Tuesday, February 23, 2010

A 10-Point Program for Job Creation and Economic Transformation

Job growth is a top priority right now for most government officials, regardless of party. But recent job-growth proposals have mainly offered measures to avoid layoffs, assist those already unemployed, and induce only incremental hiring, mostly in well-established industries. Although the recent proposal by Sens. Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.) was encouraging for its bipartisan process, its job-related provisions suffered from these limitations.

We have reached the point when the USA must rapidly stimulate major, broad-based job growth over a sustained period of time. The focus should be on transformative economic development in key industries that hold the promise of becoming the drivers of economic prosperity and exports for years -- and even decades -- to come. Rather than merely keeping workers and the economy afloat, we must invest in industries that will create the need for workers, both today and over the long-term, on a massive scale. When spending tax dollars on job growth, the emphasis should be on emerging industries, to invigorate the demand for workers in companies with global high-growth potential.

As President Obama stated on February 16th, "Whether it's nuclear energy, or solar or wind energy, if we fail to invest in the technologies of tomorrow, then we're going to be importing those technologies instead of exporting them. We will fall behind. Jobs will be produced overseas, instead of here in the United States of America. And that's not a future that I accept."

Starting Points for the "Jobs Bill"

The "Jobs Bill" that will emerge from Congress should include support for job retention and incremental hiring, as well as for the unemployed, both to stop our economic bleeding and to capture the "low hanging fruit." These steps include aid to state and local governments, a payroll tax credit for small businesses that hire unemployed workers, assistance to homeowners who are in jeopardy of foreclosure, and extension of unemployment insurance and COBRA benefits. The bill should also accelerate the Obama Administration's initiatives for highway and bridge construction, energy-efficiency retrofits of homes and buildings, and a seamless national broadband infrastructure.

Long-Term Job Growth and Transformation via the "Jobs Bill"

Yet, to maximize its impact in the near-term and lay the groundwork for future prosperity, the "Jobs Bill" must fully embrace President Obama's vision for economic transformation fueled by investment in innovation-intensive industries which will propel exports and economic primacy of the US economy for decades to come. The US must aggressively grab the advantage and secure the leadership role in these fast-evolving global industries. The key technologies and industries that should be designated as top national priorities include: renewable energy / clean energy, mobile telephony, broadband computing, biotech and health care, water desalinization and clean water production, transportation safety, homeland security, recycling and waste management, and environmental protection and remediation.

Although there is already considerable activity in the US in these industries, the progress is far short of positioning the US as the dominant world leader in them. The "Jobs Bill" provides a prime opportunity to galvanize our aim, commit our resources, and accelerate our activity in these transformative industries. The level of commitment and support should be akin to that given to the "Manhattan Project" in the 1940s and space exploration in the 1960s.

President Obama reiterated the case for such a commitment, and the high stakes involved, during his State of the Union address last month, in the context of clean energy and energy efficiency: "I know there have been questions about whether we can afford such changes in a tough economy... But here's the thing -- even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future -- because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation."

The importance of the "Jobs Bill" in advancing US long-term leadership and economic prosperity can be illustrated by envisioning the WTO trade negotiations of 2025 and 2035. The US will seek to secure fair trade and competitive advantages in industries with maximal worldwide growth opportunities in those eras and beyond. The question will be whether the US is trying to wrest a foothold from others, or be in the driver's seat. We must work TODAY to build the competencies, technologies, infrastructure, and supportive services that enable the US to lead in the high-growth industries of the future.

10-Point Program for Job Growth Now and in the Future

A program could be included in the "Jobs Bill" to propel near-term and long-term US job growth, exports, innovation, and economic leadership in the global economy. To be eligible for government assistance and benefits under this program, a company would have to be involved in one or more of the national priority industries identified above, and need to be engaged (or seek to be engaged) in at least one of the following activities:

(a) research and development of a new technology or service for which there is a high growth potential;

(b) manufacturing of a product utilizing a high-growth potential technology in connection with a patent or patent pending;

(c) implementation of a marketing and sales plan that would reach, or significantly expand penetration into, export markets with a demonstrable high-growth potential;

(d) execution of a business model that would bundle products and/or services relating to one of the targeted industries, by partnering with at least one other US-based company, for enhanced reach, scope, and impact in high-growth export markets; and/or

(e) fulfillment, order processing, inventory management, transportation, and/or delivery services for companies engaged in one or more of the targeted industries.

For qualifying companies - including start-ups, micro-enterprises, and existing companies - government assistance and benefits under this program would include:

(1) an enhanced Research and Development Tax Credit, for companies described in paragraph "a", above;

(2) an Expedited Review and Processing of Patent Applications, in the case of companies described in paragraphs "a" and "b", above.

(3) a Payroll Tax Credit for two years for each unemployed person hired by a company of any size, if the hire is directly and predominantly for the above activities;

(4) a Loan, for companies described in "c" and "d", above (re: exports) to pay the salary of new hires for one year, with such loans being repaid over the ensuing four years (which could include a requirement to retain the employee for at least one more year);

(5) Job Skills Training assistance for employees who are directly and predominantly engaged in the above activities;

(6) Technical Assistance to start-up companies and micro-enterprises for help in formation, incorporation, and otherwise establishing their company;

(7) expedited Processing Assistance with documents and procedures to enable exports;

(8) Technical Assistance with fulfillment, transportation, and delivery of exports; and

(9) an Online Partnership Development Match-Making Directory for companies that seek to access / provide value-added services from / to other companies in their industry, and for other companies to identify market opportunities that could justify additional hires;

(10) development of a Network of Business Parks throughout the US that are dedicated to accelerating the key national priority industries by co-locating many companies engaged in the same emerging industry so that participants can leverage each other's research, resources, and manufacturing and deployment capabilities, resulting in synergistic benefits for all participants (extended discussion of this proposal is found below, in blog post entitled "Job Creation as Job One: 3 Ideas for The Forum on Jobs and Economic Growth", December 2, 2009).

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