Innovation Policy in the United States: An Overview of the Issues

Abstract

Why produce a book on innovation policy? The answer rests on the importance of relationships between government action, technological innovation in industry and economic performance, and on newly emerging issues, as yet unexplored, that involve these relationships.² Declining productivity growth rates and reduced international competitiveness of some US industries recently have focused the attention of policymakers and researchers alike on these relationships. Academics, speaking primarily from business schools and departments of economics, diagnose the illness that appears to beset us and suggest cures. Some call for a larger ‘strategic’ element in the formulation and implementation of policies which affect the performance of US industries, while others call for improving the effectiveness of existing policies. We know something about the overall effects of government policies on industrial performance and industrial innovation, but relatively little about the ways which US policy making processes and political institutions condition efforts to improve, or introduce greater coordination into, those policies. Similarly, we know relatively little about how to evaluate specific innovation-related programmes and policies, or how to translate the findings of existing studies into persuasive prescriptions for government action.

I wish to thank C. T. Hill for his constructive comments on an earlier version of this chapter.