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National innovation system of the USA / SurprizingFacts

In the conventional view, innovations are technologies emerging from nowhere and turning the world on its head, as it was with home computers and smartphones. In fact, for any country they happen thanks to a built-up national innovation system. Innovation is more than science and technology. So the innovative system is not only the elements of infrastructure directly related to the advancement of science and technology.

The national innovation system includes economic, political and other social institutions influencing innovation – the national financial system, legislation on registration of enterprises and protection of intellectual property, pre-university education system, labor markets, culture and specially established development institutions. ]

This article describes the evolution of the national innovation system of the United States since the XIX century.



English economist Christopher Freeman defined the national innovation system as "a network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and spread new technologies." From the development of the innovative system depends the country's success in various areas, its competitiveness in the domestic and foreign markets. Understanding the origin, development and functioning of the national innovation system helps legislators and experts identify the strengths and weaknesses of the system, and make changes that increase the effectiveness of innovation.

Due to a variety of factors, no country's innovative system is similar to the others. Each system is unique. These factors are several:

  • Business Environment.
  • Regulatory environment – legislation in the field of trade, taxes and entrepreneurship.
  • The policy applied to the development of the innovation environment.

Success requires the right and balanced work with these three components of the "triangle of innovation success".

The business environment includes the institutions, activities and opportunities of the business community of the country, as well as broader social relations and practices that enable the introduction of innovations.

Among the factors determining the effectiveness of the business environment are:

  • The level of managerial skills.
  • Efficiency of the use of information and communication technologies.
  • The level of development of private entrepreneurship.
  • Availability of capital markets to attract investment, investors' readiness for risks.
  • Adoption of innovations by society.
  • Cultural component: the desire for cooperation and tolerance for failure.
  • The policy of the state to protect domestic business from foreign competitors – both inside the country and outside it.

The global financial crisis of 2008 showed what the lack of regulation in certain industries leads to. Therefore, it is not enough simply to abolish all prohibitions for entrepreneurs and save them from the tax burden. Regulators must balance constraints, benefits, business opportunities. Normative environment is determined by a number of factors, among which one of the most important for the national innovation system can be called:

  • Patent system, protection of intellectual property.
  • Requirements for enterprises, their discovery and activities.
  • Competition in public procurement.
  • The system of taxation

New participants implementing their own development and technology should be able to raise funds, launch the enterprise and enter the market. The development of the innovation environment depends on the policy of the central government:

  • Support for development in certain industries.
  • Grants and investments from the federal government.
  • Optimization of the process of launching high-tech enterprises.
  • Development of the scientific community, network of universities, accelerators.

Now that we have briefly discussed the components of the "triangle of innovation success," we turn to the history of the formation of the national innovation system of the United States, which dates back to the second half of the 19th century. This will allow us to better understand how the system works and how it develops.

The main stages of the formation of the American national investment system

In the first 125 years of its independence, the United States of America was not a global technological leader. They remained behind the European nations – Britain, Germany. Leaders joined the country after the Second Industrial Revolution of the 1890s, embarking on the creation of innovations.

The scale of markets is of great importance for innovation and competition. The US market, thanks to its size, allowed entrepreneurs to successfully sell new mass products – chemicals, steel, meat, and later – cars, airplanes and electronics. American DuPont, Ford, General Electric, GM, Kodak, Swift, Standard Oil and other companies broke out into the leaders.

 image Unlike Europe, which needed to overcome pre-industrial production systems based on crafts, Americans easily worked with new forms of industry. An important role was played by a culture in which commercial success was appreciated above all. In the United States lived the first female millionaire – Madame CJ Walker. In a country that did not differ a hundred years ago with a tolerance for women or people with a color different from that of white, a millionaire woman appeared, and at the same time – an African American, once again speaks of high respect for the entrepreneurial spirit.

But it can not be said that state policy played no role. The state, which supported the construction of canals, railways and other internal improvements during the first half of the 19th century, provided an opportunity for entrepreneurs to sell their goods throughout the country. Without a developed infrastructure, the market would be different.

