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as the market and regulatory environment, trade policy, intellectual-property policies, policies that affect the accumulation of human capital, and policies affecting innovation environments in specific regions. In addition, grand challenges issued by the president (such as the reaction to Sputnik and the call for the Apollo project) can mobilize resources and the national imagination in pursuit of important innovation-related goals.

How can the United States sustain and improve the environment for innovation even in a future where its relative share of global S&E inputs to the innovation process (such as R&D spending, S&E personnel, and the quantity and quality of scientific literature) declines?

Many approaches to improving the innovation environment have been suggested. On some issues, including the offshoring of service-industry jobs, contradictory diagnoses and prescriptions have emerged on the basis of interests and political outlook of the analysis. On other issues, such as patent-system reform, similar suggestions have emerged from several different reports. The approaches suggested include the following:

Market, Regulatory, and Legal Environment
  • Establish a public-private body to assess the impact of new regulations on innovation.

  • Reduce the costs of tort litigation for the economy.

  • Reform Section 404 of the Sarbanes–Oxley Act.

  • Drop current efforts to expense stock options.

  • Create best practices for collaborative standard-setting.

  • Undertake market and regulatory reforms in the telecommunications industry with the goal of accelerating the speed and accessibility of networks.

  • Increase focus on enforcement of the prevailing global rules for intellectual-property protection, particularly in China and in other countries where significant problems remain.

  • Make completion of the Doha Round of world-trade talks a priority.

Intellectual Property
  • Harmonize the US, European, and Japanese patent systems.

  • Institute a postgrant open-review procedure for US patents.

  • Stop diverting patent application fees to general revenue to provide the US Patent and Trademark Office (USPTO) with sufficient resources to modernize and improve performance.

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