Statement of William Destler to the House Technology Subcommittee.
Re: HR 2086, The Networking and Information Technology Research and Development Act of 1999 (a bill to make permanent the R&D tax credit, and other things).
Date: July 1, 1999.
Source: William Destler. This document was created by Tech Law Journal by scanning a photocopy of the statement as prepared for delivery, and then converting to HTML. Hypertext links were added.

Testimony to the
Committee on Science
U.S. House of Representatives

On

The Networking and Information Technology Research and Development Act of 1999: Resources for IT Research

Given by

William W. Destler
Vice President for Research
University of Maryland, College Park, MD 20742

The United States in 1999 finds itself in a rapidly changing technological environment that threatens our traditional leadership position in product and services innovation. Since the U.S. must compete internationally with nations with significantly lower labor costs and environmental and safety standards, the maintenance of our current position as the most innovative economy in the world will be essential if we are to maintain the current robust U.S. economy and our current high standard of living.

Unfortunately, however, the U.S. corporate sector has been steadily reducing its expenditures on medium and long term research and development in order to remain price competitive with companies abroad. This is especially true in the areas of computer networking, encryption, and information technology because of the intense competition for an expanding world market served by companies marketing products in these areas. Compounding these problems is the fact that U.S. corporate demand for information technology professionals currently far outstrips supply, thus raising IT labor costs and limiting corporate expansion even when opportunities for growth are strong.

For these reasons, passage of H.R. 2086, the Networking and Information Technology Research and Development Act of 1999, is essential if the United States is to maintain its position of global leadership in these critical areas. H.R. 2086 contains three key elements intended to address these issues. The first is the establishment of a program to award grants to colleges to support student internships at IT companies providing that the companies cover half of the cost of the program. This program is designed to address the IT manpower problem by encouraging students to study in this area and providing a means by which they may learn about the promising careers available in the information technology sector.

The second key element in H.R. 2086 is a permanent extension of the Research and Development tax credit for U.S. businesses which expires on June 30, 1999. Extension of the R&D tax credit is essential if we are to maintain anything close to our current level of corporate support for basic research, and a permanent extension will be of considerable value in encouraging the private sector to undertake longer range research and development efforts.

The third component of H.R. 2086 directs the National Science Foundation to conduct a study of available encryption technologies abroad and compare them to existing encryption technologies subject to export restrictions in the U.S. This information can then be used to determine if U.S. export restrictions of these technologies are making U.S. companies noncompetitive internationally in an area of increasing importance to electronic commerce worldwide.

In conclusion, I strongly support H.R. 2086 and encourage its adoption by the House of Representatives. The nation will be well-served by the provisions contained within this legislation.