The Water Cooler: R&D Credit & “The State of the Union”

Every Monday, Bryan Glanzberg contributes The Water Cooler, a new column that bridges the gap between technology and business.

So now that Bush’s State of the Union has come and gone, we of course need to reflect on what the implications are on the economy. Wall Street fluctuated due to the “changing of the guard” with Greenspan heading out (for better or for worse… that is to be determined). Among the major points of his speech, one important one for the technology sector was the extension of the research and development tax credit. His initiative is to encourage growth among consumer and household electronics so that we may further improve the quality of our lives and automate things further.

I am a strong proponent of the R&D credit and I think the amount of money that companies save on this tax break is a spark for further innovation; pharmaceutical companies especially, but many other major industries as well.

Bush (to our surprise) insisted that this country is “addicted to Middle-Eastern oil.” First off, do not let this fool you and make you believe that we will quickly be non-reliant on oil because only about 10% of our supply actually comes from the Middle East. What will be very interesting is to see whether the big auto manufacturers begin to invest heavily in research for my fuel efficient technologies.

I think that it is in part what could save companies like GM; focus on innovative new technology in order to drive sales. Overall I think the extension of the R&D credit was a necessary one and will continue to enhance the society that we live in. One can only wonder though where the President really wants us to go… because every company more or less has a strategic goal of providing for innovative technology and gaining above average returns for investors; is he doing what is right for the country or what is right for business. I will let you determine that.

Source: News.com