Addressing an audience at Hudson Valley Community College in Troy, New York, President Obama presented his strategic vision for American innovation. Stressing the importance of innovation as the key to America’s economic growth, President Obama plans to build on the over $100 billion of Recovery Act funds that support innovation, “from high-tech classrooms to health information technology, from more efficient homes to more fuel-efficient cars, from building a smart electricity grid to laying down high-speed rail.”

Moving forward, President Obama’s strategy calls for government policies that will harness the inventiveness of American entrepreneurs and the talent of our private sector to expand our economy and create quality jobs.  In his plan, President Obama laid out three goals for American innovation.

First, the President called for renewed investment in the basic building blocks of innovation: “education, infrastructure, research.” President Obama explained, “We know that the nations that out-educate us today will out-compete us tomorrow.  The ability of new industries to thrive depends on workers with the knowledge and the know-how to contribute in those fields.  Unfortunately, today, our primary and secondary schools continue to trail many of our competitors, especially in the key areas of math and science.”  And with graduates forsaking college or dropping out early due to skyrocketing costs, “too many of our young talented people -- are slipping through the cracks.  It's not only heartbreaking for those students; it's a loss for our economy and our country.”

President Obama continued:

Secondly, President Obama’s innovation agenda emphasized the need for competitive markets to encourage and foster entrepreneurship, allowing American ideas to spread globally. The President explained, “So as we invest in the building blocks of innovation, from the classroom to the laboratory, it's also essential that we have competitive and vibrant markets that promote innovation, as well. Education and research help foster new ideas, but it takes fair and free markets to turn those ideas into industries.” The President’s budget provides for a research and experimentation tax credit, and he has proposed “reducing to zero the capital gains tax for investments in small or startup businesses.”

The President also understands the importance of a rules based system for trade. He noted that, “it's essential that we enforce trade laws and work with our trading partners to open up markets abroad; that we reform and strengthen our intellectual property system; that we sustain our advantage as a place that draws and welcomes the brightest minds from all over the world; and that we unlock sources of credit and capital which have been in short supply as a result of the financial crisis.”

Lastly, President Obama explained how government can be part of the solution for industries such as alternative energy and health IT, where the market will not produce desirable outcomes on its own. 

President Obama explained:

For more on President Obama’s strategic vision:

• Read the transcript of President Obama’s speech here. 
• Read “A Strategy for American Innovation” White Paper here.
• Read American Innovation Fact Sheets here and here.