Professional Documents
Culture Documents
Dana Hursey
E X E C U T I V E
S U M M A R Y
nnovationandentrepreneurshiparecrucialforlongtermeconomic development.Overtheyears,Americaswellbeinghasbeenfurtheredby scienceandtechnology.FearssetoffbytheSovietUnions1957launchofits SputniksatelliteinitiatedawaveofU.S.investmentinscience,engineering, aerospace,andtechnology.Bothpublicandprivatesectorinvestmentcreatedjobs, builtindustries,fueledinnovation,andpropelledtheU.S.toleadershipina numberofdifferentfields. Inthispaper,Ifocusonwaystechnologyenablesinnovationandcreates economicprosperity.Ireviewtherangeofnewadvancesineducation,health care,andcommunications,andmakepolicyrecommendationsdesignedto encourageaninnovationeconomy.Byadoptingpoliciessuchasapermanent researchanddevelopmenttaxcredit,moreeffectiveuniversityknowledge commercialization,improvingSTEMworkertraining,reasonableimmigration reform,andregionaleconomicclusters,wecanbuildaninnovationeconomyand sustainourlongtermprosperity.
Darrell M. West is vice president and director of Governance Studies and a senior fellow at Brookings. He is also the founding director of the Center for Technology Innovation.
morepatents. TheUnitedStatesspendsonly2.8percentofitsfederalbudgetonnational researchanddevelopmentasapercentageofGDP.Thisislessthanthe4.3percent spentbythegovernmentinSweden,3.1percentbyJapan,and3.0percentbySouth Korea,buthigherthanthatofGermany(2.5percent),France(2.2percent),Canada (1.9percent),orEngland(1.9percent).Europeasawholedevotes1.9percentto researchanddevelopment,whileindustrializednationsspendaround2.3 10 percent. IfoneaddstogetherallthescienceandtechnologyworkersintheUnitedStates asapercentageoftheworkplace,33percentofAmericanemployeeshavescience ortechnologypositions.Thisisslightlylessthanthe34percentfigureforthe NetherlandsandGermany,buthigherthanthe28percentinFranceand 11 Canada,. Theproductivityinthisareahasfueledconsiderabledemandforthosewith scienceandengineeringexpertise,andithasbeendifficultfortheUnitedStatesto 12 producesufficientknowledgeworkers. ThirtyeightpercentofKoreanstudents nowearndegreesinscienceandengineering,comparedto33percentfor Germany,28percentforFrance,27percentforEngland,and26percentforJapan. TheUnitedStateshasfallenbehindinthisarea.Despitegreatdemandforthis kindoftraining,only16percentofAmericangraduateshavebackgroundsin 13 scienceandengineering. InAmerica,theprivatesectorsurpassedthefederalgovernmentin1980in termsoftheamountofmoneyspentonresearchanddevelopment.By2003, commercialcompaniesprovided68percentofthe$283billionspentonresearch anddevelopment,comparedto27percentfromthefederalgovernment.Ofthis total,$113billioncamefromthefederalgovernment,while$170camefromthe privatesector.AccordingtoinformationfromtheNationalScienceBoard,the percentageofresearchanddevelopmentspendingcomingfromthefederal governmenthasdroppedfromaround63percentintheearly1960sto27percent 14 today,whilethatoftheprivatesectorincreasedfrom30to68percent.
Highspeedbroadbandallowsphysicianstosharedigitalimageswith colleaguesinothergeographicareas.Schoolsareabletoextenddistancelearning tounderservedpopulations.Smartelectricgridsproducegreaterefficiencyin monitoringenergyconsumptionandcontributetomoreenvironmentfriendly policies.Videoconferencingfacilitiessavegovernmentandbusinesseslarge amountsofmoneyontheirtravelbudgets.Newdigitalplatformsacrossavariety ofpolicydomainsspurutilizationandinnovation,andbringadditionalpeople, businesses,andservicesintothedigitalrevolution. Intheeducationarea,bettertechnologyinfrastructureenablespersonalized learningandrealtimeassessment.Imagineschoolswherestudentsmastervital skillsandcriticalthinkinginapersonalizedandcollaborativemanner,teachers assesspupilsinrealtime,andsocialmediaanddigitallibrariesconnectlearnersto awiderangeofinformationalresources.Teacherstakeontheroleofcoaches, studentslearnattheirownpace,technologytracksstudentprogress,andschools arejudgedbasedontheoutcomestheyproduce.Ratherthanbelimitedtosix hoursadayforhalftheyear,thiskindofeducationmovestoward24/7 engagementandlearningfulltime. 17 Theserepresentjustafewoftheexampleswhereinnovationistakingplace. Technologyfostersinnovation,createsjobs,andboostlongtermeconomic prosperity.Byimprovingcommunicationandcreatingopportunitiesfordata sharingandcollaboration,informationtechnologyrepresentsaninfrastructure issueasimportantasbridges,highways,dams,andbuildings.
