Balancing competitiveness with freedom: Reflections on the U.S. Innovation and Competition Act
June 10, 2021
UIDP’s member webinar yesterday on legislative efforts to address U.S. security concerns could not have been more timely. Leslee Gilbert, vice president of government affairs firm Van Scoyoc Associates, brought her expertise to discuss legislation that passed the U.S. Senate Tuesday night—the United States Innovation and Competition Act (USICA). Drew Wayne, director of government affairs for Siemens, expertly moderated the discussion (members can view the video on demand).
At a high level, the bill is intended to mitigate China's rapid technology development trajectory by investing more than $200 billion in American research and innovation.
The bill that passed is a far cry from its origins in the Endless Frontiers Act. More than 600 amendments were offered and provisions were wrapped in from more than a dozen related pieces of legislation—which eventually produced a bi-partisan act that passed the Senate by a healthy margin of 68-32.
Although the road ahead includes additional steps—consideration and movement out of three House committees, followed by a vote in that chamber, and then reconciliation with the Senate version that passed last night—Gilbert is optimistic that USICA will eventually become law. “The fact that this had strong bipartisan support from the get-go is really remarkable and bodes well to getting to a final passage by the end of the year,” she said.
The legislation contains provisions of high interest for all UIDP members. The primary goal is to shore up U.S. economic competitiveness and security by boosting U.S. innovation and R&D. This includes $81 billion in new funding to the National Science Foundation for, among other things, creation of a new NSF technology directorate, as well as increased funding for research for 10 focus including artificial intelligence, cybersecurity, robotics, and biotechnology.
The emphasis for NSF funding will be on getting research through the “valley of death” through tech translation. “A lot of universities are already doing research in these areas and the topics are all included in NSF’s Big Ideas,” Gilbert said. Her advice is for university and industry research partners to keep an eye on the funding levels as more opportunities, especially in the applied realm, will become available.
Creation of regional technology hubs is another aspect of the bill. Notably, a third of these hubs are required to be located in rural areas, and there are provisions for minority-serving and EPSCoR institutions to collaborate on establishing these hubs.
Because security and competitiveness is implicit in the bill, it also includes provisions that can affect the burden of conducting collaborative research. Specific controlling provisions affect:
? Personnel. Proposed visa restrictions would allow the executive branch greater power to deny visas to people from specific countries who are believed a risk to leak intellectual property. There are also controls on the ability of faculty to participate in talent development and recruitment programs hosted by China, Russia, North Korea and Iran.
o Gilbert said the prohibition on faculty participating in these programs was surprising. “It doesn’t just require more reporting if faculty are involved in these programs. It means that they won’t get federal funding if their faculty are participating in those programs.”
? Gifts or Payments. Folded into the USICA legislation are elements of the Safeguarding American Innovation Act that expands university reporting thresholds for foreign gifts or contracts—from gifts greater than $250,000 to anything larger than $50,000. Fortunately, the legislation also requires the Department of Education to use a rule making process to more clearly delineate what universities need to report.
o There are new Committee on Foreign Investment in the U.S. (CFIUS) reporting requirements included as well, which have raised concern among universities because of significant additional reporting burden. However, there are conflicting provisions put forward by the Senate Banking Committee that would exempt universities from this review process included in the legislation as well. This difference is one of many points that will be decided before USICA becomes law.
? Cultural Values/Free Speech. USICA brings stronger provisions against Confucius Institutes, requiring greater reporting and compliance if institutions choose to keep these. Universities that do so and fail to comply with new reporting criteria risk losing all U.S. government grant and contract funding. The legislation aims to preserve intellectual property rights in particular, directing the executive branch to bring entities using unfair trade practices under harsher scrutiny and ensuring that free speech in particular is protected within international R&D collaborations.
There will no doubt be significant changes as the House version of the bill advances and both chambers work through differences. UIDP was pleased to bring this member update on these evolving legislative matters, and we’re grateful to Leslee Gilbert and Drew Wayne for contributing their significant expertise.