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• Since its inception in 1981, the R&D tax credit has been extended 11 times, has completely lapsed once, and is currently expired.
• The credit is claimed annually by between 14,000 and 16,000 firms distributed relatively evenly by size.
• The U.S. Bureau of Labor Statistics estimates that every dollar of tax benefit has spurred an additional dollar in private research and development
• Many countries have passed stronger incentive programs, including implementing a permanent tax credit, and are actively working to attract R&D dollars and jobs away from the United States.
• The lack of a consistent U.S. R&D tax credit makes foreign incentives for R&D much more attractive to companies. In 2003, U.S. affiliates invested $28.8 billion on R&D in foreign countries, up 72 percent from 1999.

We are delighted to bring you the tenth regular installment of the AeA Competitiveness Series.  The AeA research team produces these reports on the most timely and relevant issues to the high-tech industry and to U.S. competitiveness in a global economy.  We combine rigorous data with careful analysis to provide industry leaders and policymakers the information they need to assess the issue.