Investment in new-capital machinery, equipment and software is the primary means through which innovation spreads throughout the economy. As these innovations diffuse through industries, they raise productivity, lower costs of production and improve the competitiveness of the American economy as a whole. However business investment in the U.S. has fallen significantly in the last decade, exacerbating the economic stagnation we face.
Effective Innovation Policies and Institutions Continue to Help Drive Success of Nordic Economies
Denmark, Finland, and Sweden are three of the world's most competitive and innovative economies, as speakers commented at an ITIF event on Nordic Innovation: What Can America Learn from the Scandinavian Innovation Ecosystem. The recent success of the Nordic economies is a result of several factors that the United States can learn from, including: a strong bipartisan consensus regarding the importance of federal investment in education, scientific research, and innovation; well-organized national innovation systems that benefit from formally articulated national innovation strategies (Finland’s, Sweden’s, Denmark’s) and well-funded national innovation agencies; and fundamental reforms undertaken in these economies over the past two decades that have made their tax structures more globally competitive, markets more competition-based, federal budgets better balanced, and workers greater skilled.