All posts by Stephen Ezell

bayh-dole

Why Exploiting Bayh-Dole “March-In” Provisions Would Harm Medical Discovery

By most accounts, patients in the United States and across the globe are in the midst of a new era of medical discovery, one in which new treatments and cures for costly diseases will become increasingly commonplace.

As ITIF noted in a recent report, our nation has benefited from public policies that support innovation and discovery, including strong intellectual property (IP) protections, limits on price controls for innovative medicines, data protections for biologic drugs, and strong government research and development expenditures on health care.

Unfortunately, these core fundamentals are being set aside by proponents of expanding “march-in” rights to address concerns about the price of drugs.

“March-in” rights were included as a privilege for the government under the Bayh-Dole Act, which was enacted with bipartisan support in 1980 to address intellectual property created (at least in part) from government-funded research. The law has played a significant role in driving impactful medical discovery and life-sciences innovation by allowing academic and other research institutions to patent inventions created by federally funded research and exclusively license them to industry for further development and commercialization. As The Economist has written about Bayh-Dole, it

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conference

University Startups Conference Showcases Latest ITIF Tech Transfer and Commercialization Policy Proposals

ITIF Vice President for Global Innovation Policy Stephen Ezell spoke at the National Council of Entrepreneurial Tech Transfer’s University Startups and Global 1,000 Conference in Washington, DC, on April 5, 2016. The following excerpts his remarks.

With innovation being the lifeblood of the American economy, I’d like to offer several policy recommendations that could bolster America’s broader innovation, tech transfer, and commercialization ecosystem.

First, as a society, we’re simply not investing enough in scientific research. We’re not investing as much in research and development (R&D) compared to our own history. In fact, if our own federal government invested as much in scientific research as a share of gross domestic product (GDP) that we did in 1983, we’d invest at least $60 billion more a year in R&D than we do now. So closer to $200 billion a year than $138 billion a year. Moreover, we’re not investing as much as a share of R&D compared to competitor nations. Preliminary data for the forthcoming 2016 OECD Science, Technology, and Industry Scoreboard shows the United States falling to 10th of the 39 OECD countries in national R&D intensity (national R&D investment in

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usflag

Yes, the U.S. Really Isn’t Contributing as Much to Global Innovation as Belgium

The American Enterprise Institute’s James Pethokoukis writes about ITIF’s Contributors and Detractors: Ranking Countries’ Impact on Global Innovation report in a new AEIdeas blogpost. We certainly appreciate James bringing attention to the report and calling it out as a “must read.” Yet his post does raise a degree of skepticism about ITIF’s report, questioning in particular the United States’ overall tenth place ranking and asking “If the U.S. is really less innovative than Belgium?”

It’s vital to remember that the intent of ITIF’s report is not to rank the world’s most innovative countries or to rank countries on their aggregate innovation output as measured by indicators such as numbers of new start-ups, numbers of digital economy “unicorns” valued at over $1 billion, or new technologies created—and, indeed, the report acknowledges that the United States leads the world in levels of absolute innovation output. Rather, the report’s objective is to assess which countries’ economic, innovation, and trade policies—on a per-capita basis, crucially—are doing the most to contribute to and the least to detract from global innovation. In other words, to ascertain which countries are producing the most positive global innovation

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manufacturing-blog

New ‘Manufacturing Communities Act’ Would Spur Broad Manufacturing Renewal

While America’s manufacturing sector has rebounded somewhat from Great Recession lows—for example, adding 865,000 manufacturing jobs since February 2010—the recovery languishes, and even those job gains recover less than one-sixth of the U.S. manufacturing jobs lost during the 2000s. Moreover, the U.S. manufacturing sector has seen no growth in real value added since the end of the Recession. In fact, in 2013, U.S. manufacturing value added remained 3.2 percent below 2007 levels.

Put simply, America’s manufacturing sector continues to underperform its potential, meaning that America’s policymakers need to be leveraging every tool and instrument at their disposal to bolster the health of America’s manufacturing economy. And here, a key component of the strategy for accelerating America’s manufacturing recovery should include better empowering regional- and community-based manufacturing ecosystems.

That’s exactly what new, bipartisan legislation in the Made In America Manufacturing Communities Act, unveiled on Tuesday, February 9, 2016, sets out to accomplish. Sponsored by Senators Kirsten Gillibrand (D-NY), Mark Kirk (R-IL), and Jerry Moran (R-KS) along with Representatives David Cicilline (D-NY), Richard Hanna (R-NY), John Katko (R-NY), Tom Reed (R-NY), and Tim Ryan (D-OH), the legislation supports local manufacturing ecosystems

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china-blog

Top 9 False Promises That China Made in Joining the World Trade Organization

After almost 15 years in the World Trade Organization (WTO), China has still failed to follow through on many of the trade-liberalizing commitments it made in order to convince free trade-oriented nations to approve its membership in 2001. These broken promises have harmed the global trading system as   well as both economic growth and the health of innovative industries across the United States and Europe. Here are nine commitments China made, but never lived up to:

  1. Refraining from requiring technology transfer as a condition of market access

Although its WTO accession agreement included rules forbidding China from tying foreign direct investment or market access to technology-transfer requirements, it remains commonplace for China to compel firms to hand over their technology in exchange for the privilege of investing, operating, or selling in China.

