April 17th 2017

While policy discussions about technology and Innovation issues often focus narrowly on iconic places like Silicon Valley or Boston’s Route 128 corridor, America’s innovation-driven, high-tech economy is widely diffused—and every state and congressional district has a stake in its success.

As a nonpartisan think tank focusing on the rapidly evolving intersection of technology, innovation, and public policy, one of the Information Technology and Innovation Foundation’s (ITIF’s) most important roles is to develop actionable proposals and insights that policymakers can trust to foster innovation, growth, and progress across America and in every congressional district and state. This report provides a menu of such ideas for the Trump administration and 115th Congress.

It is not intended to be a comprehensive analysis of all tech policy issues currently before Congress. Nor should the fact that a proposal is excluded here be interpreted to mean that ITIF doesn’t support it. Rather, this list is intended to highlight a selection of new ideas that may not yet have received adequate attention. It is organized by topic area, with short summaries of each idea and citations for additional details.

For any questions or for more information, please contact ITIF at [email protected] or 202-449-1351.

(Last updated April 17, 2017)

Innovation and Competitiveness
- Innovation
- Competitiveness
- Productivity
- Education and Training
- Manufacturing
- Taxes
- Tech Transfer

IT and Data
- Cybersecurity
- Data Innovation
- Internet
- Privacy
- Transportation

Broadband Telecommunications

Trade and Globalization

Clean-Energy Innovation

Innovation and Competitiveness

Innovation

The White House or Congress should create an OMB Office of Innovation Policy Review.

All too often, federal agencies propose regulations with little consideration about how they will affect innovation. And while the Office of Management and Budget’s (OMB’s) Office of Information and Regulatory Affairs (OIRA) is tasked with reviewing major regulations from a static cost-benefit perspective, the office does not explicitly review regulations for potential impacts on longer-term dynamic effects (e.g., innovation). To remedy this, the administration or Congress should create within OMB an Office of Innovation Review whose mission should be to serve as an “innovation champion” in the regulatory process. The office should have authority to push agencies to either affirmatively promote innovation or achieve a particular regulatory objective in a manner least damaging to innovation.

More details: Stuart Benjamin and Arti Rai, “Structuring U.S. Innovation Policy: Creating a White House Office of Innovation Policy” (Information Technology and Innovation Foundation, June 2009).

The White House should charge every federal agency with naming a chief innovation officer to craft and implement an innovation strategy.

Federal agencies can drive innovation not only in their own programs and operations, but also in the broader sphere of the economy they influence. Yet few agencies, if any, have formal innovation strategies. The White House should charge every agency with developing a comprehensive innovation strategy. This should cover not only how the agencies themselves will innovate internally, but also how they can spur innovation in the sectors of the economy they impact. To ensure these plans are carried out, the White House should appoint chief innovation officers (CINOs) for every cabinet-level agency (along with other technology-related agencies, such as NASA), and these federal CINOs should meet quarterly to exchange and cross-pollinate best practices for innovation.

More details: “Transition Memo to President Trump: How to Spur Innovation, Productivity, and Competitiveness” (Information Technology and Innovation Foundation, November 2016).

Congress should create a commission to identify mechanisms to combat corporate short-termism and promote long-term investment in innovation.

Any national innovation policy needs to include measures to counter the pressure that corporations face to demonstrate short-term financial performance, because it leads to less long-term business investment in the foundations of innovation. One easy next step would be for Congress to establish a national commission to identify legislative and regulatory steps that would encourage companies to invest more for the long term. For example, such a commission might consider a proposal from the Institute of Corporate Directors to replace quarterly financial reports with less frequent updates, such as half-yearly results.

More details: Robert D. Atkinson, “Restoring Investment in America’s Economy” (Information Technology and Innovation Foundation, June 2016).

Congress should fund the National Strategic Computing Initiative and related high-performance computing initiatives at a level of at least $325 million annually for five years.

