Innovation, including the diffusion of information technology throughout the economy, is key to boosting productivity, which in turn is at the heart of increasing living standards.

Unsubstantiated Attacks on the Ex-Im Bank Fail to Take Flight

July 18, 2014
| Blogs & Op-eds

Bent on decrying ‘crony capitalism,’ the Wall Street Journal is misusing a new S&P report to discredit the Ex-Im Bank. The report’s actual finding, however, is that without Ex-Im financing support, Boeing would see a finance gap of $7 billion to $9 billion. The report demonstrates that the Ex-Im Bank is fulfilling its mandate to provide financing that enables American Exports where demand exist but credit institutions are unwilling or unable to finance deals. 

The Decline of America’s National Innovation System

July 16, 2014
| Blogs & Op-eds

The United States used to have the world’s strongest National innovation System but today lags behind many of our international competitors, hampering economic and job growth. To rebuild our innovation infrastructure, the United States must strengthen trade, tax, and regulatory institutions, implement policies to encourage research, human capital development, and the flow of 

The U.S. Government Isn't Friendly Enough To Big Business

July 8, 2014
| Blogs & Op-eds

There is an increasing hue and cry in Washington against “crony capitalism” and “industrial policy”—the notion that the federal government unfairly supports certain large corporations and industries. But what we really should be concerned about is America’s “size- based” industrial policy, which actually favors small businesses to the detriment of the economy as a whole.

What is a National Innovation System and Why Does it Matter?

July 3, 2014
| Blogs & Op-eds

In the conventional view, innovation is something that just takes place idiosyncratically in “Silicon Valley garages” and research and development (R&D) laboratories. But in fact, a broad national innovation system (NIS), backed by specific government policies and significant federal investment are essential to the development of a successful innovation ecosystem.

No, Immigrants are Not Stealing Our Jobs

July 3, 2014
| Blogs & Op-eds

The notion that immigrants are taking our jobs, similar to the robots are taking jobs theory, is completely false. Blaming immigrants for a weak U.S. economy only diverts attention from the real issue: designing and implementing a robust national competitiveness strategy.

ITIF Report: Evaluating the U.S. National Innovation System

Foreign Export Credit Competition Continues to Intensify as U.S. Competitiveness Wanes

July 1, 2014
| Blogs & Op-eds

Amidst continuing debate regarding the role of the U.S. Export-Import Bank, the 2014 Report to the U.S. Congress on Export Credit Competition provides fresh evidence that foreign export credit competition continues to intensify even as U.S. competitiveness at providing export credit assistance continues to weaken compared to leading competitor nations. As a share of GDP, competitors such as China and Germany are investing five to seven times more in export credit assistance than the United States, while Korea invests fourteen times more. Meanwhile, over the past six years, China has invested twice as much in export credit as the United States in current dollars, and almost four times as much as a share of GDP. Moreover, the majority of foreign export credit competition is now occurring outside of guidelines promulgated by the Organization for Economic Cooperation and Development (OECD) to regulate fair competition in the use of export credit a mong nations in a way that ensures that global export competition is based on free-market principles and mutually agreed-upon standards. Such data reaffirms the important and much-needed role the U.S. Export-Import Bank plays in providing export credit assistance to help finance the exports of U.S. products and services.

To Give up on Innovation is to Give up on the Future

July 1, 2014
| Blogs & Op-eds

Today, innovation is being blamed for all of society’s ills, from global warming to the rise of the “1 percent,” to the loss of jobs to automation. However, this narrative neglects to recognize the central role innovation has played throughout world history, and continues to play, in promoting new economic and social paradigms, raising the standard of living and improving the overall quality of life for citizens across the globe.

Understanding the U.S. National Innovation System

June 30, 2014
| Reports

The conventional view of innovation is that it is something that just takes place idiosyncratically in “Silicon Valley garages” and R&D laboratories. But in fact, innovation in any nation is best understood as being embedded in a national innovation system (NIS). Just as innovation is more than science and technology, an innovation system is more than those elements directly related to the promotion of science and technology. Rather, it also includes all economic, political and other social institutions affecting innovation (e.g., a nation’s financial system; organization of private firms; the pre-university educational system; labor markets; culture, regulatory policies and institutions, etc.). Indeed, as Christopher Freeman defined it, a national innovation system is “the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.”

This report identifies the broad elements that make up a national innovation system, including a description of the innovation success triangle, which measures the business environment, regulatory environment, and innovation environment of a nation, and is used to predict the success of an innovation system in promoting technological development and economic growth. It then uses this framework to analyze the U.S. national innovation system and assess the strengths and weaknesses of individual components  and whether those components  are improving, stable or deteriorating relative to our competitors. Unfortunately, in many areas the U.S. national innovation system falls behind our global competitors, hampering our ability to foster the innovation that is imperative for success in the 21st century economy.

As nations compete to win the global innovation race, the effectiveness of their national innovation systems will be a key factor in deciding the winners and the losers. Thus, the challenge for the United States going forward is whether it can make the needed changes to its innovation system to keep up with the international innovation leaders and remain a key player in the innovation economy. The future health of our nation will depend on the answer.

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