Smart Policy: Building an Innovation-Based Economy

Darrell West, Allan Friedman and Walter Valdivia argue that the United States needs smarter technology innovation policies in order to capture the economic advantages of the digital economy and improve long-term growth. Growth through smart innovation policy should be front and center for lawmakers as they wrestle with social and economic challenges in an information age, these scholars write.

This paper sets a robust domestic tech policy agenda for 2013 and beyond, as well as offers ideas to reform our economy, improve public sector performance, and train people for 21st century jobs. West, Friedman and Valdivia show how government and civil society can move from ideas, norms, structures, and regimes developed during an industrial period to institutions and policies attuned for the digital world.

Specifically, the writers propose the following to encourage an innovation-based U.S. economy:

  1. Create better metrics for measuring worker productivity in the 21st century economy. Past approaches based on worker hours or total employees in relation to Gross Domestic Product (GDP) ignore the transformational nature of digital technology.
  2. Encourage entrepreneurship by expanding Small Business Administration credit for start ups, adding entrepreneurial skills to school curricula, and making changes in immigration policy that encourage entrepreneurs to come to America.
  3. Retool governments that learn to innovate and collaborate, and develop new approaches to service delivery, transparency, and participation. This includes placing more data online and employing data analytical tools, social media, mobile technology, and search results that improve decision-making.
  4. Strengthen infrastructure by investing in broadband, data centers, and mobile cell towers, and improving access to spectrum for wireless applications.
  5. Protect vital digital assets by updating the Federal Information Security Management Act and developing procedures for monitoring threats to critical infrastructure
  6. Improve knowledge transmission through faster adoption of digital textbooks, more widespread use of creative commons licenses for instructional materials developed with taxpayer dollars, and policy changes that speed education innovation.
  7. Increase technology transfer and the commercialization of knowledge from universities and federal laboratories so that public and private investments translate into jobs and economic activity as well as better health, security, and well-being.
  8. Harmonize cross-border laws to promote global innovation and freedom of expression.

These policy prescriptions draw on a day-long workshop the Center for Technology Innovation at Brookings organized with two dozen innovation leaders in June 2012, well as online crowd-sourcing responses of several hundred experts from around the country in the areas of innovation, technology, and economic development.

Please download the full paper »