CommercializingUniversityKnowledge:Universitiesrepresentacrucial linchpinineffortstobuildaninnovationeconomy.Theyareextraordinary knowledgegenerators,butmustdoabetterjoboftransferringtechnologyand commercializingknowledge.Universitylicensingofficesmustspeeduptheir reviewprocessinordertoencouragetheformationofbusinesses.Universities shouldthinkmoreseriouslyaboutinnovationmetricssotheyallocateresources efficientlyandcreatetheproperincentives. Rightnow,manyplacescountthenumberofpatentsandlicensingagreements withoutmuchattentiontothebusinessescreated,productsthataremarketed,or revenuethatisgenerated.Theyshouldmakesuretheirresourcesandincentives arealignedwithmetricsthatencouragetechnologytransferand commercialization. 20 STEMWorkforceTrainingandDevelopment:TheUnitedStatesisfacinga crisisinSTEMtrainingandworkforcedevelopment.Therearemanydimensions ofthischallenge,butoneofthemostimportantconcernsisthelownumberof collegestudentsgraduatingwithdegreesinscience,technology,engineering,and math.FewAmericanstudentsaredevelopingproficiencyinthesesubjects,which ishinderingthecountryseconomicfuture.PastAmericanprosperityhasbeen propelledbyadvancesintheSTEMfields.Skillsintheseareashelpedthecountry winthespaceraceandtheColdWarandweneedthemnowaswetransitiontoa technologydriveneconomy. Todealwiththisproblem,PresidentBarackObamasCouncilofAdvisorson ScienceandTechnology(PCAST)hasproducedanofficialreportthatcallsforthe creationofaMasterTeachersCorps.Amongotherrecommendations,thereport emphasizestwoactions:1)hiring100,000newSTEMteachersand2)paying highersalariestothetop5percentofSTEMteachers. 21 However,inaneraof budgetcutbacksandattacksonteacherunions,ithasbeendifficulttobuild supportforraisingteachersalariesingeneralandadoptingdifferentialpayin particular. Inhis2011StateoftheUnion,thePresidentrestatedhiscommitmenttoputting educationattheforefrontofthenationalagenda,emphasizingtheneedforquality teachers,investmentinSTEMeducationprograms,andaboldrestructuringof federaleducationfunding.Hecalledforidentifyingeffectiveteachersandcreating rewardsystemstoretaintopperformingindividuals. ItisvitaltoaddresstheseissuesbecausebasicfactsaboutSTEMteachingand competencyarenotwellknown.Failingschoolsnotonlyharmstudents,they weakentheoveralleconomy.WiththeU.S.facingacrisisofmassiveproportions intermsofitsabilitytoinnovateandcreatejobs,itisimperativethatwetransform STEMteachingtopreparestudentsforthefutureeconomy.Realemphasisshould beplacedonteacherinvestmentbecauseresearchhasshownthatteachersarethe primaryfactorinensuringstudentgrowthandachievement. AnEinsteinStrategyforImmigrationReform:Weneedreasonable immigrationreform.Oneofourmostimportantchallengesisanewnarrative definingimmigrationasabraingainthatimproveseconomiccompetitivenessand
Technology and the Innovation Economy
nationalinnovation.AfocusonbrainsandcompetitivenesswouldhelpAmerica overcomepastdeficienciesinimmigrationpolicyandenableourcountrytomove forwardintothe21stcentury.Itisawaytobecomemorestrategicabout promotingourlongtermeconomyandachievingimportantnationalobjectives. 22 WeneedtothinkaboutimmigrationpolicyalongthelinesofanEinstein Principle.Inthisperspective,nationalleaderswouldelevatebrains,talent,and specialskillstoahigherplaneinordertoattractmoreindividualswiththe potentialtoenhanceAmericaninnovationandcompetitiveness.Thegoalisto boostthenationaleconomy,andbringindividualstoAmericawiththepotentialto makesignificantcontributions.Thiswouldincreasetheoddsforprosperitydown theroad.Ithasbeenestimatedthatover50,000workerswithadvanceddegrees leavethecountryforbetteropportunitieselsewhere. 