Innovation Files has moved! For ITIF's quick takes, quips, and commentary on the latest in tech policy, go to

Archive for January, 2011

Government reorganization and competitiveness

In an earlier posting on the State of the Union Address, I drew attention to the President’s plan for government re-organization.  Yesterday, the White House announced that Deputy OBM Director Jeffrey Zients to head up the government reorganization efforts.  Zients is also currently also the federal government’s Chief Performance Officer (CPO).  The announcement noted that “Our first focus will be looking at trade and exports to see how we can better reform these functions to give American companies a leg up in the global economy.”

This is a good step forward.  But there are other steps the President can take immediately to push forward the competitiveness agenda.

As I mentioned earlier, Center for American Progress (CAP) published a report outlining a number of process steps the Administration could take to address policymaking on competitiveness.  In that earlier posting, I highlighted the coordination and planning activities recommended in the report — based on the national security model.  I will come back to those recommendations.

However, the report (A Focus on Competitiveness) also addressed the reorganization question, with the following suggestion:

“To address the fragmented responsibility for key

Read the rest

Cover Your Bits, It’s Data Privacy Day!

In case you missed the announcement, today is Data Privacy Day, the once-a-year “international celebration of the dignity of the individual expressed through personal information.” While this annual event does not generate the same level of excitement among the masses as other esoteric holidays like International Talk Like A Pirate Day or Pi Day, its relative importance will likely eclipse these celebrations in the near future for the simple reason that the shear amount of personal data that has migrated to the digital world is reaching staggering proportions. Today people regularly share many types of sensitive personal information, including financial, health and location data, with individuals and businesses for a variety of purposes and for various reasons. Data Privacy Day is a good time to remind policymakers that this steady flow of data should not be treated as a leak that must be staunched, but as a wellspring of innovation that should be cultivated.

The ability to more easily store, manipulate and transmit data has been at the root of the IT transformation of the last few decades. While this steady flow of data into the digital ether

Read the rest

President Obama, Leader of the Clean Energy Innovation Movement?

From the innovation perspective, there was a lot to like in last night’s State of the Union. But particularly encouraging was his take on energy innovation. It wasn’t just part of a laundry list of priorities, and nor was it about curbing emissions alone, but rather it was a central component in achieving his goals for national competitiveness and growth. This is exactly the direction in which the energy debate needs to move, and at exactly the right time.

The significance of this rhetorical pivot shouldn’t be underestimated. The energy debate has for years been hitched to climate change, which for many advocates has meant treating dirty energy like a pollution problem. Even the President’s preferred policy vehicle – cap and trade — was derived from previous regulatory efforts to eliminate acid rain in the 1990s, a problem on a much smaller scale than that which we currently face.

Misguided from the start, this kind of thinking led to a limited vision for our energy future, and consigned Congress to focusing on controversial half-measures that wouldn’t have gotten at the real problem even if they’d succeeded. In reality, while

Read the rest

Krugman Flat Wrong that Competitiveness is a Myth

In a Sunday op-ed in the New York Times, “The Competition Myth,” Paul Krugman argues that “competitiveness” is a myth, a bad metaphor, a fundamentally misleading goal, and that it doesn’t make “any sense to view our current woes as stemming from a lack of competitiveness.” About this, Krugman is absolutely, dead-on, 100 percent wrong. For the reality is that the perilous state of the American economy has everything to do with faltering U.S. competitiveness—and more than that—much to do with the abject refusal of neoclassical economists like Krugman himself to recognize that competitiveness is an issue, that countries compete, and that U.S. economic policy should be directly designed to bolster the competitiveness of U.S. organizations and industries.

Krugman’s like the young boy who finds himself losing a race with his buddies and who stops and yells, “I’m not racing!” Better to simply pretend that you aren’t racing than to lose. For if you can convince yourself that you aren’t in a race, you sure sleep better at night than if you admitted you were in a competition and were losing…That is, until you wake up one morning

Read the rest

Rethinking competitiveness and the State of the Union

It is widely expected that this evening President Obama will use his State of the Union address to highlight America’s economic competitiveness and the challenges we face.  He will call for greater investments in R&D, education and infrastructure.  That will touch off a debate over the federal government’s budget and the role of government in the economy.  GOP critics are likely to call for less regulation, tax cuts and spending reductions as an alternative means on boosting competitiveness.

However, I fear that both sides may be stuck in an earlier vision of economic competitiveness that is no longer useful as a guide for policymaking (see our earlier paper Info Age: Recast Issues Demand New Solutions).  A quarter of a century ago, the United States confronted and overcame a challenge to its economic competitiveness.  The U.S. now faces a similar challenge.  However, the situation today is different in profound ways while our policy responses are, in many ways, echoes of the 1980s. We need to reevaluate so that we can reformulate appropriate policies.

