Pushing the Private Sector to Prioritize American Jobs

The reorganization of President Barack Obama's economic team is exactly what's needed now.

All groups benefit from periodic renewal and the fresh perspective it brings. The president's timing is perfect. We are turning a crucial corner in our recovery from the unmitigated disaster of the Bush-GOP economic meltdown.

Thanks to the Obama administration's previous economic team and the Democratic Congress these past two years, we have staved off a second Great Depression. Job losses seem to have plateaued, and unemployment is beginning to slow.

The team's task now will be to institute policies that lead to a dynamic high-growth economy, placing us at the forefront globally.

The president was absolutely right in his State of the Union address to cite American innovation as a key area for investment. His challenge to scientists and engineers to invent clean energy technologies is an ideal example of effective leveraging of limited federal dollars to produce big results.

When Obama's new team devises a game plan to spur innovation, however, it is critical that these advisers do not overlook the challenges of "scaling up" -- the process by which innovation is brought to the market.

Policies that favor scaling up domestically, as opposed to overseas, are essential to ensuring that American ingenuity generates U.S. jobs -- not just a high Dow Jones Industrial Average.

Representing Silicon Valley in Congress, I have seen the price Americans pay when scaling up occurs overseas. It undermines our domestic manufacturing.

Apple Computer, for example, has long been a darling of the stock market, with good reason. Its innovative products have consistently led the technology market. Apple changed the way we listen to music, use our cell phones and look at e-mail and other media.

Yet for all its success, Apple has only 25,000 stateside employees. But it has more than 225,000 abroad.

Apple is hardly an anomaly. Time and time again, we have seen U.S. workers lose out because we lack a stateside scaling-up strategy.

In another example, Americans pioneered flat panel displays. But no one makes them in the U.S. anymore. The entire industry has gone to Taiwan and South Korea because they had a strategy to succeed in the field, while the U.S. had no strategy for protecting and preserving domestic manufacturing.

Meanwhile, Taiwan has become a leader in promoting "scaling up" through programs and institutions, like its Industrial Technology Research Institute, which claims it is "spearheading original and innovative industrial research, transfer of technology and product developments."

The president is on the right track with his energy challenge. But the idea is really not new. Congress created something similar with the L Prize Program at the Department of Energy, to spur development of advanced solid state lighting -- an LED light bulb that can replace incandescent bulbs.

The program was successful in encouraging private industry -- in this case, Philips Lumileds Lighting, based in Silicon Valley -- to develop a product to win the prize. But unless we follow through with policies that encourage manufacturing to take place here, the company, which has significant operations in other countries, may be forced to take manufacturing elsewhere to be competitive.

The takeaway here is simple. The president's economic team must focus on creating policies that encourage scaling up American innovation into American manufacturing.

That is the only way we can keep Americans working -- and the only way America's race to the top will work.

Rep. Mike Honda (D-Calif.) serves on the House Appropriations and Budget committees and is the Democratic senior whip.