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

Science and R&D

Basic Research the Wrong Focus for ARPA-E

The Advanced Research Projects Agency-Energy (ARPA-E) has enjoyed bipartisan support since its inception, with members of Congress from both parties appearing at this year’s Energy Innovation Summit to laud its achievements. The agency’s reputation is such that a 2010 report by scholars from the American Enterprise Institute, the Breakthrough Institute, and the Brookings Institution entitled Post-Partisan Power called for its annual budget to be increased to $1.5 billion. (Congress appropriated $275 million for the agency for fiscal year 2012). Yet there has been a troubling trend as an increasing number of policymakers and advocates are calling for ARPA-E’s mission to be redirected to focus solely on basic research – exploration of fundamental principles with no regard for commercial applications. A move in that direction, however, would completely misunderstand the role the agency is meant to play in the energy innovation cycle and would be a serious mistake.

Last year, Congressman James Sensenbrenner (R-WI) accused the Obama Administration of shifting the Department of Energy’s focus from basic research to “later-stage technology development and commercialization efforts,” an approach that he panned as “picking winners and losers.” It was thus unsurprising when

Read the rest
Collage of Biomedical Images

Big Benefits from Big Pharma: Longevity and Real Welfare Growth

The pharmaceutical industry certainly doesn’t suffer from a lack of detractors. Many claim that “Big-Pharma” is simply in it for the money, and that they’ll push new drugs simply to boost profits, even if the drugs aren’t appropriate for the consumer.  Others argue that we should eliminate intellectual property protections to get lower price drugs, since there isn’t really that much innovation that has a real impact happening anyway.

However, before throwing the pharmaceutical industry under the bus, it is critical to understand the relationship between pharmaceutical R&D, new drugs and human health impacts.  And in fact, a recent study finds that the related drugs brought to market are having a bigger positive effect than you might think. Frank Lichtentberg, a professor at Columbia University and published by the National Bureau of Economic Research,  finds that an increase in drug proliferation year-over-year (drug vintage) leads to increased life expectancy.  From 2000 to 2009, the study finds that life expectancy increased by 1.74 years on average, and 73% of that increase was due to new drugs brought to market after 1990. In other words, pharmaceutical innovation added 1.23

Read the rest

Obama speaks at Alcoa

Time to Turn NNMI from Concept to Reality

Why do we need a National Network for Manufacturing Innovation (NNMI), a $1 billion initiative the Obama Administration has proposed to facilitate public-private collaboration to enhance manufacturing competitiveness?  Why not just reduce the tax and regulatory burden on companies and let free enterprise work its magic?

That question was the basis of some skepticism of NNMI voiced by members of the House Science, Space and Technology Subcommittee on Technology and Innovation at a public hearing today. As one Member put it, why not do it the “old-fashioned” way?

Well, in a way this is the old-fashioned way.  When it came to innovations such as the Internet, “fracking” in the energy sector, advances in biotechnology that have extended our lives, and other breakthroughs, the government played a modest role in undertaking initial costs and risks of R&D or in harnessing the nation’s talent and resources in ways the private sector could not or would not do. This has been true since land grant colleges were created in the 19th century and helped make America the world’s breadbasket. That’s one reason why NNMI makes sense.

That’s not say that

Read the rest

Laid-Back Higher Ed

More often than is warranted, Washington embraces consensus positions based on the view “we all know this to be true.” One of these is “well, while K-12 education is a mess, we all know that American higher education is the best.” There is increasing evidence the last half of this consensus view is not true.

The latest evidence of this is an article in today’s Washington Post that relies on data from the National Survey of Student Engagement (NSSE) showing today’s college students spend about 40 percent less time studying than they did a half century ago. While everyone focuses on getting 6 years olds to spend every waking moment doing homework and giving up summer vacations so they can go to school (a great idea if we want to rob children of childhood), we are going in the opposite direction when it comes to college.

As I wrote in a blog on Huffington Post, “The Failure of American Higher Education,” American higher education is no longer adequately educating students – not just on STEM as we have written about, but on the broad capabilities of being

Read the rest

DOE Budget Justification Gone Awry

The intention of the Energy Innovation Tracker is to analyze public investment – in budget documents, project descriptions, and legislation – to better understand how the U.S. is investing in energy innovation. As a resource for policymaking, the Tracker provides a critically important tool for decision-makers that provides access to detailed, transparent, and accessible federal investment data. It highlights spending from the past and the present while showing space for new investment in the future. Unfortunately the construction of the FY2013 DOE budget request poses major challenges to providing this level of clarity for agency spending.

