Inn nnov ovation Po Policy cy L Lessons From m America Ame - PowerPoint PPT Presentation

Inn nnov ovation Po Policy cy L Lessons From m America Ame Dr. Robert D. Atkinson President, ITIF April 6, 2016 @RobAtkinsonITIF @ITIFdc

ITIF: Who We Are The Information Technology and Innovation Foundation is a think tank at the cutting edge of designing innovation policies and exploring how innovation drives boost growth and competitiveness. ITIF focuses on: Innovation processes, policy, and metrics,  Internet, big data and ICT policy,  Tech, productivity, and jobs,  Science and tech policy, and  Innovation and trade policy. 

Today’s Presentation Explai aining g the P e Par arad adox ox of of U U.S .S. I . Innov ovat ation on 1 Lead eader ership Historical-Structural Reasons For U.S. Innovation 2 Leadership 3 Innovation Policy Reasons for U.S. Leadership Innovation Policy Principles 4 Global Best Practices for Innovation Policy 5 3

0. 0.0% 0. 0.2% 0.4% 0. 0.6% 0. Invest More in University Research? How Can the U.S. Lead When Other Nations 0% 2% 4% 6% Swe wede den Switze tzerl rland Source: ITIF Report: University Research Funding: The United States is Behind and Falling , May 2011 Nethe herlands nds Icel elan and Fi Finl nland nd Austri stria Sin inga gapor ore Austra stralia Esto stonia Portu rtugal Norway ay Cana nada da Fr Franc nce Ger erman any Ire Ireland Uni nited… d… Kor orea Ta Taiwa wan Isra Israel Bel elgiu ium Spain ain Unite ted S Sta tate tes Cz Czech ch… Jap apan Slov loven enia ia Hung ungary Pola oland Tur Turkey Chi hina na 4 Rus Russia

How Can the U.S. Lead When Other Nations Have Much More Generous R&D Tax Incentives? 0.450 0.400 0.350 0.300 0.250 0.200 0.150 0.100 0.050 0.000 Source: ITIF Report: We’re #27!: The United States Lags Far Behind in R&D Tax Incentive Generosity , July 2012 5

How Can the U.S. Lead When Other Nations Have National Innovation Agencies? Count untry Has as Articu culat ated ed a N a Nat ation onal al Nat ation onal al I Innov ovat ation on Year ear A Agen gency cy Innov ovat ation on Strat ategy egy? Agen gency cy/Fou oundat ation on Int ntroduc duced Yes Brazil Innovation Agency 1967 Br Brazil Chi hina na Yes Ministry of Science and Technology 1998 Yes Danish Agency for Science, Technology, and 2006 Denma mark rk Innovation Yes Tekes 1983 Finl Fi nland nd Yes OSEO 2005 Franc Fr nce Yes National Innovation Foundation 2000 Indi ndia Ire Ireland Yes Forfas 1994 Yes ENEA (National Agency for New Technologies, 1999 Italy Ita Energy and the Environment) Jap apan an Yes New Energy and Industrial Technology 1980 Development Organization (NEDO) Yes Korea Industrial Technology Foundation 2001 Kor orea ea Yes Senter Novem 2004 The The N Nethe herlands nds Yes Innovasjon Norge 2004 Nor orway ay Yes Agência de Inovação 2003 Por ortugal gal South th A Afri frica Yes National Advisory Council on Innovation 2006 Yes VINNOVA 2001 Swed eden en Tai aiwan an Yes Industrial Technology Research Institute 1973 Yes National Innovation Agency 2003 Thailand Tha nd Uni nited K d King ngdo dom Yes Department of Business, Innovation, and Skills 2009 Yes N/A N/A Unite ted S Sta tate tes Yes National Research and Innovation Agency (ANII) 2008 Urug ugua uay 6

Today’s Presentation Explaining the Paradox of U.S. Innovation 1 Leadership His isto toric rical-Struct ctural al Reas eason ons F For or U U.S .S. . Innov ovat ation on 2 Lead eader ership 3 Innovation Policy Reasons for U.S. Leadership Innovation Policy Principles 4 Global Best Practices for Innovation Policy 5 7

Scale Matters  Scale matters in innovation-based industries with high fixed costs and low marginal costs.  The U.S.’s large integrated continental market means its firms can get to scale faster than firms in most other markets.  This is one reason U.S. firms are much larger (32% of AU firms over 200 workers; 50% of U.S. firms over 250 workers) 8

This Is One Reason U.S. Firms Are Much Larger Percent of total workforce employed at enterprises by size, 2010. Source: OECD, Entrepreneurship at a Glance 2013 9

