In January, the Business Roundtable released “Innovation Nation: An American Agenda for 2020,” a white paper containing a set of policy recommendations “to secure U.S. leadership in innovation, maintain a robust U.S. economy and increase living standards for all Americans through 2020 and beyond.”
The Business Roundtable consists of CEO members that invest nearly $147 billion in research and development, which is equal to more than 40 percent of total U.S. private R&D spending. Drawing from ideas discussed by members at the Business Roundtable’s December 2019 CEO Summit, “Innovation Nation” includes five principles for American innovation.
The first principle is “invest in people.” The next decade will require the United States to significantly reduce its shortage of highly skilled workers. The Roundtable recommends that the U.S. education system be configured to fully tap into the potential of American human capital and increase the country’s rank in science and mathematics to the elite top 10 level of nations.
The second principle is to “make strategic, long-term investments in science and technology.” Specifically, the country needs to “strengthen foundational research, make strategic investments in science and technology, and deploy enabling infrastructure to sustain dominance in underlying technologies, such as artificial intelligence, quantum computing, advanced robotics, aerospace and advanced medicine.”
Moreover, the Business Roundtable recommends developing and implementing a whole-of-government strategic plan for R&D, and building on last year’s public R&D funding increase to sustain a 4 percent annual growth rate.
The third principle is “remove roadblock to innovation.” The white paper recommends a regulatory environment that encourages and enables innovation, being agile, clear and precise, enforceable, and predictable to reduce uncertainty and not undermine the investment environment as a global destination, as well as creating test-beds and regulatory “sandboxes.”
The fourth principle is “position America to compete and thrive worldwide.” The United States must “secure capital and talent, bring new products to market, set technology standards, and dominate strategic technologies.” This also involves “promoting market access for U.S. innovations” as well as enforcing “rules to protect those innovations and investments.”
The fifth principle is “pursue inclusive innovation,” as these innovative products and services need to be accessed by all groups and communities in American society. One recommendation is to support and expand innovation residency programs in underserved areas. “Innovation Nation” also recommends that the nation needs a national innovation strategy allowing for the pursuit of “ambitious, exploratory and ground breaking projects” that will provide solutions to challenges “in fields as varied as health, energy, transportation, education and national security.”
A few months earlier, in September 2019, the Council on Foreign Relations released its report “Innovation and National Security: Keeping Our Edge,” in which the CFR recommends that “the United States must act now to build a national strategy for sustaining American leadership in innovation.”
According to “Innovation and National Security,” this national innovation strategy has four pillars: restoring public support and funding for science; attracting and educating the world’s best STEM talent; making rapid technological adoption a core competency in the Defense Department; and building an international technology alliance. Furthermore, such a strategy will require new forms of cooperation among government officials, the private sector and universities that are designed for “agility and speed.”
President Barack Obama first issued “A Strategy for American Innovation” in 2009, and updated this document in 2011 and 2015. The Trump administration has not announced a formal national innovation strategy.
However, in the December 2017 congressionally mandated “National Security Strategy of the United States of America,” under “Pillar II: Promote American Prosperity” (of six pillars making up the national security strategy), President Trump identified two key priorities concerning innovation: first, preserving the nation’s lead in R&D and technology, and second, protecting the American economy from competitors who unfairly (that is, illegally) acquire America’s intellectual property.
In an article written a year ago (February 2019) in National Review online (“Marco Rubio Wants a National Innovation Strategy”) by Samuel Hammond, director of poverty and welfare policy studies at the Niskanen Center, Hammond notes that “we seem beguiled by the notion that there are ‘free markets’ and ‘central planning’ and nothing in between.”
Hammond references that in the report, “Made in China 2025 and the Future of American Industry,” released February 12, 2019, and the first report of the “Project for Strong Labor Markets and National Development,” Senate Committee on Small Business and Entrepreneurship (which Senator Rubio heads), is a statement worth considering: “Lost in the polarity of the discussion is a path forward that can resolve the concerns of both economic dynamism and efficiency for one, and national sovereignty and value-chain position for the other.”
The momentum for developing and implementing a national innovation strategy is not receding. In March, the Business Roundtable has scheduled a CEO Innovation Summit to discuss why a national agenda is imperative for America’s position as the global leader in innovation. A renewed national innovation strategy, involving important stakeholders in government, industry and education, and consisting of consensus, integrated innovation policies, can provide a critical path forward for maintaining American global economic leadership over the next decade.
This election year is a propitious time for both Democrats and Republicans to offer their vision of a national innovation strategy for their fellow Americans to evaluate before the November election.
After the November election, a bipartisan agreement needs to be reached on a final national innovation strategy, both approved by the Congress and the incoming administration.
Our international competition, however, is not waiting for us. In February 2019, the German government announced its new “National Industry Strategy 2030,” a response to the People’s Republic of China’s “Made in China 2025” five-year national economic plan and the 2017 “United Kingdom Industrial Strategy.”
As noted by the German government, its long-term goal is for the European Union to agree on a joint industrial strategy. However, unlike our global competitors, a more market-driven, less government-directed national innovation strategy effectively addresses both the manufacturing and service sectors of the U.S. economy.