Strategy for American Innovation: Executive Summary
America’s future economic growth and international competitiveness depend on our capacity to innovate. We can create the jobs and industries of the future by doing what America does best – investing in the creativity and imagination of our people. To win the future, we must out-innovate, out-educate, and out-build the rest of the world. We also must take responsibility for our deficit, by investing in what makes America stronger, cutting what doesn’t, and reforming how our government operates so it focuses on promoting our economic growth and preparing for the challenges of a new century.
President Obama’s Strategy for American Innovation seeks to harness the inherent ingenuity of the American people to ensure that our economic growth is rapid, broad-based, and sustained. Innovation-based economic growth will bring greater income, higher quality jobs, and improved health and quality of life to all U.S. citizens. The Strategy for American Innovation provides a multifaceted, commonsense, and sustained approach to ensuring America’s future prosperity.
This document updates the Innovation Strategy issued in September 2009, detailing how the Administration, the American people, and American businesses can work together to strengthen our long-run economic growth. It begins by explaining the essential role of innovation in our past and future prosperity, the central importance of the private sector as the engine of innovation, and the role of government in supporting our innovation system. Building from this framework and the initiatives set forth in the first innovation strategy document, it charts the progress of our initial efforts, discusses additional steps implemented in the past year, and introduces important new initiatives, all captured by the pyramid below.
Key Administration priorities will improve America’s economic growth and competitiveness on many critical dimensions.
- The Administration’s proposed Wireless Initiative will help businesses reach 98% of Americans with high-speed wireless access within five years and also facilitate the creation of a nationwide interoperable public safety network. The Initiative will substantially expand the development of new wireless spectrum available for wireless broadband, by freeing up 500 MHz over 10 years. Expanding new commercial spectrum is necessary to avoid “spectrum crunch” and facilitate the rapidly growing wireless technology revolution. The initiative will support advances in security, reliability, and other critical wireless features; accelerate wireless innovations in health, education, transportation, and other application areas; and engage community participation in generating and demonstrating next generation wireless applications.
- The patent reform agenda is essential to reducing the enormous backlog of patent applications at the U.S. Patent & Trademark Office (USPTO). By stalling the delivery of innovative goods and services to market, this backlog impedes economic growth and the creation of high-paying jobs. The patent reform legislative agenda will enable the USPTO to adequately fund its operations through user fees and allow the agency to implement new initiatives to improve patent quality while reducing the average delay in patent processing times from 35 months to 20 months. Once implemented, the USPTO’s proposed three-track model will allow applicants to prioritize applications, enabling the most valuable patents to come to market within 12 months.
- The Administration is developing new initiatives to improve K-12 education with an emphasis on graduating every student from high school ready for college and a career. The Administration’s FY 2012 Budget will launch the Advanced Research Projects Agency – Education (ARPA-ED) to support research on breakthrough technologies to enhance learning. The Budget also supports continuation of the historic Race to the Top, with an expanded focus on school districts prepared to implement and sustain comprehensive reforms. Working with a coalition of private sector leaders called Change the Equation, the Administration is encouraging public-private partnerships that inspire more students – including girls and other currently underrepresented groups – to excel in science, technology, engineering, and mathematics (STEM). The Administration will also work to prepare 100,000 STEM teachers over the next decade with a down payment in the FY 2012 Budget to recruit STEM teachers and improve teacher training.
- To accelerate the development of clean energy technologies, the President has proposed a Clean Energy Standard that will help us reach a goal of delivering 80% of the nation’s electricity from clean sources by 2035. The Administration’s FY 2012 Budget proposes to expand the funding to date for the Advanced Research Projects Agency – Energy (ARPA-E) and to create three new Energy Innovations Hubs to solve challenges in critical areas. The Budget also proposes a reauthorization of the Clean Energy Manufacturing Tax Credit and provides funding for research, development, and deployment to help the U.S. reach the goal of one million advanced technology vehicles on the road by 2015.
