1. How does NIF differ from industrial policy?
NIF is not industrial policy because it is not about picking industrial “winners”. Rather than taking the view that some industries are more important to the U.S. than others, NIF is based on the idea that innovation and productivity growth can happen in any industry and that the nation benefits regardless of the industry in which they occur.
Moreover, NIF decisions about which proposals to fund and which firms to assist would be based on collaboration with industry rather than Washington telling industry what to do. When businesses come to NIF with proposals, NIF would evaluate them with the assistance of knowledgeable experts from the private sector and academia.
Finally, a significant share of NIF funds would go to support states in the kinds of technology-based economic development activities that transcend politics. That is, funding will be available regardless of what party controls the legislature or the governor’s office.
2. Reorganizing existing agencies into the Department of Homeland Security (DHS) was difficult and complicated. Wouldn’t the creation of NIF involve similar problems?
DHS involved bringing together a large number of long-established agencies from many different parts of the federal government with very different agency cultures and missions. By contrast, NIF would bring together the activities of just six small programs—including some that are less than a decade old—from only three federal agencies. These would be the Manufacturing Extension Program (MEP) and the Technology Innovation Program (TIP) currently in the Commerce Department; the Workforce Innovation in Regional Economic Development (WIRED) in the Labor Department; and three commercial innovation programs in the National Science Foundation (NSF). These existing programs already have much in common in their institutional cultures and missions. In NIF, they would be combined with several complementary activities that are new to the federal government
Precisely because of the DHS experience, NIF is designed not to include every federal program that remotely contributes to innovation, but only a small core of complementary activities that directly contribute to non-farm commercial innovation.
3. Why not just coordinate existing federal innovation-related activities rather than create NIF as a new entity?
A loose coordinating structure for existing programs would not achieve a federal innovation policy. As it is, existing activities are fragmented and diffuse, underfunded, pay little attention to innovation in services, and do not take advantage of state-level expertise in promoting innovation. Even if additional funding, expanded missions, and better coordination could fix these problems, there would still be no person, program, or agency with the mandate and ability to improve the nation’s capacity to innova