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’s Next for Technology: How Washington and Congress will Act on Key Policy Issues in 2011

November 18, 2010
| Presentations

Participated on the "What's Next for Technology: How Washington and Congress will Act on Key Policy Issues in 2011" panel at the Politico Conference at the Columbus Club at Union Station.

2010 Ranking of ‘New Economy States’ Highlights Leaders and Laggers in Innovation, According to Kauffman/ITIF Study

WASHINGTON – Massachusetts, Washington, Maryland, Connecticut, and New Jersey are the top five states at the forefront of the nation’s movement toward a global, innovation-based new economy, according to the 2010 State New Economy Index, released today by the Information Technology and Innovation Foundation (ITIF) and the Ewing Marion Kauffman Foundation. Read more »

Interview: How Will the Current Political Climate Affect U.S. Innovation Policy?

November 16, 2010
| Presentations

Jeff Weintraub of Fleishman-Hillard Public Affairs interviews Rob Atkinson about the factors that affect how the U.S. promotes innovation in the global market.

The Federal Government needs a National Innovation Foundation to help domestic firms become more innovative and competitive.

Innovation drives economic growth. However, the nation faces a growing innovation challenge in today’s global economy. To respond, the federal government should establish a National Innovation Foundation (NIF)—a new, nimble, lean, and collaborative entity devoted to supporting firms and other organizations in their innovative activities. The basis of NIF would be the consolidation of existing programs scattered among different federal agencies.

Buying Innovation: How Public Procurement Can Spur Innovation

October 21, 2010
| Reports

Governments are generally the largest purchaser within a country, often spending tens of billions of dollars. Not all this spending is paper clips and copy paper. In fact, it represents a great opportunity to stoke innovation. In this analysis, ITIF argues that government policymakers should think strategically about procurement, taking innovation into account when buying goods and services. Innovation policy is often articulated from a supply-side perspective (R&D and corporate tax credits, worker training programs, public-private partnership grants, etc.), but public procurement contracts are a key mechanism for boosting domestic demand for innovation.

The Good, the Bad, and the Ugly of Innovation Policy

October 7, 2010
| Reports

Download executive summary (English) (中文) (Español)

Innovation has become the central driver of economic growth and thus a key focal point of countries’ economic development strategies as they seek to gain competitive advantage. Accordingly, countries are increasingly designing national innovation strategies that seek to coordinate their policies toward skills, scientific research, information and communications technologies (ICTs), tax, trade, intellectual property, government procurement, standards, and regulations in an integrated approach designed to drive economic growth through innovation. While a focus on innovation is positive, countries can implement policies that are either,

  1. “Good,” benefiting the country and the world simultaneously;
  2. “Ugly,” benefiting the country at the expense of other nations;
  3. “Bad” failing to benefit either the country or the world; or
  4. “Self-destructive,” actually hurting the country while benefiting others.

Notwithstanding the fact that countries can readily implement a range of “Good” innovation policies, there remain far too “Ugly” and “Bad” (and occasionally “Self-destructive”) mercantilist strategies that are neither sustainable nor productive. Moreover, these Ugly, Bad, and Self-destructive mercantilist strategies suffer from three other failures. They: 1) undermine confidence in the international trading system, while reducing global GDP growth; 2) fail to recognize that neither the United States nor Europe—nor even both combined—can indefinitely absorb imports if Brazil, China, India, Japan, Russia, and others continue to promote exports while limiting imports as their primary path to prosperity; and 3) ignore that raising the productivity across-the-board of all sectors, traded and non-traded, is the surer path to lasting economic growth.

The world must move beyond perceiving the pursuit of economic growth through innovation among nations as a zero-sum game to embracing a perspective that views mutual global prosperity as the goal. The report also provides policymakers a concrete guide to promoting constructive innovation policies while avoiding the ruinous ones. Among those steps are the following:

  • Urging institutions such as the World Bank, the IMF, U.S. AID and others to steer nations away from export-led growth strategies and other mercantilist policies.
  • National leaders should promote win-win innovation policies and avoid zero-sum strategies.
  • The World Trade Organization should publish annually all new trade barriers (including non-tariff barriers), whether they are allowed by the rules or not.
  • Establish trade zones of nations that exclude nations that persist in pursuing mercantilist policies that violate the principle of free and fair trade.
  • Educate policy makers that export-led growth, often abetted by mercantilist practices, is unnecessary, counterproductive, and unsustainable.  It misses the far greater opportunity to achieve economic growth through raising domestic productivity levels.