- The Startup America initiative will facilitate entrepreneurship across the country, increasing the success of high-growth startups that create broad economic growth and quality jobs. The Administration launched the Startup America initiative with new agency efforts that accelerate the transfer of research breakthroughs from university labs; create two $1 billion initiatives for impact investing and early-stage seed financing, among other incentives to invest in high-growth startups; improve the regulatory environment for starting and growing new businesses; and increase connections between entrepreneurs and high-quality business mentors. Responding to the President’s call to action around the national importance of entrepreneurship, private-sector leaders are independently committing significant new resources to catalyze and develop entrepreneurial ecosystems across the country.
These new initiatives work together with, and expand upon, sustained Administration efforts across our three critical areas. These ongoing efforts are summarized as follows:
Invest in the Building Blocks of American Innovation. Spurring the innovations that will drive America’s future economic growth and competitiveness requires critical investments in basic foundations: our workforce, our scientific research, and our infrastructure.
- Educate the next generation with 21st century skills and create a world-class workforce. President Obama is taking continuous steps to improve our educational system from early education through college and graduate school, and to promote student achievement and careers in STEM fields. In early childhood, the Administration is supporting innovation through the Early Learning Challenge Fund and injecting performance-based competition into the Head Start Program. At the elementary and secondary levels, the Educate to Innovate campaign harnesses public-private partnerships to enhance STEM education, complementing continuing efforts such as Race to the Top, which uses competitive grants to leverage state and local reform. At the college level and beyond, the Administration is committed to restoring America’s global leadership in college graduation rates (by, among other strategies, improving affordability through the Student Aid and Fiscal Responsibility Act), making investments in community colleges and the public workforce system, and supporting the new Task Force on Skills for America’s Future, which will leverage public-private partnerships to better train Americans of all ages for the jobs of today and tomorrow.
- Strengthen and broaden American leadership in fundamental research. The commercial innovations that drive economic progress often depend on breakthroughs in fundamental science. President Obama has implemented the largest increase in federally-funded research in history and is making continuous investments to double funding for three key basic research agencies: the National Science Foundation, the Department of Energy’s Office of Science, and the National Institute of Standards and Technology laboratories. These sustained science investments will lay the foundation for new discoveries and new technologies that will improve our lives and create the jobs and industries of the future. These investments will help the United States establish a leadership position in areas such as robotics and data-intensive science and engineering.
- Build a leading 21st century infrastructure. President Obama has made a renewed commitment to investing in the roads, rails, and runways that America’s businesses need to be efficient and innovative. Building on historic investments through the Recovery Act, the Administration continues to address transportation challenges through investment in high-speed rail, the next generation of air traffic control, and a new proposal for a National Infrastructure Bank, which will promote competition and innovation to maximize the return on our infrastructure investments.
Develop an advanced information technology ecosystem. President Obama has developed a comprehensive strategy to create the IT ecosystem needed for 21st century innovation. This “virtual infrastructure” encompasses the critical information, computing, and networking platforms that increasingly support our national economy. With constant effort and vigilance, the Administration is working to expand access to high-speed Internet, modernize the electric grid, increase the availability of wireless spectrum to support high value uses, and secure cyberspace.
Promote Market-Based Innovation. American businesses are our engines of innovation. They bring American ingenuity to the marketplace, where new ideas are proven, commercialized, and diffused. It is imperative to promote a national environment ripe for innovation and entrepreneurship that allows U.S. companies to drive future economic growth and continue to lead on the global stage.
- Accelerate business innovation with a simplified and permanent R&E tax credit. President Obama has called for the Research and Experimentation Tax Credit to be simplified and made permanent, creating predictable, substantial incentives for U.S. businesses to innovate. The proposed FY 2011 Budget devotes about $100 billion over 10 years to leverage additional research and development investments.
- Support innovative entrepreneurs. President Obama has expanded lending support and tax credits for small businesses while supporting well-functioning capital markets for businesses of all sizes. In addition to patent reform, which will accelerate patent issuance and better enable new companies to succeed, and the Startup America initiative, which will promote entrepreneurship across the country, the Affordable Care Act removes obstacles to entrepreneurship by making it easier for Americans to start and join new businesses without giving up health coverage.
