Here's Where Intel And Obama Agree...
by Intel FreePress
As President Barack Obama prepared to meet Intel President and CEO Paul Otellini and tour Intel's state-of-the-art chip factory in Hillsboro, Ore., we took the opportunity to examine a couple of recent speeches both leaders have made in their respective areas and found some interesting comparisons.
Otellini, who has been a strong proponent of investing in education, R&D and innovation while pushing for favorable tax policies, made his speech at the Technology Policy Institute's Aspen Forum in August. Headlines out of Aspen at the time -- "U.S. Facing Looming Tech Decline," for one -- focused on Otellini's criticism of various government policies and priorities. Ironically, while not calling out the President by name, Otellini took issue with the then-Democrat-controlled Washington saying, "I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working."
And yet, a comparison of Obama's State of the Union speech in January titled "Winning the Future" carried many similar themes that Otellini talked about in Aspen 5 months earlier and, indeed, in several appearances over the past few years. To be fair, these are only two of many speeches each has made, and this is certainly not to say the President wasn't in the same camp generally on U.S. competitiveness and investing in innovation. However, the two speeches show some interesting comparisons a few months apart.
Read the following excerpts and decide for yourself. Otellini's is from August, Obama's from January. Either way, you'll see the connection in philosophies and perhaps get some context as to why Obama chose Intel to talk about the innovation economy, new jobs and the importance of education.
Otellini: "We invest all over the world. Seventy-five percent of our sales, after all, come from outside the U.S. But 75 percent of our manufacturing and R&D spending continues to be concentrated in this country, where we attract talented scientists and engineers from around the world. But there's no guarantee that the U.S. will receive all of this investment in the future.
We need to address the fact that government policies can create disincentives to investing in America."
Obama: "This is our generation's Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven't seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We'll invest in biomedical research, information technology, and especially clean energy technology - an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."
On Tax Policy
Otellini: "Our combined state and federal corporate income tax rate, after all, is the second highest in the industrial world. It is precisely these high statutory corporate rates that punish the most dynamic and innovative firms and hinders their ability to compete globally. And, at a time when countries in Europe and Asia are clamoring to offer companies like Intel significant tax benefits to build factories, the national tax incentives for companies to invest here are few.
Then there's corporate tax policy. Any real strategy for future competitiveness has to address this issue. Comprehensive tax reform - from top to bottom - is an essential part of rebuilding the commitment among global business leaders to invest in creating jobs and running businesses in America.
There are two simple ideas that can help make this possible. The first is to adjust the U.S. corporate tax rate to a rate that is competitive worldwide."
Obama: "All these investments - in innovation, education, and infrastructure - will make America a better place to do business and create jobs. But to help our companies compete we also have to knock down barriers that stand in the way of their success.
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."
On US Competitiveness
Otellini: "I believe we are the best-positioned of any country to successfully make this transition and generate continued economic growt
"It begins with common understanding that good investments ought to lead to ideas and discovery ... which spawn new businesses ... that in turn creates new jobs ... and ultimately leads to wealth creation and higher standards of living. The start of this cycle is investment, both large and small.
And perhaps the most important of these investments, are investments in the things that make innovation possible ...."
Obama: "At stake is whether new jobs and industries take root in this country or somewhere else. It's whether the hard work and industry of our people is rewarded. It's whether we sustain the leadership that has made America not just a place on a map, but a light to the world.
To reduce barriers to growth and investment, I've ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them."
Editors note: On Feb 18, the White House announced that Otellini would be named to the President's Council on Jobs and Competitiveness, a newly formed non-partisan board of experts designed to help advise the President on how to get Americans back to work and strengthen the economy.
Otellini: "At one time, the U.S. could boast about the best students in math, science and engineering. Our research centers were without peer. No country was more attractive for start-up capital or global investors. We seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case.
Unless government and business take firm actions to improve education, create a culture of investment and job creation in this country, then the next Intel or the next big thing will not be invented here. Jobs will not be created here. And wealth will not accrue here. Ultimately, we will face an inevitable erosion and shift of wealth, much like we are witnessing today in Europe."
Obama:"Over the next 10 years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren't even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to ninth in the proportion of young people with a college degree. And so the question is whether all of us - as citizens, and as parents - are willing to do what's necessary to give every child a chance to succeed."
Otellini: "There's a fine line, however, between spurring and hindering innovation. We must resist the urge to pick winners and losers. I said it earlier and I'll say it again: The fundamental issue isn't the United States versus the rest of world. It's not a zero sum game.
So, what we need is a set of policies that takes down barriers overseas so American businesses can compete on their merits globally while also increasing competitiveness at home."
Obama: "None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn't know that something called the Internet would lead to an economic revolution. What we can do - what America does better than anyone - is spark the creativity and imagination of our people. We are the nation that puts cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn't just change our lives. It's how we make a living.
Otellini: I'd like to spend the remaining few minutes discussing why national broadband and corporate tax policies should be key elements of our competiveness strategy.
Let's start with broadband. The FCC's National Broadband Plan is a good first step for encouraging broadband adoption in the homes of low-income and rural citizens.However, more focus, effort and money are needed to complete that task ... especially if we're serious about bridging America's digital divide.
Underutilized spectrum is an opportunity for us all. As more Internet users come online and the number of people using smart phones and other mobile devices continues to grow, we need to be more progressive in the sharing of spectrum.
To do this, Congress should give the FCC the authority to set up "incentive" auctions. Just as important, though, is that Internet traffic is managed in a reasonable, non-discriminatory way. These are two necessary steps if we want to truly open up the Internet. They may not yield results immediately.... But, together they will create an environment for the pursuit of new businesses.
Obama: "The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods and information - from high-speed rail to high-speed Internet.
Our infrastructure used to be the best - but our lead has slipped. South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a "D."