Any nation that wants to achieve success in today’s dynamic world must make technology a paramount piece of its economic agenda. This is so because technology permeates all spheres of economic development, from health and business to science. Technology can hasten world trade by making it possible for businesses to market their products, meet the set quality standards and enhance competitiveness. On the global scale, China and the US are locked in a fierce battle to decide who would ultimately become the next global technology leader. According to the Andrew Knight New Canaan, innovation is the key ingredient that powers income growth and the determinant of what nation would become the diplomatic and global military leader in the coming years.
There is a school of thought that believes China; the world’s second largest economy will surpass the US to become the new economic and military power. China is responding to US advances by putting a lot of its resources in science and technology and offering crucial incentives to its farmers and certain companies. Its economic institutions are also enjoying growth due to a slew of reforms championed by the country’s rulers. However, China lacks inclusive political institutions that are crucial in promoting innovation. The political institutions in the country still have a long way to go since they are extractive by nature and remain a big impediment to new ideas. Besides radical reform of its political institutions, China also needs to secure property rights for its businesses, introduce independent media and judiciary in order to stay on the right course.
America’s challenge in maintaining the lead lies in bridging the inequality gap and the influence of money on its politics. On this account alone, proactive steps must be taken to equalize the economic inequality gap. The people benefiting from economic inequality in the US generally enjoy huge government subsidies and tax breaks. The prevailing circumstances have made it difficult for those on the other side of the divide to acquire necessary skills and stay at par in innovation matters. It is important to reiterate that innovation is what drives per capita income growth along with diplomatic and military leadership. If you are a good student of history, you will remember that the Perl Harbor attacks inadvertently helped the US economy grow rapidly and strengthened the country preparedness and military standing as it raced to outwit its opponents.
For a long time, the political institutions in the US have also played an important role of distributing power among the citizenry by controlling how the power is exercised for the benefit of the society. In spite of the closing economic and military gap, the US maintains a healthy lead over China in regard to income per capital. To this end, the US has many reasons to reclaim the mantle of tech leader. According to a report by The Hill magazine, technology promises unprecedented growth for business and industries, a fact you US must begin to fathom. The pace at which the global economy is growing has seen hitherto small startups compete on the same level with established enterprises, thereby boosting the overall GDP and enriching the lives of citizens. Historically, the US has been the unrivaled innovation leader of the information Age.
However, recent statistics rank the country, the 11th most innovative country. The sobering 2018 Bloomberg Innovation Index reveals that US has fallen out of the top 10 for the first time. Analysts attribute the poor show to skewed approach by policymakers, who’ve been pushing innovation to the back seat. For US to reclaim leadership in the technology and maintain its leadership in the global innovation race, the ruling administration and Congress must come up with policies that are pro-innovating. These policies must effectively incentivize businesses, both small and large all across the states to rediscover growth and retool their strategies to promote resilience. According to the Hill magazine, the US needs to take the following in 2018 to reclaim the tech leadership spot:
- Win the race for global talent tapping
The US can win the global race for talent by formulating business friendly policies. This can easily be done by boosting the STEM talent via targeted investments, education and training of the workforce. The government and other stakeholders can also use the Immigrant Innovation Act of 2018 to create a sizable workforce fund to support education and training programs that will promote steady STEM Investments. The country also needs to correct the challenges that exist on its skilled workers immigration program in order to make it possible for companies to recruit skilled persons for unfulfilled jobs without disenfranchising US workers. Reforming the HB1 application process can also go a long way to forestall the expected skilled labor shortage in areas like IT and prevent the bright minds from choosing other countries at the expense of the US.
- Modernize trade deals and expand the global market
The US needs to modernize the existing trade rules to make it possible and easier for homegrown companies to sell their products abroad. The same vigor should be spread to the service sector in the businesses that require digital service delivery. In spite of simmering trade wars between the US, and China and Europe on the other end, a lot should be done to promote and defend fair trade and transparency. The country can take the lead here by protecting the free flow of data around the world while safeguarding against intermediary liability and committing to the full protection of the intellectual rights.
- Maintain tax reform momentum to promote economic growth
Most economic analysts believe the US must continue the path of tax reform to promote long term economic growth. The reforms will create more opportunities in the tech sector and boost overall job creation. In the mean time, the government should cease adding undue pressure on established job creators and non-grounded startups to push growth. The country can begin the process by simplifying the existing tax code to make it easier for startups to thrive and take advantage of existing provisions.
- Fuel growth of startup by encouraging grassroots entrepreneurship
Studies have shown that strong startups play an important role in driving the GDP growth and jobs. However, unchecked regulations are often an impediment to realizing the growth objectives. Established businesses spend about $83,000 on average to deal with regulations while small businesses spend at least $12,000 on the same factor. Sound policies will encourage the growth of more special loan programs targeting startups and make the country attractive to young, up and coming investors from all over the world.
- Move beyond the Silicon Valley
Although the Silicon Valley has for a long time driven the nation’s tech innovation, and startup culture, the US still needs to do a lot to expand expanding this vibrancy across all the states in the union. Implementing proper policies can encourage risk taking and attract young entrepreneurs into venturing in business.