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4 steps needed now to remedy innovation deficit: US commerce secretary

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First, the bad news: US research and development spending is at the lowest level seen since the 1950s. However, it's not too late to reverse this trend.

Acting U.S. Commerce Secretary Rebecca Blank sounded the alarm at the lagging innovation seen within the United States, citing evidence that R&D spending and initiatives have sunk to the lowest levels in decades.

Speaking at the Third Annual Innovation Luncheon of the Global Women’s Innovation Network, Blank first gave the bad news: "The current federal share of research spending is half what it was in the Eisenhower administration," and, today, "America ranks 14th in the world in terms of the percentage of college graduates we produce. We used to be number one."  As if that wasn't enough, "The World Economic Forum now ranks our infrastructure 24th. We used to be in the top 10."

However, this can be turned around. "The good news is that none of these trends is inevitable or unchangeable," Blank said. "There are clear policy avenues that we can take to reverse the trendlines."

Here are her recommendations, reported by Julie Anixter in Innovation Excellence:

Invest more federal dollars in basic research: "The Internet, satellite communications, semi-conductors and other job-generating advances would not have been possible without the wise investment of taxpayer dollars. Unfortunately, since 1980, federal funding for basic research has dropped from 70 percent of all basic research funding to just 57 percent.... The fact is, governments around the world are increasing their public support at universities and research institutions. So must we."

Support the transfer of new technologies to help increase productivity, especially in areas such as manufacturing: "Production and innovation are inextricably linked. Innovation is an iterative process, where ideas are tested in production, and those lessons feed back into new innovation. Manufacturing R&D is also the dominant source of innovative technologies that are adopted into the service sector. The government has played an active role in this space. For instance, for nearly 25 Years, our Manufacturing Extension Partnership—MEP—has funded centers around the country that consult with private sector companies facing technological problems. MEP puts them in touch with scientists and engineers who can help solve those problems. The Advanced Manufacturing Partnership launched last summer is another important model to help advance tech transfer. This public-private partnership uses the convening power of the government to bring together top research universities with top U.S. manufacturers.... Clearly, there is a role for universities, government, and the private sector to collaborate and make the connections that lead to the transfer of technologies from lab to marketplace."

Ensure that the intellectual property protection system remains strong: "Patents are a critical tool to help commercialize game-changing ideas. They’re the fuel for innovation. The Department of Commerce recently released a report on the role of IP in the economy. It shows that nearly 35 percent of our GDP—more than $5 trillion—comes from what we call “IP-intensive industries.” These industries support about 40 million jobs. The report also made clear that IP protections have a ripple effect in the market. The landmark America Invents Act is playing a crucial role in helping us build a 21st century IP system....  And I should note that we’re already making great progress to create a more efficient patent system. For example, while patent filing in 2011 grew by 5 percent, our patent backlog actually dropped by about 10 percent."

Increase the number of science, technology, engineering and mathematics graduates: "As you know, these fields produce many of the inventors and leaders who bring new ideas from the lab to the marketplace. We need these people now more than ever.... In recent years, however, only about 13 percent of U.S. college graduates got degrees in the STEM fields. That is much lower than in many of our competitor countries like Korea and Germany where 25 percent of their students receive STEM degrees."

(Illustration: US Department of Commerce.)

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure