Commerce Secretary Gary Locke, who took part in a meeting of the President’s Council of Advisors on Science & Technology (PCAST) on Jan.7, cited serious problems with the US innovation system.“The issues being explored by PCAST are of singular importance for putting Americans back to work in the type of high-wage jobs that can support a family,” he said, “the type of jobs that have unfortunately been disappearing for years.”
“Now, we can talk about all the structural factors that have caused these jobs to disappear; be it global competition, productivity gains, or the recent folly of building an economy on the ephemeral surface of a bubble,” Locke added. “But the deeper problem is an American economy that simply isn’t innovating enough to create advanced new technologies.
“In the past, America has depended, above all, on one thing to keep growing: a continuous flow of new technologies and new ideas entering the marketplace that sweeps away old ways of doing business and replaces them with new ones,” he noted.
“But today, America has a broken innovation ecosystem that doesn’t efficiently: —Create the right incentives or allocate enough resources to generate new ideas; —Develop those ideas with focused research; —Turn them into businesses that can create good jobs.”
Secretary Locke had been invited to attend last week’s PCAST meeting by President Obama’s s&t advisor, John Holdren, who is one of its co-chairs.
“The evidence is everywhere you look,” said Locke. “You see it in the industries that used to be dominated by American companies but are now led by companies in Europe and Asia. Just a decade or two ago, the US had the unquestioned lead in the design and production of things like semiconductors, batteries, robotics and consumer electronics. No more. Our balance of trade in advanced technology products turned negative in 2002, and has shown little sign of abating.”
Secretary Locke said the US innovation deficit was visible in the distortions in the nation’s economy, where almost $4 out of every $10 in corporate profits was coming from the financial industry in recent years.
“And most strikingly, you see it in the job numbers,” he said. “America has created no net new jobs over the past decade, and median wages have remained flat.”
Locke admitted these “troubling numbers should be a wake up call to every American policymaker and business leader” that US economic challenges go well beyond the turmoil seen in 2009 in the financial markets.
“America simply doesn’t have an efficient system to take new ideas from government, academic and private-sector research labs and translate them into commercially-viable products and businesses,” Locke said. “And that’s a problem that I hope PCAST can help rectify, and I hope we can spend the balance of our time [today] discussing it.”
The first problem with the broken US innovation system was urgent, Locke said. “But at least we’ve a pretty good idea how to fix it. We’ve got to devote more resources to r&d, especially at the federal level.” The US was able to thrive through much of the 20th century, he said, because of its “sprawling public- and private-sector research labs that were constant sources of new ideas.”
In addition, he noted, massive federal spending in areas such as defense, energy and aeronautics, that might have been too risky for private investors, had helped spin off numerous private-sector innovations.
“We may have seen the Internet come of age in Silicon Valley, but it first came to life in the labs [sic] of the Defense Advanced Research Projects Agency,” said Locke.
Secretary Locke also expressed dismay at the demise of corporate research operations, such as AT&T Bell Labs and Xerox, that had helped pioneer key innovations.
“Both of those engines of research innovation are running on fumes,” he said.
Locke noted that while overall spending on corporate r&d has increased, more of it has been focused on short-term applied work, and more of it is occurring outside the US.
“American manufacturers, for example, are now expanding their foreign r&d spending three times as fast as their domestic [r&d] spending,” he said.
Although he welcomed recent boosts to federal r&d spending by President Obama and the American Recovery and Reinvestment Act, Locke said a second problem with the US innovation system “is that even in areas where we’re allocating enough funding for r&d, we’re not doing a good enough job [of] getting these ideas into the marketplace.”
“For much of the last century, the way we moved federal r&d out of our labs and into the marketplace worked well enough,” he said. “We’d give billions of dollars to the Defense Department to develop new military applications or to NASA to develop new space technologies, and eventually [the results of] that work would find its way to private-sector innovators who saw commercial opportunities.”
Paraphrasing a line in the movie, Field of Dreams, Locke said the attitude was: “If we fund it, the entrepreneurs and venture capitalists will come.”
While admitting that this was not a very efficient system, he said that for a while it didn’t matter since the US was the undoubted leader in innovation. There was almost no world-changing technology that wasn’t pioneered first in the US, he said.
But Locke said those days were over. “Today, too many of our research ideas never make it out of the lab and if they do, they get lost in the Valley of Death,” he said.
Secretary Locke said it was untenable for the US to continue with the status quo, “where we take a buckshot approach to research and hope that eventually, there will be some commercialization.”
Researchers, especially ones who rely on federal funding, needed to realize that the pursuit of knowledge for its own sake was important, he said. “[But] we’ve got to do a better job of focusing on lines of discovery that have real potential to spawn new industries, new businesses and new jobs. And when we discover promising new ideas, we’ve got to ensure their benefits are captured for [US] consumers and workers.”
Since taking over at Commerce last spring, Locke has asked his staff to examine how r&d is commercialized and how more of it can be turned into businesses more quickly.
He has launched the Office of Innovation & Entrepreneurship with a mandate to drive policies to help entrepreneurs translate new ideas, products and services into economic growth, and accelerate technology commercialization of federal r&d.
The office will convene a meeting next month, said Locke, with universities, innovators, entrepreneurs and investors to discuss technology commercialization issues.
“In addition, the office is working with an interagency team to explore ways to support proof-of-concept centers at universities,” he revealed.
Secretary Locke, who acknowledged that there are presently many more questions than answers on these issues, mentioned some of the questions:
—Do we need an ‘eBay for ideas’ that makes all ideas generated from federally-funded research publicly available to entrepreneurs? —Should we give university innovators a choice of agents to license their IP?
