The Shot In the Arm Our Economy Needs to Recover

There has been a dramatic shift in the U.S. government’s priorities from last year’s G-20 summits to the conclusion of this year’s summit.

Increased government spending was one of the four “agreements” reached at last year’s G-20 summits in London and Pittsburgh, which President Obama articulated and reiterated frequently after the summits concluded; However, recent G-20 Summit in Toronto, the U.S. government’s emphasis shifted notably, focusing on the need to reduce long-term deficits.

The Obama administration’s shift is not surprising, to say the least.

Sixteen months after a largely ineffective stimulus plan that has left more than 30 million U.S. workers unemployed, and with the economies of developed countries’ budget deficits increasing from an average of 1.1% of national income to 8.4% in three years, it is very difficult for the government to endorse increased spending.

We are now at a crucial point in our path to economic recovery. While we are no doubt in a better position than we were two years ago, we must find a way to stimulate the economy without a massive new stimulus package that is too expensive, would increase our deficits even further and one that we simply cannot afford.

One of the best and least obvious ways to stimulate the economy is through medical innovation. Investing in medical innovation will not only lead to the development of new medications, treatments and advancements in the health field, it will create jobs that help stimulate local economies, reduce our deficit and decrease health care costs.

Put simply, medical innovation is our country’s best hope to come out from this economic recession stronger than we were before. Medical innovation is critical to economic revitalization. In order to remain one of the leading nations in the world, we need to invest in medical research and development and in creating a skilled workforce so that we can develop new medicines and new technologies to face the challenges of the 21st century.

While most industries have shed jobs in the past few years, the health care industry has added almost 700,000 jobs since the start of the recession.

Private and public investment in medical research and innovation will create jobs, bring down our deficit and reduce health care costs. The jobs and new businesses related to this crucial sector are high paying and span across a diverse range of fields.

In California, research institutions and biomedical businesses employ over 235,000 people. Ninety-six percent of California voters feel that innovation and technology are an integral part of the state’s economy, according to a recent public opinion poll.

America’s economic leadership is ours to lose. A new report by the Institute for Management Development shows the United States has fallen to third place in global competitiveness, behind Hong Kong and Singapore. The U.S. must move forward with a committed and aggressive medical innovation agenda that will help get our economy back on track, facilitate the work of innovators, and produce new products that will address some of the world’s most pressing medical challenges.

So what then, should be done?

Leaders in the public and private sectors need to join together to form unique and coordinated partnerships to eliminate gaps in funding, so that medical advancements can be developed efficiently, and so that the U.S. can remain competitive.

Congress should make the federal research and development tax credit permanent and raise it so that it is globally competitive, thus incentivizing investments that will ensure that we will be at the forefront of medical innovation. According to the Information Technology and Innovation Foundation, expanding the research and development tax credit from 14% to 20% would create 162,000 new jobs.

Congress should also create tax and economic incentives to boost manufacturing and export-related job growth resulting from medical innovation. Such measures to strengthen investments in research, development and manufacturing will foster job growth and enhance America’s competitiveness.

The U.S. must also enhance regulatory sciences efforts at the Food and Drug Administration (FDA). From 2005 – 2008, the FDA only approved about 19 truly new medicines, compared to an average of 31.13 from 1990 to 1999.

We need our federal leaders to strengthen and fund the development of a Regulatory Sciences Roadmap, which would build upon and advance current efforts to bring the best science to the review and approval of biomedical advances.

Finally and perhaps most importantly, we need to strengthen and grow the talent pool of individuals who can develop these medical innovations and keep our country at the forefront of advancements. This should be done by improving our education system through federal support for the biosciences through K-12 science, technology, engineering and mathematics education efforts.

Only 52% of 12th graders and 57 percent of 8th graders are at or above a basic level of achievement in the sciences. With the U.S. falling behind other countries in math and science test scores, we must act on this problem immediately and drastically.

These steps will not only create jobs and spur the development of new medications and treatments, but they will make our country healthier and stronger in the long-term. Now is the best time to address the growing deficit and health care costs and drive economic growth.

Doug Schoen is a Democratic pollster, author and Fox News contributor. 

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