Innovation is Not Enough

The Biden administration's proposed subsidies for R&D won't by themselves do much to improve American competitiveness. A suggested $50 billion funding boost for the National Science Foundation spread over several years represents roughly a tenth of what U.S. corporations spend on R&D each year. Meanwhile, Biden's proposed corporate tax hike will cut corporate R&D budgets, shifting R&D away from the private sector and toward universities and national laboratories.

The private sector produces the overwhelming majority of new concepts and, more critically, turns them into added value. Private companies obtained 85 percent of all U.S. patents in 2016, and individuals comprised an additional 9 percent. Universities, by contrast, accounted for only 4 percent of the total, and government laboratories just 1 percent. The Biden plan would drain resources from the private sector, which is the main source of practical innovation.

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