WASHINGTON 鈥 US investment in research and development has reached its lowest level in decades while soaring in the rest of the world, the head of a US Senate committee warned at a hearing on proposed subsidies to the tech industry to help the United States better compete with China.
Senate Commerce committee chair Maria Cantwell told the committee on Wednesday the proposed 鈥淓ndless Frontier Act鈥 had been the stimulus for a big debate about America鈥檚 competitiveness.
Federal investment in research and development is at its lowest in 45 years when measured against GDP, Ms. Cantwell said.
鈥淭his comes as international competition is increasing, and other nations are ready to challenge our position on the world鈥檚 innovation stage.鈥
The ranking member of the committee, Republican Senator Roger Wicker, said it appeared the intent of the legislation was to help America compete with China, but that the United States would not beat China by copying its 鈥渢op-down program鈥 of research and investment and government subsidies.
鈥淪trategic investments in technologies and supply chains are important, but we will not win by simply throwing money at the problem,鈥 Mr. Wicker said. 鈥淲e could actually end up doing harm if recipients of funding through this concept lack the capacity and capability to conduct R&D activities that are actually useful.鈥
The Endless Frontier Act was first proposed in 2020 calling for $110 billion over five years to advance US technology efforts, co-sponsored by Senate Democratic Leader Chuck Schumer and Republican Senator Todd Young.
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Mr. Schumer also wants to move legislation on boosting US semiconductor production. Both proposals could total $200 billion, congressional aides said.
President Joseph R. Biden, Jr., has proposed a sweeping infrastructure investment plan that could provide funds for semiconductors, though it is unclear just how the various funding initiatives will be ironed out between the administration and Congress.
Mr. Biden has also sought solutions to a chip shortage that has squeezed US automakers competing against the sprawling consumer electronics industry for chip supplies.
Several US tech industry groups on Wednesday wrote to Congress and White House officials urging them to not set aside new semiconductor manufacturing capacity for older chips as part of appropriations for the CHIPS for America Act, another plan to boost US semiconductor supply chains.
The letter signals a growing rift between the two US industries, with tech companies arguing that reserved capacity for legacy chips used by automakers would be market distorting.
鈥淭he competition among the rest of America鈥檚 chip-consuming industries for this artificially tightened chip supply will translate into higher costs for companies and their customers, including American taxpayers,鈥 the letter from the tech lobbies, including the Information Technology Industry Council, said. 鈥 David Brunnstrom and Michael Martina/Reuters
