EDITOR'S VIEW

f the governing bodies of the various U.S. sports teams preparing for the summer Olympics in August act quickly, they can still enact some measures that will affect those teams’ performance in the games. Here are some suggestions: (1) The sailing team should not be allowed to use the sails on their boats. (2) Boxers can wear one boxing glove, but never both. (3) The swimmers should wear raincoats in the pool. (4) The equestrian team should ride mules.

      Absurd? It’s no more absurd than sending U.S. manufacturers onto the global playing field without a basic, yet effective, competitive asset they have enjoyed for the last 26 years. Congress, in its infinite wisdom, allowed the R&D tax credit to expire at the end of 2007, putting the companies working in U.S. science and research parks – like those covered extensively in this issue – in a difficult position competitively. Add the context of a nearly recessionary economy, and the R&D credit’s expiration moves sentient beings from a state of bewilderment to one of exasperation.

      According to Ernst & Young, nearly 18,000 companies across the U.S. claimed $6.6 billion of the R&D tax credit in 2005. The principal industries taking advantage of it were manufacturing, professional services, scientific and technical services and information sectors. The Information Technology Association of America (www.itaa.org) figures the lapse of the R&D credit may already have cost the American economy more than $8.3 billion – and that it would have spurred more than $18.6 billion in new economic activity this year alone. Using economic analysis from the National Science Foundation, the Small Business Administration and the Progressive Policy Institute, ITAA says this amounts to almost $51 million per day that could be lost as companies delay or forego research and development activity.

      “Roughly three-quarters of this credit is used directly for domestic high-skilled job creation used to create cutting-edge products and innovation,” says Monica McGuire, executive secretary of the R&D Credit Coalition (www.investinamericas future.org). “We believe these jobs and this important research are the lifeblood of our economy in an increasingly competitive global marketplace.”

      Not that this will matter to Congress, but you might find it of interest: A recent Zogby survey conducted on behalf of the R&D Coalition found that 67.7 percent of the American public want the credit revived, and nearly 50 percent want to see it expanded from previous levels. That’s the American public, not the companies who stand to benefit from the credit’s reinstatement.

      I’ll bet that same public is in favor of our American sailing team being permitted to use their sails in Beijing next month.

      Till next time,

      Mark Arend