High-performance computing has become indispensable for enterprises, scientific researchers, and government agencies to generate new discoveries and to innovate breakthrough products and services. As such, high-performance computers are contributing significantly to scientific progress, industrial competitiveness, national security, and quality of life. But U.S. leadership in high-performance computing is increasingly under threat, as competitor nations invest heavily and pursue aggressive strategies in the field. To stay ahead, the United States needs a robust and stable stream of funding, as called for in the National Strategic Computing Initiative.

More details: Stephen Ezell and Robert D. Atkinson, “The Vital Importance of High-Performance Computing to U.S. Competitiveness” (Information Technology and Innovation Foundation, April 2016).

Competitiveness

Congress should create a U.S. Economic Competitiveness Commission.

It’s impossible to have a vibrant economy without a globally competitive traded sector. Dozens of nations have specific strategies to ensure they do, and so should the United States. To that end, Congress should create a 13-member commission that provides an independent assessment of U.S. competitiveness in traded sectors, including but not limited to manufacturing. A report released every other year should analyze U.S. weaknesses and offer targeted recommendations to address them and improve the country’s position across key traded sectors. House and Senate leaders from the respective parties should each appoint three members and the administration one member.

More details: Stephen Ezell and Robert D. Atkinson, “Fifty Ways to Leave Your Competitiveness Woes Behind: A National Traded Sector Competitiveness Strategy” (Information Technology and Innovation Foundation, September 2012).

Congress should create a new traded-sector analysis unit within the federal government.

No federal entity is responsible for competitiveness analysis. Statistical agencies see their jobs as accumulating facts, not analyzing them. Thus, there is little understanding of where the United States is competitive globally. So, Congress should task the National Institute of Standards and Technology (NIST) with creating a new traded-sector analysis unit that prioritizes interpretation and analysis. It should assess key indicators of overall U.S. competitiveness performance—such as foreign direct investment (FDI), jobs, output, and market share, and develop strategic policy road maps for key traded sectors.

The White House or Congress should require OMB’s Office of Information and Regulatory Affairs to incorporate a “competitiveness screen” in its review of federal regulations.

Before global trade intensified, the federal government could afford to impose new regulations and give little thought to their impact on competitiveness. But today, regulation can increase costs or impose rigidities to an extent that makes globally traded industries less competitive internationally. To remedy this, Congress or the White House should require the Office of Information and Regulatory Affairs (OIRA) to review any new, nontrivial regulations to assess their impact on first-order competitiveness, and OIRA should place the highest priority on reviewing and reforming existing regulations that negatively affect traded sectors.

Congress or the White House should create a national industrial intelligence unit within the National Intelligence Council to better assess competitive challenges to the U.S. economy.

There is no entity within the federal government responsible for coordinating agency efforts to analyze and respond to the strategic challenge of foreign innovation mercantilism in a holistic way. To fill this gap, the president should establish and staff a new national industrial intelligence unit, ideally within the existing National Intelligence Council, and charge it with developing a better process and structure to understand the specifics and long-term implications of other nations’ economic development strategies so that the United States can respond more effectively. It would also develop approaches to better leverage and disseminate intelligence assets to boost the competitiveness of U.S. companies.

More details: Robert D. Atkinson, Nigel Cory, and Stephen Ezell, “Stopping China’s Mercantilism: A Doctrine of Constructive, Alliance-Backed Confrontation” (Information Technology and Innovation Foundation, March 2017).

The White House should create a sub-directorate within the National Security Council to champion a whole-of-government response to foreign innovation mercantilism.

There are no senior directors in the international economics directorate of the National Security Council (NSC) who are charged with developing strategy or executing tactics to combat foreign countries’ innovation-mercantilist practices. Indeed, such competitiveness issues have almost always been a second-order priority in U.S. foreign policy compared with diplomacy and national security considerations. Yet America’s national security increasingly depends on its technological leadership. That is why the president should create an NSC sub-directorate, with a senior director or special assistant plus two or three directors to liaise with the highest levels of the executive branch in conceiving and executing a whole-of-government approach to combatting foreign innovation mercantilism.

Productivity

The National Economic Council should direct federal agencies to incorporate productivity growth into their missions.

