Transcript Program Quality Assurance Review (PQAR) Improving the

Dennis Thompson
Sr. VP SCRA
7/20/2015
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Incentives
Wikipedia Definition of Incentives:
1. A thing that motivates or encourages one to do something: "incentive
to conserve".
2. A payment or concession to stimulate greater output or investment:
"tax incentives for investing".
3. Inducement or supplement reward that serves as a motivational devise
for a desired action or behavior.
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Incentives
 There are multiple incentives that may be used to help advanced
manufacturers succeed in the global marketplace.
 Today I am going to focus on:
1.
2.
3.
4.
Comprehensive tax reform
Investments in R&D
Policies to increase innovation
Fiscal rebalancing
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Comprehensive Tax Reform
 The American corporate tax system is a paradox.
 This disconnect has attracted a lot of attention.
 Comprehensive corporate tax reform sounds good politically, but is
difficult to do in practice.
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Comprehensive Tax Reform
 The nonpartisan Congressional Research Service said corporate tax
breaks cost the Treasury $158 billion dollars in 2011.
 In a clear sign of just how hard it is to take away corporate tax breaks.
 Everyone wants “Comprehensive Tax Reform” as long as you “don’t
gore their ox.”
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Investing in the Future
 “Investing in the Future” is the key marker of whether the United States
is prepared to make farsighted decisions to improve education, build
new infrastructure and increase innovation.
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Investing in the Future
 Because many of the world’s economies have already adopted new
technology growth models and are making substantial investments to
implement them, the U.S. response can be neither small nor inefficient.
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Policies to Increase Innovation
 Policies to Increase Innovation should be made in areas that will equip
the United States to compete in industries with high growth potential
 Priorities need to include:

Enhancing the United States’ attractiveness as a place for investment

Supporting entrepreneurship through effective immigration policies that attract a highly
skilled labor force

Supporting innovation in clean energy and low carbon technologies through a cohesive
set of federal, state and local low-carbon economic growth strategies that will help
increase the United States’ leadership in these sectors.
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Fiscal Rebalancing
 Fiscal rebalancing will require the United States to insulate economic
recovery from the process of fiscal reform while reducing and
stabilizing debt over the long term.
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Fiscal Rebalancing
 The short-term nature of the deal on the debt ceiling, the need to set a
new budget and the need to deal with the spending cuts under the
sequester all ensure that fiscal issues will continue to dominate
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Call to Action
 In his 2011 State-of-the-Union address, President Obama repeatedly
called for a return to innovation as the engine of U.S. competitiveness .
 Since that speech, government policies aimed at reviving and
expanding the technology-based sector of the U.S. economy,
especially manufacturing, have begun to form.
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Other Issues
 Unfortunately, budget deficits and the consequent ratio of U.S. debt to
GDP are much higher today than in the 1960s, providing substantial
barriers to needed adaptive efficiency.
 The other major barrier to the needed policy response is the almost
total focus on ‘macro-stabilization’ (monetary and fiscal) policies.
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The Elephant in the Room
 Self-sustaining growth can only result from investment in productivity-
enhancing assets based on regular advances in technology.
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Wrap up
 What incentives are needed if American industry is to do the right
thing???

Comprehensive tax reform

Investment in R&D

Policies to increase innovation

Fiscal rebalancing

Public/private Partnerships
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