New ITIF Report: Understanding the U.S. National Innovation System, 2020

Nov 9, 2020


Last week, the Information Technology and Innovation Foundation (ITIF) released a report on Understanding the U.S. National Innovation System, 2020. At the outset, the author claims that the United States has no national, coordinated innovation policy system. This bold statement is then backed by a historical assessment of how the U.S. has engaged in the innovation ecosystem. It details how World War II prompted the federal government to invest in new advanced industries, and how by the early 1990’s the U.S. had gone from being at the forefront of implementing polices that advanced technological innovation, to drastically scaling back federal investments and the devastation this caused to current day U.S. competitiveness.
The report goes on to describe three elements the aurhor believes are necessary to a national innovation system: the business environment, the regulatory environment, and the innovation policy environment. In each of these categories, the report assesses how particular actions can lead to the U.S. being more engaged in determining the future success of its innovation base. For instance, when it comes to the regulatory environment, the repot suggests that in creating regulations, policymakers would be better off focusing on what the government is trying to achieve, rather than the means of achieving it. This would promote efficiency and keep from creating unnecessary roadblocks that may stifle innovation.
In summary, the report offers the following key takeaways:
  • The U.S. national innovation system is in crisis, and in need of thorough rejuvenation, especially through significant increases in federal funding.
  • A strong national innovation system requires correctly structuring all three sides of the “innovation success triangle”—the business environment, the regulatory environment, and the innovation policy environment.
  • While under threat, the United States still has reasonably good business and regulatory environments, but it has a weak innovation policy environment.
  • Compared to other nations, the United States is trending downward in its funding for universities, federal labs, and other innovation inputs that policymakers have been unwilling to prioritize in the federal budget process.
  • No nation has its innovation system entirely right, but a few come close. The challenge for the United States going forward is whether it can make the changes needed to meet the new global competition, especially vis-à-vis China. 
To read the full report, visit:

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