No economic or financial entity in the federal government—including the National Economic Council, the Council of Economic Advisers, the Commerce Department, and the Federal Reserve Board—has as an explicit part of its mission the goal of advancing productivity. The president should rectify this by issuing an executive order directing all such executive agencies to make productivity growth a core focus. As part of this order, the president should direct the Office of Management and Budget to identify 50 government programs or processes that should be overhauled technologically to deliver greater value at lower cost to taxpayers through increased productivity.

More details: Robert D. Atkinson, “Think Like an Enterprise: Why Nations Need Comprehensive Productivity Strategies” (Information Technology and Innovation Foundation, May 2016).

The National Economic Council should create a national commission on productivity.

Lagging productivity growth is the country’s central economic challenge, yet few policymakers focus on it, and to the extent that they do, they typically consider only the broadest of measures. To bring attention to the issue and begin shaping a more focused national productivity policy, the president should appoint a national commission on productivity and charge it with exploring economic policy options that go beyond the conventional approach of focusing only on ensuring there is a generally conducive business climate with basic “factor inputs” such as skilled labor and ready access to capital.

More details: Robert D. Atkinson, “Think Like an Enterprise: Why Nations Need Comprehensive Productivity Strategies” (Information Technology and Innovation Foundation, May 2016).

Education and Training

Congress should create a New Schools America fund to support states and cities in developing new kinds of schools.

Educational improvement fundamentally depends on innovation, which requires new forms of learning and schooling. Yet most education “reform” involves doubling down on more of the same. The federal government needs to play a catalytic role to foster more systemic and transformative educational innovation. A New Schools fund would encourage states to institute a new governance and funding model to support specialized schools, including schools focused on science, technology, engineering, and math (STEM); project-based learning; and experiential learning.

More details: Robert D. Atkinson and Merrilea Mayo, “Refueling the U.S. Innovation Economy: Fresh Approaches to STEM Education” (Information Technology and Innovation Foundation, December 2010).

Congress should offer planning grants for regions that want to create alternative types of STEM high schools or universities.

In recent years, a number of universities have begun offering unique approaches to STEM education. They champion experiential learning models in which all teaching is STEM- or technology-oriented and operated on an interdisciplinary basis. Students have to complete internships and solve real engineering and technical problems. In much the same way, STEM-focused high schools allow students to fully explore subjects such as computer science at the secondary level and have proven effective in promoting more and better STEM education, including in poorer school districts. Congress should support this experimentation by appropriating $10 million for the National Science Foundation (NSF) to offer planning grants through its existing Transforming Institution Grants program.

More details: Stephen Ezell and Robert D. Atkinson, “25 Recommendations for the 2013 America COMPETES Act Reauthorization” (Information Technology and Innovation Foundation, April 2013); Adams Nager and Robert D. Atkinson, “The Case for Improving U.S. Computer Science Education” (Information Technology and Innovation Foundation, May 2016).

Congress should establish cash prizes for colleges and universities that succeed in graduating more STEM students.

America could graduate significantly more STEM students if only colleges and universities made it a priority. To give them incentives to do so, Congress should appropriate approximately $325 million over five years for the NSF to award prizes to colleges and universities that dramatically increase the rate at which freshmen STEM students graduate with STEM degrees, and that demonstrably sustain the increase. Awards could be sized in tiers for small, mid-sized, and large universities. Alternatively, Congress could require NSF to consider an institution’s record on STEM “switch-outs” and dropouts, especially among women and minority students, in fields such as engineering and computer science, as a factor in awarding research grants.

Congress should create a NSF-industry Ph.D. fellows program.

Doctoral fellowships are key factors in producing more Ph.D. degrees in STEM fields. But compared with the number of science and engineering graduates, NSF now awards less than half as many research fellowships as it did in the 1960s. Rather than expanding the existing NSF Graduate Research Fellowship program (currently funded at $102 million), Congress should appropriate $21 million per year for a new program, where NSF and industry match funds on a dollar-for-dollar basis to support an additional 1,000 STEM Ph.D. fellows.

