21st Century Innovation Systems for Japan and the United States Lessons from a Decade of Change: Report of a Symposium (2009) / Chapter Skim
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Government Programs to Encourage Innovation by Startups & SMEs: The Role of Innovation Awards--Charles W. Wessner
Government Programs to Encourage Innovation by Startups & SMEs: The Role of Innovation Awards--Charles W. Wessner
Pages 77-94
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From page 77... ...
In the United States, innovation awards such as the Small Business Innovation Research program and the Advanced Technology Program, have proven effective in helping small innovative firms overcome these hurdles while also enhancing networking among U.S. universities, large firms, and small innovative companies.
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From page 78... ...
Although overall economic prospects in the United States today remain healthy, business leaders, senior academics, and experienced policymakers believe that the country is now facing major challenges to its technological leadership. Many point, for example, to inadequacies in the education system, especially at the secondary level where U.S.
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From page 79... ...
Although the United States remains the major destination for students from around the world to pursue advanced training and high-skill employment, these individuals are increasingly offered new opportunities at home and elsewhere. A recent study by the National Academies found that as countries such as China and India develop their own public and private research infrastructures and as multinational companies outsource more of their R&D abroad, there are more opportunities for talented scientists and engineers to pursue world class research in their own countries.5 Post-9/11 reductions in visas for foreign students may have accelerated this dispersal by making it more dif ficult for many scholars to stay and work in the United States, a trend deplored in the reports noted above.6 In part, the falloff in U.S.
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10 SoMe StRenGtHS anD cHallenGeS in innoVation FacinG JaPan Like the United States, Japan also faces a competitive challenge from China and other Asian countries. Yet, despite reports about the sclerotic state of the Japanese economy, its relatively closed innovation system, and its aging popula 9National Research Council, Rising Aboe the Gathering Strom: Energizing and Employing America for a Brighter Economic Future, op.
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From page 81... ...
Solar panels for residential use have seen regular price declines resulting from economies of scale and incre mental improvements in efficiency, a proven Japanese approach to bringing new technologies to the market.12 Despite these considerable strengths, concern remains that Japan's "innova tive genius is more suited to constant improvements in integrated manufacturing than to blue-sky inventions."13 The worry is that even if Japan remains competitive in the present, it may not have the necessary agility to adapt rapidly to future trends. Whereas traditional Japanese strengths in corporate innovation have rested within the traditional Keiretsu structure, this tight integration among suppliers, manufacturers, distributors, and retailers can make it very difficult for innovative 11The Economist, "Competing Through Innovation," December 17, 2005.
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From page 82... ...
For example, Japan's 1995 S&T Basic Law encourages university-industry partnerships.16 Recent legislation has also encouraged more public investment in universities as well the creation of new graduate programs that avoid the hierarchical limitations of traditional universities.17 Spurred by this new policy environment, Japanese and foreign venture capitalists are seeking in greater numbers to provide funding for new, entrepreneurial firms.18 The number of university-based startups is showing substantial progress as well.19 Increasingly, the importance of greater openness is also recognized as important for Japan's future innovative potential. For example, in a recent presentation, the OECD's Director for Science, Technology, and Industry, Nobua Tanaka, drew attention to the fact that a more open economy has positive consequences for national innovative capacity.20 He noted that international collaboration in science and technology, which entails encouraging foreign students to study at domestic universities, welcoming foreign professors, and encouraging more foreign direct investment, can contribute to an atmosphere of greater openness within public research organizations, universities, and businesses, spurring creativity, innovation, and growth.
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From page 83... ...
Even students who returned home after completing their degrees in the United States have in many cases proved to be a source of future research collaboration, business relationships, and political support as well as a significant source of innovation and growth in their home countries. The international exchange has also been of benefit to many U.S.
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From page 84... ...
Auerswald, Taking Technical Risks: How Innoators, Executies, and Inestors Manage High-Tech Risks, Boston, MA: The MIT Press, 2001. See also Josh Lerner, "Public Venture Capital," PRePublication coPy
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Many good ideas perish on the way to the market. The challenge for policymakers is to help firms create additional market-relevant information by supporting the development of promising ideas through this dif ficult early phase.
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FillinG tHe FunDinG GaP The limitations of the market for venture capital require that small innovative firms seek funding from a variety of sources.36 In addition to pursuing business angels and venture capital firms, early stage technology firms also seek develop ment funding from industry, federal and state governments, and universities. Indeed, the diversity of these sources for early-stage funding represents one of the strengths of the U.S.
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tHe SMall buSineSS innoVation ReSeaRcH PRoGRaM (SbiR) The SBIR program, created in 1982 through the Small Business Innovation Development Act, designed to stimulate technological innovation among small private-sector businesses while providing the government new, cost-effective, technical and scientific solutions to challenging mission problems.
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Given the different agency missions, the instruments vary, with the Department of Defense and the National Aeronautics and Space Administration awarding contracts and agencies such the National Institutes of Health and the National Science Foundation awarding grants to the most highly qualified small businesses with the most innovative solutions. Program Structure As conceived in the 1982 Act, SBIR's grant-making process is structured in three phases: 40These include the Department of Defense, the Department of Health and Human Services, the National Aeronautics and Space Administration, the Department of Energy, the National Science Foundation, the Department of Agriculture, the Department of Commerce, the Department of Educa tion, the Department of Transportation, the Environmental Protection Agency, and the Department of Homeland Security.
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From page 89... ...
43For example, a logarithm developed under a NASA award to improve air traffic flow within the United States is dependent on adoption by a risk-averse Federal Aviation Administration. 44See Reid Cramer, "Patterns of Firm Participation in the Small Business Innovation Research Program in Southwestern and Mountain States," in National Research Council, The Small Business Innoation Research Program: An Assessment of the Department of Defense Fast Track Initiatie, Charles W
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From page 90... ...
The government retains royalty-free use for a period, but this is very rarely exercised. Selection to receive SBIR grants also tends to confer a certification effect, a signal to private investors of the technical and commercial promise of the technology.45 From the perspective of the government, the SBIR program helps officials draw on private sector ingenuity to achieve their respective agency missions.46 By providing a bridge between small companies and the federal agencies, espe cially for procurement, SBIR serves as a catalyst for the development of new ideas and new technologies to meet federal missions in health, transport, the environment, and defense.
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From page 91... ...
On the contrary, the reallife application of research with the attendant recognition in academic, technical, and financial terms can serve as a source of inspiration for students to pursue the real-world applications of their studies to societal needs in health, the environ ment, or national security. Similarly, well-constructed agreements can provide access to otherwise cost-prohibitive technological resources, thus enhancing the relevance of the students' educational experience.49 University innovation along with early-stage funding by the government have spurred the growth of many successful technology companies, promoting a positive symbiotic relationship between the university and the regional economy.50 Innovation Research Program Foster Entrepreneurial Behavior?
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From page 92... ...
The ATP and SBIR programs complement each other. The larger award sums offered by ATP, its focus on next-stage commercialization, as well as the synergies it creates between small and large firms make ATP, in effect, an SBIR Phase III -- helping to commercialize successful prototypes funded by the SBIR program.
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2007. Rising Aboe the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.
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2005. Policy Implications of International Graduate Students and Post doctoral Scholars in the United States.
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