What if we took the world's best ideas for helping young companies and stitched them together to create a kind of Innovation Super-Nation? Maybe it would look like this...
WIKIPEDIA
"The first step in winning the future is encouraging American innovation," President Obama declared in his 2011 State of the Union address. He's right. But what's the pathway to "encouraging American innovation?"
Innovation is a central element in promoting national economic performance, especially for the United States, which is at the technological frontier and can't effectively adopt technology invented elsewhere to achieve growth. As Paul Romer proposed in his New Growth Theory, investing in innovation is a crucial endogenous factor - and therefore one firmly in the grasp of policymakers - that creates economic growth. Future growth depends upon our ability to make new things. Nations with the ability to innovate are better poised to nurture entrepreneurship, attract early-stage risk capital and sustain a diversified ecosystem that bolsters long-term economic growth.
Some of the answers to our innovation challenge will come from within the U.S. We remain in many ways the most dynamic country in the world, with more top universities and multinational corporations than any other nation. But it's foolish to imagine that the best innovation ideas in the world already have a home in policies coming from Washington, D.C. Here is a world-wide tour of the best ideas that our government should import to jump-start innovation.
These policies encapsulate human capital, both indigenous and from immigration. Some are aimed at enhancing research and development (R&D), such as direct government funding of R&D, R&D tax credits and corporate tax rates. Others nurture innovative small and medium firms and improve access to risk capital. I've also considered policies encouraging technology transfer and commercialization from universities and other research centers and those relating to the overall business environment.
FROM SINGAPORE:
A BETTER WAY TO INVEST IN PEOPLE
First, let's look to Singapore, which developed a set of indigenous human capital strategies that radically altered its economy. In 1960 Singapore had a per capita GDP of $2,300, roughly equal to Jamaica's. Singapore focused on becoming a financial services and research hub, while Jamaica concentrated on tourism. Fifty years later Singapore's per capita GDP was $43,100, while Jamaica's is slightly above $5,000.
The difference was investment in human capital. Singapore's education system is heavily subsidized by its Ministry of Education to ensure a meritocratic principle that identifies and nurtures bright young students for future leadership positions. In the '60s, Singapore attracted foreign capital by targeting labor-intensive manufacturing to create jobs. As its workforce became better educated through its investment strategies in the '70s, it began attracting higher value-added industries such as petrochemicals, electronics and data storage. Today, Singapore is a leader in a host of knowledge-based industries, including the biomedical sciences. In just the past decade, the number of scientists has leapt from 14,500 to 26,600, a gain of more than 80 percent. In the most recent Global Competitiveness Report put out by the World Economic Forum, Singapore ranked 1st in the quality of its math and science education.
FROM CANADA:
A BETTER WAY TO TREAT IMMIGRANTS
Best practices in high-skilled immigration policy can be witnessed in Canada. The government has consistently promoted Canada as a destination for immigrants and prides itself on having a fairly open and straightforward immigration process. In 2010, Canada welcomed 280,636 immigrants while the U.S. accepted 1,042,625 -- on a per capita basis less than one-half of the Canadian figure. Under the Canadian immigration system there are three categories: economic, family reunification and refugee. The economic class is based upon a detailed points system that calculates relevant skills. Canada, with a population one-tenth that of the U.S., accepted 186,913 "economic immigrants" in 2010, accounting for 66.7 percent of its total. These immigrants unquestionably contribute to economic growth, job creation and increased demand for housing. In contrast, the U.S. currently caps employment-based visas, including those with extraordinary skills, professionals holding advanced degrees, skilled workers and professionals, special immigrants (e.g. religious workers), and investors, at 140,000, or just 13.4 percent of all immigrants. Please continue via theatlantic.com
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