The Big Story: Bipartisan bill would boost U.S. tech investments, R&D funding. A key Senate panel held a hearing this week to discuss bipartisan legislation meant to bolster the U.S. technology sector against the growing threat of competition from China. Members of the Senate Commerce Committee used Wednesday’s hearing to discuss how the bill, known as the Endless Frontier Act, would provide long-term investments in research and development, entrepreneurship, and technological advancements in order to solidify America’s leadership in the global innovation economy.
In order to ensure continuing U.S. competitiveness, the Endless Frontier Act would prioritize the federal government’s commitment to innovation by reorganizing the National Science Foundation and providing it with $100 billion over a five-year period for research into advanced technologies. The bill also authorizes the use of an additional $10 billion to designate a minimum of ten regional technology hubs to serve as centers for the research and development of advanced technologies. As the U.S. continues to emerge from the pandemic, these types of long-term investments in the innovation sector—as well as the production and development of key technologies—will help the U.S. keep pace with China and other global competitors. Efforts to curtail Beijing’s growing technological prowess have received bipartisan support from policymakers, and President Joe Biden has continued the previous administration’s hardline approach against the export of U.S.-made technologies to leading Chinese companies.
The types of bold investments in research and development proposed by the Endless Frontier Act would spur on the creation of new innovative companies across the U.S. The legislation would, in part, allocate funding for new undergraduate scholarships and postdoctoral awards, industry training programs, and graduate fellowships and traineeships in targeted research areas to enhance the nation’s workforce. And the bill would also support the creation of programs designed to accelerate the development of new technologies from ideation to to the marketplace—particularly by offering expanded access to needed capital.
With growing competition from China and other countries in the tech sector, it is also particularly welcome news that policymakers are working to create and strengthen regional hubs that can drive the production and development of innovative products and services. As startups and other tech companies continue to bounce back from the economic uncertainty caused by the pandemic, it is critical for policymakers to ensure that these key businesses are receiving the long-term assistance they need to drive the U.S. economy.
Policy Roundup:
White House holds semiconductor summit. President Biden told a group of tech and auto executives during a virtual summit this week that the U.S. needs to bolster investments in the nation’s chip infrastructure in order to address the global semiconductor shortage. The summit comes as policymakers and U.S. companies continue to express concern that the dearth of access to microchips and other components used by technology companies, electronics firms, and automakers could last for two years as global demand continues to surpass the current supply.
Republicans on key House panel circulate memo targeting Section 230. Republicans on the House Energy and Commerce Committee circulated a staff memo this week outlining a series of legislative concepts targeting Section 230 and the content moderation practices of online companies. Although many GOP policymakers have attacked Section 230—a law that provides Internet companies of all sizes with the liability limitations needed to host and moderate user content—over unfounded claims of anti-conservative bias on the part of large social media companies, it’s the startup community that will be least equipped to handle the costs of increased litigation and regulatory burden as a result of changes to the law.
Maryland lawmakers move to amend state digital services tax. The Maryland legislature this week voted to amend the state’s recently enacted digital services tax. The measure, which would tax Internet companies that profit from digital advertising in the state up to ten percent of their annual gross revenues, became law earlier this year after the Maryland House of Delegates overrode the veto of Governor Larry Hogan. The amendments to the measure would delay its implementation until Jan. 1, 2022, exempt local broadcasters from the tax, and would also prohibit affected companies from passing on the tax to their customers.
European proposal would ban certain uses of AI technologies. The European Commission is preparing to propose legislation that would ban or restrict the use of artificial intelligence and biometric identification systems, according to a draft of the bill. Companies that develop AI technologies and fail to comply with the new rules could face fines as high as four percent of their global revenue if the measure goes into effect.
Startup Roundup:
New Engine report to examine the state of the startup ecosystem. Join Engine next Thursday at noon ET for a virtual event to unveil our report with Startup Genome and the Charles Koch Institute on “The State of the Startup Ecosystem.” The report examines changes and trends in startup investment and exits over the last decade. With an expert panel we will discuss the report's findings as well as the importance of understanding the health of the U.S. startup ecosystem for sound policymaking. You can RSVP here.
