As the 2012 presidential campaign moves in the final stage, ITIF is presenting general principles and specific recommendation ideas across several policy areas we believe the next President and Congress should adopt to restore U.S. global competiveness and prosperity.

As chronicled in Innovation Economic: The Race for Global Advantage, the United States is losing its once formidable edge as an innovator. Many other nations are putting in place better tax, talent, technology and trade policies, and reaping the rewards in terms of faster growth, more jobs, and faster income growth. It’s not too late for the United States to regain its lead but it will need to act boldly and with resolve.

Week by week until the November election, the Winning the Race series will put forward creative yet pragmatic ideas in policies affecting taxes, trade, education, broadband, the digital economy, clean energy, science and technology and other areas. Taken as a whole, the series represents a new Innovation Consensus to replace the outdated Washington Consensus.

Memo One (September 3, 2012): Boosting Innovation, Competitiveness, and Productivity

Memo Two (September 10, 2012): Trade and Globalization

Memo Three (September 17, 2012): Corporate Tax

Memo Four (September 24, 2012): Digital Communication Networks

Memo Five (October 1, 2012): Traded Sector Industries

Memo Six (October 9, 2012): Digital Economy

Memo Seven (October 15, 2012): STEM Skills

Memo Eight (October 22, 2012): Clean Energy

Memo Nine (October 29, 2012): Science and Technology

Memo Ten (November 5, 2012): Overcoming the Barriers 

Complete List of Policy Recommendations: Top Policy Recommendations for the Obama Administration to Help the United States Win the Race for Global Advantage

Dean Baker critique doesn’t engage the key point of Innovation Economics: that it was the failure of the U.S. innovation economy that was the underlying cause of the economic crisis and now our continuing anemic recovery. Throwing trillions more of stimulus at it won’t solve the problem (though it may kick it to the next generation, as appears to be the wont of policymakers in Washington these days). Rather, we need to get serious about addressing the underlying competitiveness challenges we face through smart policies including what ITIF calls the “4Ts” of tax, trade, technology, and talent.

The current book-values of the Gen-Xers have been hit hard. The first asset most families purchase is a home, and then they slowly build up their portfolio over their careers. Therefore, their current book measure of “wealth” has been disproportionately hit. However, it is still the same house; and, future buyers of it are better off. So the lesson for policy makers is to not confuse prices with value. Sometimes they are the same, sometimes they are not. Economic policy would be on a stronger footing if it kept its eye on the real economy (e.g., the number of houses being produced) and not just the price-based economy.

The “new” model is actually rather simple and comes with it, a simple solution: spurring innovation. Increasing innovation will fundamentally change how we produce goods, relax current constraints, increase standards of living, and is the only sustainable source of growth.

Innovation Economics: The Race for Global Advantage delivers a critical wake-up call: a fierce global race for innovation advantage is under way, and while other nations are making support for technology and innovation a central tenet of their economic strategies and policies, America lacks a robust innovation policy. Unless the United States enacts public policies to reflect this reality, Americans face the relatively lower standards of living associated with a noncompetitive national economy.  The authors explore how a weak innovation economy not only contributed to the Great Recession but is delaying America's recovery from it and how innovation in the United States compares with that in other developed and developing nations.

The book is a detailed, pragmatic road map for America to regain its global innovation advantage by 2020, as well as maximize the global supply of innovation and promote sustainable globalization.

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“Innovation Economics: The Race for Global Advantage offers a frank assessment of many of the underlying causes of our economic challenges and helps explain why recovery has remained so elusive. Rob Atkinson and Stephen Ezell have collaborated on a timely call to action: America can compete and win the global economic race, but only if we change our mindset and update many of our policies”—Senator Mark Warner (D, VA)

“The United States is increasingly being left behind in the global competition for high-value production and jobs. While this trend is lowering our standard of living, there are steps government can take to stem this decline, such as making STEM education a national priority and pursuing a 21st century growth agenda that acknowledges the important role that innovation plays. Innovation Economics is an important read for those of us concerned about our nation’s long-term economic challenges but optimistic about solutions to improve our future in our own time.”—Congressman Richard Hanna (R-NY)

“Innovation Economics offers the most pragmatic guideposts for American and global economic renewal today. I recommend it for every leader in or out of office.“—Calestous Juma, Harvard Kennedy School

“As a long-time analyst of the trends shaping the global economy, I am struck by the increasing number of economic and political leaders that do not grasp how serious the structural economic problems facing America are. I hope they read Innovation Economics. It “speaks truth power” with candor, reason and wit and offers fresh thinking and a path forward. Rob Atkinson and Stephen Ezell have been making important contributions and better ideas about economic policy for years. Their new book is eye-opening and alarming and arrives at a critical time.” —Lenny Mendonca, McKinsey & Company, McKinsey Global Institute

“Atkinson and Ezell provide the definitive guide to innovation and its impact on economic prosperity. If you care about innovation, you need to read this book.”—Justin Rattner, Chief Technology Officer, Intel Corporation