ITIF: The Trump Administration would torpedo US growth if it adopts Heritage Foundation’s budget blueprint
Amid news reports that the Trump administration is considering a budget blueprint developed by the conservative Heritage Foundation to slash trillions of dollars of federal spending, the Information Technology and Innovation Foundation (ITIF) has warned that key aspects of the Heritage plan are premised on erroneous assumptions, empirical inaccuracies, and misguided leaps of logic, and adopting these particular proposals would severely harm U.S. innovation, productivity, and competitiveness.
ITIF, the top-ranked science and technology think tank in North America, concluded in its analysis that the country has suffered for more than a decade from chronic underinvestment in foundational areas such as science, technology, education, and infrastructure. Crippling key functions of the federal government that support business innovation and competitiveness, as the Heritage blueprint would do, would only compound the damage.
“The administration and Congress need to recognize the difference between wasteful spending and critical investment,” said Robert D. Atkinson, ITIF’s president and the report’s co-author. “There are certainly federal programs that can be cut with little to no impact on economic growth. However, many federal programs compensate for serious market failures and play a pivotal role in ensuring the United States is succeeding in global economic competition. Unfortunately, Heritage dwells in a fictional world where market outcomes are by definition optimal, even if the winners aren’t on U.S. shores, and where government programs are by definition failures, even when there is evidence to the contrary. In the real world, we need to adopt a more nuanced, less ideological approach to put the U.S. economy, businesses, and workers in a position to flourish.”
“The United States has suffered from private and public underinvestment for more than a decade,” Atkinson continued. “Crippling key functions of the federal government, which would be the consequence of adopting Heritage’s budget, will set the nation back even further.”
The ITIF report breaks down Heritage’s doctrinaire errors in two major areas: trade and competitiveness, and energy and R&D. On the first, ITIF says the Heritage plan pretends that the United States and its industries are not in competition with other nations, because whatever the market produces are ideal by definition. This simplistic worldview ignores the fact that if the United States loses traded-sector output to other countries, then it will also lose jobs and face more expensive imports. As ITIF points out, conservative governors and mayors recognize these facts and promote state-level economic development programs to maximize the benefits of economic competition. Federal programs like the Export-Import Bank, Manufacturing Extension Partnership, and the U.S. Interagency Trade Enforcement Center complement these efforts, and cutting them as Heritage proposes would only diminish U.S. competitiveness further.
ITIF points out that Heritage’s plan also ignores market failures like the lack of investment in technology commercialization. While many of these investments do pay off, there is less than optimal private-sector activity because these investments are viewed as too long-term or risky. Programs like the Small Business Innovation Research (SBIR) and Small Business Technology Transfer initiatives, which Heritage suggests cutting, counter this market failure. Unfortunately, Heritage’s ideological position predisposes it to detest government programs despite evidence of their success. For example, a recent study found that for every dollar the Air Force spent on its SBIR program, it returned $3.60 in sales and 50 cents of additional outside investment or venture capital.
With regard to energy and R&D, ITIF argues that by calling for the elimination of all climate-related programs and for massive cuts to basic R&D, the Heritage proposal blithely disregards the scientific consensus on climate change. This is not just bad environmental policy; it also makes no sense as an economic program. In particular, the Heritage plan ignores biases in the energy market that favor incumbents and the complementary nature of public and private investment in this space. ITIF argues that if the United States fails to accelerate its progress toward cheaper, cleaner energy, then the pressure for a regulatory and tax response to reduce reliance on dirty energy will grow. What Heritage fails to understand is that federal support for clean-energy innovation in the near term will limit the need for such costly and heavy-handed responses later.
“America’s economic and energy challenges are too great for policy to be shaped by ideological extremists, either on the right or the left,” said Stephen J. Ezell, ITIF’s vice president for global innovation policy and the report’s lead author. “Targeted federal government programs to help businesses in America are not crony capitalism. They are smart economic development programs, the very same kind that the most conservative Republican governors champion. To foster an innovative and competitive economy in a turbulent and sometimes hostile world, the U.S. government must use an array of tools, but use them judiciously. Heritage’s kit contains only one tool: the axe.”
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Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.