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ITIF Offers Strategy To Reignite American Competitiveness Through COMPETES Act Reauthorization

April 24, 2013

U.S. innovation policy, which in the latter half of the twentieth century became focused on massive federal investment in basic research, is no longer tenable, according to a new report from the Information Technology and Innovation Foundation (ITIF). In the post-World War II era, the federal government funded a wide variety of costly basic research projects at U.S. universities and federal laboratories without a guiding economic strategy for these investments. This approach has ceased to yield the kind of economic growth it once did, due to the globalization of the economy and knowledge diffusion. ITIF proposes 25 recommendations that could be adopted by the federal government along with the reauthorization of the America COMPETES Act in order to modernize the country's innovation policy and improve U.S. competitiveness.

The COMPETES Act, passed in 2007 and first reauthorized in 2011, did much to increase research funding, improve coordination of federal science and technology (S&T) activities and boost support for manufacturing and STEM education, but stopped short of a wholesale revamp of the federal innovation enterprise. ITIF suggests that the 2013 reauthorization provides a valuable opportunity to change the government's model of how research feeds the economy and make strategic decisions about research investments. The report offers six key principles for such an effort:

  • Increased funding is not enough; institutional reform also is needed.
  • The prevailing linear innovation approach (i.e. universities and federal laboratories conducting basic research and private industry conducting applied research) is ineffective and incomplete.
  • Barriers exist that will no longer allow government to simply fund basic reserach in expectation that new technologies will be commercialized as a result.
  • Not all scientific research funding is created equal (i.e. some research ultimately pays smaller economic dividends to the U.S. economy).
  • Certain research programs are much more important to our country's economic well-being and competitiveness than others.
  • Not all students likely are to become scientists or engineers (i.e. STEM efforts should focus on those most interested in STEM careers).

About half of the recommendations would attempt to spur U.S. innovation and technology commercialization activity through federal action and public-private partnerships. First, and key, is that the U.S. return to its commitment to double its investment in R&D for core science programs by 2018, based on 2008 funding levels. Both President Bush and President Obama endorsed this goal at various times, but economic crises have driven the federal spending from the budgetary path. Two new programs are recommended: one that would use a percentage of federal agency research budgets to fund university entrepreneurship efforts and state technology-based economic development initiatives, and one that would fund experimental technology transfer initiatives at research institutions. ITIF also proposes a new university-industry flat tax credit of 20 percent for collaborative research to help build innovation networks and a change in rules to allow government labs to take an equity stake in the startups they help launch.

The other recommendations would restructure federal institutions to better serve the modern innovation economy and bolster the U.S. S&T workforce by enhancing specialized STEM education programs. ITIF posits a number of changes for the National Science Foundation (NSF) in particular, along with a new Office of Innovation Review at the Office of Management and Budget. In order to fully embrace the federal government's necessary role in applied research and engineering, the restructuring would include a new agency alongside NSF, or a revised mission for NSF itself, that would consolidate engineering and manufacturing initiatives in several agencies. NSF would also create a deputy director position for economic growth and innovation, and begin increasing research funding for areas with greater potential for economic impact. This would entail shifting funding for geosciences and social sciences to math and physical sciences, engineering, computer and information science and engineering, and biological sciences. ITIF recommends that funding for university research be based, at least in part, on effectiveness in commercializing new technologies. To improve U.S. STEM education, the report provides a number of recommendations that would create a clearer, more effective educational track from high school to PH.D. fellowships for students that are motivated to join the S&T workforce.

A fact sheet with the list of 25 recommendations is available at: http://www2.itif.org/2013-competes-act-recommendations.pdf

Though many of the recommendations could be adopted in a piecemeal way, together, they depict the kind of federal overhaul that may be needed to re-engage the government in building an economy that can compete globally in the coming decades. While many of the specifics may stir debate within the U.S. innovation community, the report can serve as a useful frame for the coming debate over COMPETES reauthorization.

Download the full report, 25 Recommendations for the Reauthorization of the 2013 America COMPETES Act, at: http://www.itif.org/publications/25-recommendations-2013-america-competes-act-reauthorization

information technology, policy recommendations, stem, r&d, higher ed