Page last updated at 10:50 GMT, Friday, 8 January 2010

Governments stifle hi-tech innovation, says trade group

By Maggie Shiels
Technology reporter, BBC News, Las Vegas

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Border controls for skilled workers should be eased, said the CEA

Government needs to do more to encourage innovation, America's first chief technology officer has been told.

The message was given to Aneesh Chopra as he visited the Consumer Electronics Show (CES) in Las Vegas.

While being applauded for recognising the importance of technology to help the economy, Mr Chopra was also chided.

"When it comes to innovation there's a lot the government can do, and there's a lot they should not do," said consumer industry head Gary Shapiro.

"The government doesn't spur innovation or entrepreneurship. The government often gets in the way," said Mr Shapiro, president of the Consumer Electronics Association (CEA) which stages CES.

The CEA said the faltering economy meant the importance of innovation was a growing concern among a majority of Americans.

A national study by Zogby International found that 96% believe innovation is critical to the success of the US as a world economic leader.

The weakening financial markets meant that in 2009 America was overtaken as the most competitive economy by Switzerland.

Industry gripes

The CEA's concerns centre around three main issues.

It would like the government to make it easier for skilled workers to come to the US from countries like India and China.

It advocates a change in trade policy so American exports can compete with goods from other parts of the world being sold cheaper on international markets.

It also had little support for President Obama's $787bn (£490bn) stimulus act calling it "panic spending" and warned of the growing federal deficit.

The Zogby survey showed that nearly 60% of Americans asked think the rising national deficit will have a major impact on the prosperity of future generations.

"The government is often a barrier," said Mr Shapiro. "High taxes and regulatory bureaucracy are barriers."

In response, Mr Chopra said the CEA's criticisms had some weight.

"We don't have to agree on every issue, but we can always say we have room for improvement to spur innovation and entrepreneurship," said Mr Chopra during a CES press conference.

"We have to eat our own dogfood - Gary is right about the federal deficit. We are in an economic crisis but we are going to tackle it. We have to get this right," Mr Chopra told journalists.

He said the US government was planning a summit with a number of chief executives from the "most innovative companies in the country to directly advise us to make government more efficient and more effective".

Mr Shapiro said that while 2009 was a terrible year for the consumer electronics industry, things were looking up.

"There is now light at the end of the tunnel and it is the bright light of innovation. We are seeing more innovation at this show than at any show in our history," added Mr Shapiro.

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