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.

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.

Winners Only the State Can Pick: Mariana Mazzucato's The Entrepreneurial State

June 23, 2014
| Blogs & Op-eds

In The Entrepreneurial State, Mazzucato, a Professor of Economics at the University of Sussex, argues that contrary to the popular opinion of many, the state is an innovative, entrepreneurial actor in ways that the private sector cannot be, because only the state possesses the vision, resources and long-term commitment necessary to facilitate large-scale or speculative innovation. Private actors, in contrast, step in only once the state has laid the technological and legal framework to establish a viable market.

Can New Jersey Compete in the Global ‘Innovation Economy’

NJ Spotlight
Competition for innovation-based economic growth has become so intense that states have to get everything right: taxes, trade, infrastructure, and much more, says Stephen Ezell.

Total U.S. IPOs were valued at $55 billion in 2013 total proceeds, making it the strongest year for IPOs since the peak of the tech bubble in 2000.

Initial public offerings (IPOs-the first rounds of companies' stock sold when they make their debut in public markets) are an important way by which high growth companies obtain needed capital to enable their next round of growth. Total proceeds from U.S. IPOs were valued at $55 billion in 2013, making it the strongest year for IPOs since the peak of the tech bubble in 2000. Not only have IPOs grown in value and number, they appear to be spreading beyond traditional centers of innovation. Read more »