Congress looks to stop U.S. R&D from landing in other countries

By Kenneth Corbin, CIO |  IT Management

"It is no secret that it is faster and cheaper to adopt new technologies than it is to develop them. It comes as no surprise that with the development of a global marketplace, the intense competition for market share, and the movement to a more open and integrated world economy, governments have turned to policies that will enable their firms to exploit the innovations of others," Tonko adds.

"I am indeed uncomfortable with the idea that American firms license away innovations subsidized by our citizens. It is bad enough that we have lost jobs when firms offshore production and move out of our communities. The idea that they would exchange taxpayer-supported innovations for market access, however reluctantly, is very disturbing to me," Tonko says.

Congress Sees the Problems, Solutions Aren't So Clear

Lawmakers and witnesses at the hearing generally agreed that foreign technology transfer is a significant problem, both in terms of taxpayer equity and the macroeconomic concern that devaluing the intellectual property that results from U.S. R&D will undermine domestic job growth and investment. But policy prescriptions are harder to come by.

Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington think tank, suggests that Congress consider a limited joint antitrust exemption that would allow rivals within an industry to enter into an agreement to reject coercive or exploitative terms when negotiating with a foreign government to set up operations overseas.

Atkinson recommended that the United States pursue similar agreements with the governments of countries that are grappling with the same technology-transfer challenges, particularly states in the European Union and Japan.

"We can't solve this problem on our own. We have to do it with our allies," Atkinson says.

He also advises that lawmakers consider a modest increase in funding for the office of the U.S. Trade Representative to expand it capacity to address technology transfer.

Atkinson notes that the issue has flown under the radar of many policymakers, and that U.S. efforts to protect technologies stemming from domestic R&D have been "haphazard." But whether U.S. policy evolves or not, U.S. tech firms, beholden to their shareholders to maximize profits, cannot be expected to turn their back on the major population centers in emerging markets.

"A lot of this is not voluntary -- the intellectual property theft. There are certain parts where they just take it. There's another component where companies give it, but they essentially have a gun to their head," Atkinson says.

"They could not do business. I mean, they could just not go there. I mean they have that option, right?" counters Rep. Dan Benishek (R-Mich.).

Originally published on CIO |  Click here to read the original story.
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