Innovation Policy for Global Economy

599 Pages·2016·6.79 MB·English

by  Wessner C., Wolff A. (Editors) Rising to the Challenge: U.S.

Rising to the Challenge: U.S. Innovation Policy for Global Economy

RISING TO THE CHALLENGE
U.S. Innovation Policy
for the Global Economy

Committee on
Comparative National Innovation Policies:
Best Practice for the 21st Century

Board on Science, Technology, and Economic Policy

Policy and Global Affairs

Charles W. Wessner and Alan Wm. Wolff, Editors

Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

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NOTICE: The project that is the subject of this report was approved by the
Governing Board of the National Research Council, whose members are drawn
from the councils of the National Academy of Sciences, the National Academy
of Engineering, and the Institute of Medicine. The members of the committee
responsible for the report were chosen for their special competences and with
regard for appropriate balance.

This study was supported by Contract/Grant No. N01-OD-4-2139, TO #245,
between the National Academy of Sciences and the National Institutes of
Health; Contract/Grant No. DE-PI0000010, TO #15, between the National
Academy of Sciences and the U.S. Department of Energy; Contract/Grant No.
SB1341-03-C-0032 between the National Academy of Sciences and the
National Institute of Standards and Technology of the U.S. Department of
Commerce; Contract/Grant No. OFED-858931 between the National Academy
of Sciences and Sandia National Laboratories; and Contract/Grant No. NAVY-
N00014-05-G-0288, DO #2, between the National Academy of Sciences and the
Office of Naval Research. Any opinions, findings, conclusions, or
recommendations expressed in this publication are those of the author(s) and do
not necessarily reflect the views of the organizations or agencies that provided
support for the project.

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Copyright 2012 by the National Academy of Sciences. All rights reserved.

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Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of
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The National Research Council was organized by the National Academy of Sciences in
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Vest are chair and vice chair, respectively, of the National Research Council.

www.national-academies.org
Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy
Committee on
Comparative National Innovation Policies:
st
Best Practice for the 21 Century*

Alan Wm. Wolff, Chair Mary L. Good (NAE), Vice Chair
Senior Counsel Dean Emeritus, Donaghey College
McKenna Long & Aldridge LLP of Engineering and Information
and Technology
STEP Board Special Advisor to the Chancellor
for Economic Development
Michael G. Borrus University of Arkansas
Founding General Partner at Little Rock
X/Seed Capital Management and
STEP Board
Gail H. Cassell (IOM)
Visiting Professor Kent H. Hughes
Department of Global Health Director
and Social Medicine Program on America
Harvard Medical School and the Global Economy
Woodrow Wilson International
Carl J. Dahlman Center for Scholars
Henry R. Luce Associate Professor
Edmund A. Walsh School Gregory Kats
of Foreign Service President
Georgetown University Capital E

Charles K. Ebinger
Director, Energy Security Initiative
Senior Fellow, Foreign Policy
The Brookings Institution

*As of June 2012.
v
Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

Project Staff

Charles W. Wessner Sujai J. Shivakumar
Study Director Senior Program Officer

McAlister T. Clabaugh Peter J. Engardio
Program Officer Consultant

David S. Dawson Thomas R. Howell
Senior Program Assistant Consultant

David E. Dierksheide William A. Noellert
Program Officer Consultant

vi
Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

For the National Research Council (NRC), this project was overseen by
the Board on Science, Technology and Economic Policy (STEP), a standing
board of the NRC established by the National Academies of Sciences and
Engineering and the Institute of Medicine in 1991. The mandate of the Board
on Science, Technology, and Economic Policy is to advise federal, state, and
local governments and inform the public about economic and related public
policies to promote the creation, diffusion, and application of new scientific and
technical knowledge to enhance the productivity and competitiveness of the U.S.
economy and foster economic prosperity for all Americans. The STEP Board
and its committees marshal research and the expertise of scholars, industrial
managers, investors, and former public officials in a wide range of policy areas
that affect the speed and direction of scientific and technological change and
their contributions to the growth of the U.S. and global economies. Results are
communicated through reports, conferences, workshops, briefings, and
electronic media subject to the procedures of the National Academies to ensure
their authoritativeness, independence, and objectivity. The members of the
STEP Board* and the NRC staff are listed below:

Paul L. Joskow, Chair Mary L. Good (NAE)
President Dean Emeritus, Donaghey College
Alfred P. Sloan Foundation of Engineering and Information
Technology
Ernst R. Berndt Special Advisor to the Chancellor
Louis E. Seley Professor for Economic Development
in Applied Economics University of Arkansas
Massachusetts Institute at Little Rock
of Technology
William H. Janeway
John Donovan Partner
Chief Technology Officer Warburg Pincus, LLC
AT&T Inc.
Richard K. Lester
Alan M. Garber (IOM) Japan Steel Industry Professor
Provost Head, Nuclear Science
Harvard University and Engineering
Founding Director, Industrial
Ralph E. Gomory (NAS/NAE) Performance Center
Research Professor Massachusetts Institute
Stern School of Business of Technology
New York University

continued
*As of June 2012.
vii
Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

William F. Meehan III Kathryn L. Shaw
Lecturer in Strategic Management Ernest C. Arbuckle Professor
Raccoon Partners Lecturer of Economics
in Management Graduate School of Business
Graduate School of Business Stanford University
Stanford University
and Laura D’Andrea Tyson
Director Emeritus S.K. and Angela Chan Professor
McKinsey and Co., Inc. of Global Management
Haas School of Business
David T. Morgenthaler University of California, Berkeley
Founding Partner
Morgenthaler Ventures Harold R. Varian
Chief Economist
Arati Prabhakar Google, Inc.
Atherton, CA
Alan Wm. Wolff
Luis M. Proenza Senior Counsel
President McKenna Long & Aldridge LLP
The University of Akron

William J. Raduchel
Chairman
Opera Software ASA

STEP Staff

Stephen A. Merrill Charles W. Wessner
Executive Director Program Director

Paul T. Beaton David S. Dawson
Program Officer Senior Program Assistant

McAlister T. Clabaugh David E. Dierksheide
Program Officer Program Officer

Aqila A. Coulthurst Sujai J. Shivakumar
Program Coordinator Senior Program Officer

viii
Copyright © National Academy of Sciences. All rights reserved.
Rising to the Challenge: U.S. Innovation Policy for Global Economy

Contents

PREFACE xiii

OVERVIEW 1

PART I: THE INNOVATION CHALLENGE 15

Chapter 1: The Innovation Challenge 17

AMERICA’S INNOVATION CHALLENGES, 18

Capturing the Economic Value of Innovation, 19
Coping with the Growth of New Competitors, 21

NEW TRENDS IN GLOBAL INNOVATION, 23

Strong Policy Focus on Innovation, 23
Rapid Growth in R&D Spending, 25
st
21 Century Mercantilism, 30
The Search for Talent, 36
The Growth of Foreign Research Centers
of U.S. Multinationals, 37
The Rise of Open Innovation, 39
Growth of Innovative Regions Around the World, 40

THE PILLARS OF U.S. INNOVATIVE STRENGTH, 41

Strong Protection of Intellectual Property, 43
Federal Funding of Research, 44
Research Universities, 44
National Laboratories, 45
The Private Sector, 46
Public-Private Partnerships, 46

RESPONDING TO THE INNOVATION CHALLENGE, 49

Policies to Capture the Value of Innovation
in Some Leading Countries and Regions, 51
The Growing U.S. Response: Federal Government, 53
The Growing U.S. Response: State and Regional Initiatives, 56
Looking Ahead, 59
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Copyright © National Academy of Sciences. All rights reserved.