New OECD paper on US innovation

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A new working paper from the OECD looks at Strengthening Innovation in the United States. According to the abstract:

The US innovation system has many strengths, including world class research universities and firms that thrive in innovation-intensive sectors. However, fissures have begun to appear, notably in the areas of human capital development, the patent system and manufacturing activity, while public investments in R&D and research universities are at risk of being curtailed by budget cuts. Revitalizing the dynamism of innovation has become a priority for US policymakers. To this end, it is important that federal and state governments sustain financial support for knowledge creation. The US workforce's skills will need to be upgraded, especially in STEM fields, and measures taken to provide more favourable framework conditions for developing advanced manufacturing in the United States. While the recent patent reform is a big step in the right direction, patent reform needs to be taken further by ensuring that the legal standards for granting injunctive relief and damages awards for patent infringement reflect realistic business practices and the relative contributions of patented components of complex technologies.

A couple of other important topics covered by the paper did not get into the abstract. These include strengthening innovation in manufacturing and encouraging entrepreneurship. They also repeat the now standard call for combining agencies in to a national innovation agency.

Most of these recommendation are one we have heard before. I was disappointed that additive manufacturing was not discussed or even acknowledge in the paper. And my take on government re-organization is that we need to start thinking about networks more and formal bureaucratic organizations less (see previous postings). Rather, I support the idea of a Quadrennial Competitiveness Assessment by an independent panel of the National Academies, a Biannual Presidential Competitiveness Strategy that lays out the president's competitiveness agenda and policy priorities, and an Interagency Competitiveness Task Force (see previous posting).

The discussion of the patent system is the one area that is beyond the current debate. The paper calls for patent reform to take the next step:

Patent reform (America Invents Act) needs to be taken further by ensuring that the legal standards for granting injunctive relief and damages awards for patent infringement reflect realistic business practices and the relative contributions of patented components of complex products.

I think few in Washington are interested in revisiting patent reform at this time. But it is good to try to keep in on the agenda.

I do have another complaint: the introductory section on the health of the innovation enterprise in the US defaults to the standard measures of R&D spending and patents (their Figure 2 in the paper). They do discuss other measures, such as the innovation survey and multifactor productivity. But the highlighting of patents and R&D spending as proxies is still disappointing. I wish we would confront our "drunk under the lightpost" problem directly.

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