—How do we better integrate federal research that’s happening across multiple agencies?
—And should we factor a university’s track record of commercialization in our decision to award r&d grants?
Secretary Locke said he thought all these ideas were worth considering.
In his introduction of Secretary Locke, Office of S&T Policy (OSTP) director Holdren described him as “smart, energetic and committed.”
The day-long PCAST event, attended by 20 of its 21 members, also heard from DOE under secretary Kristina Johnson, Harvard associate professor Atul Gawande, OSTP associate director for environment Shere Abbott, and DARPA director Regina Dugan.
“The evidence is everywhere you look,” said Locke. “You see it in the industries that used to be dominated by American companies but are now led by companies in Europe and Asia. Just a decade or two ago, the US had the unquestioned lead in the design and production of things like semiconductors, batteries, robotics and consumer electronics. No more. Our balance of trade in advanced technology products turned negative in 2002, and has shown little sign of abating.”
Secretary Locke said the US innovation deficit was visible in the distortions in the nation’s economy, where almost $4 out of every $10 in corporate profits was coming from the financial industry in recent years.
“And most strikingly, you see it in the job numbers,” he said. “America has created no net new jobs over the past decade, and median wages have remained flat.”
Locke admitted these “troubling numbers should be a wake up call to every American policymaker and business leader” that US economic challenges go well beyond the turmoil seen in 2009 in the financial markets.
“America simply doesn’t have an efficient system to take new ideas from government, academic and private-sector research labs and translate them into commercially-viable products and businesses,” Locke said. “And that’s a problem that I hope PCAST can help rectify, and I hope we can spend the balance of our time [today] discussing it.”
The first problem with the broken US innovation system was urgent, Locke said. “But at least we’ve a pretty good idea how to fix it. We’ve got to devote more resources to r&d, especially at the federal level.” The US was able to thrive through much of the 20th century, he said, because of its “sprawling public- and private-sector research labs that were constant sources of new ideas.”
In addition, he noted, massive federal spending in areas such as defense, energy and aeronautics, that might have been too risky for private investors, had helped spin off numerous private-sector innovations.
“We may have seen the Internet come of age in Silicon Valley, but it first came to life in the labs [sic] of the Defense Advanced Research Projects Agency,” said Locke.
Secretary Locke also expressed dismay at the demise of corporate research operations, such as AT&T Bell Labs and Xerox, that had helped pioneer key innovations.
“Both of those engines of research innovation are running on fumes,” he said.
Locke noted that while overall spending on corporate r&d has increased, more of it has been focused on short-term applied work, and more of it is occurring outside the US.
“American manufacturers, for example, are now expanding their foreign r&d spending three times as fast as their domestic [r&d] spending,” he said.
Although he welcomed recent boosts to federal r&d spending by President Obama and the American Recovery and Reinvestment Act, Locke said a second problem with the US innovation system “is that even in areas where we’re allocating enough funding for r&d, we’re not doing a good enough job [of] getting these ideas into the marketplace.”
“For much of the last century, the way we moved federal r&d out of our labs and into the marketplace worked well enough,” he said. “We’d give billions of dollars to the Defense Department to develop new military applications or to NASA to develop new space technologies, and eventually [the results of] that work would find its way to private-sector innovators who saw commercial opportunities.”
Paraphrasing a line in the movie, Field of Dreams, Locke said the attitude was: “If we fund it, the entrepreneurs and venture capitalists will come.”
While admitting that this was not a very efficient system, he said that for a while it didn’t matter since the US was the undoubted leader in innovation. There was almost no world-changing technology that wasn’t pioneered first in the US, he said.
But Locke said those days were over. “Today, too many of our research ideas never make it out of the lab and if they do, they get lost in the Valley of Death,” he said.
Secretary Locke said it was untenable for the US to continue with the status quo, “where we take a buckshot approach to research and hope that eventually, there will be some commercialization.”
Researchers, especially ones who rely on federal funding, needed to realize that the pursuit of knowledge for its own sake was important, he said. “[But] we’ve got to do a better job of focusing on lines of discovery that have real potential to spawn new industries, new businesses and new jobs. And when we discover promising new ideas, we’ve got to ensure their benefits are captured for [US] consumers and workers.”
Since taking over at Commerce last spring, Locke has asked his staff to examine how r&d is commercialized and how more of it can be turned into businesses more quickly.
He has launched the Office of Innovation & Entrepreneurship with a mandate to drive policies to help entrepreneurs translate new ideas, products and services into economic growth, and accelerate technology commercialization of federal r&d.
The office will convene a meeting next month, said Locke, with universities, innovators, entrepreneurs and investors to discuss technology commercialization issues.
“In addition, the office is working with an interagency team to explore ways to support proof-of-concept centers at universities,” he revealed.
Secretary Locke, who acknowledged that there are presently many more questions than answers on these issues, mentioned some of the questions:
—Do we need an ‘eBay for ideas’ that makes all ideas generated from federally-funded research publicly available to entrepreneurs? —Should we give university innovators a choice of agents to license their IP?
—How do we better integrate federal research that’s happening across multiple agencies?
—And should we factor a university’s track record of commercialization in our decision to award r&d grants?
Secretary Locke said he thought all these ideas were worth considering.
In his introduction of Secretary Locke, Office of S&T Policy (OSTP) director Holdren described him as “smart, energetic and committed.”
The day-long PCAST event, attended by 20 of its 21 members, also heard from DOE under secretary Kristina Johnson, Harvard associate professor Atul Gawande, OSTP associate director for environment Shere Abbott, and DARPA director Regina Dugan.
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