ALLIANTGROUP AND CSIA CO-HOST AUTOMATION AND SYSTEM INTEGRATION CEO ROUNDTABLE

On October 13, automation and system integration CEOs deeper context into a number of key economic indicators. and executives gathered in Houston to participate in an As noted by Lazio, the economy has made strides seven exclusive, invite-only roundtable co-hosted by the Control years removed from the recession, with unemployment System Integrators Association (CSIA) and alliantgroup, down dramatically and other indicators such as the Dow the nation’s premier provider of government-sponsored Jones Industrial Average and the S&P 500 bouncing tax credits and incentives to the automation and system back from the depths of the recession. integration industry. However, while these statistics would seem to point to The event’s key speakers included former U.S. an economic rebound, the panel contrasted this with the Congressman Rick Lazio, former Senior Counsel to the general attitudes of Americans toward the economy, with U.S. Senate Finance Committee Dean Zerbe, former polls showing that two-thirds of Americans feel that the IRS Acting Commissioner Steven Miller, Private Equity country is on the wrong track and other polls citing that and M&A Advisor Neeraj Mital, CSIA CEO Jose Rivera, a majority still feel the economy is in recession. Digging alliantgroup CEO Dhaval Jadav and alliantgroup deeper into the context of these negative perceptions, Managing Director Michael Siegel. Specifically, the Lazio and Mital traced the anxiety back to subdued roundtable focused on the broader economic challenges growth and overall economic underperformance. While facing automation and system integration companies, the economy is growing once more, Lazio noted that the and policy proposals that would encourage greater nation is in the midst of the weakest economic recovery productivity and broader prosperity within the industry from a recession since 1949, growing at a rate of just 2.2 and the economy at large. percent.

“It doesn’t sound like much, the difference between 2.2 or U.S. Economic Outlook: 3 percent growth, but it’s an enormous amount of money Rebounding…But Underperforming when you talk about an economy the size of the United The event began with an overview of CSIA’s membership States,” said Lazio. “This translates to literally trillions of and of general industrywide trends from Rivera, followed dollars in lost output, growth and income throughout the by an economic update panel hosted by Jadav, Lazio economy.” and Mital. During the latter presentation, the panel The subdued recovery has meant that much of the reviewed the current state of the economy and provided

www.alliantgroup.com | 800.564.4540 | 2 economic gains have simply not been felt in the Believing that the key to stimulating the automation pockets of ordinary Americans, with many dealing with and system integration industry (as well as the economy stagnant wages and stalled living standards. While the at large) is solving the productivity issue, the panel unemployment rate is at five percent, statistics from the advocated for both long-term policy solutions that would U.S. Bureau of Labor show that many of the jobs created expand the workforce further down the line (such as were on the lower end of the wage scale and that labor greater public and private investment in STEM education utilization and labor force participation numbers were initiatives) and more immediate fixes such as tax policy not as strong, with the number of involuntary part-time that would provide companies the means to be more workers at around 9 percent. competitive when attracting the technical talent already on hand. “That’s why you have a lot of grumpy Americans out there,” said Lazio. “They may be working at a part-time Federal Incentives for the Automation and job or working at a fraction of what they had previously.” System Integration Industry

Productivity and the Workforce: The Key to Switching gears from potential to current policy, Zerbe Sustainable Growth and Siegel followed up with a panel on the federal policies and tax incentives currently available for the benefit of The panel tied the reasons for subdued growth and the system integrators. In particular, the panel went into an drop in labor force participation to the same culprit—a in-depth discussion on the Research and Development decrease in the number of qualified workers in the labor (R&D) Tax Credit, which due to legislation that was pool and an overall drop in productivity. According to signed into law this past December, was not only made the panel, much of the American workforce simply lacks permanent, but includes two major expansions beginning the skills required in a 21st century economy, and in no in tax year 2016 that will greatly increase the number of area has this been more evident than in the science, system integration and automation companies that can technology, engineering and mathematics (STEM) claim the credit. fields, with CSIA members and other system integration executives in attendance echoing their personal struggles The first—the startup provision—allows businesses with in attracting and retaining top-tier technical talent. As less than $5 million in gross receipts to take the credit a result, many companies have been forced to offshore (capped at $250,000) against their payroll taxes. their work rather than hire American workers. The second—the turnoff of the alternative minimum tax (AMT) floor for companies with less than $50 million in “I live in and our city has a large base in the annual gross receipts—represents perhaps the greatest machining of parts,” said CSIA CEO Jose Rivera. “I know expansion ever for a credit whose purpose is to not only some company owners in that space and they have had reward companies for advancing new technologies and huge shortages in the number of technicians able to their internal processes, but for keeping high-paying work CAD and technical skills of that nature.” STEM jobs such as those found in the system integration “The lack of labor is stunting our growth,” said industry here in the U.S. Environmental System Corporation CEO Craig McCurdy. “I would like to thank our partners at CSIA for co-hosting “We have tremendous opportunity, but we are not going this incredible roundtable and for everyone who took to sell and commit to more work than we can provide. the time to attend this event,” said alliantgroup CEO We have people full-time trying to get more talent at our Dhaval Jadav. “Our firm is fully devoted to educating company and it’s not there.”

www.alliantgroup.com | 800.564.4540 | 3 the automation and system integration industry on these fantastic credits and incentives geared specifically for their benefit. It is my hope that we can play a role in supporting this industry that will be of the utmost importance to the future of our economy and in helping to keep high-paying technical jobs here in the U.S.”

alliantgroup’s mission is one of education and awareness—we exist to help industry organizations, U.S. businesses and the CPA firms that advise them, take full advantage of all federal and state tax credits, incentives and deductions available to them. Our government has legislated these powerful incentive programs to help businesses grow and successfully compete both in the U.S. and abroad. We are proud to have helped over 25,000 businesses claim more than $5 billion in tax incentives. alliantgroup’s headquarters is in Houston, Texas, with offices across the country including , , Chicago, Orange County, Sacramento, Orlando, and Washington, D.C.

www.alliantgroup.com | 800.564.4540