Economic Theory

Demand Innovation

November 1, 2013
| Blogs & Op-eds

Demand innovation explains how market structure often protects incumbents from the need to improve. Customers in every market want better, cheaper and faster services. But in many industries, the existing rules and practices effectively protect suppliers from having to respond to the full force of these competitive pressures. A wave of new technology is about to enter the economy. Major industries can show significant productivity improvements if they reorganize around these technologies. Doing so will entail a great deal of economic disruption, however.

The Nordic Nations are Innovation Leaders and Models the U.S. Should Follow

Sweden, Denmark and Finland finished first, third and fourth respectively in the Innovation Union Scoreboard 2013, a ranking of innovation performance of EU member nations.  Read more »

Grasping at Luddite Straws

October 21, 2013
| Blogs & Op-eds

Benjamin Freidman has joined the ever growing neo-Luddite movement in America that mistakenly attributes our economic problems to too much technology and automation. This theory has now basis in the facts and is damaging to long term U.S. economic and innovation competitiveness.

Innovation Economics: How a New Theory Casts Light on an Old Problem of the Budget Deficit

October 21, 2013
| Reports

The recent government shutdown and debt ceiling brinksmanship just postpones the time when the nation’s budget issues will have to be addressed.  Unfortunately the “Washington consensus” on the budget, based on neoclassical economic thinking, leads to the wrong solutions. With its focus on cutting debt, rather than the debt-to-GDP ratio, and its overriding mantra that “everything should be on the table,” this mantra, being promoted by groups such as Simpson-Bowles, Domenci-Rivlin, The Concord Coalition, and the Committee for a Responsible Federal Budget, is generating budget solutions that will lead to less, not more U.S. growth.

It is time for a budget debate that is based on a new approach to economics – innovation economics – that focuses on maximizing innovation and long-term growth. This report argues that any budget solution must set a goal of improving the debt-to-GDP ratio as opposed to simply cutting the debt. It also needs to actually increase public investment and cut corporate taxes to drive growth, even though in the short run these steps will increase the budget deficit. These policies will be much more effective at spurring growth and U.S. competitiveness, which is what the ultimate goal of any economic policy, including budget policy, should be. Moreover, by spurring growth, these policies will help cut the debt-to-GDP ratio, a more accurate measure of the government’s fiscal condition.

Why Has American Budgeting Failed?

Effective Innovation Policies and Institutions Continue to Help Drive Success of Nordic Economies

October 17, 2013
| Blogs & Op-eds

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. 

Nordic Innovation: What Can America Learn from the Scandinavian Innovation Ecosystem?

October 16, 2013 - 9:00am - 10:30am
The Information Technology and Innovation Foundation
1101 K Street NW
Suite 610A
Washington
DC
20005

Two decades ago, most pundits wrote off the Nordic countries, arguing that their social democratic model of high taxes, generous social benefits, and worker security were antithetical to innovation, productivity, and growth. Read more »

The Department of Commerce Should Establish an Office of Data Innovation

September 27, 2013
| Blogs & Op-eds

While President Obama has signed an historic executive order on open data and various government agencies have begun to promote data-driven innovation within their communities, such as the successful Health Datapalooza, there is still no federal government agency responsible for developing and implementing a national strategy to promote data-driven innovation across all sectors of the economy. To help fill this void, the Department of Commerce should establish an Office of Data Innovation.

Engineering 2.0: Rekindling American Ingenuity

September 11, 2013 - 9:00am - 10:30am
The Information Technology and Innovation Foundation
1101 K Street, NW
Suite 610A
Washington
DC
20005

Engineering is the “sine qua non” of technological innovation. Unfortunately, the U.S. is falling behind in the race for global innovation advantage in part because we are unable to efficiently translate research into competitively produced products. This leads to huge trade deficits in advanced technology products and stagnant growth. Read more »

Winning With Innovation-Based Economic Development

August 23, 2013
| Presentations

Robert Atkinson presented "Winning With Innovation-Based Economic Development" to the North Carolina Association of County Comissioners. His presentation touched on getting the economic development principles right and ensuring that the region's competitive future rests on innovation and entrepreneurship.