Blame for the Great Recession and America’s halting recovery has been attributed to many factors. But according to a new book, a major culprit has gone unnamed: the United States’ decline in the race for global innovation advantage. A complacent and politically polarized America is fated for a slow, painful transition into a “Rust Nation,” they warn, unless our leaders can muster the will to act.
In INNOVATION ECONOMICS: The Race for Global Advantage, Robert D. Atkinson and Stephen J. Ezell, president and senior analyst, respectively, of the non-partisan Information Technology and Innovation Foundation, explain that today, economic growth hinges on the ability to create new products, services, processes, or ways of doing business. And the competition in these areas is intensifying. While the U.S. has watched its manufacturing sector decline at a rate faster than in the Great Depression, shifted its R&D overseas, and squandered its ample resources on risky speculation, scores of nations have done the opposite and made investment in innovation a top priority. It’s not too late for America to take the lead again, the authors write, but changes must be made.
Using publicly-available data and a historical perspective, Atkinson and Ezell shed new light on trends such as the decline of U.S. manufacturing jobs and the broken link between company and country. They describe how technology and innovation ultimately drive long-run economic growth, and show how countries now compete on the basis of their national innovation ecosystems—comprised of knowledge, risk capital, and regulatory, institutional, and technological factors. This in turn is forcing governments to rethink their economic growth strategies and policies, making support for technology and innovation a central tenet.
Yet the United States is woefully unprepared for this new world, they argue, in part because it lacks a robust innovation and competitiveness policy. In INNOVATION ECONOMICS, Atkinson and Ezell analyze what nations around the world are doing to either help or hinder innovation, and how the U.S. might emulate the best ideas. They lay out a practical roadmap of eight steps the U.S. must take to stimulate innovation and job creation, and explain why the U.S. to date has been unwilling to take the necessary steps to win the race.
And finally they explain how global bodies like the WTO and IMF must change to ensure innovation can flourish amid fair competition, allowing all boats to rise.
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