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Connolly: Industry Needs Government Help

The federal government and leading technology firms have a symbiotic relationship.

Historically, the public sector has made pure science investments that were too risky or expensive for individual companies. These investments laid the groundwork for dramatic technological advancement and private-sector growth.

For example, the Advanced Research Projects Agency within the Department of Defense created the first remote network, which was the predecessor to the Internet. Conversely, the federal government relies on technology companies to deliver information technology solutions to federal agencies that rely on improved productivity to serve a growing populace in a budget-constrained environment.

The Cold War created a political environment in which unprecedented levels of research spending, mostly related to national defense and space, led to an explosion of technological innovations and related products from private investors. From kidney dialysis to CAT scans to Lasik eye surgery, NASA investments led directly to private-sector-provided products that improve health and quality of life for millions around the globe.

Today, government investment is still driving private-sector product development. For example, federal contractors in Northern Virginia have developed an electronic record processing system that has allowed the Social Security Administration to cut the waiting period for some disability applications from 90 days to two. In this case, government investment led to the creation of the Internet, which fueled private-sector IT products, which in turn are improving the efficiency of a federal agency.

Passage of the American Recovery and Reinvestment Act jump-started research funding and deployment of existing private-sector IT products. For example, ARRA provided $20 billion to spur the conversion to electronic medical records. This investment is improving the efficiency and quality of care at hospitals and doctors offices throughout the country, leveraging the expertise of the private sector for the public good.

In energy, ARRA provided $10 billion for smart grid technologies that will improve the reliability and efficiency of the nation’s electric grid. Smart grid technology will provide more security to businesses that would be harmed by blackouts. It also will create a more dynamic electric grid that can accommodate non-baseload power sources such as wind and solar. Already, NOVEC, an electric utility in Northern Virginia, is using an ARRA grant to move forward with smart grid technology for the benefit of its customers and the utility.

The Washington Post wrote that ARRA has been a “boon” for federal contractors, injecting $859 million in Northern Virginia’s economy alone with 459 contracts. If history is any guide, these investments will be repaid in efficiencies federal, state and local governments derive from technological services of contractors and in the deployment of new products by the private sector.

The House has built on ARRA’s record of success by passing the America COMPETES Act, which makes critical investments in science, technology, engineering and math education, and had the support of every major business and education advocacy group. COMPETES and ARRA were particularly important because American investment as a percentage of gross domestic product has fallen while countries like China have dramatically increased research funding, underscoring the urgency for swift Senate action.

Just as it relies on the federal government for research funding, the private sector also relies on the federal government to establish clear rules of the game with respect to net neutrality, carbon emissions and other public policy issues. Once the government sets transparent rules, the private sector can make the investments that will create jobs and fuel economic growth. Historically, federal investments in technology have created whole new industries, fueling productivity and job growth that has offset some lost jobs associated with outsourcing of manufacturing. However, the federal government has not established clear ground rules for net neutrality or greenhouse gas emissions, to the detriment of industry and economic growth.

The private sector’s need for clear rules of the game is one reason that a wide variety of technology companies and organizations, including Google, Siemens and the Silicon Valley Leadership Group, support passage of clean energy legislation that puts a price on greenhouse gas pollution. Similarly, both technology companies and some cable companies such as AT&T supported the Federal Communications Commission’s net neutrality principles instead of the uncertainty of a wholly unregulated Internet environment.

Although legislation affecting complex issues such as cap-and-trade and net neutrality will continue to present significant challenges, technology industry support for certain approaches demonstrates that Congress must act to provide regulatory predictability for investors. Combined with continued investment in pure science and applied research, these clear ground rules will continue to ensure that America remains a leader in technological innovation.

Rep. Gerry Connolly (D) represents several high-tech communities in Northern Virginia.

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