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

Archive for October, 2012

CalBattery Breakthrough a Product of the National Innovation Ecosystem

California Lithium Battery Inc. (CalBattery) – a start-up established in 2011 – has announced the development of a potential battery breakthrough that could significantly increase energy density and reduce costs. As the battery industry continues to struggle with performance and cost issues, especially when it comes to electric vehicles, technology breakthroughs are central to creating a competitive industry. While the CalBattery news is potentially important, however, the overlooked story here is how the company is a successful product of government investments in clean energy innovation. CalBattery’s breakthrough is a composite anode material for lithium-ion batteries (LIBs) – one of the three main components of battery technology along with the cathode and electrolyte. The anode is the material in which an electric current flows into the battery. For most advanced batteries used in the market, graphite is typically used because it is lightweight and has a relatively high energy density. In comparison, silicon offers a much higher energy density potential, but is typically not stable enough for commercial use – after a few charges the silicon cracks and the battery is inoperable.

To solve this issue, CalBattery’s technology embeds nano-silicon on

Read the rest

The Tech Industry’s Odd Relationship with Government

Two recent posts on TechCrunch about tech industry efforts to influence and work with government deserve comment, because one clearly shows the right way to go while the other just as clearly exemplifies the wrong way. We’ll take them in time sequence, starting with how not to do things.

Three geeks go into a bar. Several drinks later, they determine that all it takes to solve the world’s problems is a new web site to crowdsource amendments to acts of Congress.

If you’ve been following technogeek efforts at leveraging the Web to magnify tech political influence for very long, you’ve heard this story several times. Larry Lessig, Tim Wu, and their cronies at the Stanford Center for Internet and Society and the Harvard Berkman Center for Internet and Society have been on this mission since the turn of the century. They’ve been joined by the folks who believed blogs were going to change the world, such as the founders of Personal Democracy Forum and MIT Media Lab director Joi Ito, an early investor in blogging platform Moveable Type. When congressman Darrell Issa wrote his alternative to SOPA, the OPEN Act

Read the rest

Regional High School Science Bowl team from Thomas Jefferson High School for Science and Technology

Punishing Hard Work: Entrance to Specialty STEM High Schools Should be Based on Merit

One of the best Kurt Vonnegut short stories is “Harrison Bergeron,” which pictured a dystopian future in which social equality was achieved by handicapping the more intelligent, athletic, beautiful, or capable members of society. Ballerinas had to wear lead weights, and the most intellectually gifted had to wear headphones that played distracting noises every thirty seconds, carry three hundred pounds of weight strapped to their bodies, and wear distorting eyeglasses designed to give them headaches. It was only then that true equality could be achieved. Just like the Handicapper General in Vonnegut’s story, whose duty it was to impose handicaps so that no one would feel inferior to anyone else. Is America going down this same road? As my colleague Stephen Ezell and I argued in our new book Innovation Economics: The Race for Global Advantage, America has “developed a perverse egalitarianism and anti-elitism that bodes ill, for it means that efforts to enable excellence—whether it’s private toll lanes or high schools for those gifted in math and science—are branded as antidemocratic and elitist.”

Math and science education is critical for our nation’s future. As we noted in our

Read the rest

China Doubles Down on Green Mercantilism, Purchases LDK Solar

LDK Solar, the world’s second-largest solar wafer maker, is now a Chinese state-owned enterprise. ITIF previously noted that the company had $80 million in debt paid back by Xinyu, a city in the eastern Jiangxi province which is also home to LDK’s main headquarters. But LDK Solar reached a new milestone last week with the news that it is selling a 20 percent stake in the company to the state-run Hen Rui Xin Energy for roughly $23 million. While the United States has raised tariffs on Chinese solar imports this year in an effort to discourage the country’s green mercantilism, the LDK Solar move suggests that China is doubling down on such policies.

The Xinyu-debt repayment and Hen Rui Xin Energy-equity acquisition are two recent instances in a string of notable government actions to shore up the struggling LDK Solar. Two months before the Xinyu announcement, MorningWhistle reported that the Jiangxi provincial government “pressur[ed] state-owned banks into approving a loan package worth 2 billion yuan” (more than $320 million USD) for the company, interest rate unknown. And just three days after the announcement of the Hen Rui Xin Energy news,

Read the rest

Can Rare Earth Replacements Spur A Supply Chain Revolution?

Guest posted by Adam James, Special Assistant for Energy Policy at the Center for American Progress. The piece is being cross-posted from Science Progress, and can be found here, and is part of a series called “UpStart,” which focuses on innovative companies in the clean energy economy.

This column in the past has focused largely on market barriers and consumer engagement with clean energy, but less on the supply chain portion of  companies’ business models. Along with supplying end-products, the clean energy economy will be populated by many companies who are purely in the business of supplying the materials used in clean technologies. It is important for U.S. competitiveness and industry to ensure that these new companies are fostered right here at home.

A Common Thread: Rare Earth Metals

Rare earth metals are naturally occurring minerals whose properties make them uniquely suited to certain clean technologies, particularly electric vehicles and wind turbines. The components in these clean technologies — including magnets, superconducting wire, batteries, and motors — are made possible through the unique properties these rare earth metals provide.