Congress should require colleges to report their National Survey of Student Engagement scores.

The National Survey of Student Engagement measures more than 1,300 colleges on student participation in the various programs and activities they offer for learning and personal development. The data can help show which institutions offer compelling educational experiences, but few publicly report their scores. Therefore, Congress should require reporting this data as a “check-off” criterion in the certifications and representations section of any federal higher-education grant proposal.

The Department of Education should provide matching grants to states for establishing teacher-certification programs in computer science.

To provide more students with the opportunity to learn computer science in a rigorous manner from a certified teacher, all 50 states should have certification programs that allow graduate students in education fields to become teachers specializing in computer science. The Department of Education should create federal matching grants for states implementing these certification programs to incentivize teachers to acquire certifications without making it a requirement that could force out current teachers.

More details: Adams Nager and Robert D. Atkinson, “The Case for Improving U.S. Computer Science Education” (Information Technology and Innovation Foundation, May 2016).

Congress should subsidize the cost of certifications and master’s programs for prospective teachers who successfully teach computer science for five years.

The country faces a nationwide shortage of qualified teachers to expand computer-science education. Subsidizing the cost of certification and providing higher wages for teachers who earn certificates will incentivize teachers to acquire them and make teaching a more attractive option for people who are also in high demand in the private sector. Funding for these grants should come from a new program that resembles the “Computer Science for All” plan in the Obama administration’s 2016 budget, which proposed $4.1 billion over three years for states to expand computer-science education.

More details: Adams Nager and Robert D. Atkinson, “The Case for Improving U.S. Computer Science Education” (Information Technology and Innovation Foundation, May 2016).

Congress should add expenditures for employee training to the R&D tax credit.

Training and ongoing education for incumbent workers are critical drivers of productivity growth and rising worker incomes. And a key way workers acquire skills is through on-the-job training provided by employers. But U.S. companies invest much less in training today than they did a decade ago. Therefore, to spur greater workforce training while at the same time lowering the effective corporate tax rate, Congress should allow employee training expenses to be added to qualified research expenditures under the R&D tax credit.

More details: Robert D. Atkinson, “Effective Corporate Tax Reform in the Global Innovation Economy” (Information Technology and Innovation Foundation, July 2009).

Congress should establish a process to accredit organizations that provide education certifications.

To spur innovation and lower costs in higher education, the federal government should promote alternatives to traditional college diplomas, so individuals can more effectively demonstrate educational mastery to prospective employers. The Department of Education should establish a program to accredit organizations providing educational certifications in much the same way it oversees organizations that provide accreditation of colleges and universities. Establishing an accreditation process for these certifications will serve as a useful indicator of quality for public- and private-sector organizations that want to hire individuals who pursue nondegree learning options. At the same time, the process will begin to break the lock between education and credentialing and help create a new market for alternative certifications. This will bring real competitive pressures to bear on colleges and universities, which will create incentives for better educational outcomes overall.

More details: Joe Kennedy, Daniel Castro, and Robert D. Atkinson, “Why It’s Time to Disrupt Higher Education by Separating Learning From Credentialing” (Information Technology and Innovation Foundation, August 2016).

Congress should encourage federal agencies to accept alternative certifications in lieu of degree requirements.

The federal government should lead by example in breaking the lock between education and credentialing. To that end, it should demonstrate to the private sector the feasibility of using alternative credentials by accepting a suitable set as a substitute for a college degree when filling federal jobs. The Office of Personnel Management should change current requirements for many positions to allow individuals with acceptable scores on relevant certification exams to be eligible rather than just those with a college degree.

The Department of Education should encourage the private sector to recognize and rely on alternative certifications in its hiring decisions.

The Department of Education should work with corporate partners to encourage the use of alternative certifications in hiring decisions. The goal here is to develop a credential that measures skills that many companies expect college graduates to possess upon graduation. If the top employers in America were to agree that they would treat the relevant certified credentialing programs as equivalent to college degrees, they would help create a new market for alternative certifications.

