Trelysa Long

When local data storage regulations are open or with pre-authorized safeguards, global exports are expected to rise by 3.6 percent and global gross domestic product (GDP) is expected to increase by 1.77 percent. When regulations are more stringent against different geopolitical blocs, global exports are expected to decline by 1.76 percent while GDP is expected to fall by 0.94 percent. Regulations that prohibit the flow of data also have a sizable impact with exports declining by 8.45 percent and GDP declining by 4.53 percent.

The manufacturing industry is vital to the United States' long-term growth and competitiveness against China. However, the U.S. manufacturing sector is shrinking as a share of the national economy.

The tax provision allowing firms to fully expense their R&D costs in the year of investment expired, decreasing the incentive to invest in this key driver of economic growth and competitiveness. Congress should pass the American Innovation and R&D Competitiveness Act of 2025 to restore the immediate deductibility of R&D expenses.

A recent working paper finds that management quality plays a pivotal role in determining whether firms expand, contract, acquire, or shut down.

Imposing blanket tariffs on U.S. semiconductor imports would imperil U.S. leadership across a broad range of digital and nondigital industries while significantly decreasing U.S. economic growth, raising prices, and jeopardizing broader U.S. manufacturing competitiveness.

When it comes to a nation’s innovation and global competitiveness, what truly matters is how the top students perform, since they will play a disproportionate role in shaping the nation’s technological and economic edge. Policymakers should expand K-12 gifted and talented programs and provide high school students with more advanced and honors classes.

Innovation can stagnate when workers remain in the same positions for extended periods. Policymakers should invest in reducing labor market barriers (e.g., hiring barriers) and workforce training while creating targeted safety nets to balance flexibility with security.

Nations with businesses that spend more on R&D experience fewer firm closures. As such, policymakers should incentivize domestic businesses to invest more in R&D if they want to see industries succeed and grow, boosting the overall economy.

The higher education sector remains the leader in R&D investments for basic research. If the United States wants to stay ahead of China, it must invest more, not less, in basic and applied research to build the foundational knowledge needed for innovation.

China is rapidly overtaking the U.S. in production across many advanced industries. If the United States wants to remain competitive and keep its market share in these industries, it must act now to incentivize R&D investment.

Policymakers should make it easier for foreign AI researchers with master’s degrees and beyond to work in the United States.

Policymakers should not attempt to reallocate innovative resources from large to small firms. Instead, Congress should pass the Tax Relief for American Families and Workers Act of 2024 and expand the R&D tax credit. These measures will incentivize firms of all sizes to continue investing in productivity-enhancing and socially valuable R&D.