Industrial Innovation: Implementing the Policy Agenda

Numerous studies have been made on how to revitalize declining US industrial innovation, but none of these studies has led to policy implementation. In the 1960s, the US Congress tried to make federally-funded research and development (R&D) more effective. The 1970s saw concern over the impact of fiscal policies on industrial innovation and the effect of regulation on declining productivity. In the 1980s, effort is being directed toward tax incentives to boost investment and to increase the participation of small business in federal R&D efforts. Past inaction may be attributed to inadequate institutional infrastructure, a lack of consensus on the various remedies, and flawed policy formulation. The private sector should understand that proposed policy options in the public sector are evaluated using 4 criteria: 1. equity, 2. likelihood of success, 3. efficiency, and 4. simplicity of administration. Understanding this framework may serve to generate new, high-payoff solutions.