Obama hails innovation as route out of recession

President Barack Obama has called on the US to "out-innovate" the rest of the world in order to maintain its competitiveness, in the annual State of the Union address on Tuesday. Obama's speech focused on the economy and opportunities to create jobs through investment in new technologies.

Barack Obama gives his 2011 State of the Union address. Reuters/Jim Young

The president insisted that government investment in research, education and infrastructure is essential if the US is to compete with rising economic powers such as China and India.

"At stake is whether new jobs and industries take root in this country, or somewhere else," he said. "It's whether the hard work and industry of our people is rewarded. It's whether we sustain the leadership that has made America not just a place on a map, but a light to the world."

Obama pledged that the upcoming budget would include investment in biomedical research, information technology and clean energy technology.

Acknowledging that the US has an already substantial budget deficit, however, Obama proposed a freeze on non-security domestic spending for the next five years, a measure which he said would reduce the deficit by more than 400 billion dollars over the next decade.

He appealed to his opponents in the Republican Party to cooperate with the strategy instead of calling for greater cuts in government spending.

But the Republicans are committed to opposing Obama's plans.

Hours before his speech on Tuesday, the House of Representatives - where  Republicans have a majority - voted in favour of a non-binding resolution to return public spending to 2008 levels. Such a measure would represent far more drastic cuts than those Obama has outlined.

Yet public opinion appeared to approve of the president's address. According to instant polling by CNN television, more than three-quarters of respondents said they felt favourably about the speech, and a similar proportion said it had made them more optimistic.