Students will take away from this class key foundation elements in sci/tech public policy: 1) a review of the applicable aspects of growth economics theory, 2) the concept of innovation systems and the actors and players behind them, 3) a framework for looking at an innovation system of direct and indirect factors, and 4) a grasp of one of the deepest problems in innovation, the "valley of death" between research and development.
Class One will start by summarizing two classic works (by Solow and Romer) in economic growth theory, turn to a discussion of the innovation-related basis for growth in the 90's, and note the emerging debate on the effect of the economics of globalization and the comparative efforts of other competitive nations. Two elements of direct or explicit innovation policy will be introduced: R&D funding, (including the physical science R&D funding challenge) and science and technology education levels, with international comparisons noted.
The class will also discuss the innovation system, with a brief summary of indirect or implicit elements in this system. On the governmental side, these elements include fiscal policy, tax policy, standards, technology transfer policies, trade policy, procurement, intellectual property, the legal system, regulation, antitrust, export controls, etc. On the private side, these include markets, management approaches including support for incremental verses radical innovation, accounting systems and information transparency, business models, and venture and angel capital, etc. The direct and indirect factors will be discussed as elements in an "innovation system," building on the Nelson reading cited below. Particular "indirect elements" will be briefly noted, including the emerging debate over how the accounting system values innovation, the ramifications of current fiscal policy, and the role of venture and angel capital. The lack of innovation metrics will be cited. The class will also discuss policy justifications for governmental verses private sector roles, including the debate over "industrial policy," and the "market failure" and the "public value" (as pursued by science and technology mission agencies) justifications for a public role.
We will also briefly discuss at the end of the class the longstanding problem of the "valley of death", i.e., of moving technology from the research stage through the development stage, and discuss the pipeline (linear) model verses dynamic model for research and development. More recent attempts for crossing the "valley of death" will be briefly noted, including the biotech model, NIST's Advanced Technology Program (ATP), the Small Business Innovation and Research Program (SBIR), NIST's state-based Manufacturing Extension Program (MEP), and the CIA's In-Q-Tel.
The Drivers behind Science and Technology Support (PDF)
Nelson, Richard R. National Systems of Innovation. New York, NY: Oxford University Press, 1993, pp. 3-21, 505-523. ISBN: 9780195076172. [Preview with Google Books]
Other Readings for Discussion
Solow, Robert M. Growth Theory, An Exposition. 5th ed. New York, NY: Oxford University Press, 2000, pp. ix-xxvi. ISBN: 9780195109030.
Romer, Paul. "Endogenous Technological Change." Journal of Political Economy 98, no. 5 (1990): 72-102. (PDF – 2.8MB)
Jorgenson, Dale. "U.S. Economic Growth in the Information Age." Issues in Science and Technology 18, no. 1 (2001): 42.
Milunovich, Steven, and John M. A. Roy. The Next Small Thing: An Introduction to Nanotechnology. Global Securities Research and Economics Group, Merrill Lynch & Co. September 4, 2001.
Branscomb, Lewis M., and Phillip E. Auerswald. Between Invention and Innovation: An Analysis of Funding for Early-Stage Technology Development. Gaithersburg, MD: Report for National Institute of Standards and Technology, 2002.