The U.S. must move quickly to develop a national innovation strategy if it is to remain competitive in the global economy, a panel of experts said at the AAAS Forum on Science and Technology Policy.
They also outlined the roles that regions, universities, and government can play in developing such a strategy.
“I’m optimistic that we will end up getting it right,” said Rob Atkinson, president of the Information and Technology Innovation Foundation (ITIF). “The real question is, we don’t have all day to do that. We’ve probably got about 10 years. If we don’t get it right in 10 years, we basically will end up like the U.K., [with] very little manufacturing and then struggling to catch up again. It’s just a very, very hard thing to do once you’ve lost it.”
The 36th annual AAAS Forum, the premiere Washington, D.C., gathering for those interested in the intersection of science and policy, was held 5-6 May and attended by more than 475 leaders from government, education, and business.
A national innovation strategy is “much, much more than a science strategy,” Atkinson said. “It’s elements of science, technology, and economic policy that explicitly aim to promote the development, speed, and efficient use of new products, processes and services.” Innovation itself should be the goal, not increasing jobs, producing clean energy, or other policy objectives, he added.
Other countries are out-innovating the U.S. because “they think they’re in competition,” Atkinson said. “They also understand they’re not No. 1 even when they are No. 1.” For example, in a study of innovation-based competitiveness, Singapore captured the top ranking, but leaders there assume that they are lower in the rankings and are working hard to move up, he explained.
Moreover, American economists and politicians generally expect innovation to come from the free market, but “markets fundamentally under-perform at producing innovation,” Atkinson said. In the absence of government incentives, such as tax policy, private companies will focus on short-term investment to the detriment of long-term interests, he said.
Richard Bendis, president and chief executive officer of Innovation America and editor of innovationDAILY said that the United States needs to focus on economic development based on innovation rather than technology. Over the past 25 years, much of the focus has been on developing new technology products.
“It’s not just about products when you’re talking about innovation,” he said. “It’s about the creation and transformation of knowledge and new processes and services that meet a market need in addition to products. It’s new ways to partner, innovative interactions, entertainment forms, ways of communicating, and collaborating. It’s not just about creating the next iPad.”
However, Bendis added, innovation-based economic development “doesn’t work unless we have industry, academia and government working together, each with their own missions, and at the center we hope that we have a common goal that we’re all working towards.”
The panelists agreed that one way to foster a culture of innovation in the United States is to develop more Regional Innovation Clusters (RICs), networks of complementary organizations that use their regions’ competitive strengths to create jobs and increase prosperity. The networks started in the Clinton administration, Bendis said, and they allow the unemployed or underemployed to transition to higher wage jobs and move within a field without having to leave the region.
Generally Regional Innovation Clusters are “led by the private sector, not by government,” Bendis said. The federal government should help organize and support existing clusters, not create new ones, he added.
“I think for a country as large as ours, as economically diverse as ours, the region is really the most important level for thinking about innovation strategy,” David Hart, a professor in the School of Public Policy and director of the Center for Science and Technology Policy at George Mason University. However, the federal government needs to have rules in place to prevent regional competition from becoming a race to the bottom, he said. Regions should be encouraged to compete on the basis of innovation, not tax incentives, Hart added.
Universities are also “extremely important to the innovation ecosystem,” Bendis said. “If you look at U.S. research institutions and their contributions to the national economy, just in 2009 there were 3300 patents issued to universities” and more than 500 companies are formed annually around discoveries made at universities, he said. However, a recent ITIF report documents the decline in government-funded and business-funded university research.
Decreasing federal funding for higher education is going to force universities to consider partnering with industry on research even more, Bendis said. He cited the example of Pennsylvania State University, which he described as “one of the best and leading universities in the United States doing industrial R&D.”
Successful partnerships with industry require universities to work on the same timeline as industry and establish clear definitions of intellectual property, Bendis said. Some institutions, including several in North Carolina, “are developing standard conflict-of-interest and licensing policies to make it a little more friendly to interact with industry so you can shorten that negotiation process if you really want to develop a meaningful relationship,” he explained.
The federal government can facilitate partnerships between universities and the private sector through revisiting the R&D tax credit, Atkinson said. “If a U.S. company wants to enter into a research partnership at Penn or Stanford or MIT, we actually penalize them,” he said. “We give them a less generous credit than if they do the research in their own lab.”
Reconsidering the role of regulation would also help spur innovation in the United States, said Michael Mandel, senior fellow at the University of Pennsylvania’s Mack Center for Technological Innovation. The Progressive Policy Institute, where Mandel is chief economic strategist, has a proposal for a regulatory improvement commission “to make it easier for innovative companies [and] enterprises to get the innovations through the system faster.”
Panelists agreed on the need for one agency to take the lead on innovation. “We’re one of the few countries in the world without a national innovation agency,” Atkinson said. “If you look at the U.S., there is no agency whose mission is to spur commercial innovation and competitiveness around technology.”
Bendis stressed that strategy needs to be paired with an implementation plan. “You can develop all the strategies you want in the world, but if you don’t have an implementation plan or process to go with it, a strategy is not going to be effective,” he said.
At the end of the day, Atkinson said, there is generally political agreement on the need for a national innovation strategy. “It’s not as if there are many interest groups out there who are fighting against an innovation strategy,” he said. However, he argued, proponents of a national innovation strategy have to fight faulty assumptions about the nature of innovation. “Innovation is not manna from heaven,” he said. “Innovation is something that is publicly and collectively created.”
A national innovation strategy will require “long-term investments in institutions, in cultural change, in people, in hardware,” Hart said. “You’re not going to going to get results overnight, which I think is one of the biggest challenges in actually creating an innovation strategy. So I don’t think it’s too late, but it’s time for us to get going.”
Read more coverage from the AAAS Forum on Science and Technology Policy.
See the full Forum agenda.