- Catalyze innovation hubs and encourage development of entrepreneurial ecosystems. President Obama continues to emphasize the potential of “innovation hubs,” looking for new opportunities to bring talented scientists and entrepreneurs together to support innovation in cutting edge areas. This concept underlies the Department of Energy’s Energy Innovation Hubs program and is also driving the Startup America initiative’s focus on building connections between established and new entrepreneurs, including those making the leap from lab to industry. Through these efforts, the Obama Administration is working to catalyze a new model of economic development.
Promote innovative, open, and competitive markets. President Obama is working to encourage innovation by improving regulation and enhancing market access at home and abroad. The revised Horizontal Merger Guidelines, released in August 2010, bring innovation considerations forcefully into antitrust evaluation. In addition, through efforts such as the free trade agreement with South Korea, the National Export Initiative brings a sustained, vigorous commitment to ensure fair and open export markets for American producers, allowing our innovative businesses to expand globally with the goal of doubling exports by the end of 2014.
Catalyze Breakthroughs for National Priorities. For national priorities where innovation is critical but market failures impede progress, government can help spur technological advances. Priorities include developing alternative energy sources, reducing costs and improving care with health IT, catalyzing advances in educational technologies, and ensuring that the U.S. remains on the leading edge of the bio- and nanotechnology revolutions.
- Unleash a clean energy revolution. New and improved energy technologies will play central roles in the 21st century global economy, and the Obama Administration is committed to fostering American leadership in this area, providing economic growth and creating jobs of the future while confronting environmental challenges and enhancing our energy security. Building on the successful investments geared toward doubling the supply of renewable energy by the end of 2012, and other initiatives, the Administration is setting ambitious new goals and laying the pathways to meet them. Through the proposed Clean Energy Standard, expanded investments in research through the Department of Energy’s Office of Science, ARPA-E, three new Energy Innovation Hubs, and other means to accelerate research, development, and deployment of clean energy technologies, the Administration will shift the American economy toward global leadership and a clean, secure, and independent energy future.
- Accelerate biotechnology, nanotechnology, and advanced manufacturing. The President is committed to investments in innovation that promise to drive better health, future economic growth, and quality jobs in America. The National Institutes of Health has proposed a new National Center for Advancing Translational Sciences, which will speed the development of new diagnostics, treatments, and cures by building new bridges between the lab and clinic. The National Nanotechnology Initiative (NNI) is investing in areas such as nanoelectronics, which will foster a revolution in computing comparable to the transition from the vacuum tube to the transistor. And the FY 2012 Budget is making substantial investments to accelerate breakthroughs in advanced manufacturing technologies that can provide foundations for private sector investment and growth.
- Develop breakthrough space capabilities and applications. Space capabilities play critical roles in global communications, navigation, and commerce, while warning of natural disasters and improving national security. Guided by the National Space Policy, NASA, the Department of Defense, and other agencies are working to advance U.S. capabilities and expand American industry’s role in developing next-generation applications.
- Drive breakthroughs in health care technology. Innovations in health care delivery, harnessing the power of data and technology, promise to help prevent medical errors, improve care quality, and reduce costs. Building from the Recovery Act and the Affordable Care Act, the Administration is continuously engaged in projects to promote health IT adoption, reform payment incentives to reward value instead of volume, and liberate an unprecedented amount of health information. In combination, these trends will facilitate fundamental improvements in national health and harness American ingenuity in solving our health care challenges.
- Create a quantum leap in educational technologies. The United States should foster innovation in technologies that have the potential to dramatically improve student performance, such as software that is as effective as a personal tutor, and increase access to lifelong learning and training for American workers. The President’s FY 2012 Budget for the Department of Education includes a proposal to launch the Advanced Research Projects Agency – Education, a new organization that will support research on breakthrough technologies to enhance learning.