Race to Innovate
Competitiveness, Manufacturing, and Trade Policy Analysis
On Wednesday, October 29, the Information Technology and Innovation Foundation hosted an event exploring whether the United States needs a new approach to Trade Promotion Authority (TPA), which featured keynote remarks from U.S. Representative Jim Moran (D-VA) and remarks from former Congressman Phil English, now Senior Government Relations Advisor at Arent Fox; former Deputy U.S. Trade Representative Miriam Sapiro; Grant Aldonas, Principal Managing Director, Split Rock International; and Tim Keeler, a Partner at Mayer Brown.
ITIF believes that Trade Promotion Authority plays an important role in enabling the United States to pursue 21st century trade agreements—such as the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (T-TIP)—that support and create U.S. jobs while helping American manufacturers and service providers increase U.S. exports and compete in a highly competitive, globalized economy.
These next-generation trade agreements matter particularly because, as an economy, U.S. comparative advantage increasingly lies in innovation-based industries—such as life sciences, information and communications technologies (ICT), digital services, music and film, aerospace, advanced manufacturing, etc.—and these agreements are being intentionally designed to ensure that America’s innovation-based enterprises can fairly compete and thrive in global markets.
They do so … Read the rest
Over the past week, critics of the Trans-Pacific Partnership (TPP) Agreement—a free trade agreement (FTA) currently being negotiated by the United States and 11 of its trading partners across the Asia-Pacific region—have made a large hue and cry regarding a draft chapter of the agreement leaked on WikiLeaks pertaining to the TPP’s intellectual property (IP) provisions. Critics have lodged a litany of complaints against the TPP in general and the IP sections of the agreement in particular, including that the TPP has been negotiated “in secret,” that America’s TPP negotiators are attempting to surreptitiously circumvent existing U.S. law in negotiating the agreement, that the “onerous” protections for innovative products such as novel biologics would compromise access to medicines in the developing world, and that the TPP is likely to lead to much greater surveillance by Internet service providers (ISPs) on citizens’ online surfing habits. Yet each of these criticisms is either downright unfounded or significantly overblown, and the reality is that the “leaked TPP IP chapter” is really much ado about nothing, despite its scandalous trumpeting by those who wish to sow fear, doubt, and uncertainty regarding the TPP.… Read the rest
Last Friday, Google published its new How Google Fights Piracy report with details of the improved methods Google is using to combat piracy across a variety of its services. While the report itself is an impressive overview of the many policies and protocols Google has put in place, as well as the results of such protocols, most notable are the three ways Google has reformed search over the last year: demoting sites with many DMCA takedown notices, removing piracy-related autocomplete terms, and improving ad formats.
The report notes that in 2013, Google received just over 224 million DMCA requests for Google search results and they removed over 222 million of them, with an average turnaround time of six hours or less. But in addition to removing these infringing pages from search results (whether through its content removal webform or the Trusted Copyright Removal Program that allows trusted content owners to submit bulk takedown requests), Google has improved and refined its search algorithm to rank sites in part by how many removal notices it has received. Consequently, sites with high numbers of removal notices are demoted to lower search results. This … Read the rest
Proponents of effective intellectual property (IP) rights have long argued that weak IP protections will lead to less intellectual property creation. The logic appears clear: if content creators and other innovators know that a significant share of their work will be pirated or otherwise stolen they will have both less incentive and less revenue to create new ideas, creative goods, and innovations.
But how strong is this effect? To find out, we compared IP protection data from the World Economic Forum’s 2014-2015 Global Competitiveness Report, which incorporates the strength of IP laws and the stringency and effectiveness of anti-counterfeiting laws, and creative outputs scores from the 2014 Global Innovation Index, a report from Cornell, Insead and WIPO.
Put simply, countries that score higher on IP protection also score higher on creative outputs relative to the size of their economy. Over a sample of 136 countries there is a strong positive correlation of 0.72 between the strength of IP protections and score on creative outputs.
The Global Innovation Index has three distinct measures of creativity in an economy. First, “intangible assets” combines measures of domestic and international trademark applications … Read the rest
In today’s fast-paced, globalized world, knowledge workers can choose to work anywhere. In fact, being an appealing place for people to locate, especially those with advanced skills, is a valuable national resource. Highly skilled workers earn high wages, spend those wages locally, pay domestic taxes, and contribute to spill-over effects that benefit everyone in the area. Most engineers will tell you that the most appealing location for tech workers is located right here in the United States. Some countries strike oil. Others find diamonds. The United States hit it rich with Silicon Valley.