23 O1GeniusVisas:InordertoboostAmericaninnovation,currentpolicy containsaprovisionforavisabrainsprogram.Thesocalledgeniusvisa knownasO1allowsthegovernmenttoauthorizevisasforthosehaving extraordinaryabilitiesinthearts,science,education,business,andsports.In 2008,around9,000geniusvisasweregranted,upfrom6,500in2004.Theidea behindthisprogramistofocusontalentedpeopleandencouragethemtocometo theUnitedStates.Itisconsistentwithwhatnationalleadershavedoneinpast eras,whereweencouragedthosewithspecialtalentstomigratetoournation. However,thisprogramhasbeensmallandentrypasseshavegoneto individualssuchasprofessionalbasketballplayerDirkNowitzkiofGermanyand variousmembersoftheMerceCunninghamandBillT.Jones/ArnieZanedance companies. 24 Whilethesepeopleclearlyhavespecialtalents,itisimportantto extendthisprograminnewwaysandtargetpeoplewhocreatejobsandfurther Americaninnovation.ThiswouldhelptheUnitedStatescompetemore effectively. EB5JobCreationVisas:ThereisalittleknownEB5visaprogramthatoffers temporaryvisastoforeignerswhoinvestatleasthalfamilliondollarsinAmerican localesofficiallydesignatedasdistressedareas.Iftheirfinancialinvestment leadstothecreationof10ormorejobs,thetemporaryvisaautomaticallybecomes apermanentgreencard.Withoutmuchmediaattention,therewere945 immigrantsin2008whoprovidedover$400millionthroughthisprogram. 25 Ona percapitabasis,thesebenefitsmaketheprogramoneofthemostsuccessful economicdevelopmentinitiativesinthefederalgovernment. ThisisagreatwaytotieU.S.immigrationpolicytojobcreation.Ifagoalof nationalpolicyistoencourageinvestmentandjobcreation,targetedvisasofthis sortareveryeffective.Suchprogramsexplicitlylinknewimmigrationwith concreteeconomicinvestment.Theyalsogenerateneededforeigncapital ($500,000)forpoorgeographicareas.Thereispublicaccountabilityforthispolicy programbecauseentryvisasaregrantedonatemporarybasisandbecome permanentonlyAFTERatleast10jobshavebeencreated.Thiskindofvisa programistheultimateintargetingandqualitycontrol.Unlessthemoneyis investedandleadstonewjobs,thenewcomerisnotallowedtostayintheUnited
Technology and the Innovation Economy
States. H1BWorkerVisas:Rightnow,only15percentofannualvisasaresetaside foremploymentpurposes.Ofthese,somegotoseasonalagriculturalworkers, whileasmallnumberofH1Bvisas(65,000)arereservedforspecialty occupationssuchasscientists,engineers,andtechnologicalexperts.Individuals whoareadmittedwiththisworkpermitcanstayforuptosixyears,andareable toapplyforagreencardiftheiremployeriswillingtosponsortheirapplication. Thenumberreservedforscientistsandengineersisdrasticallybelowthefigure allowedbetween1999and2004.Inthatinterval,thefederalgovernmentsetaside upto195,000visaseachyearforH1Bentry.Theideawasthatscientific innovatorsweresoimportantforlongtermeconomicdevelopmentthatwe neededtoboostthenumbersetasideforthosespecialtyprofessions. Today,mostofthecurrentallocationof65,000visasrunoutwithinafew monthsofthestartofthegovernmentsfiscalyearinOctober.Eveninthe recessionplaguedperiodof2009,visaapplicationsexceededthesupplywithinthe firstthreemonthsofthefiscalyear.Americancompanieswereresponsiblefor49 percentoftheH1Bvisarequestsin2009,upfrom43percentin2008.The companieswhichwereawardedthelargestnumberofthesevisasincludedfirms suchasWipro(1,964),Microsoft(1,318),Intel(723),IBMIndia(695),PatriAmericas (609),Larsen&ToubroInfotech(602),Ernst&Young(481),Infosystechnologies (440),USTGlobal(344),andDeloitteConsulting(328). 