On Monday at the G8 Summit, President Obama, U.K. Prime Minister Cameron, European Commission President Barroso, and European Council President Van Rompuy announced plans to launch negotiations for an ambitious trade deal between the European Union and the United States. The Transatlantic Trade and Investment Partnership (T-TIP) is an ambitious, comprehensive, and high-standard trade and investment agreement that promises to boost worldwide economic growth. During the negotiation announcement, Prime Minister Cameron said a successful deal could add £100 billion ($157 billion) to the EU economy, £80 billion ($125 billion) to the U.S. economy, and as much as £85 billion ($133 billion) to the rest of the world. While these numbers are impressive, as ITIF’s March 2013 report, Estimating the Benefits of a Transatlantic Trade Partnership found, citing data from the U.S. Chamber of Commerce, gains could be as high as $450 billion for the United States and $495 billion for the Europe Union, boosting both EU and US GDP by 3 percent. “We’re talking about what could be the biggest bilateral trade deal in history; a deal that will have a greater impact than all the other trade deals on … Read the rest
Evidence of technological change is all around us—smartphones, self-driving cars, amazing drug discoveries, and even drone warfare. With all of this novelty many futurists and other pundits breathlessly proclaim that technological change is speeding up. In fact, some go so far as to claim that the pace of innovation is not only accelerating, it is accelerating exponentially (which, anyone with a rudimentary understanding of exponents can see, is utter nonsense). Peter Diamandis, author of Abundance: The Future Is Better Than You Think, argues that “Within a generation, we will be able to provide goods and services, once reserved for the wealthy few, to any and all who need them. Or desire them.”
But is the rate of technological change really getting faster? Other commentators, including some notable academic economists, actually think the opposite—that we have run out of the “easy” technological advances and new breakthroughs will take much more work.
Questions about the rate of technological change may seem trivial—will I get one hoverboard or two?—but getting a handle on an answer is critical because in economic terms, technological change equals economic growth. And growth has powerful implications for … Read the rest
Making Innovation Part of Climate Hawks Policy Pitch
In a previous article I argued that climate policy advocates should make energy innovation part of their policy elevator pitch. A good opportunity to start is now available through the debate on reforming and re-authorizing the America COMPETES Act.
Within the climate advocacy community there are those that argue for aggressive clean energy innovation policy (such as myself) and those that argue for aggressive deployment of existing clean energy technologies (such as Center for American Progress’s Joe Romm and 350.org’s Bill McKibben). Each provides different policy emphasis and nuance. Today, deployment policies receive higher priority, reflected in it dominating the narrative among advocates as well as dominating the portfolio of U.S. public investments in clean energy. As a result, conflict occurs over what policy changes should be made.
As Grist’s Dave Roberts argues (correctly to a degree), both “camps” agree on a lot and everyone should aggressively work for clean energy to be a national priority to “lift all boats,”—both innovation and deployment of today’s technologies alike. How then should this consensus be reflected in our pitches to policymakers?
In my … Read the rest
As ITIF documents in 25 Policy Recommendations for the 2013 America COMPETES Reauthorization, Congress is currently considering a wide range of options for reforming U.S. high-skill immigration policy. The Senate Gang of Eight’s immigration reform legislation would create an additional 25,000 visas for foreign students graduating from U.S. universities with a Masters or Ph.D. in science, technology, engineering, and mathematics (STEM) fields. And the Startup Act 3.0 would make it 50,000 such visas for STEM graduates and introduce a “startup visa” for qualified immigrant entrepreneurs. As the Kauffman Foundation finds in Give me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa, immigrant-entrepreneur founded startups could generate as many as 1.6 million new jobs after ten years (assuming that 75,000 visas are granted and that half the startups are technology or engineering companies).
To be sure, a startup visa could have a beneficial impact on U.S. economic and employment growth, but why limit this dynamic only to foreign entrepreneurs looking to invest in starting new businesses? Why not extend visas to foreign individuals investing substantially into ongoing federally funded research and development (R&D) activities at … Read the rest
Yesterday, US stocks experienced a brief plunge in price due to a bogus tweet on the Associated Press’ Twitter page regarding explosions taking place at the White House. While the market impact was literally momentary, the larger issue of investor confidence plays to the narrative that the financial markets are truly not the domain of the average investor. Yet another example that it’s not your grandfather’s stock market any longer. And such thinking impacts the average investor’s confidence in the system that financial innovation has wrought.
Here’s an excerpt from CNBC regarding the incident:
“When the market briefly skidded after a hacked AP Twitter account reported explosions at the White House, we saw the first real-time demonstration of robo-trading riding on the back of social media.
The plunge in the market was so quick that it obviously was not the result of individuals reading the phony news and deciding what action to take. Computers were making the trades-or, more precisely, ending the trades.
“It’s not so much that the computers initiated trades. What happened is that they canceled the orders, so the bids come out of the market. That causes … 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
After already slashing R&D funding, the Sequester is about to deliver another kick in the teeth to American competitiveness: it’s going to sharply reduce our ability to measure it. This one comes courtesy of the Bureau of Labor Statistics, which announced last month that the sequestration has forced it to eliminate its International Labor Comparisons (ILC) program, a neat little database that adjusts foreign data to a common framework, allowing you to compare the traded sector health and competiveness of the United States against that of other countries.
This may not sound like much, but in the nerdy world of competitive analysis economics, it’s huge. No one else provides this data to the same extent as ILC. The OECD does a bit,[i] but their data are rife with warnings about the perils of cross-country comparison among their indicators. Moreover, the OECD has little-to-no data on the big boys such as China and India, which renders its data useless for any “big picture” comparisons of our competitive health. Other organizations, such as the UN Industrial Development Organization, provide limited competitiveness data that is vastly incomplete.
In contrast, the ILC … Read the rest
I have just finished a fascinating book about the history of phone hacking from the 1950s to the 1980s, Exploding the Phone by Phil Lapsley. The phone system was one of the first communications networks in America, and as such, just like today, it attracted its share of amateur hobbiests who wanted to understand how it worked, including finding out how to make free long distance calls, conferences calls and the like. While Apple founder Steve Wosniack may have been the first to create a “blue box” using digital instead of analogue technology (a blue box is the term for an electronic box made to mimic sounds on the phone system in order to trick the phone network into doing what the user wanted) he was hardly the first young person to “hack” the phone system. It turns out that a whole network of folks—what became known as Phone Phreaks emerged, and many became loosely tied into a network that compared notes on best practices. Some were high school students bored with school and fascinated with telephony, others college students also bored with classes. Several of the most prominent were … Read the rest