All posts by Stephen Ezell

On March 20, Congressman Bill Foster (D-IL) introduced The National Fab Lab Network Act of 2013 (H.R. 1289), which would create a federal charter for a non-profit organization called “The National Fab Lab Network” (NFLN). NFLN would act as a public-private partnership whose purpose is to facilitate the creation of a national network of fab labs and serve as a resource to assist stakeholders with their effective operation. The network would be comprised of local digital fabrication facilities providing community access to advanced manufacturing tools for learning skills, developing inventions, creating businesses, and producing personalized products. The labs would represent workshops equipped with computer-controlled machine tools and “3-D printing” additive manufacturing devices which would allow children, students, or hobbyists to build virtually anything.

The NFLN would serve as a first point of contact for communities and organizations seeking to create fab labs; link funders and sites with operational entities that can source and install fab labs; support workforce training and job creation programs; and conduct research assessing the impact of the fab labs. The NFLN would operate at no cost to taxpayers, and would be chartered to accept funds from … Read the rest

With America’s economy continuing to plod along in a sluggish recovery, policymakers are searching for ways to spur U.S. economic growth. With the U.S. running massive trade deficits, we’ve realized in recent years that in order to grow America needs to increase its exports (hence the Obama Administration’s National Export Initiative, which seeks to double U.S. exports from 2010 levels by 2015), in part by encouraging the opening of markets throughout the world to freer trade. Having real access to foreign markets is crucial—it may mean the difference between a decade of stagnation or robust growth. Right now we are poised to make this essential leap forward with the Trans-Pacific Partnership (TPP), a 12-nation trade agreement that includes Australia, Canada, Japan, and Mexico as some of the major players. If enacted, the agreement would tie nations together that comprise 40 percent of the world’s gross domestic product. But before policymakers approve the TPP, the United States needs to make sure certain critical provisions are addressed. Some of the most important issues involve intellectual property (IP) protection.

IP is fundamental to America’s economy. With 40 million workers, or 30 percent … Read the rest

Global competition in export credit financing has become increasingly formidable, with foreign competitors enjoying substantial support from their countries’ export credit agencies, as ITIF explains in Understanding the Importance of Export Credit Financing to U.S. Competitiveness. The United States’ Export-Import Bank (Ex-Im Bank) fills an important role in leveling the playing field for U.S. exporters by matching credit support that other nations provide to their exporters, thus preventing foreign exporters from enjoying undue advantage. This ensures that U.S. exporters are able to compete against foreign competitors based on the quality and price of their products and services, and not lose sales because a foreign government has helped a foreign competitor by providing superior financing terms to a potential buyer.

Unfortunately, other countries—and principally America’s top economic competitors in Europe and China—continue to invest significantly more than the United States does in export credit financing, both as a share of GDP and, in China’s and Germany’s case, even current dollars.

In fact, from 2007 to 2011, China invested $227.6 billion in cumulative new medium and long-term official export credit volumes compared to the United States’ $70.6 billion, according to data … Read the rest

On Capitol Hill yesterday, ITIF hosted an event making the social and economic case for autonomous vehicles. The event featured presenters from Toyota, Google, and Texas Instruments, as well as DC Councilmember Mary Cheh, who introduced the Autonomous Vehicles Act of 2012, which authorizes autonomous vehicles to operate on the District’s roadways. (Similar legislation has also been enacted in California, Florida, and Nevada and introduced in nine other states.) Collectively, the panelists made the case that the advent of automated driving (i.e. driver assistance) technologies—and ultimately fully autonomous vehicles—is poised to deliver tremendous safety, personal mobility, environmental, productivity and efficiency, and economic benefits.

Regarding safety, with human error the definite or probable cause of 93 percent of traffic accidents, autonomous vehicles could dramatically reduce accident incidence because they will obey all traffic laws, won’t speed, and won’t drive while distracted, tired, texting, or inebriated. This could significantly ameliorate the over 4 million traffic accidents which occur annually on U.S. roadways and which cause more than 35,000 traffic fatalities (almost 100/day) and an estimated $450 billion in economic losses. In the meantime, a range of automated driver assistance technologies, … Read the rest

Innovation is one of America’s most prized assets. If our country is going to successfully compete on the global stage over the course of the next several decades, we must develop the new technologies, businesses and industries that will allow us to keep pace. President Obama’s just-released budget for 2014 contains several key components that further this goal.

ITIF applauds the President’s $1 billion request to create a series of manufacturing innovation institutes that will help propel advanced manufacturing and rejuvenate a sector of our economy that has been hit especially hard over the past decade. The National Network for Manufacturing Innovation will create 15 advanced manufacturing centers across the country that will spur research, development and deployment of next generation technologies, products and processes. As ITIF has shown, improving manufacturing innovation is central to enhancing American competitiveness and furthering economic development and business creation.

