Qualcomm, a developer of mobile-phone chips and technology based in San Diego, earns roughly 40% of its revenue from licensing and royalty fees for technology developed primarily in America, where three-quarters of its employees work. Last year it spent $2.5 billion, or roughly 20% of revenue, on R&D for such projects as developing Mirasol, an easy-to-read, energy-efficient phone display. Paul Jacobs, the company’s boss, complains about high corporate-tax rates and the difficulty of getting immigrant visas for foreign-born engineers and scientists, but maintains that America is not about to be superseded as a centre for innovation. In California Qualcomm has access to the best college graduates and a pool of ideas and recruits generated by a nexus of established and start-up companies.
But Qualcomm has done no manufacturing of its own since selling its last handset plant in 2000. Although Mirasol was developed in America, the displays will be made in Taiwan, which has the skills, the suppliers and the economies of scale.
These findings present a dilemma for America’s policymakers. Raising federal R&D spending and easing immigration for foreign-born PhDs would boost innovation and company successes, but would not produce many jobs. Mr Spence and Mr Atkinson would like to see government incentives aimed at strategic manufacturing sectors. But such policies have a poor track record. And in any case Congress is in no mood to pay for them, no matter what Mr Obama says.
