Brookings-ITIF Call for National Innovation Foundation, More Cluster Funding

With the goal of helping frame innovation policy for the next Administration, the Brookings Institution and the Information Technology and Innovation Foundation (ITIF) released two reports today calling on the federal government to respond to America’s slipping leadership in commercial innovation. Together, the reports argue that without fundamentally new and different federal interventions, the U.S. lead in innovation will continue to shrink.
 
In Boosting Productivity, Innovation, and Growth through a National Innovation Foundation, Brookings and ITIF researchers recommend that the federal government reorganize and augment its diffuse current activities by establishing a National Innovation Foundation (NIF) – a lean, nimble and collaborative organization designed to work with businesses and other organizations in support of their innovation activities. Optimally, the report suggests NIF would have an annual appropriation of $1 billion to $2 billion annually.
 
NIF is proposed to engage in the following activities:

• Catalyze industry-university research partnerships through national sector research grants to help promote innovation and commercialization;
• Expand regional innovation-promotion through state-level grants to fund activities like technology commercialization and entrepreneurial support;
• Encourage technology adoption by assisting small and mid-sized firms in implementing best-practice processes and organizational forms;
• Support regional industry clusters with grants for cluster development;
• Emphasize performance and accountability by measuring and researching innovation, productivity, and the value added to firms from NIF assistance; and,
• Champion innovation by promoting innovation policy within the federal government and serving as an expert resource on innovation to other agencies.

“In a highly competitive global economy, innovation is essential because it drives our economic growth and provides good jobs, but we are slipping on innovation in part because federal policy is poorly organized to promote it,” said Rob Atkinson, president of ITIF and co-author of the NIF report.
 
Atkinson observes that while other advanced and developing nations are implementing smart, aggressive national strategies to stimulate commercial innovation, the U.S. lacks a strategy, invests little in innovation-promotion efforts, and provides limited support to the effective, but under-funded, innovation efforts of state and local governments.
 
In Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies, Brookings scholars further describe the need for a federal cluster grant program to stimulate competitive regional cluster initiatives across the nation.
 
Brookings argues industry clusters – geographic concentrations of interconnected firms and supporting industries – are underutilized in promoting growth. On this front, some states, including Arizona, Connecticut, Iowa, Oregon, Texas and Washington, have launched their own regional cluster initiative programs.
 
However, federal programs do little to support competitive regions in general and competitive clusters in particular, the authors assert. In fact, federal efforts to support regional economic development are, for the most part, ad hoc, insufficient, uncoordinated and diffuse, Brookings argues. The authors identified no fewer than 250 separate federal programs in 2006 that they consider as supporting economic development. Spread across 14 different agencies, together these programs cost the federal government almost $77 billion. Among these programs, only a small number work with regional clusters, and they cost less than 1 percent of the total federal economic development spending. 
 
“It’s time for the federal government to act as a true partner to state, local, and industry leaders who are working to advance the nation’s prosperity,” Atkinson contends. In this vein, the two reports offer detailed recommendations on how the nation should step up its promotion of innovation.
 
Boosting Productivity, Innovation, and Growth through a National Innovation Foundation may be accessed at either of two websites: http://www.itif.org/ or http://www.brookings.edu/papers/2008/04_federal_role_atkinson_wial.aspx
 
Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies is available at: http://www.brookings.edu/papers/2008/04_competitiveness_reamer.aspx