  1. Significantly reducing intellectual property (IP) theft and violations

Joining the WTO required China to recognize the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides protections for patents, copyrights, trademarks, service marks, industrial designs, digital content, and other intangible property. Unfortunately, Chinese IP theft grows unabated. The IP Commission Report on the Theft of U.S. Intellectual

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‘Innovation Box’ Proposal Would Stimulate U.S. R&D and Innovation

In recent years, the United States has become less competitive in retaining and attracting globally mobile capital. That’s in large part due to an uncompetitive tax code that features the highest statutory corporate tax rate among OECD countries; a worldwide, as opposed to territorial, tax system; and an intermittent research and development (R&D) tax credit that has fallen to just the world’s 27th most generous, behind even Brazil, China, and India.

It’s high time for Congress to begin a serious reexamination of U.S. tax policy and to incorporate innovative approaches that spur greater levels of R&D, innovation, and investment by enterprises operating in the United States. One proposal that ITIF has long championed is the “innovation box” (or “patent box”). So named because it is implemented through a check box on a tax form, the policy provides favorable tax treatment for revenues generated from newly developed intellectual property (IP). As ITIF explained in its 2011 report “Patent Boxes: Innovation in Tax Policy and Tax Policy for Innovation,” these provisions differ from—and should be seen as a supplement to—R&D tax credits in that they provide firms with

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digital

Data a Key Driver of Transatlantic Economic Growth

The Transatlantic Policy Network hosted an event on Capitol Hill yesterday to discuss the data revolution in the transatlantic marketplace. The discussion was timely, for the reality is that data is the key commodity in today’s knowledge-based economy. In fact, a recent study by Finland’s TEKES finds that, by 2025, half of all value created in the global economy will be created digitally. Meanwhile, half of all global trade in services depends on access to open, cross-border data flows. Indeed, a wide range of industries—from manufacturers to miners, to banks, hospitals, and grocers—depend on the ability to move data across borders and/or analyze it in real-time as a fundamental component of their supply chains, operations, value propositions, and business models, as ITIF writes in Cross-Border Data Flows Enable Growth in All Industries. And this is as true for small businesses at it is for large—a 2014 study found that 60 percent of U.S. and European businesses with 50 or fewer employees regard data analytics as important to their enterprises’ success.

Moreover, the competencies of countries, and their enterprises therein, at extracting value and insights from data is instrumental to

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medicalworker

TPP Poised to Improve, Not Diminish, Health Outcomes Across Asia-Pacific Nations

In a not-so-shocking revelation last week, a leaked draft of the Trans-Pacific Partnership (TPP) intellectual property (IP) chapter turned up the fact that…surprise…the United States is fighting for its domestic industries in a trade agreement.

No real news there, especially since that’s exactly what our trade representatives should be doing, namely bringing home the strongest possible deal that protects and creates jobs and fosters the kind of innovation that will secure 21st century prosperity for Americans. What is extremely disconcerting, however, is that special interest groups and the generic drug industry are lobbying for drastic cuts to intellectual property protections for innovative medicines that could have lasting consequences for both global patient health as well as U.S. jobs and economic competitiveness.

These groups are (wrongly) asserting that the IP provisions being negotiated in the TPP will weaken competition from generics and raise drug prices by establishing protections that go beyond U.S. law. But, as usually happens, groups that oppose free trade agreements never let minor inconveniences like facts get in the way of their arguments.

For instance, it’s telling when the head of one of the world’s largest generic

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Dancing in the Streets

They’re Dancing in the Streets in Beijing and Berlin

Congressional authorization of the U.S. Export-Import Bank (Ex-Im Bank) is set to expire this evening, ending 81 years of continual and effective operation in the service of American exporters. The Bank has played a critical role in supporting the competitiveness of America’s traded-sector enterprises—that is, those competing in global markets—by stepping in to provide financing or insurance for export transactions that might not otherwise occur and by leveling the playing field for U.S. exporters by matching the credit support that other nations provide for export transactions.

Yet while some in Congress are pleased that they’ve “beat back the scourge of crony capitalism,” those who are truly giddy with delight are to be found in the capitals of the more than 80 countries that operate export credit agencies (ECAs)—from Beijing, to Berlin, to Brussels—and at the headquarters of businesses both small and large in such countries. That’s because, much to the chagrin of those in Washington who insist on not recognizing that America’s traded-sector enterprises are locked in fierce competition with foreign businesses spanning the globe, the ECAs of America’s competitors aren’t going to close up shop overnight in solidarity with

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transportation

DRIVE Act Drives in Right Direction; Yet Intelligent Transportation Systems Still Underfunded

The U.S. Senate Environment and Public Works Committee introduced a new bipartisan surface transportation reauthorization bill this week: the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act. And as ITIF called for in a May 2015 report, From Concrete to Chips: Bringing the Surface Transportation Reauthorization Act Into the Digital Age, the six-year reauthorization proposal does place increased policy emphasis on intelligent transportation systems (ITS)—particularly through a ground-breaking “Transportation Innovation” title which includes numerous provisions incentivizing the use of innovative transportation technologies.

That said, and despite this progress, the proposed bill continues to significantly underfund ITS research, development, and deployment over the next six-year period. This despite the fact that intelligent transportation systems—the application of information and communications technologies (ICTs) to bring actionable, real-time intelligence to every actor and asset in a transportation network—have a cost-benefit ratio at least 9 to 1 over investments in traditional highway infrastructure.

With regard to research and development (R&D), the DRIVE Act keeps ITS research funding constant at $100 million annually. While the Act does provide an additional $72.5 million annually for the University Transportation Centers (UTC) program to fund

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