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Think Global (Competition); enAct Local (Innovation)

 

Background

Inventions are usually viewed as the domain of private enterprise, with the patents and profits resulting therefrom being held either by the inventor or the company that employed them. While this is sure to remain the norm, in today's economic environment of global competition, it may be appropriate to consider occasional circumstances under which our government could take a more active role in spurring inventions and business development, with the resulting patents benefiting taxpayers as a whole.

In some countries, the government has a predominant role in the development of new technology. Some countries, particularly in Asia, put forth an orchestrated national effort, in which many companies jointly participate, to develop new ideas to propel their economies. In the United States, however, the limits on the appropriate role of government, as well as our anti-trust laws, largely prohibit such collaborations. While such a policy is well intended, rooted in history, and in many instances still necessary, it may be appropriate to have occasional exceptions for the same reasons that other countries engage in consolidated efforts.

One glance at our enormous ever-growing international trade deficit substantiates the need for treating our businesses and our government as one team for increasing US exports.

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Ideas / Solutions

To address these concerns, the Federal government should initiate a process that adapts to the realities of today's internationally competitive climate. Leading scientists, industrialists, venture capitalists, economists, and other leaders would convene to identify areas in which further innovation would satisfy social objectives as well as provide new business opportunities. This would enable bodies such as the National Science Foundation and Department of Commerce to proactively, and very aggressively, chart the course for future innovation, rather than wait for universities or private research and development labs to come to them. This is compatible with the suggestions put forth in the chapter providing an alternative to tax hikes and budget cuts. Whereas that chapter discussed monetization of existing governmental assets, this proposal suggests creating altogether new ones.

The panel of experts should first conduct a SWOT Analysis, identifying the community's Strengths, Weaknesses, Opportunities, and Threats, focusing on an evaluation of their assets in terms of the workforce, infrastructure, attributes of the location, existing industry expertise, access to capital, etc.  The group would also identify needs -- such as research, capital, planning coordination, technology transfer, patent protection, zoning variances, job skills training, data, and leadership -- that it seeks to fill from key stakeholders.  The panel of experts could then develop strategies to satisfy the identified needs, and identify potential problems that could be solved through innovative alliances. Eventually, the panel should recommend and reach out to leaders, companies, or institutions in the affected fields that would be requested to take up the effort at that point.

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Once an idea is developed to the stage at which it can be patented, it would be registered in the name of the Federal government, which would then have the latitude to enter into licensing agreements with U.S.-based companies for the manufacture and marketing of such products. The revenue generated would be shared by the Federal Treasury and, to a lesser extent, the companies that participated in the research and development that led to the patent. Benefits would accrue to the overall economy. It would create new broad-based opportunities for employment. Our national trade balance would be positively impacted, as international trade potential would be among the criteria used by the panel in selecting industries and innovation areas.

The areas in which attention could be focused could include those in which the government already plays a major role, such as biotech products and medical devices, where the Food and Drug Administration and the National Institutes of Health are already essential players. The product areas could also include entirely new horizons, such as the creation of environmental remediation devices, "clean tech" renewable energy technologies that will enhance our energy independence, and the further development of occupational and automotive safety equipment, where there is currently predominantly private sector activity.  In these new arenas, government could team up with the venture capital community on leading-edge technologies which have the potential to solve societal challenges and position the US as the worldwide leader in each particular industry for years to come.  Long-term competitive advantages would accrue in terms of job creation, wealth creation, accelerating our technological leadership, and generating demand for support services.

At a minimum, anti-trust rules concerning research and development collaborations should be promptly and severely restrained, whether or not governmental involvement is present in the R&D activities. Surely that would be necessary when the Federal government is coordinating product development, manufacturing, and marketing efforts. Additional exceptions to the anti-trust prohibitions should also be made when it is in the best interests of the U.S. economy to do so, even when there is not governmental coordination.

Anti-trust laws should continue to be viewed in terms of large versus small companies and relative domestic market share, which are among the concerns that gave rise to those laws. There are plenty of industries and situations in which it will continue to be necessary to "protect the little guy" and encourage competition by enforcing anti-trust laws. Additionally, though, anti-trust laws should also be sensitive to the dynamics of U.S. industries in competition with industries of other countries. A better balance must be reached. Not doing that when many other countries are operating in that manner will continue to put us at a distinct competitive disadvantage, and will continue to fuel the US trade deficit.

It's time to coordinate and mobilize all of our collective national intellectual and capital resources, and aggressively compete as a unified nation for success in today’s increasingly global economic environment.

 
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