Silicon Valley: Top executives from high-tech companies today (Jan 8, 2004) urged US policymakers to avoid protectionist trade measures that could hurt the industry's global competitiveness and lead to further loss of American jobs.

Computer Systems Policy Project (CSPP), one of the high-tech industry's leading advocacy organisation which includes CEOs of Intel, Dell and Hewlett-Packard Co, issued a report urging the Government not to fight the tide of globalisation and instead make efforts to improve US industry's global competitiveness.

The report entitled "Choose to Compete: How Innovation, Investment and Productivity Can Grow US Jobs and Ensure American Competitiveness in the 21st Century," released in Washington, specifically called on policymakers to expand support for research and development, maintain a business climate that rewards risk and entrepreneurship, and improve education and training.

"As the US encounters new global realities, policymakers face a choice: we can compete in the international arena or we can retreat," said Craig Barrett, CEO of Intel Corporation and chairman of CSPP.

"America can only grow jobs and improve its competitiveness by choosing to compete globally, and that will require renewed focus on innovation, education and investment."

Global competitiveness in the IT industry is stiffening, the report said adding the US had to engage in global competition and that meant moving operations to developing markets, such as China, India and the Philippines.

"We can either choose to compete with the rising powers of China and India and other would-be economic leaders and take advantage of worldwide business opportunities or we could retreat," Bruce Mehlman, CSPP executive director said.

"As a nation we face the choice of whether or not we want to erect barriers to keep out our new competitors because we don't think we can overcome them," he added.

The industry report argued that by hiring lower cost workers abroad it can improve profits and expand, which, in turn, results in new American jobs.

The report said Governments overseas are targeting the US technology industry through tax breaks and subsidies for their companies, currency manipulation and incentives for worker training. Even so, the US must be careful not to take steps that might ignite a trade war.

"Any trade barriers created by the United States in an attempt to avoid global competition could lead to retaliation from our training partners and even an all-out trade war -- resulting in a drag on the global economy and reduced employment here at home," the report said.

"IT companies need ready access to foreign markets to compete for foreign business and keep Americans working to serve global customers," the report said, adding "trade must work both ways; protectionist measures must be avoided in the United States as well as abroad."