This week, NVCA submitted our comments to the White House Office of Science and Technology Policy (OSTP) and the National Economic Council (NEC) on their updates to the 2009 Strategy for American Innovation, a comprehensive set of goals to advance innovation in the U.S.
We are committed to advancing public policies to support the growth of innovative new companies that are the foundation of a vibrant, prosperous U.S. economy. Despite the rise of incubators, crowdfunding, corporate venture capital, along with traditional venture capital, there remain considerable challenges for new companies in capital-intensive sectors such as life sciences, advanced materials and clean energy. In these sectors, in particular, the government has a critical role to play in fostering an environment for increased investment and innovation through tax and regulatory policies.
A report by the Department of Commerce from 2010 that found “technological innovation is linked to three-quarters of the nation’s post-WWII growth rate. Two innovation-linked factors – capital investment and increased efficiency – represent 2.5 percentage points of the 3.4% average annual growth rate achieved since the 1940s.”
In order to reduce the cost of launching and reaching commercial scale for companies in life sciences, advanced materials and clean energy, the Administration must seize the opportunity to shape tax reform in a manner that promotes innovation. Although changes to the tax code are the domain of Congress, the Administration should champion tax policies that encourage investment in new innovative technologies.
In our comment letter, we address specific changes to the tax code that would encourage investment in energy technologies. Current energy policy is an amalgam of decades of regional priorities and inconsistent policies. No current policy supports the kind of innovation and adoption of new technology that ensures our long-term competitiveness in global energy markets.
Among other solutions, we support the creation of a new, non-refundable credit would support technologies as they develop and begin to enter the market — before they have fully reached economic scale. The structure would be focused on driving technologies down their respective cost curves and then automatically roll off tax credit support as these technologies reach maturity and can compete on their own in the market.
America has the most robust private capital markets in the world, but long-term, reliable public policies that create a level playing field are required to unlock this capital.
Read NVCA’s comment letter to OSTP and NEC here.