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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release December 3, 1999

        PRESIDENT CLINTON HIGHLIGHTS PROGRESS TOWARD BUILDING A
                      HIGH-TECH, HIGH-WAGE ECONOMY
                            December 3, 1999

Working with Congress on a bipartisan basis, the Clinton Administration succeeded this year in winning approval for key components of its high-tech agenda -- an agenda that will foster economic growth, improve America's ability to compete and win in global markets, and help create more high-tech, high-wage jobs. These new investments will build on the Administration's work since taking office to boost high-tech investment and innovation.

Important New Steps to Spur High-Tech Growth. Major legislative accomplishments this year include:

Extending the Research and Experimentation Credit. The tax legislation that the President will sign this month includes a five-year extension of the Research and Experimentation credit - the longest extension ever. Congress has often extended the credit 12 or 18 months at a time, sometimes at the last minute or after the credit has expired. Research and development projects in industries such as pharmaceuticals and electronics can easily take 5-10 years from planning to completion. A longer extension will allow companies to count on the credit in a way that they have not been able to in the past.

Increasing Balanced Investments in Long-Term Research and Development. Many of the technologies that are driving America's economy today can be traced back to far-sighted government investments made in the 1960's and 1970's. The Administration believes that it is important to increase research not only in biomedical research, but in all science and engineering disciplines. This is because breakthroughs in one scientific field are often dependent on advances in other areas. Biomedical research, for example, benefits from advances in physics (CAT scans) and computer science (faster development of drugs). That's why President Clinton and Vice President Gore fought for increases in long-term research and development in all science and engineering disciplines. The final budget included: (1) a more than $3 billion increase in the "21st Century Research Fund" for key civilian research programs in a wide range of science and engineering disciplines; (2) an historic increase of more than $220 million in information technology research based on the recommendations of the President's Information Technology Advisory Committee; (3) $80 million for the Next Generation Internet, which is connecting more than 100 universities at speeds that are up to 1,000 times faster than today's Internet; and (4) a 6.6 percent increase in support for research and education at the National Science Foundation - a leading supporter of university-based research.

Reforming our patent system for America's entrepreneurs. The patent reform legislation that the Administration fought for and that the President signed last week will help meet the needs of America's inventors and entrepreneurs. It will strengthen the U.S. patent system in a number of ways, including provisions to: (1) crack down on fraudulent invention promotion services; (2) extend the term of a patent when there is an excessive administrative delay in the issuance of the patent; (3) require the timely domestic publication of patent applications that are also filed abroad; (4) make it easier for the public to call for re-examination of a patent without requiring costly court litigation; and (5) make the Patent and Trademark Office a Performance-Based Organization, which will make the office able to more effectively serve America's entrepreneurs and innovators.

Increasing competition between satellite and cable TV companies. The Administration strongly supported the Satellite Home Viewer Improvement Act, and successfully fought for changes to improve the legislation. The act will increase the ability of satellite companies to compete against cable companies, and will result in more customer choice, lower prices, and increased access to local news and information. The legislation allows satellite television companies to provide local broadcast stations to their subscribers. The inability to offer local programming had been one of the biggest roadblocks to their ability to compete effectively against cable companies. As of January 2002, a satellite service must carry all local channels in a market where it carries any local channels. Since the President signed the bill, satellite companies have responded by making local channels available in some of the major markets.

Building on a Record of Progress. Since taking office, President Clinton and Vice President Gore have pursued policies that have allowed America's high-tech industries to flourish. One month after they assumed office, the President and Vice President released their comprehensive agenda -- "Technology for America's Economic Growth." And every year since then, they have worked to increase investment in long-term research and development, open foreign markets for America's high-tech goods and services, promote the Internet and electronic commerce, remove regulations that were impeding America's entrepreneurs, and prepare America's workers for the high-tech workplace of the 21(superscript: st) century. This focus on high-tech issues has helped fuel America's economic growth - and will also help increase the standard of living of future generations of Americans. New technologies are playing an increasingly important role in our economy -- a trend likely to increase in the future.

Information technology and other R&D-intensive sectors are driving the economy. Between 1995 and 1998, the information technology sector alone has accounted for 1/3 of America's economic growth. In 1996 and 1997, rapidly falling prices in the IT sector reduced inflation by almost a full percentage point. Moreover, all companies are using information technology to compete and win in today's global marketplace. Information technology now accounts for almost one-half of business investment. Companies are using IT to tailor their products and services to the needs of individual customers, forge closer relationships with their suppliers, and deliver just-in-time training to their employees. Electronic commerce between businesses could reach $1.3 trillion by the year 2003 in the U.S. alone.

High-Tech = High Wages. Jobs in the information technology sector pay almost 80 percent more than the private sector average. In 1997, workers in IT industries earned $53,000, compared with an economy-wide average of $30,000.

Preparing the Future Generations for a High-Tech World. President Clinton and Vice President Gore have set a national goal of ensuring that every child is technologically literate. That means that children will understand the mechanics of using computers and the Internet, but also be able to use it to improve their performance in all academic subjects -- and be able to acquire and synthesize information from multiple sources. The Administration's educational technology strategy has four pillars: connecting every classroom and library to the Internet by the year 2000; technology training for teachers; modern computers in the classroom; and high-quality educational software and content. As a result of the Clinton-Gore educational technology initiative: (1) the number of classrooms connected to the Internet has increased from 4 percent in 1994 to 51 percent in 1998; (2) the "e-rate," part of the Telecommunications Act of 1996, is providing $2.25 billion annually in 20% - 90% discounts to connect schools and libraries to the Internet, with the deepest discounts going to the poorest schools that need it most [our total investment in educational technology at the federal level (including the e-rate) has increased from $23 million in 1993 to over $3 billion today]; and (3) grants supported by the Department of Education are training 400,000 new teachers to use technology effectively in the classroom.

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