Congress should allow students to use federal aid for alternative learning options, such as massive open online courses.

Much of the direct cost of college is tuition, but most of the rest is room, board, and other living expenses. Federal student aid covers the direct costs of college and room and board and some other expenses. Likewise, Congress should allow students pursuing nondegree educations to be eligible for federal student aid to cover the costs of enrolling in programs, such as certain professional certification programs approved by the Department of Education and massive open online courses (MOOCs), as well as their living expenses. In addition, students should not have to be enrolled in a college or university to use federal student aid to pursue alternative learning options.

The Department of Education should conduct a regular survey of employer skill needs.

Better information on what skills employers value would help spur innovation across the educational system. Unfortunately, this information is often difficult to find because there is no national survey on the specific skills employers desire in recent graduates. The Department of Education should launch an annual employer survey that asks these questions and make the findings available to the public, with individual employer information anonymized.

Manufacturing

Congress should create manufacturing reinvestment accounts for small and mid-sized enterprises.

Congress should establish a 401(k)-like deferred-investment program that would give small and mid-sized manufacturers greater resources to bootstrap themselves by allowing them to make tax-deferred investments through manufacturing reinvestment accounts. The funds would be available for tax-free withdrawal if used for research and development (R&D), workforce training, or capital equipment investments. Connecticut has already put such a program in place.

Congress should direct the Small Business Administration to shift its focus toward traded-sector firms.

The Small Business Administration (SBA) treats all industries alike in its funding priorities, but industries serving local markets play no role in supporting economic competitiveness, and for the most part their funding simply shifts activity from one firm to another. Neither of these things is true for firms in industries that are globally traded (such as manufacturing). Congress should require the SBA to develop a plan to significantly increase the share of support going to traded-sector firms. Congress should then require that a significant share of SBA lending—both guarantees and direct lending—go to fund scale-up activities for small and mid-sized traded-sector firms.

Congress should pass the Made in America Manufacturing Communities Act.

The act authorizes a public-private program to enhance how federal economic development funds encourage American communities to focus not only on attracting individual investments, but also on transforming themselves into globally competitive manufacturing hubs. The act awards preferential consideration to designated communities for up to $1.3 billion in existing federal economic development assistance across 11 federal agencies, thereby reducing burdens that communities and small manufacturers face in navigating and accessing federal support. The legislation will assist regions in thinking strategically about how and where they can be competitive in emerging industries and value chains.

More details: Robert D. Atkinson and Stephen Ezell, “Ten Principles to Guide the Trump Administration's Manufacturing Strategy” (Information Technology and Innovation Foundation, January 2017).

Congress should appropriate funds it has already authorized to launch a manufacturing universities pilot program within the Department of Defense.

Engineering education in the United States has increasingly moved toward more abstract engineering science, leaving university engineering departments more concerned with producing pure knowledge than educating students and working with industry to solve real-world problems. To bridge this gap, the United Sates should designate a core of at least 20 “manufacturing universities” that revamp their engineering programs to focus much more on manufacturing engineering, and, in particular, on work that is relevant to industry. The 2017 National Defense Authorization Act (NDAA) authorized such a manufacturing universities pilot program at the Department of Defense. Congress should now formally appropriate funds to launch that pilot program.

Congress should continue appropriating funds for the Manufacturing USA program to build out more manufacturing-innovation institutes.

Manufacturing USA is a public-private network of manufacturing-innovation institutes that have played a critical role in revitalizing America’s industrial commons and that have contributed to U.S. leadership across a range of advanced-manufacturing process and product technologies. Thus far, 14 institutes have been launched to focus on technologies, including additive manufacturing, digital manufacturing and design innovation, lightweight and modern metals, power electronics, advanced composites, integrated photonics, flexible hybrid electronics, clean-energy smart manufacturing, revolutionary fibers and textiles, robotics, and biopharmaceuticals manufacturing. Congress should appropriate funds to support a next round of industry-identified institutes and support a share of their ongoing operations.

