For over 200 years, the U.S. has been
a home to innovation. We are still celebrated for innovation, but
today innovation is more diverse, often more complex, and increasingly
collaborative. In addition to product and process innovation, we
benefit from new forms of marketing and other business and social
activities.
The policy tools we have for encouraging innovation
have also grown in scope and complexity. The Constitution authorized
patents and copyright “to promote the progress of science and the
useful arts.” In the 19th Century, states invested heavily in
agricultural research. After World War II, the federal government
began making large investments in basic science, as well as in
technology for defense. Post-Sputnik, we worked to improve education
in math and science. We grant tax credits for “research and
experimentation.” We have set-asides for small business, because small
businesses are considered more innovative than large businesses.
For
innovation to happen, ideas are not enough, there must be real impact.
Realizing innovation may require research, practical invention, product
development, integration, design, marketing, and/or organizational
change.
The federal government seldom invests directly in
innovation, except where it supports a recognized federal purpose such
as defense. State governments (as well as other countries) have been
more adventuresome, sometimes putting money into incubators, technology
parks, research consortia, investment funds, regional clusters,
research institutions, and region-specific technologies. Yet the
federal government plays a critical role in setting the right
conditions for innovation. It supports a vast amount of scientific
research and data collection. The federal government sets the ground
rules for intellectual property, environmental protection, corporate
reporting, financial markets, trade, consumer protection, and health
and safety standards – all of which shape innovation and competition.
Innovation
is key to long-term economic growth through productivity gains and new
wealth creation. Innovation enables the U.S. – and the rest of the
world – to prosper and to address monumental challenges such healthcare
and climate change. At the same time, the United States faces an
increasingly competitive global economy in which other traditional
advantages are less distinctive. Fortunately, our country has a unique
capacity and culture for innovation. The problem is getting the right
mix of policies and programs to optimize opportunities, conditions, and
payoffs. Not just in manufacturing, but in services, research,
learning, and government itself. Resources are limited and old
policies and practices do not automatically apply to the growing
diversity of innovation. The ecology of innovation is changing
rapidly, and we need to know how programs, policies, and practice
interact.
The Obama Administration’s
Strategy for American Innovation
is a big step in the right direction. However, it needs work. It
advocates building roads and bridges but ignores the problems of the
patent system. While roads and bridges are important to the efficiency
of the economy as a whole, the connection to innovation is remote.
Whereas the patent system, which dates back to the Constitution, is at
the heart of U.S innovation policy, and it needs serious attention.
There
is nothing particularly controversial about roads and bridges, but
there is plenty of debate about the patent system. Historically, the
patent system has been shaped by patent applicants and owners – and
especially by the patent bar, which has consistently advocated for more
patents, ever stronger patents, and patents for all human activity.
Today,
in a global economy that prizes agility, speed, efficiency, and
collaboration, the patent system has grown bloated, ideological, and
costly. It remains dogmatically one-size-fits-all, despite an
ever-growing body of evidence that it works very differently in
different fields and conditions. The debate over reform pits industry
against industry, upstream against downstream, speculators against
service providers, etc. Yet we do not attempt to measure or monitor
how the patent system is working, so patent policy becomes a political
exercise in which Congress ends up choosing winners and losers.
With
the America COMPETES Act up for re-authorization this year, we need a
deeper and broader understanding of innovation. The problem with
patents is only the most conspicuous manifestation of a general
problem. We want more innovation, but our tools for understanding it
are increasingly inadequate. Our capacity for innovation has
distinguished us, but we live in a time where a rich fabric of
competition and collaboration needed to support innovation has become
the objective of every enterprising region on the globe. Business as
usual, innovation as usual, is not the answer.
