ITIF Ranks U.S. Last in Progress on Innovation and Competitiveness

A recent Information Technology and Innovation Foundation (ITIF) report ranks the U.S. last among 40 countries in progress toward creating an innovation-based economy over the past decade. The findings contradict several other studies that continue to depict the U.S. as the global leader in economic competitiveness. E-government, broadband, trade balance and corporate R&D were particularly weak areas for U.S. progress relative to other countries. ITIF warns that the U.S. economy will continue its decline in innovation unless federal policymakers recognize the need for a national innovation strategy.

The Atlantic Century: Benchmarking EU & U.S. Innovation and Competitiveness offers a different perspective from recent reports from the World Economic Forum and The Economist, which paint a more optimistic picture of the U.S. economy. The report uses 16 weighted indicators to assess competitiveness, including indices related to human capital, innovation capacity, entrepreneurship, information technology infrastructure and economic performance.

While the U.S. ranks sixth in terms of overall score, it lags behind every other country on the list for progress made between 1999 and 2009. The U.S. posts its weakest showing for its lack of progress in indicators related to IT infrastructure, including e-government and broadband infrastructure. E-government resources in the U.S. still rank second in the world, after Sweden, but its competitiveness in the area dropped significantly in the 10 years of the study. The U.S. ranked 36th in progress on broadband infrastructure, though the report explains that this is at least partially due to the relatively large base of broadband penetration in the early years of the study. The U.S. also scored poorly in other categories such as GDP per adult and venture capital.

China tops the list for improvement during the 1999-2009 period, though it still ranks 33rd in overall score. China made particular strides in its number of researchers, scientific publications, GDP per adult and productivity. Singapore takes the number one spot in overall score and ranks second in progress made, with strong improvement in its level of entrepreneurship. The remaining top ten countries for improvement during the last decade include Estonia, Denmark, Luxembourg, Slovenia, Russia, Lithuania, Cyprus and Japan.

The ITIF report concludes that an increasingly globalized economy has altered the U.S.'s competitive position in the world. Federal policymakers should think of the U.S. as a large state, instead of an unchallenged economic superpower. Maintaining U.S. competitiveness will require proactive innovation policies to drive growth and to retain the benefits of that growth within the U.S. ITIF includes several recommendations for what an effective national innovation agenda should try to accomplish, including:

• Put in place incentives for firms to innovation within their borders;
• Be open to high-skill immigration;
• Foster a digital economy;
• Support institutions that are critical to innovation; and,
• Ensure that regulations and other related government policies support, not retard, innovation.

The Atlantic Century: Benchmarking EU & U.S. Innovation and Competitiveness is available at: http://www.itif.org/index.php?id=226.