I’ve been offline for two weeks, spending much off it in the Southwest, outside of broadband range. Returning to the theater of our politics is a jolt, with most of the discourse beside the point. We’re in the toilet. How do we get out? That’s the big question. The old, conventional economics of more spending or more tax cuts just don’t cut it.
We have to begin thinking about a new field—Innovation Economics—and the policies associated with it on a state and national level. There is a big conference in Washington DC on Sept. 25 called “Innovation Economics for the Next Administration.” Go if you can. It’s important.
Let me quote from The Information Technology & Innovation Foundation: “Up to now, innovation economics, and innovation policy, has not fully been appreciated by policy makers, in large part because the dominant economic policy models advocated by most economic advisors and implicitly held by most policy makers largely ignore innovation and technology-led growth, in favor of macro economic issues, such as tax cuts on individuals, budget surpluses, or social spending, which at the end of the day pale in significance to innovation in driving economic growth.
In contrast, “innovation economics” recognizes the reality that a global, knowledge-based economy requires a new approach to national economic policy based less on capital accumulation, budget surpluses, or social spending and more on smart support for the building blocks of private sector growth and innovation.”
What does Information Economics focus on? Here are key questions:
Are entrepreneurs taking risks to start new ventures?
Are companies investing in technological breakthroughs and is government supporting the technology base (e.g., funding research and the training of scientists and engineers)?
Are regional clusters of firms and supporting institutions fostering innovation?
Are research institutions transferring knowledge to companies?
Are our trade policies working to ensure a level playing field for American companies?
Are workers getting skilled and are companies organizing production in ways that utilize those skills?
Are policymakers avoiding erecting protections for companies against more innovative competitors?
And perhaps most importantly, are policies supporting the ubiquitous adoption of advanced information technologies and the broader digital transformation of society and the economy?”
The shape of this nascent field is just coming into view but it is important for the two candidates for the US Presidency to begin to embrace Innovation Economics. Indeed, it is critical for them to be discussing just what innovation policies they intend to implement once in office.
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