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Universities in Innovation Networks

The Role and Future Promise of University Research in U.S. Science and Economic Policymaking

SOURCE: AP/Steven Senne

The vast majority of economic growth in America arises from technological innovation, which depends heavily on research universities.

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See also: Overview: Series on U.S. Science, Innovation, and Economic Competitiveness, Rewiring the Federal Government for Competitiveness by Jonathan Sallet and Sean Pool, Economic Intelligence by Andrew D. Reamer, Building a Technically Skilled Workforce by Louis Soares and Stephen Steigleder, Immigration for Innovation by Marshall Fitz

The United States is known for its innovativeness and entrepreneurial spirit. Between half and three-quarters, or even more, of all economic growth in the last half-century can be tied to technological innovation, depending on which study you use. Yet in the last few decades, measures increasingly demonstrate that the United States is falling perilously behind in innovation.

When we think of technological innovation, we think of inventors, entrepreneurs, and corporations joining novel ideas with financial capital and market opportunities. Efforts to increase innovation should help support circumstances for the private sector to bring new products and services to market. The spark of technological innovation, however, often begins well before the opportunity is obvious or attractive to private sector. As a result, the partnership between the U.S. government’s funding of research in the nation’s public and private universities plays a larger role than most observers recognize.

Universities play a vital and extensive role in driving innovation in the United States. They offer a vast research base (a total of $50 billion nationwide), the ability to teach and develop a fresh new workforce (3 million graduates each year), goodwill of successful alumni, the ability to convene disparate expertise, and a deep commitment to local communities. Universities have been important players to date, and we have an opportunity to further nurture these vibrant ecologies to sustainably generate greater innovation and economic growth.

In the context of the declining state of innovation in the United States, we have an opportunity to tap into universities in a variety of ways, among them:

  • Stoking the engine of innovation—supporting university research, the foundation for the most groundbreaking innovations and innovators that can create new industries
  • Supporting the flow and application of knowledge—bringing industry expertise to academia and reducing scientific risk to enable early discoveries to advance to the stage where the private sector is willing to invest and capitalize on them
  • Seeding innovation ecosystems—creating the culture, human capital, and connections necessary to form innovation networks where researchers, entrepreneurs, investors, manufacturers, and other research interests can collaborate and compete
  • Measuring for success—developing the right framework and infrastructure for measuring innovation to guide policymaking and investments
  • Preparing for shifts in competitiveness—rethinking assumptions and trying new approaches so that policy can drive new frontiers of innovation

Increasing globalization, connectivity, access, and acceleration of technology only make the need to invest in innovation all the more urgent. And ultimately, we must realize that the landscape is shifting, and what works yesterday may not be as effective today, nor be the best approach in the future. The United States and its universities should not only accelerate its investments in research and innovation but also continually reevaluate and redesign the traditional mechanisms for doing so to prepare for the changing face of innovation long term.

In the pages that follow, we examine all five of these ways to stoke innovation through and around universities, relying on public- and private-sector support and collaboration. We include specific policy recommendations at the end of each chapter of this report, but here is a brief synopsis of our main recommendations:

  • Increase investments in early-stage research, targeting part of these investments toward high-risk, large-scale, transformational projects, with an emphasis on the development of talent
  • Bridge the gap between early-stage research and the marketplace through policies that support technology transfer, programs that increase knowledge flow between academia and industry, and partnerships that support translational research and proof-of-concept projects
  • Refocus federal economic development funding on regional and local ecosystems that develop talent and create links between researchers and the private sector
  • Develop new, more comprehensive methodologies to measure the linkages between investments in innovation and the broader impacts in human capital, new products, and jobs to drive better policy decisions and incentives for innovation
  • Develop radical policy experiments and incentives to enable universities to be at the forefront of trends in innovation and competitiveness as the future mechanisms of innovation change

This paper will demonstrate that these recommendations are definitively appropriate for our nation to pursue in order to boost the global strength and competitiveness of our science and our economy.

Krisztina “Z” Holly is the vice provost for innovation at the University of Southern California and the founding executive director for the USC Stevens Institute for Innovation.

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