'America needs to be a country that makes things again,' Klobuchar says
By Leslie Brooks Suzukamo
Saying the United States no longer can afford to rest on its laurels with rising economic powers like China and India waiting in the wings, U.S. Sen. Amy Klobuchar on Tuesday proposed a series of steps the federal government can take that she said will jumpstart innovation and boost job creation.
The measures include relatively noncontroversial measures such as emphasizing more math, science and engineering for high school and college students and extending tax credits for university-led research and development.
They also include measures that might meet more resistance, such as adjusting H1-B visas to allow for more foreign technology workers, or cutting red tape and regulatory requirements for medical device makers, which have come under fire for product recalls.
The Minnesota Democrat, who is chairwoman of the Commerce Subcommittee on Competitiveness, Innovation and Export Promotion, introduced her ideas before a packed audience at the University of Minnesota's Mayo Building Auditorium as part of an "Innovation Summit."
The summit featured speakers from various key Minnesota industries as well as regulators, bankers, venture capitalists, university research and development specialists and government bureaucrats.
The United States ranks sixth among industrialized nations for its innovation capacity but dead last in efforts over the past decade to improve upon that capacity, Klobuchar told the crowd.
"America can no longer be a country that churns money and shuffles paper," Klobuchar said. "America needs to be a country that makes things again."
Most of the country's innovation in the past decade came in the banking sector, which invented financial instruments that were supposed to reduce investment risk, said U.S. Sen. Mark Warner, a member of the Senate Banking Committee and co-founder of the push-to-talk cell phone company Nextel.
Instead, their inventions blew up and nearly buried the economy, Warner, D-Va., said.
There are good areas where the government should step in to provide support for activities that the private sector will not support, such as in basic research and development, said University of Minnesota economist V.V. Chari, who was interviewed before the summit.
But the federal government is less effective in translating that research into actual products or companies, Chari said. The government should avoid trying to figure out whether particular innovations are special enough to warrant investment, he argued.
"My question is, 'if your innovation is so valuable, why can't you get your customers to pay for your innovation?' " he said.
But speakers at the summit said it has been harder lately to find investors who can get a product or research idea past the so-called "valley of death" between startup and a successful job-creating expansion.
"We're trying to make that research money more efficient," Klobuchar said. If the United States won't fund those companies, they will go to countries that will offer that kind of help, she said.
The Minnesota Legislature will confront that challenge this year. Its newly created Science and Technology Authority is asking for $20 million for the next two years to help technology commercialization and small business innovation, among other measures.
States like Ohio, North Carolina, Kansas and Pennsylvania have made similar investments in their own technology-based industries, the authority said in a report released Monday.
Leslie Brooks Suzukamo can be reached at 651-228-5475.