A Competitive U.S. Business Climate: Innovation, Chemistry, and Jobs
ACS Position Statement
Science and technology help create millions of high-skill, high-wage jobs that support a strong U.S. economy and enhance American quality of life. Since World War II, nearly half of all gross domestic product (GDP) growth has been a direct result of investments in research and development (R&D) and there is abundant evidence that the great majority of newly created U.S. jobs have been the indirect or direct result of advancements in science and technology.
The world is now a much more competitive place than it was even five years ago. Only two of the top 10 chemical companies with the highest R&D investments are U.S.-based companies. And yet, the nation’s chemical industry is an $812 billion enterprise that touches 96 percent of U.S.-manufactured products and generates nearly 17 percent of all U.S. patents. Deloitte anticipates that, even in a “worst-case” economic scenario for the coming decade, “the demand for innovative uses for chemicals and chemical-based products will remain strong.” A strong U.S. chemical enterprise is supported by both “sustaining” innovations to keep commodity chemicals production competitive and also “disruptive” innovations that introduce new materials and applications that are tailored to the needs of customers across the greater community of business entrepreneurs.
The scientific and technological innovation that underpins our economic competitiveness results from sustained investments in scientific research and in strong education and training systems. To complement this technological advancement, our nation’s business laws, tax code, trade policies, and regulatory environment should work together to assure that the products of U.S. science and technology companies can be introduced to the international marketplace competitively and without facing inappropriate barriers. The United States should be the most welcoming place to start, maintain, or expand science- and technology-based business activity.
Historically, the largest employers of chemists have been large, publicly owned chemical companies. Increasingly, small businesses and entrepreneurs are becoming essential contributors to the chemistry economy and a growing factor in the chemistry employment picture. Federal research investments in university and national laboratories continue to spur new opportunities for technology transfer. Many large companies are now using venture capital funds to support small start-ups in collaborative business and commercialization models. By fostering the domestic expansion of existing companies and development of small businesses that can be centers of job creation, the chemistry enterprise not only improves its own prospects, but helps raise the prosperity of the entire nation.
The federal government should create a policy environment conducive to business development at all levels that would aid the chemistry enterprise in creating and commercializing new products and services here in the United States. These products and services would help strengthen our existing industry and help nucleate new industries, thus supporting new and sustainable science-based jobs.
Business, Technology and Commercialization
ACS supports a fair and level playing field that enhances competition and stimulates research and development by
- Expanding university research infrastructure and developing communities of innovation centered on academic research environments and national laboratories.
- Providing grants, low-interest loans, and accelerated depreciation tax incentives to mitigate the high start-up or retooling costs associated with high technology businesses.
- Expanding federal programs that provide targeted support for commercialization activities at science research agencies.
- ·Revising existing laws strategically as business conditions change.
Small Business and Entrepreneurship
ACS supports policies that foster the growth of small research and development businesses and encourage entrepreneurship by
- Improving access to shared resources and facilities for the conduct of early-stage proof-of-concept work by entrepreneurs.
- Making R&D tax credits accessible to start-up businesses by making them refundable or transferable.
- Expanding funding for the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR), Small Business Investment Companies (SBIC), and Small Business Administration microloan programs and reforming these programs to make direct research funding for small businesses more readily available.
- Providing incentives for larger companies to expand investments in start-up R&D businesses.
Taxes and Trade
ACS supports efforts to foster U.S. corporate tax and trade policies that will support American firms’ competitiveness in the global business atmosphere.
- Making the R&D tax credit permanent and large enough to place the United States in a globally competitive position.
- Encouraging more states to provide tax credits for R&D and investment in technology startups.
- Providing preferential tax treatment for repatriated income that is invested in U.S.-based technology development and job creation as well as reducing the incentives to locate businesses or jobs outside the U.S. to avoid taxation.
- Maintaining taxation of carried interest at the capital gains level for long-term, venture and angel capital invested in high-risk start-up companies.
- Providing tax incentives to spur U.S. science and technology investment and job creation.
- Advocating a more flexible international trade framework to better balance securityconsiderations with the partnerships that advance science and technology development.
- Assisting displaced science and technology workers with trade-related retraining and job searching.
Regulation and Intellectual Property
ACS supports reforms to the U.S. regulatory and intellectual property frameworks that will promote, and minimize impediments to innovation by
- Focusing federal laws concerning air, water, and other media to protect health, safety and the environment while minimizing their impacts on businesses.
- Updating federal chemical management laws using appropriate scientific data for risk-based assessment.
- Streamlining the federal chemical security program to effectively address current threat levels with minimum disruptions to business.
- Balancing the public’s right to know with protection of confidential or proprietary business information in the development of new regulations, including chemicals management laws.
- Increasing U.S. Patent and Trademark Office (PTO) staff to expedite the evaluation of patent applications and thereby reduce the patent backlog.
- Allowing the PTO to apply all fees directly to a more efficient patent review process.
- Strengthening intellectual property protection to reduce instances of foreign violation of American copyright and patent holdings.