It makes available additional financial resources to companies seeking to accelerate research efforts. It lowers the economic risk to companies seeking to initiate new research, which will potentially lead to enhanced productivity and overall economic growth. Finally, customers benefit from advances in technology that improve their productivity and ability to compete. By making other industries more competitive, research within one industry contributes to preserving and creating jobs across the entire economy. Research projects cannot be turned off and on like a light switch.
Research projects have long horizons and extended gestation periods.
They must often invest in new physical plants and equipment. There is little doubt that a portion of the incentive effect of the credit has been lost over the past seventeen years as a result of the constant uncertainty over the continued availability of the credit. Only then will the full potential of its incentive effect be felt across all the sectors of our economy. No one has said this more forcefully than Federal Reserve Chairman Alan Greenspan who testified at last week's high technology summit. Chairman Greenspan was emphatic in his conclusion that, if there is a credit, it should be permanent.