In the past, DOE budget justifications captured office- and program-level data. For instance, the Tracker identifies that the Vehicles Technology program within DOE’s Office of Energy Efficiency and Renewable Energy (EERE) invested $223.6 million in 2009, $274.0 million in 2010, and $278.9 million in 2011. Within the Vehicle Technologies program, spending is distributed to projects focusing on batteries and electric drive technology, vehicle simulations, engine research and development, fuels technology and materials research. Within each project are activity-level investments that further delineate even more specific research efforts – i.e. the Battery and Electric Drive

Read the rest

Obama waves at SOTU

Good Speech, Good Ideas, Yet More Needed…

The President mentioned many issues ITIF focuses on in his State of the Union address last night. And by in large, we agree with what he said when it comes to economic competitiveness. The President deserves praise for putting these issues, specifically manufacturing, front and center. He helped rally the nation and the Congress to the fact that restoration of competitiveness and a vibrant manufacturing sector are, indeed, the pillars on which rests our economic future. However, in some cases, we wish he had gone just a little further, maybe clarifying, maybe being a little bolder. Here are a few examples: Funding R&D: “Innovation is what America has always been about,” he said. Absolutely. We laud him for prodding Congress to maintain basic research funding budgets. However, the President should have included applied research in his prod. To understand why, look at Germany. Its manufacturing sector accounts for 20% of the country’s GDP as opposed to the United States 11% and German manufacturing workers earn 40% more in hourly wage compensation than U.S. manufacturing workers. Its exports of research-intensive high-tech products are seven times greater than the United States’ as a share of GDP. One reason is that the country spends six times as much on industrial research and production technologies as does the United States.

Read the rest

Cranes Over Downtown Washington, DC

IT is the Foundation for Better Building

We live in a wireless world of tablets, 4G networks, and cloud computing. But on construction sites, where the future is actually being built, making sure there’s place to plug in a microwave to heat up an abandoned cup of coffee is too often about as high tech as it gets. Despite innovations in recent years such as virtual design models, building innovation modeling and laser scanning, the construction industry may have the distinction of having lower productivity than it did 40 years ago. At best construction productivity lags far behind other sectors. “You really have to work at that,” commented ITIF President Rob Atkinson.

Atkinson was speaking at “Bits and Bricks: Transforming the Construction Industry Through Innovation,” an event ITIF co-hosted with the Information Technology Industry Council and Autodesk, that explored how IT can play a crucial role in making the construction sector more productive, innovative and globally competitive. Even in these recent bleak recession years, we spent some $1.3 trillion on “things that are built and how they are used,” according to S. Shyam Sunder, director, Engineering Laboratory, NIST – that is roughly 4.5% of U.S.

Read the rest

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

Read the rest

Drilling Revenues: A Funding Stream for Energy Innovation?


One of the major challenges in structuring a large-scale push to accelerate clean energy innovation is figuring out how to fund it in a time of austerity. The International Energy Agency estimates a global shortfall of tens of billions a year in public clean energy research, development and demonstration (RD&D). Domestically, several leading authorities in industry and government have persuasively argued that the federal clean energy innovation budget – now around $4 billion – needs to be tripled or more to have the best shot at producing the kinds of scalable clean technologies we need to displace fossil fuels. So big investment boosts are clearly needed – yet, as the House budget debate has made painfully clear, there’s little interest in even maintaining RD&D at its current meager levels, let alone increasing it. And carbon pricing, which would be a logical place to look for revenues, is also not in the cards this Congress.


In this austere environment, we thus need to be looking for alternative, dedicated revenue streams wherever we can find them – which brings us to drilling revenues. Just last week, Senator Murkowski proposed dedicating

Read the rest

Time To Fix Higher Ed

Whenever there is a conversation in Washington about competitiveness you can almost guarantee that it will quickly default to “fixing K-12.” And usually along the way someone makes the statement, “We all know that K-12 is broken, but thank God the United States has the best higher education system in the world. But as I argued last year in a post “The Failure of American Higher Education,” we don’t. I argued that there was disturbing evidence that many colleges were failing to adequately educate their charges. I cited findings from national tests that showed that among recent graduates of four-year colleges, just 34, 38 and 40 percent were proficient in prose, document, and quantitative literacy, respectively.

Now a new book reinforces these findings. Academically Adrift: Limited Learning on College Campuses, by Professors Richard Arum and Jospipa Roksa, argues that many students now get through college taking easy courses, doing little homework (50 percent less than students did in the 1960s), and failing to learn key skills. The book is based on a study by Arum that showed that in their first two years of college, 45 percent

Read the rest