Lessons from Foreign Countries on How U.S. States Can Spur Manufacturing

One policy instrument gaining global traction is the use of innovation vouchers (or “innovation checks”) to spur R&D, new product development, and/or innovation activity in SME manufacturers. Almost a dozen countries—including Austria, Canada, Belgium, Denmark, Germany, the Netherlands, Ireland, and Sweden—as well as Iowa in the United States, use innovation vouchers. These vouchers, usually ranging in value from $5,000-$30,000, enable SMEs to “buy” expertise from universities, national laboratories, or public research institutes regarding preparatory studies, analysis of technology transfer, analysis of the innovation potential of a new technology, etc. The intent of the vouchers is both to spur innovation in SMEs and to stimulate knowledge transfer from universities and research institutions to SMEs; they also have an added benefit of more closely aligning the interests of industry and academia in a country.