How Would A National Innovation Foundation Work?

from the or-would-it-work-at-all? dept

The Brookings Institute has called for the government to set up a National Innovation Foundation modeled after the National Science Foundation. The idea is to offer government grants to companies doing innovation. This is an interesting idea, but it raises a variety of questions — including the government’s role in funding innovation. There isn’t anything necessarily wrong with government funded innovation, as long as one realizes that it, by default, distorts the market in some manner. The NSF is really designed to help fund the sort of basic research that is much more difficult to get outside funding for — but which could have some commercial potential. When you start talking about the much more amorphous “innovation,” it’s going to be a lot more focused on commercial potential from the get go — which raises some questions about why the government needs to be involved at all. If the market is taking care of innovation, then is government funding necessary?

Along those lines, it also brings up the same old questions about how do you determine what innovation really is — and how do you measure it. The Freakonomics guys just asked a panel of folks how to measure innovation and their answers diverged wildly. The good news is that only one out of the five responses seemed to think patents should be a part of the measure (one other answer mentioned patents as a measure, before noting that using patents to measure innovation was “largely hokum.”) Even the one guy who does support using patents in some measures, notes the problems with doing so. Also, the research he quotes in favor of patents only shows that patents are valuable to patent holders (not something anyone disputes). That has little to do with whether or not they encourage or accurately measure innovation.

If we stick with the definition that innovation is the process of successfully bringing new offerings to market in a way that the market wants, then I think it’s not as important to “measure” innovation, as to create the right ecosystem for it. That would mean encouraging competition (which drives companies to keep out innovating each other) and take away unfair roadblocks to competition. If a National Innovation Foundation can figure out a way to do that, then it might be quite interesting.

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Comments on “How Would A National Innovation Foundation Work?”

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GeneralEmergency (profile) says:

Nuh-Uhh, don' go 'dare mahn

The only possible way for government to spur innovation is to GET OUT OF THE WAY. Reduce regulation. Reduce Capital Gains tax rates. Eliminate, reduce, streamline bureaucracy.

If the government really wants to spur future innovation, the single most concrete thing it can do is get out of the primary and secondary education business. Completely. Privatize this sector using vouchers. Our schools have become useless, inept institutions and monuments to failure.

Oh…but what I’ve suggested here is…boo-hoo-hoo…hard to do and will hurt people’s feelings.

OK then, lets ignore the real problems and figure out how to force people to innovate.

When you’re a liberal, every problem looks like a conservative.

Matt says:


generalemergency is dead spot on. We all know scientists are stuck making livelihoods on government grants and sometimes will do BS work just to make gov’t happy so they can get their meal ticket in bad instances (and also mostly because gov’t has little to no priority on science investment).

What sounds like this would be a good idea for innovation?
Answer: Hell no.

Anonymous Coward says:

Re: More X prizes

Maybe we could require entrants to keep really good accounting and then reward those who meet the goals with their costs plus a reward amounting to 100% annual ROI or something. The risk would prevent wastes of money, but the potential reward would guarantee that no matter how long it took, if you made it there, you would get payoff.

Trish says:

My vote

We look forward to the suggestion for Adoption of Invention Taxation by The National Innovation Foundation. Thus will begin modernization cogitation abrogation.
I’m sorry, the rhyme was more powerful than I… I would define innovation not as bringing the new invention to market, which is commercialisation, but as the creation of something new that could potentially lead to commercialisation. And whether funded by the gov’t or my pocket change, ideas have to be thought up, and they have to be good to work. Throw money around all you want, innovation is still going to be driven by a need and some creativity, nothing else.

Patrick Castellucci says:

How Would A National Innovation Foundation Work?

The USA had such a program from 1989 until 2008. It was called the Advanced Technology Program. It put hundreds of small businesses in business. They measured success by the number of patents and by what happened to those patents. What products were produced, how many people were employed, and how much tax money was generated by the companies and the employees. ATP returned $8 in new tax money to the treasury for every $1 spent over its 19 years. Products included technology in every flat screen TV, every cell phone, every lithium battery, and the improved build quality of American cars that occurred in the 90’s. The conservatives closed it down because it was corporate welfare. There were some big businesses with good ideas in the program along with the small, less than 1 in 10.

Iron Chef says:

Probably not. Burocracy and Innovation = ???

So I believe Steve Jobs has a pretty good idea of what “Innovation” is.

When asked “How do you systematize innovation?” Steve Jobs responded:
The system is that there is no system. That doesn’t mean we don’t have process. Apple is a very disciplined company, and we have great processes. But that’s not what it’s about. Process makes you more efficient.

But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem. It’s ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what other people think of his idea.

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