Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
Global Innovation Kickoff Luncheon
Thursday, January 27, 2011
Raleigh, North Carolina
As prepared for delivery
Thank you very much for your introduction, Greg. Thank you also to the North Carolina World Trade Association and all the sponsors for inviting me today. I am pleased to be here on the one year anniversary of President Obama’s announcement of the National Export Initiative and on the heels of the State of the Union address. I am delighted to be here to kick off your global innovation series- it could not have been more timely.
The President said on Tuesday “We need to out-innovate, out-educate, and out-build the rest of the world.” As the world recovers from one of the sharpest economic declines, we must work together to create opportunities that encourage innovation and spurs growth. We must produce innovative products and technologies and connect our exporters with buyers, while recognizing that growing U.S. exports is not only good for the U.S. economy but also for our trading partners. When the United States exports, jobs are created here in the U.S. and abroad.
I would like to share some thoughts about the Obama Administration’s short and long term economic strategy which serves as a catalyst for significant change across our economy; and where exporting fits into this strategy. This approach enhances our competitiveness, creates sustainable jobs and builds a stronger America while providing superior technologies, products and services to consumers across the world
This Administration’s overarching policy aims to transform the U.S. economy and lay the foundation for sustainable long term success. By investing in emerging technologies and encouraging innovation, we help create new market sectors like renewable energy. Through education programs we are developing skills that will help sustain innovation and build a competitive advantage. And through commercialization initiatives such as the National Export Initiative, we help connect innovative products and services to global markets. Innovation, education and commercialization are the foundation for creating jobs today and making these investments enhances our competitiveness and creates greater sustainable employment in the future while helping companies expand their global footprint to reach more customers worldwide.
As Assistant Secretary and Director General of the U.S. & Foreign Commercial Service, I lead a team of 1,500 trade professionals in 109 offices across the U.S. and 127 cities in 79 countries. The Commercial Service is a key implementing agency of the President’s National Export Initiative and is committed to enhancing U.S. competitiveness. Last year, ITA helped nearly 5,600 companies increase their exports and 85 percent of those were small and medium-sized businesses. In North Carolina we have three offices across the state that work with companies each day to find new ways for North Carolina products to reach new parts of the globe.
Competing in international markets makes us more innovative and cost-effective. A recent Brookings Institution study shows that exports spawn ancillary industries in urban centers that enhance competitiveness. The Research Triangle Park is a leading example of American innovation multiplying sectors in an urban area. The U.S. has always offered solutions that have been well received in the international marketplace for their quality; the NEI helps commercialize and scale exporting into a larger strategy of economic transformation.
U.S. enterprise has always been amongst the most inventive in the world: the motorcar, the computer, the internet and GPS were all invented in the USA. When we have innovated we have prevailed. And that is why this Administration places so much emphasis on innovation on building and owning the markets of tomorrow even as we vigorously compete for market share in today’s markets. American products improve lives and livelihoods globally and because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
Private sector employers driven by small and medium-sized companies have added jobs for twelve straight months. But unemployment remains unacceptably high and facilitating exports is a way of creating more employment. This is why President Obama is calling on leaders in Congress, American businesses and the private sector to work with him to accelerate job creation.
To spark innovation and creativity of our businesses, it is critical that we make the investments necessary to stay competitive in the 21st century by rebuilding our economy on a new, stronger foundation for growth and simultaneously assisting America’s companies to export our products and services to the 95% of consumers who live outside our borders. We must continue to provide assistance to
The Administration’s two-pronged recovery strategy – with focus on short-term relief and simultaneously encouraging longer-term, lasting transformation – has been consistent from the start of the Administration, with the passage of the Recovery Act.
The President signed into law in December a tax bill that allows American business to write off all the R&D investment they do in 2011. The President has a proposal to expand, simplify, and permanently extend the Research and Experimentation Tax Credit in order to help companies create good jobs in America today and increase productivity and growth in the future. The President’s proposal would devote about $100 billion to encourage private-sector R&D in the United States, and it would make that policy permanent so that businesses can count on it in the years ahead The Obama Administration has made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development. Nowhere is this more important than with small and medium-sized enterprises, which make up 97% of all firms in the United States.
We cannot cut back on investments in areas that have the biggest impact on our economic growth. The Administration made the largest investment in research and development in our nation’s history.