However, Silicon Valley has a weakness that threatens this preeminence: the lack of enough skilled workers to promote expansion and innovation by existing firms and industries and the development of new ones. One of the chief causes of this problem is America’s growth-stymying, restrictive immigration policies toward high-skill, foreign-born talent. For example, for the first time in American history, there are fewer startups founded by immigrants than there were 10 years ago. The effect is especially apparent in Silicon Valley, where immigrant-founded startups dropped from 52.4 percent to 43.9 percent from 2005 to 2012. And unfortunately for … Read the rest
The film and TV industry receives a lot of flak from critics for being its own worst enemy. If Hollywood studios want consumers to pay for content, the argument goes, then they should make it easier to download legally. If piracy is a problem for the industry, then maybe it should take a hard look in the mirror.
The only problem with this argument is that it’s completely false. KPMG just released a first of its kind study assessing the availability of movies and TV shows online. It found that as of December 2013, 81 percent of the 808 unique films studied were available on at least 10 of the 34 online video-on-demand (VOD) service providers. Only 50 of the films studied were not available on any of the 34 online video offerings that KPMG reviewed. The study also found rapid growth in the number of TV viewing options available to audiences. Overall, 85 percent of the most popular and critically acclaimed TV titles were available in the U.S. through legitimate online video services.
This development could not be timelier, with both the ramp up to the Oscars and Fall … Read the rest
Indian Prime Minister Narendra Modi’s historic election was viewed with a great deal of optimism by much of the world, including here in the United States. His campaign platform—putting economic growth front and center—championed the kinds of policies needed to get India’s economy back on track. With the Modi Administration having been in office for just about four months now, and as he embarks on his first official visit to the United States, it’s a good moment to take stock of the Modi Administration’s accomplishments to date—and areas where we hope to see continued progress toward improving the state of U.S.-India economic and trade relations.
On the positive side, the Modi Administration has announced a number of promising economic reforms. In particular, it has:
- Retired India’s Planning Commission, a vestige of centralized state planning;
- Eased some restrictions and limitations on foreign direct investment (FDI), notably in the defense and railway sectors (with the FDI ceiling in the former raised to 49 percent and in the latter to 100 percent);
- Committed to renewed infrastructure investment in power generation and transportation networks;
- Set a year-end target to complete long-pending implementation of a
Late yesterday (September 15, 2014), the U.S. House of Representatives passed the Revitalizing American Manufacturing Innovation (RAMI) Act of 2013 (H.R. 2996 in the House; S. 1468 in the Senate). ITIF commends the U.S. House of Representatives for passing this important legislation and calls upon the U.S. Senate to follow suit in quick order. The RAMI legislation calls for one-time funding of $300 million over seven years for the Secretary of Commerce to establish several Institutes for Manufacturing Innovation (IMIs), collectively known as the National Network for Manufacturing Innovation (NNMI). The IMIs represent unique public-private partnerships between the federal government, local governments, universities, research institutes, and industry designed to accelerate manufacturing innovation in technologies with commercial applications by leveraging resources to bridge the gap between basic research performed at U.S. universities and research laboratories and product development by U.S. manufacturers.
Four IMIs have already been established, including America Makes, focusing on additive manufacturing (i.e., 3D-printing) in Youngstown, Ohio; the Next Generation Power Electronics National Manufacturing Innovation Institute in Raleigh, North Carolina; the Digital Manufacturing & Design Innovation Institute (DMDII) at the University of Illinois; and the Lightweight & Modern Metals … Read the rest
Sometimes statistics just make sense. For instance, the revelation that spending more on education is correlated with a more highly educated workforce is hardly a surprise. To be sure correlation is not causation, but as more states look to cut corners on education spending, it is important to remember the relationship between spending and results.
Using the 2014 State New Economy Index’s workforce education score (a weighted score of the educational attainment of the workforce), there is a significant positive correlation of 0.46 between the education levels of a state’s workforce and the state’s current spending on education per student.
Of course, with a simple correlation it is impossible to attribute any directional causality. Part of the correlation could derive from higher incomes earned by a more educated workforce. Much of education spending comes from property taxes, so wealthy areas where land is more valuable tend to have higher education spending. For instance, education spending is highest in Northeastern states, led by New York ($19,552), where schools spent over three times as much per student as in Utah ($6,206). Resource rich Alaska and Wyoming also spent heavily, though … Read the rest
In 1956, an American engineer, William Shockley, had an idea that silicon could be used to make transistors, and founded a company in Mountain View, California. The rest is history. The area experienced explosive growth after the invention of the silicon semiconductor sparked waves of innovation. Other firms developed around the Shockley’s first company, also developing and improving on the invention. Continual support from nearby Stanford University, along with collaboration between local firms, created an innovative environment ideal for fostering growth. By the 1960s, 31 semiconductor firms had been established in the country, of which only five were located outside the region. Smaller firms providing research, specialized services, and other inputs located nearby the larger companies. Innovation thrived, the local economy boomed, the center of high-tech innovation shifted from the east coast to the west, and the Silicon Valley was born.
The Silicon Valley is a prime example of how advanced R&D tends to focus in clusters- geographically concentrated industries that maximize spillovers from firm to firm and between public and private researchers. Once research concentrates in an area, it is hard to displace, which is why DOE and other … Read the rest