Updated at 8:39 a.m. on January 26.
In his State of the Union address, President Obama offered technology companies something they say they desperately need to stay competitive in a global economy: a substantial and potentially historic increase in federal funding for research and development. But with no details about how this goal would be achieved, or guarantees that Congress will approve the proposed spending hikes in this era of belt-tightening, the pledge is a headline grabber that will be tough to implement.
The president also sought to appease the tech sector on another front with a promise to overhaul the corporate tax code. But here again, the details were sketchy and appear to fall short of what high-tech corporations have sought. His plan involves closing what he described as overseas tax loopholes and using the savings to lower the domestic corporate tax rate, among the highest in the world. The goal is to spur more U.S. companies to invest at home rather than abroad, but expect companies to fight to retain those loopholes, which they insist are incentives designed to keep them competitive overseas.
The president’s proposals in other areas also face hurdles:
- Obama pledged to improve math and science education, but previous efforts in this area have failed as other nations, such as India and China, pull ahead on educating the next generation of innovators.
- Lamenting that South Korean homes have faster and more ubiquitous Internet access than those in the U.S., Obama proposed that within five years, the next generation of high-speed wireless service would be deployed to 98 percent of all Americans. The operative word here is “deploy,” meaning that the coverage merely would be available. Getting Americans to adopt broadband is a much tougher challenge. Obama’s Federal Communications Commission put forward a detailed plan last year that calls for connecting 90 percent of Americans to the Internet in 10 years, a tall order given that only two-thirds of Americans subscribe to broadband and some rural areas lack service.