More details: David M. Hart, Stephen Ezell, and Robert D. Atkinson, “Why America Needs a National Network for Manufacturing Innovation” (Information Technology and Innovation Foundation, December 2012).

The president should launch two new research institutes under the auspices of the Manufacturing USA program to spur innovation in transportation infrastructure.

Manufacturing USA—launched in 2012 as the National Network for Manufacturing Innovation—brings together industry, universities, community colleges, and government agencies to support precompetitive R&D to accelerate innovation in manufacturing. The administration should expand the program with two new institutes led by the Department of Transportation. The first institute should bring together industry, government, and university partners to pursue the R&D necessary for advancing high-impact intelligent-transportation systems and autonomous vehicles, so that these lifesaving technologies reach America’s roadways faster. A second institute should investigate new materials for surface transportation, including longer-lasting materials.

More details: Stephen Ezell and Robert D. Atkinson, “From Concrete to Chips: Bringing the Surface Transportation Reauthorization Act Into the Digital Age” (Information Technology and Innovation Foundation, May 2015).

Taxes

Congress should increase the Alternative Simplified Credit to boost private R&D.

The U.S. R&D tax credit is far less generous than that of most other countries. Congress should either increase the alternative simplified credit for R&D from 14 percent to 20 percent—or expand it by enacting a three-tiered credit for qualified expenses that are 50 percent, 75 percent, or 100 percent above firms’ previous three-year averages. At the low end, they would continue to receive a 14 percent credit; in the middle band, they could receive a 20 percent credit; and at the high end, they could earn a 40 percent credit.

More details: Robert D. Atkinson, “Expanding the R&E Tax Credit to Drive Innovation, Competitiveness and Prosperity” (Information Technology and Innovation Foundation, July 2007).

Congress should broaden and expand the R&D credit for collaborative research.

The United States provides a 20 percent credit for collaborative R&D, but it only applies to energy research. Congress should eliminate the energy restriction. Research consortia, whether with companies or universities, tend to focus more on more basic and exploratory research, which have big spillovers, with many of the benefits going to other firms and society. Therefore, firms do less of this kind of research than is economically optimal. That is why a number of other countries, including Canada, Denmark, Hungary, Japan, France, Norway, Spain, and the United Kingdom have in the last decade established more generous incentives for this form of research.

More details: Robert D. Atkinson, “Effective Corporate Tax Reform in the Global Innovation Economy” (Information Technology and Innovation Foundation, July 2009).

Congress should pass the R&D Workforce Act or a similar knowledge tax credit.

Corporate investment in workforce training has declined substantially over the past two decades. One way to address this while encouraging companies to build out their research and development programs would be to expand the R&D tax credit to include expenses related to workforce training. The R&D Workforce Act being developed in the Senate would expand the categories of allowable expenses under the R&D credit to include wages related to training employees for qualified research activities plus expenses related to developing and implementing training programs.

More details: Robert D. Atkinson, “How a Knowledge Tax Credit Could Stop Decline in Corporate Training,” The Hill, March 9, 2015.

Congress should pass the Made in America Deduction Enhancement (MADE) Act, which would strengthen the Section 199 domestic production tax deduction.

The Made in America Deduction Enhancement (MADE) Act encourages U.S. manufacturers to use domestically produced, high-quality American content by strengthening the Section 199 domestic production tax deduction. The legislation proposes increasing demand for “Made in USA” inputs by enabling manufacturers to take a 3 percent enhancement in their 199 domestic production tax deduction for every 15 percent increase (over a base amount of 50 percent) in the amount of “Made in USA” inputs they use. The legislation would strengthen domestic manufacturing supply chains and bolster U.S. manufacturing output.

More details: Contact ITIF Vice President for Global Innovation Policy Stephen Ezell at [email protected].

Congress should pass the Support the Small Business R&D Act.

In December 2015, Congress passed the PATH Act, which expanded small businesses’ access to the R&D credit by permitting them to claim the credit against their employment taxes or against their alternative minimum credit (AMT) tax. But not enough small businesses are aware that this legislation greatly expands their access to the credit. Accordingly, Congress should pass the Support Small Business R&D Act, which would require the Small Business Administration and the Internal Revenue Service to expand knowledge-sharing and training on these instruments and provide a report to Congress on their progress.

