With the rise of China and other robust economic competitors, the United States needs a more coherent national advanced technology strategy. Effectively crafting and implementing such a strategy requires the right kind of economic data. In part because of years of budget cuts to federal economic data agencies, coupled with a long-standing disregard of the need for sectoral and firm-level economic data to inform an industrial strategy, the federal government is severely lacking in the kinds of data needed.
Notwithstanding the hundreds of millions of dollars spent every year and the thousands of economists working for the federal government, the exact nature of the challenges to U.S. capabilities with regard to the competitiveness of America’s traded sectors is only weakly understood. At least since after the Great Depression, the federal government has never felt the need to develop strategic economic intelligence in order to fully understand the competitive position of its traded sectors or to help support overall economic productivity. Rather, most of the focus goes to understanding the ups and downs of the business cycle.
If the U.S. government is going to develop more effective policies to spur competitiveness, growth, and opportunity it will need to support better data collection. It should be able to understand the U.S. competitive position vis-à-vis other nations on key technologies and industries, as well as key strengths and weaknesses and where specific policies are needed.
As such, one of the most cost-effective investments Congress could make would be to significantly expand funding for federal economic and technology data collection. As part of a national infrastructure package, Congress should make a one-time appropriation to fully modernize and expand federal statistical agency IT systems. It should then increase annual funding on an ongoing basis.
To read the full report by the Information Technology and Innovation Foundation, please click here.
Robert D. Atkinson is the President of the Information Technology and Innovation Foundation