The global economy has entered a new era. The industrial age was driven by machines and natural

Read the rest

China’s Reverse Robin Hood: Stealing Intellectual Property from the Poor

Many of the facts relating to the globalization of intellectual property (IP) theft over the last decade are not debatable.  For example, IP theft has decreased the market share of U.S. firms and destroyed or prevented the creation of millions of U.S. jobs.  While currently 18 million Americas are employed in IP-intensive industries, the U.S. economy loses over $20 billion annually to IP theft and in 2007 IP theft reduced global trade by 5 to 7 percent.

However once one gets beyond a simple fact-based analysis the debate over IP theft becomes more contentious.  Specifically when it comes to policy prescriptions such as the true societal cost of IP theft, enforcement strategies and stakeholders rights, there is significant disagreement.  One of the most contentious elements of IP theft is how to deal with developing countries.  As technology spreads to emerging markets, specifically in Eastern Europe and Asia, faster than legal frameworks to prosecute IP violations, theft has steadily risen.  For example, although emerging markets only account for 20 percent of the software market, they make up 45 percent of software piracy.  China is a particular conspicuous violator.  According to the

Read the rest

No, COICA Will Not Break the Internet


Last fall I wrote an article about Sen. Leahy’s proposed legislation—the Combating Online Infringement and Counterfeits Act (COICA)—that summarized the criticism of the bill and provided a rebuttal to those arguments. Since last year the issue of online piracy has not abated and the opposition to the legislation remains as heated as ever. Since COICA draws heavily on ideas proposed by ITIF in the report “Steal These Policies: Strategies for Reducing Digital Piracy,” I think it is appropriate to respond again to some of these concerns. As part of a two-part blog series, I would like to dive deeper into the two main objections to COICA: 1) that it will break the underlying technical foundations of the Internet and 2) that it is a direct threat to and contradiction of the U.S.’s commitment to global Internet freedom.

In this post, I will address the first objection, i.e. that COICA represents a threat to the technical integrity of the Internet. This argument has been put forth by organizations like the Electronic Frontier Foundation (EFF) who argue that it will “undermine basic Internet infrastructure” and the Public Interest

Read the rest

Crowdsource Regulatory Reform

Regulatory reform promises to be a major agenda item in the new Congress. Support for improving the regulatory process appears to be bipartisan. In late December, President Obama called on government to be a “good partner” to the private sector and eliminate regulations that restrict innovation. Similarly, House Majority Leader Eric Cantor recently called on Congress to “stop the job-killing regulations.” Policymakers constantly struggle with finding the right balance for regulations that improve citizen welfare while not causing undue burdens on the private sector. Certainly some regulations are useful; however, some may be inefficient or harmful. In our current economic environment, it is critical that government better understand the impact of regulations on economic growth and innovation.  As such, it is time to give policymakers better tools to get the job done.

Identifying the specific regulatory problems is the first step. In December, Rep. Darrell Issa (R-Calif.), Chair of the House Oversight and Government Reform Committee invited over 150 businesses and organizations to submit comments on which regulations they believe impede job growth. This is a good start, but a more systematic process is needed so

Read the rest

Message to PUCs: Forward or Backward?

While many from the FCC are headed to Vegas to see the latest, coolest devices displayed at the Consumer Electronic Show, I am heading to wintery New York for a conference of State PUC officials.  I’m going to talk about the national broadband plan and universal service fund (USF) and intercarrier compensation (ICC) reform.  Oddly, I think I will have more fun.  I guess there is no accounting for taste.

Most of what I will say relates to what we analyzed through the planning process: that USF and ICC are the two largest revenue streams controlled by the FCC affecting the broadband ecosystem, that the logic and financial underpinnings of both are rapidly breaking down, and that neither is designed to fill the critical gaps in that ecosystem.  To make matters worse, the most prevalent idea in broadband policy–that the primary metric by which a nation’s broadband policy should be judged is the speed of the wireline network to the most rural of residents—is both profoundly wrong and badly affects the way many think about USF and ICC.  That idea, applied as many propose, would lead us backwards, slowing down

Read the rest

Death to Nuance!

Susan Crawford rings in the New Year in the Yale Law and Policy Review with an article (The Looming Cable Monopoly) that illustrates a prime reason that it’s nearly impossible to have a discussion about Internet policy in the United States without a food-fight breaking out. Crawford tells us, unequivocally, that a cable company takeover of the Internet is imminent, according to no less an authority than the National Broadband Plan. The Plan doesn’t say this, of course, but Crawford twists it into a pretzel to make it seem so. First she cites some text from the National Broadband Plan that speculates about one possible broadband future and finds a dark cloud around the silver lining of higher speeds:

Analysts project that within a few years, approximately 90% of the population is likely to have access to broadband networks capable of peak download speeds in excess of 50 Mbps as cable systems upgrade to DOCSIS 3.0.[7] About 15% of the population is likely to be able to choose between two robust high-speed service services [sic]—cable with DOCSIS 3.0 and upgraded services from telephone companies offering

Read the rest