ITIF Report Details 50 Policies to Bolster U.S. "Traded Sector" Competitiveness

September 20, 2012

WASHINGTON (September 20, 2012) - A comprehensive strategy aimed at strengthening U.S. establishments competing in global markets is needed for the United States to boost short-term recovery and long-term prosperity, according to a report released today by the Information Technology and Innovation Foundation.

Establishments in traded sector industries, such as manufacturing, software, or engineering and design services, compete with firms worldwide. They are the core engine of U.S. economic vitality but face unique challenges. If a company like Boeing loses market share to Airbus, thousands of domestic jobs at Boeing, its suppliers, and the companies the employees spend at will be lost. In contrast, a local grocery store may compete for business with other supermarkets, but it's not threatened by international competition. If Safeway loses market share to Walmart or even Tesco, the jobs will remain in the United States. As such, the fact that the U.S. traded sector has not created a single net new job in 20 years is a core reason for the current U.S. economic malaise.

The report, Fifty Ways to Leave Your Competitiveness Woes Behind: A National Traded Sector Competitiveness Strategy, presents 50 federal-level policy recommendations to help restore U.S. traded sector competitiveness, along with 13 state-level recommendations.

"The United States is increasingly isolated in its belief that countries don't compete with one another and that only firms compete" said ITIF Senior Analyst Stephen Ezell, co-author of the report. "Our traded sector establishments are up against competitors that are aided in countless ways by their governments. It's time to level the playing field."

The recommendations are organized around federal policies regarding the "4Ts" of technology, tax, trade, and talent as well as policies to increase access to capital, reform regulations, and better assess U.S. traded sector competitiveness. 

The report's top 10 recommendations are:

  1. Create a nationwide network of 25 "Engineering and Manufacturing Institutes" performing applied R&D across a range of advanced technologies.
  2. Support the designation of at least 20 U.S. "manufacturing universities."
  3. Increase funding for NIST's Manufacturing Extension Partnership (MEP).
  4. Increase R&D tax credit generosity and make the R&D tax credit permanent.
  5. Institute an investment tax credit on purchases of new capital equipment and software.
  6. Develop a national trade strategy and increase funding for U.S. trade policymaking and enforcement agencies.
  7. Fully fund a nationwide manufacturing skills standards initiative.
  8. Expand high-skill immigration, particularly focused on the traded sector.
  9. Transform Fannie Mae into an industrial bank.
  10. Require the Office of Information and Regulatory Affairs to incorporate a "competitiveness screen" in its review of federal regulations.


"Skeptics of a national traded sector strategy may label it 'industrial policy' and insist that market forces alone work well," said ITIF President Rob Atkinson. "What they are missing is that the status quo is not working well, as evidenced by our economic crisis, and that our current policies are serving our companies and our nation poorly in today's global innovation race."


The Information Technology and Innovation Foundation (ITIF) is a Washington, D.C.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities and improve quality of life in the United States and around the world. Founded in 2006, ITIF is a 501(c)(3) nonprofit, non-partisan organization that documents the beneficial role technology plays in our lives and provides fact-based analysis and pragmatic ideas for improving technology-driven productivity, boosting competitiveness, and meeting today's global challenges through innovation. For additional information, visit ITIF at or contact Steve Norton at (202) 626-5758 or [email protected].