This helps craft a larger focus for the United States: to reinvent what we make, consume, market and sell; and to reinvent government support, focusing on self-sufficiency, sustainability and innovation.
At the Department of Commerce, we created the Office of Innovation and Entrepreneurship (OIE), that brings together leading entrepreneurs, investors, and university presidents to collaborate on ways in which the public and private sectors can work together to meet some of the Nation’s biggest challenges and reenergize the Nation’s economic momentum.
Such partnerships led to the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E), a fund created to finance breakthrough clean energy technologies, and the National Science Foundation’s (NSF) new program called Accelerating Innovation Research (AIR) that supports researchers that have made an important fundamental advance in science and engineering but who require additional funding to help commercialize their research. Through this and other programs, the federal government is acting as a partner in innovation, and encouraging competition among ideas for grant monies and has stimulated collaborations to accelerate transformational technological advances and help commercialize university research, create jobs, and prepare students to become successful entrepreneurs while reducing risk that industry is not likely to undertake.
We are also investing in our infrastructure. On Tuesday night, President Obama reiterated the Administration’s commitment to build the best infrastructure from high-speed rail systems to high-speed internet.
Hand-in-hand with innovation through R&D and investment in infrastructure the Administration has a targeted focus on creating and funding sustainable solutions for the future that lead the global marketplace.
Our global leadership is dependent on how we educate our students today – especially in science, technology, engineering, and math. In an era where most new jobs will require some kind of higher education, we have to keep investing in the skills and education of our workers. That’s why the President has called for America to once again have the highest proportion of college graduates in the world by 2020.
We already have one of the most educated labor force in the world and the Administration’s investments in education will ensure that we are even more competitive going forward. The Administration’s focus on innovation, education and commercialization, along with an emphasis on infrastructure, and sustainability reflects market-driven, competitive approaches, allowing the best ideas to rise to the top and development of an economic policy that makes sure that the United States is the best place to do business and to innovate.
Leveraging this strategy requires creating deep market linkages and connecting innovation to the marketplace. This is the core of the NEI — connecting American Innovation and our innovative products and services with consumers worldwide. The Administration recognizes that increasing global trade is imperative to provide new opportunities for growing America’s SMEs. Exporting must play a larger role in the U.S.’s economic prosperity. The pre-crisis drivers of U.S. economic growth - domestic consumer and business spending - can no longer be the only levers of emerging and even more globally connected marketplace. Fast developing economies like Brazil, India, and China must stimulate and encourage domestic consumption, open their markets to global trade. This will create domestic prosperity, make products and services that improve lives and livelihoods available to their people and help stimulate sustainable global trade.
To move forward, U.S. businesses must expand their global reach to new markets. As part of the strategy to ensure that the U.S. economy moves forward in its recovery, President Obama launched the National Export Initiative. The National Export Initiative has sharply defined goals: 1. double exports over five years and 2. support millions of jobs. By helping U.S. companies export to more markets and encouraging more U.S. companies to export, we create well paying jobs here at home in the U.S.
The NEI will help connect U.S. businesses with global consumers and market opportunities. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally. On the one year anniversary, the NEI is off to a great start. Exports are up about 18 percent compared to where they were a year ago – in North Carolina, exports topped $21 billion in 2009. We must continue to support companies like Protochips based here in Raleigh that manufactures analytical tools that allow R&D of nano-scale materials. With the help of the Commercial Service, Protochips now exports to the largest electrical equipment manufacturer in Japan.
Today, exports support nearly 10 million jobs in America, including almost 7 million manufacturing jobs. Exports as a percentage of our GDP were 11 percent in 2009, but the U.S. is still far behind countries like Germany where exports account for 40 percent, or Canada at 30 percent or even China where 25 percent of its GDP comes from exports. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future.
The Obama Administration’s vision to rebuild our economy differently – to “change the game” by focusing on innovation and competition; sustainability; education; and international engagement – is laying the foundation for a strong sustainable economy in the United States and beyond. Innovation and exporting are inextricably linked; they ARE the drivers for sustainable American economic growth. I look forward to our continued collaboration with the North Carolina World Trade Association and our partners to help U.S. companies connect with global markets and to substantially scaling up our engagement in our mutual goal of creating jobs and improving lives and livelihoods worldwide.
Thank you for having me here today.
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