Cisco Systems CEO John Chambers

TechNet, a lobby group comprising top American tech CEOs and venture capitalists, on Tuesday warned U.S. policy leaders that profound changes in the global economy put America's competitiveness at risk. In the face of this challenge, the group unveiled an Innovation Policy Agenda designed to maintain U.S. global leadership through policies that encourage entrepreneurship, job creation and economic growth by strengthening innovation.

The Innovation Policy Agenda is the product of a year of regional summits and collaboration among the nation's leading visionaries from industry, academia and policy-making. Last year, TechNet Innovation Initiative events were held in New England, Texas, Pacific Northwest, Southern California and Silicon Valley and showcased the emerging technologies, industry initiatives, and policy challenges that will shape our future. Many of the participants in the development of the Innovation Policy Agenda, including Cisco Systems CEO John Chambers, were in Washington D.C. Tuesday to discuss the report's findings and recommendations with Administration and Congressional leaders.

"The countries that create the best environment for innovation will be the economic powers of tomorrow," said John Doerr, TechNet co-founder and partner at Kleiner Perkins Caufield & Byers. "Look at the last 10 years for evidence. High technology represented less than 10 percent of the overall U.S. economy, but the industry drove more than 25 percent of overall economic growth."

Innovation Summit Findings
Across the country, the academics, industry leaders and policymakers involved in the Innovation Summits collectively found that:

• The U.S. education system is not preparing young Americans for the careers of the future
• The United States is no longer assured of attracting and retaining the world's best innovators
• Global innovation leadership requires a long-term, strategic approach to create an ecosystem that fosters innovation
• We are gravely under-investing in research and development as a nation
• The U.S. lags behind other nations in the deployment of broadband networks that are the foundation of the next wave of technology innovation.

"America's ability to innovate and compete is integral to job creation, productivity and sustainable economic growth," said John Chambers. "TechNet's policy agenda is a great template for the work we have ahead of us to ensure that Americans remain leaders in the new, global economy. We look forward to working with the Administration, members of Congress and regulators to make this happen."

"What was abundantly clear from discussing the critical innovation issues with leaders from all over the country is that this is no longer an academic debate," said Rick White, TechNet President and CEO. "Innovation and competitiveness are real issues now for the United States. And, they are affecting jobs and our economy right now. TechNet's Innovation Policy Agenda is not a white paper to ponder -- it's an action-oriented wake-up call."

Innovation Policy Agenda Recommendations
The Agenda includes the following recommendations. (The full document contains more detail. Click here to download the full document.)

• Strengthen education and develop a skilled technology workforce. Specific education recommendations include continued implementation and full funding of the No Child Left Behind Act; making science, math, engineering and technology education a national priority by increasing funding for math and science partnerships; effective retraining for displaced and unemployed U.S. workers; and, efforts to ensure that foreign innovators trained in the United States are able to remain to create technologies, companies and jobs.

  TechNet also announced on Tuesday the formation of an CEO Education Task Force. It includes Craig Barrett, CEO, Intel Corporation; Art Coviello, President and CEO, RSA Security; Paul Deninger, Chairman, Broadview - A Jeffries Company; John Doerr, Partner, Kleiner Perkins Caufield & Byers; John Morgridge, Chairman, Cisco Systems, Inc.; Henry Samueli, Chairman and CTO, Broadcom; Stratton Sclavos, President and CEO, VeriSign; Jeff Taylor, Founder, Monster Worldwide; and Joe Tucci, President and CEO, EMC Corporation.

• Maintain the U.S. entrepreneurial culture by preserving broad-based employee stock options. Billions of dollars of tax revenue could be wiped-out and the entrepreneurial spirit of 14 million Americans holding stock options could be dashed if a mandatory option expensing formula is enforced without a thorough study of the economic impact of the expensing standard prior to its implementation; guidance that results in realistic valuation methods for employee stock options; and, a thorough program of field-testing to ensure the viability of any new standard.

• Promote accelerated broadband deployment and demand. This is especially important in the face of a likely reopening of the 1996 Telecom Act. Recommended policies include minimizing VoIP regulations, increasing spectrum availability and rejecting technology mandates in favor of market solutions for the legal distribution of entertainment content online.

• Create opportunities for expanded international trade beginning with enactment of the U.S.-Central America-Dominican Republic Free Trade Agreement. Free and open trade is critical to an industry competing in a global market and CAFTA should be a top U.S. priority. Other TechNet trade recommendations include moving forward with the stated U.S. WTO goals; clearing hurdles that will allow U.S. companies and products to compete effectively around the world; and, efforts to safeguard intellectual property through trademark, copyright and patent protections as well as enhanced enforcement provisions.

• Increase federal funding for basic research at key agencies and enact a permanent extension of the R&D tax credit. A sustained public and private investment in R&D will foster a skilled American workforce, stimulate new technologies and maintain U.S. dominance in vital industries. It is critical that Congress enact a permanent R&D tax credit and take steps to achieve a doubling of the basic research budget of the National Science Foundation.

• Promote private sector initiatives to improve cyber security. With more than 80 percent of the Internet infrastructure operated by the private sector, protecting our enterprise systems is not only a practical safeguard against business losses; it is key to our national competitiveness and security. TechNet urges the Administration and Congress to support voluntary, private-sector initiatives that enhance the security of the nation's information infrastructure. TechNet also strongly advocates the creation of an Assistant Secretary for Cyber Security within the Department of Homeland Security and supports the "Department of Homeland Security Cyber Security Enhancement Act."

• Pursue legal reform initiatives that reduce frivolous lawsuits that drain innovation resources. TechNet applauds President Bush and Congress for taking a major step toward improving our nation's legal system by enacting the Class Action Fairness Act in February 2005 and will continue to champion legal reform initiatives that strengthen our nation's global competitiveness and technology leadership.