So what’s the issue? It isn’t that rare earth

Read the rest

Third Debate: Basic Research Not Enough to Spur Energy Innovation

Last night marked the third and final presidential debate of the 2012 election, and was the first time since 1984 that climate change went unmentioned by the presidential candidates in any of the debates. (“Obviously there are only so many [topics] you can get to,” debate moderator Bob Schieffer noted afterwards. “I had questions about climate change to talk about.”) The election has generally been devoid of serious discussion of climate change and energy innovation, and candidates and moderators alike avoided both the issues in the first and second presidential debates of this cycle as well. Beyond recalling the same rhetoric about energy security used in the last two debates, however, this discussion did highlight the candidates’ positions on federally-funded basic research.

The president observed that “if we’re not making investments in education and basic research, which is not something that the private sector is doing at a sufficient pace right now and has never done, then we will lose the [lead] in things like clean energy technology.” He was right to make the link between smart government investment and technology development, but wrong to focus on basic research.

Read the rest

The Sad Reality Behind Foreign Direct Investment in the United States

One rebuttal out commonly used against those of us worried about the large and persistent U.S. trade deficit is that  a trade deficit implies a “capital account surplus.” In other words, a trade deficit must be offset by inflows of funds, and those funds are sometimes (although far from always) used to finance investment in the U.S. economy. One big part of these inflows is foreign purchase of U.S. debt, such as corporate securities or Treasury bonds that finance government spending. The other big part is foreign direct investment (FDI), which is the inflow of foreign funds used to control (i.e. own) business assets within the United States. While the economic benefit of the financing of U.S. debt by foreign entities is hotly debated, the inflow of FDI is often touted as a sign of continuing U.S. economic strength, given that, at first blush, the influx of foreign dollars appears to support investment in companies in the United States and thus million of American jobs. It is important to note, however, that there are in fact two kinds of FDI, and each has different consequences for the American economy. Read the rest . . .

The Myth of Anonymity

The Federal Trade Commission (FTC) released its staff report yesterday on facial recognition technologies where it warned of potentially “significant privacy concerns” and called on companies to respect the privacy interests of consumers by implementing FTC-recommended “best practices.”

First, as I have written before, policymakers should not create technology-specific rules for facial recognition. Facial recognition technology belongs to a larger class of biometric technology that should be treated the same. In addition, facial recognition has many benefits, from improving security to automating tasks to personalizing transactions.

That said, there is nothing wrong with the federal government working with industry and advocacy groups to develop voluntary best practices that protect privacy and spur innovation. But these best practices should be based on sound knowledge, such as a clear understanding of technology and an accurate representation of the world. What I’d like to address here is the myth, repeated in the FTC report, that facial recognition technology “may end the ability of individuals to remain anonymous in public places.” The FTC identifies this particular privacy risk as one of the major privacy concerns of the technology. However, contrary to the FTC’s

Read the rest

President George W. Bush poses for a photo with Dr. Paul Krugman, Economics Prize Laureate; Dr. Martin Chalfie, Chemistry Prize Laureate; and Dr. Roger Tsien, Chemistry Prize Laureate.

Does the U.S. Economy Compete with Other Economies?

As we argue in our book “Innovation Economics: the Race for Global Advantage,” the United States has been losing the competitiveness and innovation race, with severe consequences for our economy. And we can’t get back to winning the race unless we put in place a national competitiveness and innovation policy. And we won’t do that unless policymakers recognize that America is an intense race for innovation and competitive advantage with other nations.

Unfortunately, too many economists who advise policymakers rightly note that U.S. companies compete with foreign companies but mistakenly counsel that America itself is not in global economic—and innovation—competition with other nations. Perhaps most well known for making such a claim is economist Paul Krugman who makes the astounding—but quite conventional (at least among neoclassical economists)—contention that “the notion that nations compete is incorrect . . . countries are not to any important degree in competition with each other.” And it’s not just liberal economists that hold such a view, so do many conservative economists. AEI’s Kevin Hassett claimed, “Non-economists regularly appeal to competitiveness when motivating a wide array of policies, while economists protest or look the

Read the rest

Second Debate: Another Night Sans Energy Innovation and Climate Change

Last night, President Obama and Governor Romney met for the second of three presidential debates that included a strong focus on energy and the economy. The problem is that the two biggest issues driving both topics – spurring clean energy innovation and addressing climate change – were no-shows. Instead, the debate was focused on how the candidates can significantly lower gasoline prices (they can’t) and who supports coal, natural gas, and oil more.

Without sounding like embittered policy wonks, this is troubling. A policy debate on energy and the economy that ignores innovation and climate change just isn’t a serious or rational debate.

This is best summed up by the debate moderator, Candy Crowley, who noted on CNN that she refrained from calling on one participant who had prepared a question on climate change: “Climate change, I had that question. All you climate change people. We just – you know, again, we knew that the economy was still the main thing, so you knew you kind of wanted to go with the economy.” Except climate change and the economy are not mutually exclusive! In fact, addressing climate change

Read the rest