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ment and private funding, the diverse portfolio of government-funded research awarded through peer review, strong intellectual property and securities regulation, and the financing of innovation “led by a uniquely dynamic venture capital industry.”f

It is generally considered important for the United States to continue to reassess the environment for innovation and to address shortcomings wherever possible; some believe current incentives for companies to innovate and commercialize are strong and not in need of a significant overhaul.


aP. W. Bauer. “Are WE in a Productivity Boom? Evidence from Multifactor Productivity Growth.” Cleveland, OH: Federal Reserve Bank of Cleveland, October 15, 1999. Table 1. Available at:


bD. W. Jorgenson, M. S. Ho, and K. J. Stiroh. “Projecting Productivity Growth: Lessons from the US Growth Resurgence.” Discussion Paper 02-42. Washington, DC: Resources for the Future, July 2002. Available at:’U.S.%20productivity%20growth’; Bureau of Labor Statistics. “Productivity and Costs, 2nd Quarter 2005, Revised.” News Release, September 7, 2005. Available at:


cM. Dertouzos, R. Lester, and R. Solow. Made in America: Regaining the Productive Edge. Cambridge, MA: MIT Press, 1989.


dNational Research Council. US Industry in 2000: Studies in Competitive Renewal. Washington, DC: National Academy Press, 1999.


eR. J. Gordon. Why Was Europe Left at the Station When America’s Productivity Locomotive Departed? Working Paper 10661. Cambridge, MA: National Bureau of Economic Research, August 2004. Available at:


fR. J. Gordon. The United States. In B. Steil, D. G. Victor, and R. R. Nelson, eds. Technological Innovation and Economic Performance. Princeton, NJ: Princeton University Press, 2002. Pp. 49-73.

cific changes recommended here create significant opportunities. It should be noted that several focus-group members and reviewers raised product liability and tort reform as areas for potential improvement. However, the committee determined that the Class Action Fairness Act of 2005, which represents a major policy change, is a step forward in the national approach to issues of product liability.9


Enhance intellectual-property protection for the 21st century global economy to ensure that systems for protecting patents and other forms of intellectual property underlie the emerging knowledge economy but allow


Statement on S.5, the Class-Action Fairness Act of 2005. White House press statement. February 18, 2005.

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