US President Barack Obama has called for another "Sputnik moment", saying America must invest in innovation and technology and seize new opportunities to remain competitive with nations like India and China.
"We need a commitment to innovation we haven't seen since president (John F.) Kennedy challenged us to go to the moon," he said in a speech on Monday in Winston-Salem, North Carolina recalling what the US did in the 1950s and 60s to match the Soviet Union after it launched the first satellite Sputnik.
Warning that countries like India, China, and South Korea posed fierce economic competition by focusing on educated workers, research and technology and quality infrastructure, Obama said the US was not keeping up.
"When global firms were asked a few years back where they planned on building new research and development facilities, nearly 80% said either China or India - because those countries are focused on math and science, and they're focused on training and educating their workforce," he noted.
Recalling his visit to India and three other Asian countries in November, Obama said, "You've got a billion people in India who are suddenly plugged into the world economy. You've got over a billion people in China who are suddenly plugged into the global economy."
"And that means competition is going to be much more fierce."
Obama said one reason why more companies are choosing to do their research and development in places like China and India, was "because the United States now ranks 24th out of 38 countries in the generosity of the tax incentives we provide for research and development".
"There is no doubt that we are well-equipped to win," said Obama. "But as it stands right now, the hard truth is this. In the race for the future, America is in danger of falling behind."
To encourage homegrown American innovation, the president said he "proposed a bigger, permanent tax credit for companies for all the research and innovation they do right here in America. All of it."
"We need to do what America has always been known for - building, innovating, educating making things," said Obama.
Deputy Press Secretary Bill Burton described the president's North Carolina remarks as the beginning of a process in which Obama will roll out new ideas and proposals aimed at moving the economy forward, some of which will be presented in his State of the Union Address early 2011.