Historically, American research universities date back to the model of public land grant colleges. In 1862, the United States adopted the Morill Act, according to which land for the foundation of the college was allocated free of charge – 30,000 acres, or 120 square kilometers. In every state. Until then, scientists were "free artists" who sometimes made discoveries. Now scientific activity in the US has acquired a regular character. The act was also designed to satisfy the need for qualified personnel.

Sherman's antitrust act of 1890 became the first US antimonopoly law that attributed to crimes the obstruction of the freedom of trade by the creation of a trust (monopoly) and collusion with such a purpose. Federal prosecutors began to pursue such criminal associations. The punishment was carried out in the form of fines, confiscations and prison terms of up to 10 years. Sherman's Act is still in effect.

Following the Sherman Act in 1914, Clayton's Anti-Trust Law was adopted, which regulates the activities of trusts. They were forbidden to sell goods in a load, and also sell the same goods to different buyers at a different price – this is called "price discrimination."

Prior to World War II, most inventions were private inventors and private companies. The war spurred the development of industry and stimulated the creation of new technologies in state-based enterprises, as well as in large companies that received orders from the federal authorities. During the Great Depression, and then during the war, a number of research laboratories were opened. This contributed to the introduction of innovations in a number of industries, including electronics, pharmaceutics and the aerospace industry. Federal support for research and technology development in World War II helped develop the "arsenal of democracy" that the Anti-Hitler Coalition used to fight the Axis powers and their allies.

The state continued to play an important role in the innovation system and after War through the financing of the system of national laboratories and research universities. Research funding helped to stimulate innovation and played a key role in ensuring US leadership in a number of industries, including the development of computers and software and biotechnology. Most of the funding went through mission agencies or development institutions seeking to fulfill a certain federal mission – for example, to develop defense technologies, health care or energy.

Nevertheless, the volume of support for the innovation sphere declined in the post-war period. Work in this direction in the administrations of Presidents Kennedy, Johnson and Nixon did not have a systemic character. For the first time since the war, a major attempt to improve the effectiveness of the national innovation system on the part of the federal authorities was undertaken by the Kennedy Administration in 1963 – it proposed the creation of the Civilian Industrial Technology Program (CITP).

The CITP initiative was designed to balance developments in a country where there was a clear bias towards defense and space technologies, which intensified as the US sought to confront the Soviet Union during the Cold War. In the framework of CITP, the state provided funding for university research in useful civil society sectors: coal mining, housing construction, textile industry. Congress rejected the program because of the industry opposition. For example, the cement industry opposed this program because it feared that innovation could reduce the need for cement in construction.

Two years later, the Johnson administration presented Congress with a revised program. The new State Technical Services program included funding for university technology centers that had to work with small and medium-sized companies to help them make better use of new technologies. The Nixon administration curtailed this program on the grounds that it considered it an undue interference by the state in the economy, but offered its own initiative – the "Technology Opportunities Program" – again aimed at creating technologies to solve social problems, including The development of high-speed rail transport and the treatment of certain diseases. This program operated until 2004.

The government's efforts to develop defense and space technology were caused by the need to respond to the Soviet threat, and attempts to support commercial innovations were not guided by any principled vision or mission. At that time, they were not connected with the general economic policy, which was mainly focused on combating poverty and unemployment.

In the late 1970s, the United States had competition in the face of countries such as Japan and Germany. With the election of President Jimmy Carter in 1976, the federal government has become more serious about promoting technology, innovation and competitiveness. The motivation for this was a severe recession in 1974 (worst since the Great Depression), a shift in the US trade balance from a surplus to a deficit, and a growing recognition that nations such as France, Germany and Japan now pose a serious challenge to the competitiveness of US industry. It was at that time that the so-called "rusty belt" appeared.

The legislators responded with the adoption of several laws. In 1980, the Stevenson-Widler law "On technological innovation" required each federal laboratory to create an office to identify commercially valuable technologies and their subsequent transfer to the private sector. In the same year, the Bay-Dole Act was passed, which The Economist called the most successful in the second half of the 20th century, and The Wall Street Journal included the three most effective measures to promote innovation. This law gave higher education institutions the opportunity to earn on the results of their research. Prior to the adoption of this law, universities that received funding from the state could not dispose of the results of the survey, and in order to buy out a patent for private production, it was necessary to spend a lot of time negotiating with the unwieldy state services.