26 Highskillvisasneedtobeexpandedbackto195,000becauseatitscurrent level,thatprogramrepresentsonlysixandahalfpercentofthemillionwork permitsgrantedeachyearbytheUnitedStates.Thatpercentageiswoefully inadequateintermsofthesupplyneeded.EntryprogramssuchastheH1B,O1, andL1visaprogramsgranttemporaryvisasforaperiodofafewyearstoworkers withspecialtalentsneededbyAmericanemployers.TheyenableU.S.companies toattracttoppeopletodomesticindustries,andrepresentagreatwayto encourageinnovationandentrepreneurship. RegionalEconomicClusters:Weneedregionaleconomicclustersthattake advantageofinnovationrichgeographicniches.Thereareseveralexamplesof successfulandgeographicallybasedclusterssuchasSiliconValley,BostonsRoute 128,andtheResearchTriangleinNorthCarolina.Ineachoftheseareas,thereisa combinationofcreativetalentassociatedwithterrificuniversities,accessto venturecapital,andstatelawsthatpromoteinnovationthroughtaxpolicyand/or infrastructuredevelopment. Researchhasdemonstratedthattheseinnovationclustersgeneratepositive economicresults.AccordingtoaBrookingsreportbyMarkMuroandBruceKatz, itisnowbroadlyaffirmedthatstrongclustersfosterinnovationthroughdense knowledgeflowsandspillovers;strengthenentrepreneurshipbyboostingnew enterpriseformationandstartupsurvival,enhanceproductivity,incomelevels, andemploymentgrowthinindustries,andpositivelyinfluenceregionaleconomic performance. 27
Technology and the Innovation Economy
Governance Studies The Brookings Institution 1775 Massachusetts Ave., NW Washington, DC 20036 Tel: 202.797.6090 Fax: 202.797.6144 www.brookings.edu/governance.aspx Editor Christine Jacobs Production & Layout John S Seo
Endnotes
ChristineZhenWeiQiang,TelecommunicationsandEconomicGrowth, Washington,D.C.:WorldBank,unpublishedpaper.
1
ErikBrynjolfssonandAdamSaunders,WiredforInnovation,Cambridge, Massachusetts:MITPress,2009.
3
DanielMcGinn,TheDeclineofWesternInnovation:WhyAmericaisFalling BehindandHowtoFixIt,TheDailyBeast,November15,2009.
4
DanielMcGinn,TheDeclineofWesternInnovation:WhyAmericaisFalling BehindandHowtoFixIt,TheDailyBeast,November15,2009.
5
DanielMcGinn,TheDeclineofWesternInnovation:WhyAmericaisFalling BehindandHowtoFixIt,TheDailyBeast,November15,2009.
6
DarrellWest,BrainGain:RethinkingU.S.ImmigrationPolicy,Washington,D.C.: BrookingsInstitutionPress,2010.
7
DarrellM.West,BiotechnologyPolicyAcrossNationalBoundaries,NewYork: Palgrave/Macmillan,2007.
8
MichaelArndt,BenFranklin,WhereAreYou?BusinessWeek,January4,2010, p.29.
9
OrganisationforEconomicCoOperationandDevelopment,Scienceand TechnologyStatisticalCompendium,2004.
10
OrganisationforEconomicCoOperationandDevelopment,Scienceand TechnologyStatisticalCompendium,2004.
11
DarrellWest,BrainGain:RethinkingU.S.ImmigrationPolicy,Washington, D.C.:BrookingsInstitutionPress,2010.
12
OrganisationforEconomicCoOperationandDevelopment,Scienceand TechnologyStatisticalCompendium,2004.
13
NationalScienceBoard,ScienceandEngineeringIndictors2004,Washington, D.C.:NationalScienceFoundation,2004,p.04.
14
PhilipBond,TechProvidesMapforNationsFuture,Politico,September18, 2011.
15
DarrellWest,AnInternationalLookatHighSpeedBroadband,Washington, D.C.:BrookingsInstitution,February,2010.
16
DarrellWest,UsingTechnologytoPersonalizeLearningandAssessStudentsin RealTime,Washington,D.C.:BrookingsInstitution,October6,2011.
17 18
MartinBaily,BruceKatz,andDarrellWest,BuildingaLongTermStrategyfor GrowththroughInnovation,Washington,D.C.:BrookingsInstitution,May,2011.
PhilipBond,TechProvidesMapforNationsFuture,Politico,September18, 2011.
19 20
MartinBaily,BruceKatz,andDarrellWest,BuildingaLongTermStrategyfor GrowththroughInnovation,Washington,D.C.:BrookingsInstitution,May,2011.
MoiraHerbst,GeniusesattheGate,BusinessWeek,June8,2009,p.14. LisaLerer,Invest$500,000,ScoreaU.S.Visa,CNNMoney.com.
25
MoiraHerbst,StillWanted:ForeignTalentAndVisas,BusinessWeek, December21,2009,p.76.
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