New National Academy study on innovation

The Board on Science, Technology, and Economic Policy (of the National Academy of Sciences) has issued a new report on innovation: Rising to the Challenge: U.S. Innovation Policy for Global Economy. The result of a multiyear endeavor, the report brings together a number of studies of national innovation systems and builds upon earlier Academy studies.
The report does a good job of describes how the technology-based innovation system has shifted in the past few decade. Importantly, it raises the issue of commercialization in the context of capturing economic value and enhancing national advantage. These are vital concerns that must be added to the national debate on innovation. It is not enough to have a thriving R&D sector. Government policies and actions are need to insure that activity is translated into public benefit.
The report lists a number of specific policy recommendations ranging across a number of areas such as support for R&D, workforce development & education and trade & investment. These are captured in four core goals:

1. Monitor and learn from what the rest of the world is doing: The United States needs to increase its understanding of the swiftly evolving global innovation environment and learn from the policy successes and failures of other nations. It is generally recognized that there is much to be learned from the rest of the world in science. This is equally true with regard to innovation policy. See Recommendation 1.
2. Reinforce U.S. innovation leadership: It is very important that the United States reinforce the policies, programs, and institutions that provide the foundations for our own knowledge-based growth and high value employment. These include measures to strengthen our research universities and national laboratories, renew our infrastructure, and revive our manufacturing base. See Recommendations 2, 3, and 4.
3. Capture greater value from its public investments in research: The United States should improve its ability to capture greater value from its public investments in research. This includes reinforcing cooperative efforts between the private and public sectors that can be grouped under the rubric of public-private partnerships, as well as expanding support for manufacturing. See Recommendations 5 and 6.
4. Cooperate more actively with other nations: In an era of rapid growth in new knowledge that is being generated around the world, the United States should cooperate more actively with other nations to advance innovations that address shared global challenges in energy, health, the environment, and security. See Recommendation 7.

My one critique is that they limited themselves to technology-based innovation. Having said that, the four core goals can easily encompasses non-technological innovation as well.
There is one specific policy recommendation I would like to highlight. I has long argued for a more pro-active role for procurement as an innovation policy (see earlier postings). As I noted before, government as a demanding customer can create the “thin opening wedge” — new products and services that have a specialized use. Once that specialized use is established, the product or service can be refined and adopted to a broader customer base. The demanding customer in fact becomes a co-creator.
Thus I was very pleased to see this aspect of innovation policy specifically addressed:

Leverage government procurement: Federal agencies can use their purchasing power to help drive domestic commercialization of emerging technologies. The U.S. government has done this many times previously in industries such as semiconductors, computers, and aerospace. Federal and state agencies can help build domestic markets for important new
technologies for electric-drive vehicles, energy-efficient buildings, solidstate lighting, and next-generation photovoltaic cells. Procurement rules of Federal agencies and armed forces should be reformed to put more emphasis on providing incentives for spurring innovation in products and processes that result in continuous performance improvements and lower long-term life-cycle costs (vs. up-front costs). Government agencies also should accelerate innovation by providing early-stage financial support for small companies that can address national needs. (Recommendation 5j.)

There are lots of other good recommendations in the report. Let us hope that policymakers read the report carefully and implement its recommendations.

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