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Archive for October, 2011

High Risk, Higher Reward: David Sandalow on Why the Government Must Invest in Innovation


By Lauren Simenauer, in a Science Progress cross-post.

The Internet is ablaze with allegations of government overreaching as the Tea Party rails against federalism and pundits lambast the administration’s role in the manufactured Solyndra scandal.  YouTube videos abound depicting a popular protest chant on Wall Street: “Banks got bailed out; we got sold out.” But the 99 percent wouldn’t even have the Internet as a medium of expression if the government hadn’t made a high-risk investment.  Now, more than ever, it is imperative that we remember our innovative roots and do not compromise on government-funded research.

On Friday, David Sandalow, assistant secretary for policy and international affairs at the DOE, addressed Yale University on the subject of government’s role in funding innovation. In his speech, he emphasized the importance of the government footing the bill for research that would otherwise be too expensive, too time consuming, or too risky for individual corporations to fund. Sandalow highlighted some key examples of government investments yielding monumental rewards: Google, natural gas from shale, GPS, the mapping of the human genome, and the Internet, just to name a few, wouldn’t have been

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America Must Learn from Germany- Before It’s Too Late

This blog is cross-posted from CNN’s Global Public Square.

Too many American policy-elites pundits, economists and policymakers – tragically accept the ongoing catastrophic decline of American manufacturing as inevitable. As some 5.5 million jobs and 54,000 factories have disappeared over the last decade, many U.S. elites have noted that intense competition from low-wage countries has caused other industrialized countries to experience similar declines. This view is wrong.

In fact, the United States’ precipitous drop in manufacturing is actually atypical. Indeed, the manufacturing employment, output and market share of many other comparable countries has actually been stable in recent years.  Between 1997 and 2010, U.S. manufacturing job growth was the worst among a group of ten OECD countries while Germany’s was the best.

At an event this month, the Information Technology and Innovation Foundation hosted a number of German government officials and probed why Germany has managed to retain and create research-intensive, high-wage manufacturing jobs. Why tried to understand how Germany could boast an unemployment rate of 6.6% while the U.S. unemployment rate is stuck at 9%.

It must be because wages in Germany are much lower than

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Stick to the Middle East Tom

After recently writing a review for The Washington Post of Tom Friedman’s new book That Used to be Us, I thought I had was done for a while criticizing the flaws in Friedman’s economic analysis. But after reading his op-ed this morning I find I can’t help myself. Now he’s claiming that we shouldn’t get tough with China because it would trigger a trade war. More on that in a minute.

What’s immediately striking about the op-ed, if you’ve read That Used to be Us, is the logical contradiction. In the book he states “Our problem is not China,” and “Asia’s surging economic growth has made Americans better off.” But now in the op-ed, China is a problem since “China’s strategy of using low wages and a cheap currency to build up an enormous export-led growth engine — while using its huge market to lure and compel companies to transfer their next-generation technology to China as well — is now hurting both sides.” Which is it? Are they hurting us or not? Clearly they are.

He then goes on to make a common mistake about China and their currency

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spectrum dormant image-wireless tower

Good Spectrum Lying Dormant

If you want to understand how problematic our spectrum allocation practices are in the United States, you need look no further than the kerfuffle around the transfer of Channel 55 licenses from Qualcomm to AT&T. The transfer should be a no-brainer: Qualcomm isn’t using the spectrum and AT&T has an immediate need for it. Qualcomm bought their licenses fair and square, and they’re happy with the price AT&T is willing to pay. The new use is similar to the old use in all the relevant technical dimensions, the amount of spectrum is relatively trivial (6 MHz in the D block, and another 6 MHz in the E block in a few markets,) so there’s no real competitive impact. What’s not to like?

Oddly, the FCC docket for the transaction (WT 11-18) is full of objections. Before we get to them, here’s the background: Qualcomm originally bought their spectrum licenses in order to operate an innovative mobile TV system called FLO TV. The previous owner had bought them at auction, so the transfer to Qualcomm was relatively straightforward (except for some complications that arose from a special bidding credit the

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A Word from the Wise is Sufficient

Some of the country’s most promising young scientists, in Washington this week to be honored at the White House, offered some useful insights for policymakers about the nation’s science innovation ecosystem: 1) The United States has a lot going for it– fine universities and talented, curious and innovative people eager to bring about monumental transformations, 2) Government funding is critical– often the only source for basic research and 3) Scale back on item #2 and you compromise #1.

At a press roundtable today recipients of Presidential Early Career Awards for Scientists and Engineers (PECASE) were unanimous in saying a steady and consistent funding stream helps maintain the country’s brain power and world class R&D infrastructure. It also begins a process that can lead to successful commercialization of ideas and discoveries.

Michael Escuti, associate professor of electrical and computer engineering at North Carolina State University, affirmed that money he has received from the National Science Foundation has leveraged private capital and led to a small business startup. His has pioneered the development of liquid crystal “polarization gratings” which could have a wide array of applications from battlefield communications to advanced cameras.

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Government Opportunities to Harness “Big Data”

Recently more attention has been drawn to the emergence of “Big Data”—large scale data sets that businesses and government are using to unlock new value using today’s computing and communications power. As a McKinsey Global Institute (MGI) study recently showed, Big Data offers a wide range of commercial opportunities in virtually every sector of the economy for the United States. To take one example, the authors estimate that better use of big data in health care could generate an additional $300 billion in long-term value, with approximately two-thirds of that coming from a direct reduction in national health care expenditures.

The use of Big Data should not be confined to just the private sector; data offers incredible new opportunities to the public sector as well. Policymakers have the opportunity to use Big Data to improve government in areas such as public safety, public health, public utilities and public transportation. ITIF has discussed many of these opportunities before.

Consider the following:

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Are We a Nation of Homer Hickmans or Homer Simpsons?


On this day in 1957, the Soviet Union deployed Sputnik. The two-foot, 180-pound orb’s beeping was the starting gun of the space race and we in the U.S. seemed to be just putting our sneakers on. Despite President Eisenhower’s initial shrug, America freaked out – but in good way.

In under a year, a Democratic Congress and the Republican President created and made operational the National Aeronautics and Space Administration (NASA). The National Defense Education Act, which not only jump started higher education in math and science here but also promoted the study of countries we realized were gaining on us, became law. The Advanced Research Projects Agency (ARPA) came into being.  Later, of course, it became (Defense) DARPA, which yielded numerous technological advances, including what became the Internet.

When it came to being #1 in space, we didn’t wait for market forces to work their magic. In a speech at Rice University on September 12, 1962 President Kennedy said the tripling of the space budget in a little over two years was worth it. There were new jobs, new companies and new discoveries.  We were in the race but

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Web Disintermediation, Incumbents, and Innovation

TechDirt has a great article passionately decrying what the video content owners are trying to do to Hulu.

Essentially, the content owners don’t understand it, so they are doing what happened in the fairy tale about the goose that laid the golden egg: they’re going to cut it open and get all the golden eggs out.

Maybe it’s just that they’re frightened about what the Internet will do to their business.  But that doesn’t make their behavior adaptive; it simply makes it understandable.

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