In 1980, the US government funded 60% of academic research and owned 28 thousand patents, 4% of which were claimed by industry. After the adoption of new laws, the number of patents for several years increased tenfold. By 1983, 2,800 firms had been established at universities to commercialize scientific and technical results, in which more than 300,000 jobs had appeared. Instead of continuing to absorb budgetary funds, universities began to generate money for the American economy.

Also in the 1980s, there were various programs to stimulate innovation: Small Business Innovation Research, Small Business Investment Company-reformed, Small Business Technology Transfer, Manufacturing Extension Partnership. These are various grants for development, for research, for joint work with universities. Tax incentives for research and development were introduced. Thanks to the grants, many new joint research enterprises, scientific and technological centers were created. Another stimulus was the US National Medal for Technology and Innovation – the state award "for outstanding contribution to the national economic, environmental and social welfare through the development and commercialization of technological products, technological processes and concepts, through technological innovation and the development of the national technological workforce ", Which is an average of about eight people or companies per year.

The innovation system was not only working on the central rights ments. More than 50 states contributed to the development of the system. R & D and innovation are the driving force behind the New Economy. The state thrives when it supports research related to the commercialization of technology. For example, under the leadership of Governor Richard Thornburg, Pennsylvania established the Frank Franklin Partnership Program, which grants mainly small and medium-sized enterprises to work together with universities in Pennsylvania.

By the beginning of Bill Clinton's presidential term in 1992, the United States already had fewer problems with competitiveness on the global market. Japan was busy with its own problems – a financial bubble in 1986-1991, which was blown away for more than ten years. Europe was preoccupied with the domestic market. Moreover, with the growth of the Silicon Valley as a technological power and the growth of the Internet revolution, and by companies such as Apple, Cisco, IBM, Intel, Microsoft and Oracle, America has held a leading position in a number of industries. Washington has reduced the number of efforts aimed at policies in the field of industrial innovation and competitiveness.

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Soon after this information technology entered a new phase, with more powerful microprocessors, the large-scale deployment of fast broadband telecommunications networks and the growth of social networking platforms Web 2.0. Politicians realized that information technology has become one of the key factors of growth and competitiveness. The effectiveness of economic policy required proper work with IT. The Bush administration has proposed a number of initiatives to stimulate IT innovation, including simplifying the regulation of Internet connectivity, the release of radio frequencies for wireless broadband and the transformation of public services into an "e-government" format.

While IT business flourished, The US had a problem with competitiveness in the industry. In the "zero" countries, the country lost more than a third of jobs in production, with the majority due to a decline in international competitiveness, and not because of low productivity.

The United States moved from managing trade surplus in high-tech products in 2000 to about $ 100 billion of deficit after a decade. The great recession, or the global financial crisis of 2008, on the one hand was the result of this loss of competitiveness, and on the other – the cause of further industrial decline.

During the period of President Barack Obama's work, the authorities again drew attention to innovations in the sphere of industry. The US had to fight the strongest competitor – China. Администрация президента предложила создать Национальную сеть инноваций в области производства (National Network for Manufacturing Innovation). Основная идея проекта — создать в стране сеть исследовательских институтов, призванных разрабатывать и коммерциализировать промышленные технологии посредством сотрудничества между индустриальными компаниями, университетами и федеральными правительственными агентствами. В 2016 году сеть состояла из девяти институтов, а в 2017 году было запланировано открытие ещё шести. Проект был разработан по примеру Общества Фраунгофера, основанного в 1949 году в Германии. Около 17 тысяч работников Общества работают в 80 научных организациях, среди которых 59 институтов в 40 городах Германии, а также филиалы и представительства в США, Европе и Азии.

Администрация предложила конгрессу увеличить налоговые льготы, повысить финансирование научных учреждений. Была проведена патентная реформа. Множество мер представил сам конгресс. Но большая часть законов не была принята из-за дефицита федерального бюджета и нежелания взваливать на плечи граждан налоговое бремя.

В следующей статье мы поговорим об элементах национальной инновационной системы и понятии «треугольника успеха инноваций»: бизнес-среде, регуляторной среде, собственно инновационной среде, и об особенностях каждого из этих элементов в США.