that America’s children and grandchildren may not continue to enjoy the level of prosperity that has been taken for granted over the last several decades. Innovation has been the driver of our success, and if we want to continue to prosper, we need to nurture innovation. The report makes some recommendations about how to do that:
First, we need a strong technical work force, and science and technology education are necessary to this endeavor.
Second, we need to generate good ideas, and we should strongly support basic research.
Third, we need to attract the best minds to science and engineering education.
In addition to these crucial components, a larger “ecology” that supports innovation, permits and even encourages risk-taking, and offers “patient capital” to the entrepreneur should be fostered. Laws and regulations must protect the public while simultaneously encouraging experimentation through tax laws that support and reward investment and intellectual property (IP) laws that adequately and appropriately protect intellectual property. The list of essential components in the innovation ecology—the collection of interacting and interdependent policies and activities that support innovation—is extensive. Perhaps most importantly, the world is no longer a set of independent economies, which means that each component must interact harmoniously with its foreign counterpart.
Let me illustrate the two points above, namely that the ecology we have today was invented for the technology of yesterday, and that the changes to the components of the innovation ecology have generally been incremental. I will give examples from the U.S. experience because I know that system best. I believe all these examples, however, have counterparts in other countries.
Let’s start with the current patent system. The system was originally designed to protect large physical machines, which were