More details: Stephen Ezell, “A Policymaker’s Guide to Smart Manufacturing” (Information Technology and Innovation Foundation, November 2016).

Congress should create global knowledge investment zones to attract foreign direct investment.

The federal government should enable a limited number of global knowledge investment zones in and around research agglomerations (e.g., Research Triangle, N.C.; Rochester, N.Y.; and Ames, Iowa) to attract high-value-added foreign direct investment. Communities would compete for the designation by offering incentives such as property-tax waivers, and firms eligible to relocate there would receive a generous mix of benefits to spur innovation and jobs, including special R&D tax credits, streamlined access to university technology, and visa preferences.

Similar to countries with so-called “patent-box” regimes, Congress should allow U.S. companies to pay a lower corporate tax rate on income generated from innovation-based products.

“Patent boxes” are among the most interesting developments in the race for global competitiveness. So named because they appear as check boxes on tax forms, they allow corporate income from the sale of patented products to be taxed at lower rates than other income. If designed to link the incentive to conducting R&D or producing innovation-based products domestically, this tax reduction would go even further in spurring innovation-based U.S. job creation. By lowering the effective corporate tax rate for knowledge-based firms located in the United States, an “innovation box” also would make it easier for them to take on competitors in other nations that provide robust innovation incentives.

More details: Robert D. Atkinson and Scott M. Andes, “Patent Boxes: Innovation in Tax Policy and Tax Policy for Innovation” (Information Technology and Innovation Foundation, October 2011).

Tech Transfer

Congress should support the innovation potential of rural areas by creating rural innovation institutes.

Many rural areas have suffered decades-long economic decline or stagnation. One way to restore their growth would be to boost their innovation potential. This would help those areas’ own economic growth prospects and contribute to America’s overall innovation system. Congress should support rural innovation by creating a nationwide network of rural innovation institutes in sectors such as aquaculture, agriculture, wind and water energy, mining, and timber. For example, Congress could task the U.S. Department of Agriculture with leading a major technology initiative around how to get more value-added out of rural communities through fishing, fiber, food, wind, water, etc. Such a program, perhaps in coordination with the U.S. Department of Commerce’s Manufacturing Extension Partnership, also could build on and support existing rural manufacturing clusters, such as the carpet cluster in rural Alabama and the snowmobile cluster in northern Minnesota.

More details: Stephen Ezell and Scott M. Andes, “Localizing the Economic Impact of Research and Development: Policy Proposals for the Trump Administration and Congress” (Information Technology and Innovation Foundation and Brookings Institution, December 2016).

Congress should introduce an Open Commercialization Infrastructure Act.

One way to increase the use of America’s national R&D infrastructure would be to pass an “Open Commercialization Infrastructure Act” that permits private use of bonded facilities—including universities, federal labs, and public libraries—for certain activities related to entrepreneurial education and training as well as for economic development and job creation. This would be useful because buildings that are financed through tax-exempt bonds currently are not permitted to develop private programming. For example, a small business trying to develop a commercial product would be restricted from taking advantage of a 3-D printer in a makerspace at a bonded facility such as a public library. This and many other kinds of private activities that benefit entrepreneurs—such as business incubators, accelerators, and training programs—are important for broader economic development. Congress should ensure more infrastructure is available for such purposes.

Congress should allocate a share of federal research funding to promote technology transfer and commercialization, such as through a Spurring Commercialization of Our Nation’s Research Program.

The current federal system for funding research pays too little attention to commercializing technology and is still based on the linear model that assumes basic research gets easily translated into commercial activity. To address this, the administration should work with Congress to establish an automatic set-aside program that allocates a modest percentage of federal research budgets to technology-commercialization activities. For instance, Congress could allocate 0.15 percent of agency research budgets to fund university, federal laboratory, and state government technology-commercialization and innovation efforts. The funds could be used to provide: 1) “commercialization capacity-building grants”to institutions of higher education pursuing specific initiatives to improve their capacity to commercialize faculty research, and 2) “commercialization-accelerator grants” to support institutions of higher education pursuing initiatives that allow faculty to directly commercialize research in an effort to accelerate research breakthroughs.

