The United States lacks an integrated national service innovation strategy which reduces technological deployment and business development in a range of sectors, from health care to education. In addition, this lack of focus puts American industries at a disadvantage as other nations seeks to develop stronger service innovation policies across business sectors.
Winning the Race 2012 Memos
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 Taken as a whole, the series represents a new Innovation Consensus to replace the outdated Washington Consensus.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
Winning the Race 2012 Memos: Boosting Innovation, Competitiveness, and Productivity
Since the economy has still not fully recovered from the Great Recession, the challenge for the next administration will be two-fold: restoring U.S. global innovation leadership and driving productivity growth. To achieve robust job growth, the United States needs a growing and competitive “traded sector engine” powered by innovation. America also needs strong productivity growth because it is the surest way of addressing the fiscal challenge presented by the baby boom retirement. The next administration needs to make both top priorities and not be diverted by non-crisis foreign policy challenges or other domestic policy issues. We need the next President to state, to paraphrase John F. Kennedy, “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of U.S. innovation leadership.”
However, as long as economic policy is a fight between small government, free-market advocates and big government, Keynesian redistributionists it will be difficult to address major economic challenges. The next administration needs to put aside obsolete doctrinal views and focus pragmatically on ensuring that economic organizations in the United States (for-profit, non-profit and government) boost competitiveness, innovation, and productivity
More Baby Boomers Need to Delay Retirement
The number of Americans aged 55 to 64 grew 8 times faster than the rest of the U.S. population in the last decade, reflecting the "pig in the python" of aging baby boomers. As this cohort retires in ever larger numbers they will place an ever greater strain on the economy, as they produce less (and pay fewer taxes) but consume more taxpayer-provided services such as Medicare and Social Security.
Road Congestion, TSA Congestion. What’s the Difference?
Sun City or Sun Power: Early Retirement is Hurting America
Americans face a choice as a country: we can either keep focusing on maximizing present consumption, especially by older people, or we can focus on maximizing production so we can afford the critical investments in America. If fewer American’s retired early and if we raised the retirement age to 70, we’d have more money to invest in science needs in research, infrastructure and skills, and maybe discover solar power that’s cheaper than coal power.
When Markets Fail, Do We All Lose? The Evidence Isn’t As Clear As Reported
It may not have come as a surprise that a week ago, the Federal Reserve released a report showing how U.S. family wealth and income declined from 2007 to 2010. However, most mainstream media sources took a single statistic (changes in median wealth) from the over 80 page bulletin and ran away with the wrong message.
Bridges: Technology, Automation, and Innovation Create, Not Destroy, Jobs
The problem for the US economy – and the global economy, for that matter – is not that we have too much innovation; rather, we don't have enough of it. What's needed is not for the political class to denigrate technology, automation, or innovation, but to enact more aggressive innovation-supporting policies: everything from more generous R&D tax credits and greater federal investment in R&D to better education policies. The nations that will do best in the intensifying global race for innovation-based economic growth are those that embrace both innovation and creative destruction, while also putting in place effective public policies that empower society to cope with the rapid and ongoing changes brought by technology, automation, and innovation.