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Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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INNOVATION POLICIES FOR THE 21ST CENTURY

Report of a Symposium

Committee on Comparative Innovation Policy: Best Practice for the 21st Century

Board on Science, Technology, and Economic Policy

Policy and Global Affairs

Charles W. Wessner, Editor

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

Washington, D.C.
www.nap.edu

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
×

THE NATIONAL ACADEMIES PRESS

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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

This study was supported by: Contract/Grant No. SB1341-03-C-0032 between the National Academy of Sciences and the U.S. Department of Commerce; Contract/Grant No. OFED-381989 between the National Academy of Sciences and Sandia National Laboratories; and Contract/Grant No. NAVY-N00014-05-G-0288, DO #2, between the National Academy of Sciences and the Office of Naval Research. This material is based upon work also supported by the Defense Advanced Research Projects Agency Defense Sciences Office, DARPA Order No. K885/00, Program Title: Materials Research and Development Studies, Issued by DARPA/CMD under Contract #MDA972-01-D-0001. Additional funding was provided by Intel Corporation, International Business Machines, and Google. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.

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Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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THE NATIONAL ACADEMIES

Advisers to the Nation on Science, Engineering, and Medicine


The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.


The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering.


The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.


The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council.


www.national-academies.org

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Committee on Comparative Innovation Policy: Best Practice for the 21st Century*

William J. Spencer, Chair Chairman Emeritus, retired

SEMATECH

Kenneth Flamm, Vice Chair

Dean Rusk Chair in International Affairs

Lyndon B. Johnson School of Public Affairs

University of Texas at Austin and STEP Board

Alice H. Amsden Professor of Political Economy

Massachusetts Institute of Technology

Gail H. Cassell Vice President, Scientific Affairs

Distinguished Lilly Research Scholar for Infectious Diseases

Eli Lilly and Company

Lewis S. Edelheit Senior Research and Technology Advisor, retired

General Electric

Mary L. Good, Vice Chair

Donaghey University Professor

Dean,

Donaghey College of Information Science and Systems Engineering

University of Arkansas at Little Rock and STEP Board

Bronwyn Hall Professor of Economics

University of California at Berkeley

Mark B. Myers Visiting Professor of Management

The Wharton School of Business University of Pennsylvania

Alan Wm. Wolff Managing Partner

Dewey Ballantine

*

As of December 2006.

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
×

Project Staff*

Charles W. Wessner Study Director

Sujai J. Shivakumar Senior Program Officer

McAlister T. Clabaugh Program Associate

David E. Dierksheide Program Officer

Paul Fowler Senior Research Associate

Ken Jacobson Consultant

Jeffrey C. McCullough Program Associate

*

As of December 2006.

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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For the National Research Council (NRC), this project was overseen by the Board on Science, Technology and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the STEP Board is to integrate understanding of scientific, technological, and economic elements in the formulation of national policies to promote the economic well-being of the United States. A distinctive characteristic of STEP’s approach is its frequent interactions with public and private-sector decision makers. STEP bridges the disciplines of business management, engineering, economics, and the social sciences to bring diverse expertise to bear on pressing public policy questions. The members of the STEP Board* and the NRC staff are listed below:


Dale Jorgenson, Chair

Samuel W. Morris University Professor

Harvard University


Timothy Bresnahan

Landau Professor in Technology and the Economy

Stanford University


Lew Coleman

President

Dreamworks Animation


Kenneth Flamm

Dean Rusk Chair in International Affairs

Lyndon B. Johnson School of Public Affairs

University of Texas at Austin


Mary L. Good

Donaghey University Professor

Dean, Donaghey College of Information Science and Systems Engineering

University of Arkansas at Little Rock


Amo Houghton

Member of Congress, retired


David T. Morgenthaler

Founding Partner

Morgenthaler Ventures


Joseph Newhouse

John D. MacArthur Professor of Health Policy and Management

Harvard University


Edward E. Penhoet

President

Gordon and Betty Moore Foundation


Arati Prabhakar

General Partner

U.S. Venture Partners


William J. Raduchel

Independent Director and Investor


Jack Schuler

Chairman

Ventana Medical Systems


Suzanne Scotchmer

Professor of Economics and Public Policy

University of California at Berkeley

*

As of December 2006.

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Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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STEP Staff*

Stephen A. Merrill

Executive Director


McAlister T. Clabaugh

Program Associate


David E. Dierksheide

Program Officer


Paul Fowler

Senior Research Associate


Charles W. Wessner

Program Director


Sujai J. Shivakumar

Senior Program Officer


Jeffrey C. McCullough

Program Associate


Mahendra Shunmoogam

Program Associate

*

As of December 2006.

