Seattle, WA, July 19 -- If the U.S. is to remain the world leader in innovation, state policymakers and executives must work with the high-tech industry to strengthen the knowledge economy infrastructure and create a business landscape that encourages investment. That was the central message Dave McCurdy, president of the Electronic Industries Alliance (EIA), presented to policymakers at the National Governors Association (NGA) annual meeting here yesterday.

"We must create an environment for innovation at the state level that ensures `the next big thing' is developed here and brings a new wave of high-skill jobs for U.S. workers," McCurdy said in a presentation to the NGA's Economic Development and Commerce Committee. McCurdy's remarks focused on EIA's recently released policy playbook, The Technology Industry at an Innovation Crossroads, which includes 40 legislative and regulatory recommendations for addressing the long-term viability of the U.S. innovative sectors.

To improve the business climate for U.S. innovation, McCurdy urged governors from both political parties to consider the recommendations from the playbook that address needs at the state level. In particular, these proposals relate to tax and regulatory landscapes and to state and local incentives for research and development (R&D) investment.

"Many of the factors that lead businesses to move operations offshore are homegrown," McCurdy noted. "Taxes, employee benefits [such as health care] and regulatory burdens are among the costs that add tremendously to business overhead in the U.S." State and local regulatory burdens such as unreasonable or misplaced environmental requirements only exacerbate efforts to nurture high-tech growth in America.

Among policies EIA believes can be most effective at the state level are: 1) required review of proposed regulations and legislation to determine the impact on small and mid-sized businesses; 2) measures that simplify tax policy and minimize cases of double taxation; and 3) prevention of inconsistent state electronics recycling requirements and environmental design requirements.

In addition, there are steps that can be taken at the federal level that would greatly benefit states. EIA recommends the establishment of an Innovation Extension Partnership, modeled after the current Manufacturing Extension Partnership. Such a program would promote and enhance states' capacity to cultivate regional innovation clusters and would be tailored to leverage local expertise and resources to create an environment for investment.

If the U.S. is to maintain its economic preeminence, it must adapt and respond to worldwide trends such as technological advances, the growth of new free market economies and global competition, McCurdy concluded. "In the past, developing nations followed the U.S.'s lead in encouraging investment and fostering technological innovation. Now those same nations aspire to lead. We must respond to the challenge and plan."

The Technology Industry at an Innovation Crossroads can be accessed online at www.eia.org/outsourcing.

About EIA: The Electronic Industries Alliance is the leading trade organization in the U.S. for the high-tech industry. Its 2,500 member companies provide products and services ranging from microscopic electronic components to state-of-the-art defense, space and industry high-tech systems, as well as the full range of telecommunications and consumer electronic products. EIA's mission is to promote the market development and competitiveness of the U.S. high-tech industry through domestic and international policy efforts. For more information, please visit www.eia.org.