high in the index. For example, 10 states have already established tax credits for angel investors. “I think goal at all levels of government,” she said, “has been to find ways to collaborate and remove obstacles,” she said.

The questioner also asked whether there were direct monetary incentives for open source innovation. Ms. Lew said that, again, the federal government intentionally tries not to intervene in such processes. The government does involve itself in some issues, such as cyber security, privacy, or consumer protection, “but I think, again, let the marketplace do what it needs to do, and we get out of the way.”

Dr. Harhoff commented on similar considerations in Germany, such as the policy initiatives favoring the formation of innovation clusters. “It’s a multilevel process with lots of folks and agencies becoming involved, and it poses its own difficulties.” The German government also becomes involved in financing firm formation because the angel sector is so small. A student or private individual can apply for a founder’s stipend worth up to 100,000 Euros from the Ministry of Economics. “We ought to do something about that,” he said. “It should be private capital that finances these businesses from the early stage onward.” On the other hand, he said, the share of R&D financed by the private sector in Germany is very high by comparison to the United States, and this adds to the stability of the innovation system.



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