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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Contents

PREFACE

 

xiii

I.  INTRODUCTION

 

1

II.  PROCEEDINGS

 

39

 

 

Welcome Remarks
Charles W. Wessner, National Research Council

 

41

 

 

Opening Remarks
William J. Spencer, SEMATECH, retired

 

43

Panel I:

 

An Overview of the Global Challenge
Moderator: Bradley Knox, House Committee on Small Business

 

45

   

 The Innovation Challenge: Drivers of Growth in China and India
Carl J. Dahlman, Georgetown University and The World Bank, retired

 

45

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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Panel II:

 

New National Models
Moderators: Bradley Knox, House Committee on Small Business and Charles W. Wessner, National Research Council

 

68

   

 The Record and the Challenge in Germany
Stefan Kuhlmann, Fraunhofer ISI, Germany

 

68

   

 The Tekes Experience and New Initiatives
Heikki Kotilainen, Tekes, Finland

 

77

   

 Converting Research to Innovation
Peter J. Nicholson, Office of the Prime Minister, Canada

 

85

 

 

Luncheon Address in the Great Hall
John H. Marburger, White House Office of Science and Technology Policy

 

99

Panel III:

 

New Models in Japan, Taiwan, and China
Moderator: Alice H. Amsden, Massachusetts Institute of Technology

 

111

   

 The Taiwanese Model: Cooperation and Growth
Hsin-Sen Chu, Industrial Technology Research Institute (ITRI), Taiwan

 

112

   

 Japanese Technology Policy: Evolution and Current Initiatives
David K. Kahaner, Asian Technology Information Program

 

121

   

 New Paradigms for Partnerships: China Grows a Semiconductor Industry
Thomas R. Howell, Dewey Ballantine

 

129

   

 Innovation Policies in Japan
Hideo Shindo, New Energy and Industrial Technology Development Organization (NEDO), Japan

 

137

Panel IV:

 

Evolution of Technology Partnerships in the United States
Moderator: Lewis S. Edelheit, General Electric, retired

 

141

   

 U.S. Policy for a Key Sector: The Case of Supercomputers
Kenneth Flamm, University of Texas at Austin

 

142

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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 Crossing the Valley of Death: The Role and Impact of the Advanced Technology Program
Marc G. Stanley, National Institute of Standards and Technology

 

152

   

 Sandia National Laboratories: DoE Labs and Industry Outlook
J. Pace VanDevender, Sandia National Laboratories

 

159

Panel V:

 

Discussion Roundtable: What Are the Conditions for Success?
Moderator: Mark B. Myers, The Wharton School Stefan Kuhlmann, Fraunhofer ISI, Germany Hsin-Sen Chu, Industrial Technology Research Institute (ITRI), Taiwan Peter J. Nicholson, Office of the Prime Minister, Canada Marc G. Stanley, National Institute of Standards and Technology Lewis S. Edelheit, General Electric, retired

 

167

III.  APPENDIXES

 

 

A.

 

Biographies of Speakers

 

179

B.

 

Participants List

 

192

C.

 

Bibliography

 

200

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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Preface

Recognizing that a capacity to innovate and commercialize new high-technology products is increasingly a part of the international competition for economic leadership, governments around the world have taken active steps to strengthen their national innovation systems. These steps underscore the belief that the rising costs and risks associated with new potentially high-payoff technologies, and the growing global dispersal of technical expertise, require national R&D programs to support new and existing high-technology firms within their borders.

We define innovation as the transformation of an idea into a marketable product or service, a new or improved manufacturing or distribution process, or even a new method of providing a social service. This transformation involves an adaptive network of institutions that encompass a variety of informal and formal rules and procedures—a national innovation ecosystem—that shape how individuals and corporate entities create knowledge and collaborate to bring new products and services to market. If we define competitiveness as the ability to gain market share by adding value better than others in the globalized economic environment, the ability of these actors to collaborate successfully within a given innovation ecosystem gains significance. Recognizing this, policymakers around the world are supporting a variety of initiatives to reinforce their national innovation ecosystems as a way of improving their national competitiveness.

The proliferation of national initiatives to support innovation highlights the need for better understanding by U.S. policy makers of the objectives, structure, operation, funding levels, and trends characterizing some of the major programs around the world. These programs and associated policy measures are of great

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
×

relevance to the United States both for their potential impact on U.S. competitiveness and for the lessons they may hold for U.S. programs.

With these objectives in mind, the National Research Council’s Board on Science, Technology, and Economic Policy (STEP) has embarked on a study of selected foreign innovation programs in comparison with major U.S. programs. As such, the premise of this study is not to consider the possibility of a pure laissez-faire approach to fostering innovation, but rather to recognize the importance of targeted government promotional policies relative to innovation.1 The analysis, carried out under the direction of an ad hoc committee, is to include a review of the goals, concept, structure, operation, funding levels, and evaluation of foreign programs designed to advance the innovation capacity of national economies and enhance their international competitiveness.2

In his welcoming remarks as the chair of this study, William Spencer stated that the purpose of the study’s inaugural conference held on April 15, 2005, “was to try to gather the facts on how innovation and technology transfer were being funded in the various economic regions, and in particular on the roles of private and public funding.” In particular, the conference focused on how universities, laboratories, and the private sector—both large companies and small—can link together in an effective system of national innovation. This volume provides a summary of this conference.

THE CONTEXT OF THIS REPORT

Since 1991 the STEP Board has undertaken a program of activities to improve policy makers’ understanding of the interconnections among science, technology, and economic policy and their importance to the American economy and its international competitive position. The Board’s interest in comparative innovation policies derive directly from its mandate.

