Idea Generation

At a hearing to commemorate the U.S. House Committee on Science and Technology 50th
anniversary, Microsoft Corp. Chairman Bill Gates focused on the future of innovation and U.S.
competitiveness, including education and work-force development, the need for immigration reform
to allow highly skilled workers to remain in the U.S, and the need to continue to invest in basic
research.

“I know we all want the United States to continue to be the world’s center for innovation. But our
position as the global leader in innovation is at risk,” Gates said. “If this nation is to continue to be
the global center of innovation, Congress, the current administration and the next president must act
decisively.”

In his testimony , Gates addressed the following important areas:

• Science and math education must be improved. Gates argued that U.S. companies face a severe
shortfall of scientists and engineers with the skills necessary to develop future innovative
technologies. “If we don’t reverse these trends, our competitive advantage will continue to erode.
Our ability to create new high-paying jobs will suffer,” Gates said. “Companies like Microsoft and
organizations like the Bill & Melinda Gates Foundation cannot address these issues alone. Only the
government has the resources to effect change on a broad scale.” Gates praises Congress for passing
the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education
and Science Act (COMPETES Act) of 2007, but says it now must follow through by fully funding the
legislation’s educational initiatives. He also urges Congress to increase the use of data to measure
student improvement.

• U.S. immigration policies need to allow American companies to hire the best talent. Gates
called on Congress to reform immigration policies to allow more highly skilled professionals to work
for companies in the U.S. “At a time when talent is the key to economic success, it makes no sense
to educate people in our universities, often subsidized by U.S. taxpayers, and then insist that they
return home,” he said. “To address the shortage of scientists and engineers, we must ... reform our
education system and our immigration policies. If we don’t, American companies simply will not
have the talent they need to innovate and compete.” Gates urges Congress and the White House to
address this problem by extending the period that foreign students can work in the U.S. after
graduation, raising the cap on H-1B visas, creating a clear path to permanent residency for high-
skilled foreign-born employees and increasing the number of green cards. “The shortage of scientists
and engineers is so acute that we must do both: reform our education system and reform our
immigration policies.”

• Funding for basic research should be increased. Gates believes basic research funding is an
essential part of keeping American companies competitive and sparking new industries. “Even
though we know that basic research drives economic progress, real federal spending on basic
research has fallen since 2005,” he said. “I urge Congress to increase funding for basic research by
10 percent annually for the next seven years.” Gates said that federal funding for basic research
supports the education of the next generation of scientists and engineers, and provides the raw
material that U.S. companies transform into commercially successful products.

Gates said he is optimistic that information technology will continue to transform business
productivity and the quality of our day-to-day lives, adding that private companies alone cannot
ensure that the U.S. will remain the pre-eminent force in innovation. “Without leadership from
Congress and the president ... and the commitment of the private sector to do its part, the center of
progress will shift to other nations that are more committed to the pursuit of innovation,” Gates said.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and
solutions that help people and businesses realize their full potential.