President Joe Biden’s infrastructure plan has a lot for the tech industry to like.
The major investments in broadband access, chip manufacturing and basic research and development are long overdue. The bigger question is whether Congress will take the time to give the $2 trillion package the scrutiny it deserves. Not to mention find a way to pass it in the Senate.
Once upon a time Congress was a place where serious discussions could be held over the merits of major legislation. Strengths and weaknesses would emerge. Negotiations, while not perfect, generally resulted in improvements.
Fast forward to today. Biden has pledged to invite Republicans to the White House to discuss his infrastructure proposal. But those meetings are likely just for show. Senate Minority Leader Mitch McConnell already has announced his opposition to the plan. So it largely will fall to Democrats to study the details and determine the ultimate fate.
Careful scrutiny is in order. The plan specifies how much money would be allocated for various programs. But it’s vague on project priorities and timetables for completion.
As for the tech portions of the package, the pandemic has made clear the benefits of investing $100 billion in universal broadband access. Bringing speedy internet to rural and low-income communities would have allowed more people to reduce their exposure to COVID-19 by working, shopping, seeking medical advice and learning from home. It’s unacceptable that more than one in four K—12 students in California lack reliable internet access, for example. In today’s world, access to broadband is as essential as reliable power and telephone service.
The current chip shortage provides a compelling argument for investing in semiconductor manufacturing. Ford Motor Co. announced Wednesday that it will significantly cut production at six plants due to the global shortage of semiconductors. A reliable chip supply is critical for maintaining tech products ranging from cars to game consoles to the latest devices for maintaining national security.
For decades the United States dominated the world’s chip manufacturing. But Taiwan is now the leader, capable of producing 22% of the world’s chips. The United States (12%) also trails South Korea (21%), Japan (15%) and China (15%). Biden’s plan would invest $50 billion in subsidies to reestablish U.S. semiconductor leadership, but it offers few details on how that would be accomplished. Congress needs to dig into the plan’s details to ensure the money will be well spent.
The third major tech component of Biden’s infrastructure plan involves basic research and development. As the president said, the United States is one of few major economies whose public investments in research and development in the past 25 years have declined as a percentage of gross domestic product.
Biden wants to commit $180 billion for R&D. That includes $50 billion for the National Science Foundation to advance computing, biotech and energy programs.
U.S. R&D spending was once the envy of the world. Our basic research fueled innovations — including the breakthroughs that led to COVID-19 vaccines now saving lives around the world — that gave us a clear advantage over global competitors. But China is investing aggressively in R&D and, in 2018, surpassed the United States.
The Biden administration has said that the president’s proposal is the “beginning of a conversation with Congress and the American people.” Congress needs to clarify the specifics of the proposal before any vote to make the plan a reality.