This mandate has previously been reflected in STEP’s widely cited volume, U.S. Industry in 2000, which assesses the determinants of competitive performance

1

Government programs to promote promising technologies are a well-known and longstanding practice. See, for example, Vernon W. Ruttan, Technology, Growth, and Development: An Induced Innovation Perspective. Oxford, UK: Oxford University Press, 2000.

2

Thus, while cognizant of the role of Defense Advanced Research Projects Agency (DARPA), and more broadly the Department of Defense, in the U.S. innovation system, the focus of the conference was on civilian technology programs that operate closer to market than does DARPA. In addition, as Alic and Branscomb et al. have described in Beyond Spin-off, the earlier military driven model of U.S. innovation is no longer as effective as it once was. DARPA funding of advanced technologies, particularly in Information Technology (IT), have had enormous impact, although largely on platform technologies that had wide and profound spillovers. Indeed the emergence of China and certainly India in the global economy attests to the impact of the Internet, to which DARPA made major contributions. See John A. Alic, Lewis M. Branscomb, Harvey Brooks, Ashton B. Carter, and Gerald L. Epstein, Beyond Spin-off: Military and Commercial Technologies in a Changing World, Boston, MA: Harvard Business School Press, 1992.

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
×

in a wide range of manufacturing and service industries, including those relating to information technology.3 The Board also undertook a major study, chaired by Gordon Moore of Intel, on how government-industry partnerships can support the growth and commercialization of productivity enhancing technologies.4 Reflecting a growing recognition of the importance of the surge in productivity since 1995, the Board also launched a multifaceted assessment, exploring the sources of growth, measurement challenges, and the policy framework required to sustain the New Economy.5

The current study on Comparative Innovation Policies builds on STEP’s experience to develop an international comparative analysis focused on U.S. and foreign innovation programs. The analysis will include a review of the goals, concept, structure, operation, funding levels, and evaluation of foreign programs similar to major U.S. programs. Among other initiatives, this study will convene senior officials and academic analysts engaged in the operation and evaluation of these programs overseas to gain a first-hand understanding of the goals, challenges, and accomplishments of these programs.

The project held its opening event, “Innovation Policies for the 21st Century,” on April 15, 2005. This international symposium drew experts from Europe, North America, and East Asia to provide overviews of major programs underway around the world to support innovation. This conference report summarizes their practical, “hands-on” insights concerning government and government-related programs that have worked. While the conference stimulated a rich and varied discussion, it did not (nor could it reasonably hope to) cover all facets of this important topic. For example, the issue of national treatment of intellectual property rights, while raised by some speakers, did not emerge as a focus of discussion. (The relationship between national innovation policies and global linkages is another issue touched on in this conference but not fully amplified. Similarly, the issue of national themes or innovation focus as practiced in different parts of the world was raised during the conference but not sufficiently articulated.) These issues are important and call for further attention. This report reflects both the strengths and limitations of the conference of April 15, 2005; it captures the scope and diversity of national programs and raises issues of direct policy interest for further research.

3

National Research Council, U.S. Industry in 2000: Studies in Competitive Performance, David C. Mowery, ed., Washington, D.C.: National Academy Press, 1999.

4

This summary of a multivolume study provides the Moore Committee’s analysis of best practices among key U.S. public private partnerships. See National Research, Government-Industry Partnerships for the Development of New Technologies: Summary Report, Charles W. Wessner, ed., Washington, D.C.: The National Academies Press, 2003. For a list of U.S. partnership programs, see Christopher Coburn and Dan Berglund, Partnerships: A Compendium of State and Federal Cooperative Programs, Columbus, OH: Battelle Press, 1995.

5

National Research Council, Enhancing Productivity Growth in the Information Age: Measuring and Sustaining the New Economy, Dale W. Jorgenson and Charles W. Wessner, eds., Washington, D.C.: The National Academies Press, 2007.

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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ACKNOWLEDGMENTS

We are grateful for the participation and the contributions of the Defense Advanced Research Projects Agency, the National Institute of Standards and Technology, the National Science Foundation, and Sandia National Laboratories.

We are indebted to Ken Jacobson for his preparation of this meeting summary. Several members of the STEP staff also deserve recognition for their contributions to the preparation of this report, including Sujai Shivakumar, McAlister Clabaugh and David Dierksheide for their role in preparing the conference and getting this report ready for publication.

NRC REVIEW

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for quality and objectivity. The review comments and draft manuscript remain confidential to protect the integrity of the process.

We wish to thank the following individuals for their review of this report: Vinod Goel, The World Bank; Thomas Howell, Dewey Ballantine LLP; Kent Hughes, Woodrow Wilson International Center for Scholars; William Morin, Applied Materials; Dirk Pilat, Organization for Economic Cooperation and Development; and Andrew Toole, Rutgers University.

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the content of the report, nor did they see the final draft before its release. Responsibility for the final content of this report rests entirely with the committee and the institution.


William J. Spencer

Charles W. Wessner

Suggested Citation:"Front Matter." National Research Council. 2007. Innovation Policies for the 21st Century: Report of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/11852.
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