More details: Stephen Ezell and Robert D. Atkinson, “25 Recommendations for the 2013 America COMPETES Act Reauthorization” (Information Technology and Innovation Foundation, April 2013).

Congress should develop a proof-of-concept, or “Phase Zero,” individual and institutional grant award program within major federal research agencies.

The Small Business Innovation Research (SBIR) program and Small Business Technology Transfer (STTR) program both support innovation, but their approval processes are high bars to clear for very early-stage companies. Too often, there is insufficient funding available at universities (or from other sources) to push nascent technologies to the point where these companies can receive SBIR or STTR grants. A national “phase zero” proof-of-concept program would address this problem by helping more projects cross the so-called “valley of death” from early-stage research to commercialization, by providing infrastructure (e.g., expertise, personnel, and small business and venture capital engagement), and by facilitating the cultural change necessary for universities, federal laboratories, and other nonprofit research organizations to better support these kind of commercialization activities. Kentucky and Louisiana, among other states, have developed such “phase-zero” grants to help firms apply for SBIR grants and support early proof-of-concept research. One way Congress could implement such a proof-of-concept program would be through a grant program to states that agree to match funds on a dollar-for-dollar basis.

Congress should allow a share of SBIR and STTR grant awards to be used for commercialization activities.

SBIR’s impact could be much greater if some facets of the program were geared slightly more toward commercialization. Awardees currently are prohibited from using grant money to fund critical commercialization activities that would enable them to raise their profiles and accomplish certain key milestones, so they can build prototypes of new products or services, acquire commercial customers, attract private capital, or accelerate market entry. These activities cover the gamut from intellectual-property development and prosecution to marketing and staff recruitment. To fill these gaps, SBIR awardees should be permitted to expend at least 5 percent of their SBIR funds on commercialization-oriented activities.

Congress should direct NSF to establish stronger university entrepreneurship metrics and use them to provide stronger incentives for commercializing research.

Congress should direct the National Science Foundation (NSF) to partner with the National Institute of Standards and Technology (NIST) to develop a metric for universities to report entrepreneurship and commercialization information annually, including data on new business starts by faculty, spin-offs, license agreements, patenting, and industrial funding of research. Congress should further direct agencies to factor these metrics into their decisions to award research funds.

Congress should fund a pilot program supporting experimental approaches to technology transfer and commercialization.

A number of organizations are experimenting with novel approaches to bolstering technology transfer from universities (and national laboratories) to industry and accelerating commercialization. Congress should support these novel approaches by including $5 million in the reauthorization of the America COMPETES Act to fund experimental programs through a grant process managed by the Commerce Department’s Office of Innovation and Entrepreneurship.

More details: Stephen Ezell and Robert D. Atkinson, “25 Recommendations for the 2013 America COMPETES Act Reauthorization” (Information Technology and Innovation Foundation, April 2013).

Congress should create an “Innovation Voucher” program operated by NIST.

As in almost a dozen other countries, these vouchers would spur innovation and stimulate knowledge transfer by allowing small and mid-sized enterprises to “buy” expertise from universities, national labs, and research institutions to conduct studies, analyze the innovation potential of new technologies, etc. Congress should facilitate this by authorizing $20 million for National Institute of Standards and Technology (NIST) to fund a pilot program that select states would operate with matching funds.

More details: Stephen Ezell and Robert D. Atk

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Tech Policy To-Do List

Contents

Innovation and Competitiveness

Innovation

Competitiveness

Productivity

Education and Training

Manufacturing

Taxes

Tech Transfer

Related Articles

Tech Policy To-Do List

Contents

Innovation and Competitiveness

Innovation

Competitiveness

Productivity

Education and Training

Manufacturing

Taxes

Tech Transfer

Related Articles

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