First Mover Advantage Matters  In the 1960’s, the U.S. federal government spent more on R&D than the rest of world, government and business, combined.  United States was first in world to develop a venture capital industry. – American Research and Development Corporation in Boston in 1946  These helped U.S. innovation firms and U.S. innovation gain first mover advantages that remain. 10

Federally Supported Innovations Advanced Prosthetics   Google Search Engine The Human Genome Project GPS    Supercomputers  HIV/AIDS Artificial Intelligence and Speech  Reverse Auctions  Recognition Kidney Matching Program  ARPANET: Foundation of the Internet  Fast Multipole Method  Closed Captioning   SCALE-UP (Student-Centered Active Learning Environment for  Smartphone Technologies Undergraduate Programs) Learning The Shale Gas Revolution Science Advances   Seismic Imaging Civilian Aviation  Visible LED Lighting Technology  Hybrid Corn   Magnetic Resonance Imaging (MRI) Lactose Free Milk  11

A Risk-Taking Culture Matters  Long culture of “Yankee ingenuity,” meaning a deep- seated interest in tinkering, inventing, and making things better.  Acceptance and even embrace of “Schumpeterian destruction.” 12

Americans Are More Eager to Take Risks and Compete http://ec.europa.eu/public_opinion/flash/fl_283_en.pdf 13

Today’s Presentation Explaining the Paradox of U.S. Innovation 1 Leadership Historical-Structural Reasons For U.S. Innovation 2 Leadership 3 Innov ovat ation on Pol olicy cy R Reas eason ons for or U U.S .S. L . Lead eader ership Innovation Policy Principles 4 Global Best Practices for Innovation Policy 5 14

Long Tradition of Policies to Support Tech-Transfer  Bayh Dole Act to give universities rights to IP from federally-funded research Stevenson-WydlerTechnology Innovation Act in 1980 made a number of changes to  better enable the transfer of technology from federal laboratories to commercial use System of industry-university institutes (e.g., Engineering Research Centers,  Industry-University Cooperative Research Centers) The Small Business Innovation Research Program requires federal agencies to  allocate around 3% of R&D budgets to small business research projects related to agency goals Cooperative Research and Development Act in 1984 allowed companies to gain an  anti-trust exemption for participating in pre-competitive R&D consortia 15

Most U.S. States Have Innovation Policies  Illinoi ois Sci cien ence ce & T Tech echnol ology ogy C Coal oalition on Cor orpor orat ate- St Startup Cha up Challeng nge  Pe Penns nnsylvani nia B Ben Fr n Frank nklin n Tech echVen entures es  i2E, , Inc. O c. Okl klah ahom oma’ a’s P Proof oof-of of-Co Conc ncept pt Fund Fund  Geor eorgi gia R a Res esear earch ch A Allian ance ce 16

Today’s Presentation Explaining the Paradox of U.S. Innovation 1 Leadership Historical-Structural Reasons For U.S. Innovation 2 Leadership 3 Innovation Policy Reasons for U.S. Leadership In Innovatio tion P Polic licy Prin rincip iple les 4 Global Best Practices for Innovation Policy 5 17

Strategic Issues Related to S&T Goals 1. S . Sci-Tech h or Inno r Innovati tion 18

Innovation is More Than Sci-Tech Product Development 19

Innovation is More Than Sci-Tech Product Development 20

Strategic Issues Related to S&T Goals 1. Sci-Tech or Innovation 2. Devel evelopment opment or or Diffusi usion on 2. 21

Strategic Issues Related to S&T Goals 1. Sci-Tech or Innovation 2. Development or Diffusion 3. All Technol echnolog ogies or es or Speci pecial alizat zation on 3. 22

Strategic Issues Related to S&T Goals 1. Sci-Tech or Innovation 2. Development or Diffusion 3. All Technologies or Specialization 4. Breakth Breakthrou rough gh or In or Incremen cremental tal Advan ance ce 4. 23

Strategic Issues Related to S&T Goals 1. Sci-Tech or Innovation 2. Development or Diffusion 3. All Technologies or Specialization 4. Breakthrough or Incremental Advance 5. Lais issez F Fair ire o or “Industria ial l Polic licy” 5. 24

Today’s Presentation Explaining the Paradox of U.S. Innovation 1 Leadership Historical-Structural Reasons For U.S. Innovation 2 Leadership 3 Innovation Policy Reasons for U.S. Leadership Innovation Policy Principles 4 Glob obal al B Bes est Pract actices ces f for or Innov ovat ation on P Pol olicy cy 5 25

Global Examples of Innovation Policy Best Practices: SME Support and Tech Transfer  Innovation vouchers (Austria, Netherlands, & Germany)  Refundable R&D tax credits (France, Norway, Australia)  Performance-based university funding (Sweden, Finland)  Design assistance (UK, Ontario)  “On the spot” new firm registration (Portugal, Chile) 26