NAE President William A. Wulf Urges Reforms to Aid U.S. "Innovation Ecology"

William A. Wulf

William A. Wulf, the president of the U.S. National Academy of Engineering, tells a story about a successful inventor and entrepreneur who came to him recently and told him of developing a cancer vaccine. The vaccine, the inventor claimed, stimulated the immune system in such a way that made it "extremely effective" against pancreatic and other lethal forms of cancer.

Foreshadowing an age of individualized medical therapies, the vaccine was tailored for just one person, one tumor. Perhaps, in time, the approach could benefit thousands of people. But in a lecture at the AAAS Forum on Science and Technology Policy, Wulf called such a positive outcome unlikely.

Without a change in the United States' regulatory climate, the vaccine "will never be sold in this country," he said. "Why? Because the gold-standard for FDA (U.S. Food and Drug Administration) tests is the randomized, double-blind study." And while that testing regimen helps "guarantee efficacy and safety" for new medical treatments, he explained, "it is literally impossible to do a randomized, double-blind study" on a therapy that applies to only one person.

Wulf said he didn't know whether the vaccine could in fact be effective, but, he said, it is illustrative of a breakdown in the "innovation ecology" of the United States—its system of regulations, tax codes, copyright and intellectual property laws and manufacturing policy.

What's needed, he urged, is a fundamental change in policy orientation, so that U.S. policymakers can regularly step back and assess what's working—and what isn't—and then adjust as needed to maintain the nation's creative and competitive edge.

"The innovation ecology we have today is more one for the technologies that were, not the technologies as they will be," Wulf said. And while potential reforms have been detailed in the National Academies' seminal 2005 report Rising Above the Gathering Storm and other studies, "at the moment inertia is so strong that we seem not to be making any progress at all."

A healthy innovation ecology requires "more than just education and research," he added. "There's got to be a culture that supports risk-taking... .Tax laws need to support investment. There have to be laws and regulations that protect the public, but at the same time encourage innovation. There have to be adequate intellectual property protections—it goes on and on."

Wulf drew a standing ovation after he spoke 4 May to about 450 policymakers from government, education, industry, and other fields who attended the 32nd annual AAAS Forum on Science and Technology Policy in Washington D.C. The Forum, regarded as the premier event of its kind in the United States, focused on innovation; federal budget and R&D issues; public- and private-sector research; education; and other high-profile domestic and international S&T issues.

After nearly 12 years as president of the National Academy of Engineering (NAE)—he leaves office at the end of June—and as vice chair of the National Research Council, Wulf is one of the nation's most authoritative and compelling voices on research and innovation policy. He also has served as assistant director of the National Science Foundation; chair and chief executive officer of Tartan Laboratories Inc. in Pittsburgh; and professor of computer science at Carnegie Mellon University in Pittsburgh. He is the author of more than 100 papers and technical reports, has written three books, and holds two U.S. patents. At the close of his NAE term, he will return to the University of Virginia, Charlottesville, where he is a University Professor and AT&T Professor of Engineering and Applied Sciences.

In his talk at the AAAS Forum, Wulf detailed the need for reform in several areas, including:

• Patents.The current U.S. patent system is geared to an era when innovation cycles were far slower than today's, and is not suited to "software or snippets of DNA or business processes," Wulf said. "From the point of view of the intent to promote innovation, the current patent system is at best irrelevant and at worst counterproductive."

• Intellectual Property and Copyright law. Limiting and controlling reproduction made sense in pre-digital times when artistic or literary expression were produced on physical media. But in a digital era, Wulf said, such controls make little sense; the value of artistic or literary expression rises the more it is copied. For example, he explained, a web page must be copied at least a half dozen times or more on its route from a server to a user's video screen.

  A web page "would have zero value if it hadn't been copied," Wulf said. "If it was just stuck on the hard drive of the server, it would have no utility whatsoever."

• Taxes.The U.S. R&D Tax Credit has little influence on R&D policy because of the "idiocy" of reviewing and renewing the credit on a year-to-year basis, he said, drawing a laugh from the audience. "It's really pretty obvious: R&D takes many years. If they [businesses] invested this year... and then next year it [the credit] went away, they probably would have to stop that research and they would've just wasted money."

• Manufacturing Policy.The United States has effectively "ceded manufacturing to low-wage countries," but that's "both dangerous and unnecessary," Wulf said. "I have real trouble with the notion of a robust economy that doesn't produce something, even if the something produced is ephemeral, like software. I just don't see an all-service economy."

  Wulf forecast a sea-change in manufacturing, in which mass-production will give way to mass-customization done not by low-wage workers, but by robots. "I think we could get manufacturing back," he said. "We have the ability to be the greatest manufacturing country in the world—we're just not doing anything about it."

Wulf said that efforts to update the innovation ecology face a dilemma: With innovation unfolding at unprecedented—and accelerating—speed, any new legal and regulatory regime must be fluid and flexible, allowing for near-constant review. He acknowledged the rate of change makes that assignment difficult.

"Even if we fixed every one of the components of this innovation ecology to be just right for today and tomorrow, it probably wouldn't be a week hence," he said. The key is to regularly assess the intent of past policy to determine whether it remains effective or whether it needs revision.

While the United States lags, other countries recognize the need for a systematic approach to innovation. He told of a visit to China in June 2006, and of being one of perhaps a dozen foreigners among the 3000 top Chinese scientists and engineers at the annual joint meeting of the Chinese Academy of Engineering and the Chinese Academy of Sciences.

"On the dais was the president of China, the prime minister of China, and every single member of the Politburo—the dozen most powerful people in all of China," he recalled.

The keynote address was given by President Hu Jintao, and it focused on how to make China into an innovation-driven country, how to draw people into the country's science and engineering sectors, both from inside China and from outside.

"He could've been reading from Rising Above the Gathering Storm," Wulf said.

"And I'm sitting there thinking, 'How ironic it will be if these guys implement Rising Above the Gathering Storm before we do.'"

After the audience's laughter subsided, he added: "Everybody that was needed to make it happen was sitting on that dais... They have seen why we succeeded and they have every intention of implementing that."

Edward W. Lempinen

24 May 2007