By US Daily Review Staff.
Today, the Center for Public Policy Innovation (CPPI), a not-for-profit educational think tank, published a special report on the impact of public policy on strategic business planning & global investment, which identifies several important policy changes that could help strengthen American global competitiveness in the coming years. The report follows CPPI’s March 21st Public Policy Forum, co-sponsored by the Digital Dialogue Forum (DDF), which brought together Chief Financial Officers (CFOs) from three of America’s leading technology companies – Dell, Qualcomm and NCR – to discuss how public policy impacts strategic business planning, operations, and international trade at United States-based multinational companies.
“The current policy and regulatory environment has made the job of the CFO very challenging from a strategic planning and global investment standpoint,” remarked Chris Long, CPPI’s president and CEO. “Today’s CFO must be integrally involved in every major decision impacting their company – from financial reporting to new corporate investments – to help give them a competitive advantage in today’s rapidly changing global marketplace. This report sheds new light on how public policy can make a significant impact on business decisions that enable American companies to better compete both at home and abroad.”
Key findings from CPPI’s special report include:
Comprehensive Tax Reform is Needed to Help American Companies Compete Globally. Since Japan lowered its corporate income tax rate in April of this year, the United States now holds the highest corporate tax rate in the world among developed nations, with a federal/state integrated rate of 39.2 percent. CPPI’s panelists suggested the U.S. corporate tax rate should be reduced closer to 25.4 percent, which is the average rate for developed countries, according to the Organization for Economic Cooperation and Development. Panelists also agreed that moving to a territorial tax system will strengthen American companies’ ability to compete in the global marketplace. “CFOs, CEOs and job creators must work together to achieve a more competitive, pro-growth tax code,” remarked U.S. Congressman Pat Tiberi (R-OH), chairman of the House Subcommittee on Select Revenue Measures, at CPPI’s March forum.
Incentives Attract Corporate Investment. Competitive tax rates and other incentives offered by foreign governments attract American corporate investment while in many cases U.S. policies and regulations deter investment at home. Also, research & development tax credits in countries like China and India provide extended periods of certainty for companies, allowing CFOs to better plan for the future. According to NCR’s CFO Bob Fishman, some local governments in the United States – such as the State of Georgia – have begun to aggressively court corporate investment through targeted tax credits, infrastructure improvements, and ready access to skilled labor.
The Availability of a Highly Skilled Workforce Factors into Corporate Planning. Historically, the United States’ education system attracted the best and brightest students in the world. Today, however, foreign-born students are finding it increasingly difficult to remain in the United States after graduation, due in large part to outdated immigration policies. The United States is also trailing other countries in graduating students with advanced degrees in Science, Technology, Engineering and Mathematics. The U.S. ranks 27th among developed nations in the proportion of college students receiving undergraduate degrees in science and engineering and 49th in the quality of math and science education. “The global demand for highly skilled workers is growing and the United States is falling behind. I think we’re at the edge, in some parts of our businesses, of maxing out when it comes to finding and accessing talent here in the U.S. and that’s forcing us to go look in other parts of the world,” noted Dell CFO Brian Gladden.
Global Expansion Boosts Corporate Growth in America. The success of American companies overseas benefits their U.S. operations by making them more profitable, growing their business, and building a more talented and diversified workforce. Another important aspect of global expansion is the formation of strategic global partnerships in emerging markets which will help diversify the risk for multinational U.S. companies. As such, free trade agreements provide a useful framework for how American and foreign businesses interact. As Qualcomm’s CFO Bill Keitel noted, “Without that framework, a company such as Qualcomm, Dell or NCR, can be whipsawed by the local authorities. That framework provides an opportunity for the United States to help American businesses when operating on foreign soil.”