Box 1-1

The Context for Innovation and Competitiveness Policy

The United States takes deserved pride in the vitality of its economy, which forms the foundations of our high quality of life, our national security, and our hope that our children and grandchildren will inherit ever greater opportunities. That vitality is derived in large part from the productivity of well-trained people and the steady stream of scientific and technical innovations they produce. Without high-quality, knowledge-intensive jobs and the innovative enterprises that lead to discovery and new technology, our economy will suffer and our people will face a lower standard of living. Economic studies conducted even before the information-technology revolution have shown that as much as 85 peecent of measured growth in U.S. income per capita was due to technological change.

Today, Americans are feeling the gradual and subtle effects of globalization that challenge the economic and strategic leadership that the United States has enjoyed since World War II. A substantial portion of our workforce finds itself in direct competition for jobs with lower wage workers around the globe, and leading-edge scientific and engineering work is being accomplished in many parts of the world. Thanks to globalization, driven by modern communications and other advances, workers in virtually every sector must now face competitors who live just a mouse-click away in Ireland, Finland, China, India, or dozens of other nations whose economies are growing. This has been aptly referred to as “the Death of Distance.”

Having reviewed trends in the United States and abroad, the committee is deeply concerned that the scientific and technological building blocks critical to our economic leadership are eroding at a time when many other nations are gathering strength…. Although the U.S. economy is doing well today, current trends indicate…that the United States may not fare as well in the future without government intervention. This nation must prepare with great urgency to preserve its strategic and economic security. Because other nations have, and probably will continue to have, the competitive advantage of a low wage structure, the United States must compete by optimizing its knowledge-based resources, particularly in science and technology, and by sustaining the most fertile environment for new and revitalized industries and the well-paying jobs they bring.

—Excerpted from NAS/NAE/IOM’s, Rising Above the Gathering Storm: Energizing and Employing Americans for a Brighter Economic Future (Washington, DC: The National Academies Press, 2007), 1-4.

cates a national effort to spur innovation as the intensification of a global knowledge economy has put pressure on the United States to remain a step ahead of the competition and ensure the United States is the premier place in the world to innovate.2


Thomas L. Friedman, The World Is Flat: A Brief History of the 21st Century (New York: Farrar, Giroux, and Strauss, 2005). See also Andrew S. Grove, High Output Management

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