Allocating 0.15 percent of agency research budgets to commercialization programs would generate $110 million per year to fund technology commercialization and innovation efforts. Half the funds could go to universities and federal laboratories for a variety of initiatives, including mentoring programs for research entrepreneurs, student entrepreneurship clubs and entrepreneurship curricula, industry outreach programs, seed grants for researchers to develop commercialization programs, etc. The other half could go to match state technology-based economic development (TBED) programs. These programs, such as the Oklahoma Technology Commercialization Center, assist researchers, inventors, entrepreneurs, and companies in turning advanced technologies and high-tech startup companies into growing companies.

This program would resemble the current Technology Improvement Program (TIP) operated by NIST but would have an even greater focus on broad sectoral consortia and would allow large firms as well as small and mid-sized ones to participate. To be eligible for matching funding, firms would have to: form an industry-led research consortium of at least five firms; agree to develop a mid-term (three-to-ten year) technology roadmap that charts out generic science and technology needs that the firms share; and provide at least a dollar-for-dollar match of federal funds. This initiative would increase the share of federally funded university and laboratory research that is commercially relevant. In so doing it would better adjust the balance between curiosity-directed research and research more directly related to societal needs.

Accessibility, much like security or privacy, must be engineered early on in the development of products and services. For example, a self-service kiosk may not always be accessible to an individual in a wheelchair or an online application may not be compliant with accessible web standards. To ensure that as more self-service technology becomes available it does not come at the expense of any particular population, NSF should fund the creation of a Center of Excellence (COE) for Accessible Design in IT at a major U.S. university. The COE would support the development of best practices for accessible design for kiosks, online services, interactive voice response systems, and mobile applications and devices.

The PTO’s policy of requiring examiners to check into the office every two weeks requires patent examiners to live in the Washington, DC metro area. If PTO set up small satellite offices around the country examiners could choose to live in less expensive areas and increase their standard of living, while still getting access to an office.

To reduce the delays that currently plague the U.S. patent system, the PTO should be able to retain all patent fees and the PTO should have fee-setting authority to increase fees to meet budgetary needs. The current statute requiring USPTO to wait for a congressionally amended fee schedule is inflexible and does not allow USPTO to respond to increased costs.

Commercialization and entrepreneurship are keys to economic development. To maximize both, there should be at least one organization in each state that has this as its mission. One model is Oklahoma’s non-profit i2E organization. Through its various programs i2E helps Oklahoma companies with strategic planning assistance, networking opportunities, and access to capital. Likewise, Pennsylvania’s Ben Franklin Technology Partners have over their 25 year history evolved to serving as a statewide resource for technology commercialization for entrepreneurs.

A wide array of economic studies points to the importance of IT in driving productivity. Yet, most states are still stuck in the old economy when it comes to their tax incentives for manufacturers. Most provide a sales tax exemption for manufacturers for equipment purchased in the manufacturing process, and some even provide tax credits for the purchase of manufacturing equipment. But few extend this exemption (or credit) to computer and other IT equipment used in the rest of the plant, even though from a competitiveness standpoint it can have an even bigger impact than a traditional piece of machinery. For example, under Washington state’s rules governing its manufacturing sales tax exemption , manufacturing computers qualify only if they “direct or control machinery or equipment that acts upon or interacts with tangible personal property” or “if they act upon or interact with an item of tangible personal property.” Many other states have similar restrictions. States should simply eliminate this requirement and allow any IT equipment, software or devices purchased by manufacturers to be exempt from state sales taxes.

Since it was revised over a decade ago, SBIC has been an effective tool. However, if all the program does is provide lower cost capital to venture firms investing in late stage and large deals, it is not fulfilling its purpose of addressing market failure or limitation. Congress should require that SBIC devote some share of funds (perhaps not less than 25 percent) to smaller deals (perhaps less than $2 million).

Through their fiscal policies, states play an increasing role in U.S. macroeconomic stability. Yet most have underfunded rainy day accounts. As a result, when national economic downturns hit, states raise taxes and cut spending, exacerbating recessions and slowing recovery. The federal government can put policies in place to ensure that state and federal budget policies are more harmonized. One way to do this is to tie the states' receipt of federal funds to their willingness to maintain much larger rainy day funds.

To boost U.S. international competitiveness and the number of good jobs, we need a more robust innovation policy. State governments can play a key role in this. In fact, all 50 states now have initiatives to promote technology-based economic development. However, because the benefits of innovation spill across state borders, states invest less in innovation-based economic development than is in the national interest.