Beyond the Box: Innovation Policy in an Innovation-Driven Economy

Abstract

Everybody agrees that innovation is important to our nation’s economic growth and future prosperity, but what can the government do to promote it? The consensus of four years ago focused on remedying our perceived competitive shortcomings in science education and research, especially in the physical sciences. Today, the question takes on new urgency with the recognition that much of the economic growth experienced over the past decade was illusory. For the long term, we need to take a closer look at the institutions that enable innovation, not only to see how they can be better coordinated but also how they can respond to the evolving forms and practice of innovation. This kind of adaptive intelligence has not been a strong point of the federal government, but it is essential to long-term economic growth and security. It will require infusing competence, innovation, and entrepreneurship into the government. Yet it also means recognizing that the capacity and role of government is limited, and that the functions of government are subject to high standards of transparency, accountability, and participation. A national commitment to innovation requires not only remediation but exploiting our strengths and enhancing the fabric of innovation, especially in the social, commercial, and institutional applications of technology. Innovation policy as practiced to date tends to take a top-down macroeconomic approach that views public research funding and tax credits as the primary policy tools. Those are important tools, but they are limited (and costly) and get caught up political processes that have become all too familiar. Important as they are, they should not distract from a closer appreciation and understanding of the processes of innovation — processes that can be improved by a focused and coordinated approach to standards, infrastructure, enabling technology, clusters, and patents, an approach that takes into account evolving practices and models in the many contexts in which innovation takes place.