On energy innovation, the President’s budget request continues to push for greater public investment in the development of new clean energy technologies. The budget proposes boosting clean energy research to nearly $5 billion, a 15 percent increase compared to the FY2013 Continuing Resolution (CR) … Read the rest

The 2013 Aviation Summit, held on Thursday, March 28 at the U.S. Chamber of Commerce, showcased the critical contributions the U.S. aerospace and airline industries make to the U.S. economy, while highlighting policy issues that must be addressed if these industries are to remain globally competitive. This matters because, as ITIF explains in Fifty Ways to Leave Your Competitiveness Woes Behind: A National Traded Sector Competitiveness Strategy, the health of U.S. traded sector enterprises in industries such as aerospace, automobiles, and airlines—all far more exposed to global competition than local-serving firms and industries—simply can’t be taken for granted. For example, while we can know there will be a certain number of jobs in domestic-serving industries like grocery retail based solely on local demand, we can’t be certain there will be aviation industry jobs in the United States, since this depends on the United States winning in global competition in this industry.

Boeing CEO James McNerney, who gave the keynote address, emphasized the vital importance of the U.S. aerospace industry to America’s economy, noting that it contributes $325 billion annually to U.S. GDP while also contributing $86 billion in … Read the rest

On Wednesday, March 13, the House Ways and Means Trade Subcommittee held a hearing on the turbulent state of U.S.-India trade relations. The Subcommittee’s hearing reflects growing attention and concern related to India’s recent embrace of a wide slate of “innovation mercantilist” policies that seek to bolster Indian economic and employment growth by distorting global trade rules and forcing investment and production to occur in India. India has erected these policies in a diverse range of sectors from information and communications technology (ICT) to life sciences, clean energy, and retail.

For instance, in February 2012, the Indian Ministry of Communications and Information Technology announced a Preferential Market Access mandate for electronic goods (the PMA Mandate) which imposes local content requirements on procurement of electronic products by government and private sector entities with “security implications for the country.” A specified share of each product’s market—anywhere from 30 to possibly even up to 100 percent—would have to be filled by India-based manufacturers, with the local content share for each product rising over time. The policy’s coverage is so broad it could easily capture half of India’s ICT market. In fact, on … Read the rest

Originally posted on Ideas Lab.

With the iPhone 5 in stores and a new iPad Mini on the way, we seem to be in an era when innovation blossoms on a daily basis. Yet despite these much-ballyhooed examples, America could be achieving far more innovation if not for a growing anti-innovation “neo-Luddite” movement. Named after Englishman Ned Ludd, whose followers destroyed textile machines at the beginning of the Industrial Revolution, today’s neo-Luddites view innovation not as a force for progress to be encouraged, but as something to be stopped, regardless of the benefits innovation brings.

A generation ago, neo-Luddites were firmly ensconced in Europe, providing Americans with amusement and occasional frustration. Only in Europe could a government (the Swiss) restrict research into bioengineered plants because plants have “feelings” which deserve respect. Where else but in France would protesters uproot genetically modified grapevines at the National Institute for Agronomic Research while others “boss-napped” managers who had the temerity to announce layoffs when sales plunged.

If Europe embraces the “precautionary principle,” when it comes to innovation, America historically has embraced the “anticipatory principle.” Indeed, it’s hard to image Walter Ehret’s stirring 1950’s musical pageant “Our Country ‘Tis of Thee,” being written in Europe when … Read the rest

Yet another study has highlighted the United States’ expanding investment deficit and our growing innovation disadvantage compared with our global competitors. Battelle’s 2013 Global R&D Funding Forecast indicates that, even before accounting for the looming sequester, total U.S. R&D investment in 2013 is expected to decline in real dollars, with growth of only 1.2 percent compared with an inflation rate of 1.3 percent. This continues a long period of U.S. underinvestment in R&D, which has been particularly acute in stagnating federal research investment. According to the National Science Foundation, federal R&D investment grew at just 1.3 percent annually from 1989 to 2009, while gross domestic product rose an average of 2.4 percent over that time. In fact, to restore federal support for research as a share of GDP to 1987 levels, Congress would have to increase federal research funding by almost $110 billion—per year.

Meanwhile, the world’s greatest growth in R&D investment in 2013 will come from China, which is expected to increase its R&D investment by $22.9 billion in 2013.Through its Innovation 2020 strategy, China plans to invest $1.5 trillion over the next seven years on seven “strategic emerging … Read the rest