasing the number of IPR attaches in our embassies around the world.

Closing
Today what we need more now than ever is leadership. President Bush has read the compass and set the course. 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 innovative, closing the skills gap in math and science and winning the war on terrorism.

Optimists take risks. And they see the "opportunity in every difficulty," as Winston Churchill said. And when I look at our history and our present economic situation, I believe we have every reason to be optimistic about our future. We have built an environment in which innovators and entrepreneurs can take risks and be rewarded for their successes.

We need everyone to realize that what we have in front of us are tremendous opportunities to make this a stronger country, a safer, and more prosperous country, a country that can continue to shine as an example to the rest of the world.

So I ask that you commit to being a part of the process, to speak up and be part of solution to the challenges we face.

Thank you very much.