Center for American Progress

A National Innovation Agenda: Progressive Policies for Economic Growth and Opportunity Through Science and Technology

A National Innovation Agenda: Progressive Policies for Economic Growth and Opportunity Through Science and Technology

Part of Progressive Growth, CAP’s Economic Plan for the Next Administration

Part of Progressive Growth, this report outlines progressive policies for economic growth and opportunity through science and technology.

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Read the overview of Progressive Growth

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The Importance of Science, Technology, and Innovation

Science, technology, and innovation have long provided the foundation for America’s prosperity. Naturally inquisitive and inventive, the American people have developed new products and technologies that have fueled our economy and improved our quality of life. Consider how different our lives would be without electricity, air travel, antibiotics, computers, and the Internet.

Along the way, myriad new products and services emerged from this shared public and private commitment to science, technology, and innovation, creating entirely new industries and good paying jobs up and down the economic ladder. This creativity still underpins our economy, yet the United States faces intense economic competition in the 21st century and is not adopting the policies that will keep it at the cutting-edge of innovation.

That’s why science, technology, and innovation policy must be a top priority for the next administration and a central component of America’s national economic strategy.

Science, technology, and innovation are critical to America’s future for a variety of reasons. First, innovation—the development of new products, services, and processes—drives economic growth and job creation. Innovation is important not only for high-tech sectors such as advanced manufacturing, aerospace, clean energy, the life sciences, semiconductors, and the Internet. It is also essential for companies that are using technology to develop products more rapidly, harness the “collective IQ” of their customers and employees, and orchestrate sophisticated global supply chains. Innovation is not solely the province of the venture capitalist, the entrepreneur, and the molecular biologist. Innovation can create jobs for workers who are installing broadband networks, retrofitting buildings with energy-efficient technologies, manufacturing biopharmaceuticals, and building a 21st century infrastructure.

Second, even small differences in productivity have a huge impact on America’s long-term standard of living. Our average standard of living will double every 23 years if our productivity growth rate is 3 percent, and every 70 years if it is 1 percent. Furthermore, high productivity growth rates will make it much easier to honor our commitments to older Americans, expand access to healthcare for the uninsured, and increase our investments in infrastructure, education, and worker training.

Third, innovation is currently a source of competitive advantage for the United States in the global economy. We have world-class research universities, an entrepreneurial culture, flexible labor markets, and deep capital markets. Americans are twice as likely as adults in Europe and Japan to be “high expectation” entrepreneurs—that is, to start a business with the intention of growing it rapidly. The United States is also one of the quickest and least expensive places to start a new business. It costs less than 1 percent of per capita income to start a business in the United States, compared to 5.1 percent in Germany and 7.5 percent in Japan.1 The United States can not afford to rest on its laurels, however. Other countries are determined to match and surpass America’s investment in research and development and a skilled workforce. We should have a laser-like focus on strengthening our position as an innovation superpower.

Fourth, innovation can play an important role in meeting many of the most important goals we have as a nation. Innovation is pivotal to providing all Americans with longer, healthier lives, fighting global warming, maintaining a strong defense at home and abroad, expanding access to high-quality education and training, and making government more open and efficient.

Fifth, innovation is important in the civic sector as well as the private sector. A new generation of “social entrepreneurs” is changing the way we educate our children, lift people out of poverty, prevent crime, and build vibrant communities. Innovation in the civic sector has the potential to help address some of our toughest and most persistent societal challenges (see box on page 3).

Finally, advancing the frontiers of human knowledge and increasing our understanding of ourselves and the world around us are worthy goals themselves. We want to understand the ultimate fate of the universe, the nature of matter, the origin of life, and how human consciousness emerges from 100 billion neurons and 100 trillion synapses. We want to know why civilizations rise and fall, and how to foster thriving, multi-cultural societies. It is important to support unfettered inquiry to address these and many other questions.

An Innovation Agenda

This report sets forth an innovation policy agenda that will foster economic growth, create high-wage jobs, and help address the critical challenges we face in the 21st century. This agenda is informed by a set of principles (see box on page 4) and an important but limited role for the government in fostering innovation. It builds on the important work of the Council on Competitiveness and the National Academy of Sciences (particularly the Rising Above the Gathering Storm report)2 but with a greater emphasis on harnessing innovation to help meet key economic and societal goals.

The agenda—outlined here and described in greater detail in the pages below, consists of four sets of policy proposals to:

  • Increase federal research funding
  • Spur private sector investment in research and innovation
  • Build a workforce with world-class science and technology skills
  • Restore the integrity of U.S. science and technology policy.

The next administration should provide sustained increases in funding for research and development by boosting the budgets of key science agencies such as the National Science Foundation and the National Institutes of Health. Some of these increases should be targeted to help address some of the key challenges we face in the 21st century, such as fighting global warming and developing more effective technologies for education and training. The impact of these investments should be increased by boosting support  for research that is multidisciplinary and offers the potential for revolutionary advances in science and technology.

This increased federal support for research must be complemented by policies that will spark private sector investment in research and innovation, such as a permanent Research and Experimentation tax credit, a commitment to build thriving regional economies, and a strategy for promoting the deployment of broadband networks.

America’s global competitiveness and capacity to innovate, however, ultimately rests on the skills of its workforce. The next administration should increase our nation’s commitment to creating a workforce with world-class skills in science, technology, engineering, and mathematics, while making it easier for the “best and brightest” from all over the world to study here and contribute to our economy.

Finally, the next administration should increase the capacity of the government to understand the forces that are shaping America’s economic competitiveness and restore integrity to U.S. science policy.

These bold policy directions must be embraced by the next president and the Congress if the United States is to remain at the forefront of innovation while leading the world toward a more prosperous and sustainable future. The policy prescriptions that follow constitute a comprehensive blueprint to ensure all Americans benefit from sustained productivity and innovation in this new century. Future work by the Center for American Progress will address additional critical innovation policy issues, such as intellectual property.


The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

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