these laws permit prompt recovery and reallocation of human capital. Because of this and similar advantages of the United States’ open and competitive market, the United States is rightly known for its entrepreneurial spirit, “perhaps the most unfettered of any on the planet.”

As an example, he noted the case of Bethlehem, Pennsylvania, part of the “rust belt” that had long represented the “old economy” of steel manufacture. When the steel industry collapsed, Bethlehem collapsed with it— until it began to renew itself as a manufacturer of advanced medical equipment. Similarly, the state of Maine once relied on large textile centers in Lewiston, Augusta, Brunswick and elsewhere; when textiles moved south in the mid-20th century, textile workers lost their jobs—until they were retrained to work for the semiconductor firms that became the state’s largest employer several decades later.

Mr. Wolff noted that many of the nation’s broader deficiencies are familiar, such as secondary education in science and mathematics and the nation’s physical infrastructure. “When we see places like Berlin, we see that we could do a little more,” he said. “And when we go to Beijing and Shanghai, we know we have to do a lot more.” The nation has also identified key priority areas for progress: curing disease; providing clean energy, for the sake of both the environment and national security; transportation; harnessing further advances in ICT; accelerated research on new materials; sustained investments in nanotechnology. “And we understand that we need to have supportive international and investment policies, including especially better protection of intellectual property, which is a major challenge in some areas.”

TRANSFORMING INNOVATION INTO JOBS

Beyond these particulars, however, he emphasized a single major gap in knowledge for both the United States and Germany: “the right formula for transforming the benefits of innovation into high-quality jobs in large quantities.” This, he said, was the “key concern of the U.S. government.” He added, “It is not spinning straw into gold that’s the challenge; our inputs are better than straw. The challenge is to rediscover the alchemy of moving from innovation to strong domestic employment in an era of globalization.”

Mr. Wolff reiterated that Germany and the United States had much to learn from one another, and he proposed that “a regular exchange of information other going forward would be extraordinarily valuable.” He said that the United States would be interested in learning more about German ideas on fostering innovation, “from the first spark of invention through to the challenges of commercialization, manufacture, and export. We also look forward to exploring prospects of future collaboration among U.S. and German research institutions, universities, businesses, and government agencies.”

He emphasized the potential value of cooperation—even when progress seems hopeless. He said he had spent much of his career working with the semiconductor industry, and recalled “the challenge of Japan” in the 1980s.



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