The Federal Budget

[DavidRoss]

I suspect that for all the flaws inherent in such an enterprise, a relatively small and homogeneous state like Sweden has a much better chance of picking winners and losers than a behemoth like the U.S.  Although it conflicts with extreme simplification of the tax code (a universal good for all but accountants and tax attorneys), I'm inclined to favor government encouragement of basic R&D by making such expenditures deductible.  Other encouragement is amply provided by the marketplace (at least, in the absence of government meddling, well-intentioned or otherwise).

Of interest to some: http://www.guardian.co.uk/commentisfree/2011/mar/03/india-emerging-geek-superpower

[Scarpia]

Also, perhaps you can answer a question I asked earlier: from an end user perspective, why does it matter where innovation originates?  Were I to buy an iPad or something similar, would it really matter if it was designed in the US and manufactured in China (or wherever iPads are made), or vice versa?

Does it matter to a person in Somalia where innovation originates.  Presumably it does because the iPad is designed in the US, assembled in China from parts made in Korea, Singapore, Indonedia and Malaisia.  Why would anyone send one to Somalia?

If the iPads of the future are designed in Korea, India or China using technology developed in those countries, and manufactured there, what do they need the US for?

Maybe there is some hyperbole involved, and the fact that the US is relatively friendly to entrepreneurial activity is certainly a critical factor in its economic success.  But the US tech sector would not exist without federal support, and given that we have the lowest performing students in the developed world, stealing the smartest students from the rest of the world is part of the process.  Asian countries want to keep those students in the future and are investing heavily in scientific infastructure. 

[Todd]

If the iPads of the future are designed in Korea, India or China using technology developed in those countries, and manufactured there, what do they need the US for?

Trade and innovation are not zero sum activities.  Because country X makes widget A does not suddenly mean that Country Y is no longer adding any value.  Also, continuing to focus so much on countries ignores the reality that corporations own and drive much innovation.  Publicly funded (and privately funded) incentives may help lure a company to set up shop, or it may lure students, but it is only part of the picture.

Asian countries want to keep those students in the future and are investing heavily in scientific infastructure.

Of course they do.  I don't blame them. 

[bwv 1080]

I suspect that for all the flaws inherent in such an enterprise, a relatively small and homogeneous state like Sweden has a much better chance of picking winners and losers than a behemoth like the U.S.  Although it conflicts with extreme simplification of the tax code (a universal good for all but accountants and tax attorneys), I'm inclined to favor government encouragement of basic R&D by making such expenditures deductible.  Other encouragement is amply provided by the marketplace (at least, in the absence of government meddling, well-intentioned or otherwise).

Of interest to some: http://www.guardian.co.uk/commentisfree/2011/mar/03/india-emerging-geek-superpower

R&D is tax-deductible for US corporations - drug and tech companies could barely stay in business if that were not the case

[DavidRoss]

R&D is tax-deductible for US corporations - drug and tech companies could barely stay in business if that were not the case

Yes it is, and that is sufficient government "stimulus."