Innovation Fact of the Week: Doubling Number of Universities Will Grow Country’s GDP By Average of 4%

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Innovation thrives off well-educated and high-skilled workers, and institutions of higher learning, such as universities, play a key role in developing such workers. Establishing a university generates a self-reinforcing cycle of human capital development by generating and disseminating knowledge. As workers learn and develop more advanced skills, they in turn contribute more to the innovative capacity of high-tech sectors.

Economists Anna Valero and John van Reene from the London School of Economics developed a data set that catalogued universities in 185 countries between 1950 and 2010. They estimate that when a country doubles the number of universities, it leads to an average of 4 percent higher GDP over the long-run. To illustrate their findings, they estimate that if the United Kingdom were to establish 10 more universities, it would increase its GDP by £11.3 billion. In terms of weighing cost versus benefit, expected GDP growth would be five times the cost of opening these 10 institutions.

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STEM Education

Innovation Fact of the Week: Students Are More Likely to Pursue STEM Degrees in College If They Are Exposed to More Science Subjects During High School

(Ed Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

STEM workers punch above their weight in contributing to innovation and productivity in the digital economy. But economic projections show that demand for STEM skills is growing faster than the number of workers with STEM skills. Part of the problem has been that countries’ investments in increasing STEM graduates have not yet produced appreciable results—the level of interest and graduation rates in STEM fields both have remained stable since the 1980s.

But if countries can get their STEM education policies right, they will be well positioned to capture maximum benefit from the expanding digital economy. London School of Economics research assistant Marta De Philippis finds that tweaking subject curriculum can foster a student’s interest in STEM fields. Using education data from the U.K., she estimates that when a student takes more science classes in secondary school, it increases the student’s probability of enrolling in a university STEM program by 1.5 percentage points, and it increases the probability that the student will eventually graduate

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Innovation Fact of the Week: Counterfeit Goods Accounted for 2.5% of Global Trade in 2013

(Ed Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

Companies depend on intellectual property rights, including patents, trademarks, and copyrights, to derive revenue from their innovations. When counterfeiters flout these intellectual property rights to cash in on ideas that aren’t theirs, they undermine the economy by eroding the incentive to innovate. This is a huge problem worldwide. Indeed, by analyzing the manifests of detained shipments of counterfeit goods, the OECD has estimated that this misappropriated revenue stream totaled $461 billion in 2013, or 2.5 percent of global trade.

Counterfeit products impact innovators all along the supply chain and across many industries, with examples ranging from factory machinery to industrial chemicals to consumer products such as apparel and pharmaceuticals. Governments can support innovation by legislating and enforcing robust intellectual property rights.

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Photo Credit: UK Home Office via Flickr

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Innovation Fact of the Week: Foreign Patent Applications in Tech Fields of Strategic Importance to China are 4-7 Percentage Points Less Likely to be Approved than Local Applications, All Else Equal

(Ed Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

Despite the fact that the World Trade Organization commits member nations to accord treatment no less favorable to nationals of other member nations as it treats its own with regard to intellectual property, a new study from Rassenfosse and Raiteri finds evidence of an anti-foreign bias in the issuance of patents in sectors that the Chinese government finds of strategic importance (as defined by a sector’s inclusion in China’s National Medium and Long-Term Program for Science and Technology Development 2006-2020).

While much analysis has focused on unequal enforcement of IP rights in China, this is the first study to find systematic evidence of bias in the granting of patents against foreigners in China. As the authors conclude, “Given the importance of industrial policy in China and the country’s strong focus on indigenous innovation and intellectual property, the empirical results provide a case of technology protectionism by means of the patent system.”

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Photo Credit: Keoni Cabral

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Wheat Follies

“That way madness lies.” – King Lear

On July 29 the U.S Department of Agriculture (USDA) announced the discovery in Washington State of wheat plants of an unapproved variety containing an herbicide tolerance trait. News sources immediately picked up the story, and Monsanto confirmed it. This set off a predictable round of breathless anti-GMO panic, as evidenced by Japan and South Korea announcing that they will “step up quarantine measures for U.S. milling and feed wheat shipments” and block certain varieties.  All this despite the fact that the rogue plants (enough to make about an ounce of grain) were in a noncommercial field, and none have been reported found in any harvests.

We have seen this movie before, in 2013 and 2014. Spoiler alert: It turns out the monster isn’t scary.

In the present case, 22 wheat plants were discovered in an unnamed farmer’s fallow field, presumably when they survived a wheat treatment with glyphosate. Harvests from adjacent wheat fields are being tested for the presence of the unapproved trait, and held pending confirmation they contain no contraband.

The unapproved plants come from a variety, MON71700, that was field

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