Credit Claims For Kansas Science And Technology Professionals: Attorney Insights For Financial Success – Stephen Ezell and Stephen Ezell VP, Global Innovation Policy – Information Technology and Innovation Foundation @ITIFdc Scott Andes Scott Andes Former Fellow – Centennial Scholar Initiative @scott_andes

The following paper is the product of a collaborative research effort between the Anna T. and Robert M. Bass Institutional Initiative for Innovation and Placemaking and the Foundation for Information Technology and Innovation.

Credit Claims For Kansas Science And Technology Professionals: Attorney Insights For Financial Success

Government and business investments in basic and applied research and development (R&D) plant the seeds for the technologies, products, companies and industries of tomorrow. They contribute significantly to the fact that at least half of America’s economic growth can be attributed to scientific and technological innovation.1 But the increased complexity of technological innovation and the growing strength of America’s economic competitors mean that it is no longer enough to simply fund scientific and engineering research and hope that it will translate. into commercial results. The US government needs to expand federal support for research and, just as importantly, needs to improve the efficiency of the process by which federally funded knowledge creation leads to innovation and jobs in the US.2

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This report offers 50 policy actions that the Trump administration and Congress can take to strengthen America’s technology transfer, commercialization, and innovation capacity, from the local to the national level. These recommendations include:

Innovation is key to increasing economic growth and wages in the medium to long term. Yet innovation does not fall like “manna from heaven,” as economists once suggested. It is the product of intentional human action, and to have more of it, we need to enact public policies that connect research and development investments to the companies and inventors in the communities where they are located.

After seven years of growth since the end of the Great Recession and more than 70 consecutive months of employment growth, it can be argued that the country has recovered and that the main focus of economic policy should be on those left behind. But the reason so many Americans aren’t seeing their wages rise fast enough isn’t just because they’ve fallen behind, it’s because the country as a whole isn’t moving forward fast enough.

It’s certainly true that the labor market has begun to approach full employment (in fact, in December 2016 the unemployment rate fell to 4.6 percent), but that’s far from a leading indicator of the health of the US economy. Because the reality is that the economy still has a long way to go to return to its full potential. Employment growth in the 36 months following the trough of the recession was the slowest of the 11 post-World War II recoveries, and average productivity growth was twice as high in the four decades after World War II as it had been since the end of World War II. The Great Recession.3 Economists Martin Baily and Nicholas Montalbano describe the country’s productivity growth as “weak since 2004 and miserable since 2010.”4 And as the Information Technology and Innovation Foundation (ITIF) reports, productivity growth in the US in the last decade is the lowest is since the government began recording the data in the late 1940s.5 Still, if the United States could increase its productivity level by even just one percentage point, it could make the economy $2.3 trillion larger than otherwise projected. in 10 years, while the federal budget deficit is reduced by more than 400 billion dollars. 6

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Meanwhile, other countries are increasing their technological sophistication, conquering crowded international markets and pushing American companies—and, by extension, American workers—behind them. And while America’s leading technology competitors were once largely isolated from Western Europe and Japan, today many developing countries are crafting innovation strategies designed to seize leadership in advanced technology categories such as life sciences, clean energy, new materials, flexible electronics, computing and the Internet, and advanced production. As evidence of these trends, the United States has run a trade deficit in advanced technology products every year since 2002; the cumulative deficit since 2010 is $580 billion.7 Improving America’s capacity to innovate is a key step toward meeting these challenges.

The American innovation economy exists on three levels: technological, industrial and spatial. Much innovation is happening in specific technology areas, for example life science innovation funded by the National Institutes of Health (NIH), additive manufacturing supported by America Makes, and composites and lightweight materials supported by the Institute for Advanced Composites Manufacturing Innovation (IACMI) and the Lightweight Innovations for Tomorrow (LIFT) Institutes for Product Innovation. Innovations also occur among companies in the same industries that collaborate to drive technological progress (eg, aerospace and automotive). For this reason, sector- and technology-based innovation policies and programs, such as the Manufacturing USA Institutes of Manufacturing Innovation and the Advanced Research Projects Agency-Energy, effectively target research and development dollars.

The spatial level of innovation does not only include hotspots like Silicon Valley; Austin, Texas; or Boston, but also a host of communities across the country in places like Chattanooga, Tenn.; Denver; Minneapolis; Mobile, Alabama; and Pittsburgh, Pa. which are intensively developing their innovation ecosystems at the regional level. Indeed, as ITIF has shown, innovation is occurring in all 435 US congressional districts.8

This dispersion is important because regional technology clusters create concentrated flows of knowledge and spillovers, workers with specialized skills, and dense supply chains that improve firm productivity. Many R&D-intensive companies benefit from proximity to innovation resources such as universities and federal laboratories, and this proximity produces myriad “ecosystem” benefits.9

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This is particularly the case with knowledge spillovers – the ability of workers and firms to learn from each other without incurring costs. Recent research shows that the value of proximity for companies and workers to exchange ideas declines extremely rapidly with distance. For example, Rosenthal and Strange found that for software firms, spillover benefits are 10 times greater when firms are within one mile of each other than when they are two and five miles apart, and by 10 miles there are no more intra-city localization advantages.10

In other words, in order to be effective, technological policy should not only focus on the first two levels, technology and industry, but also on the spatial – regional level. Therefore, if America’s innovation economy is to function at its best, Washington must promote smart policies and initiatives that work effectively in concert at the city, regional, state, and national levels.

A central component of an effective national technology policy system is strong state funding of scientific and engineering research. But in this regard, the United States is failing. If the federal government invested as much in R&D as a share of GDP today as it did in 1983, we would be investing over $65 billion more annually.11 Unfortunately, given budget and policy constraints, the Trump administration and the upcoming 115 .Congress may find it difficult to significantly increase overall federal investment in science and technology. And that’s despite the fact that it would be a wise investment, as economists estimate that a 1 percent increase in U.S. research and development capital improves GDP by 0.13 percent.12 But regardless, one thing America should be able to reach bipartisan agreement on is the consensus is the need to find ways to increase the return on investment from existing resources and programs.

What follows are 50 policy recommendations that President Trump and Congress can make to improve the economic performance of existing resources (with some modest additional investment). Many of these recommendations could be added to the COMPETES-related reauthorization bill currently under consideration in the House and Senate. The recommendations are divided into five categories: strengthening innovation districts and regional technology clusters; launching or expanding institutions that support America’s innovation economy; facilitating technology transfer and commercialization activities; promoting the establishment of high-growth companies; and encouraging innovation in the private sector. These recommendations are the result of a joint research effort of the Institution and ITIF.

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The federal government invests $146 billion a year in research and development, and whether those dollars go to military bases, federal labs, universities, or small technology companies, they reach grass roots in communities and play a critical role in local technological capacity. Federal investments often drive high-skilled jobs, fund local universities and hospitals, support high-tech entrepreneurs, and lead to large company exports—all of which bring foreign dollars and jobs to the region.

To maximize and leverage the benefits of research and development within regional economies, mayors, regional economic development, and philanthropic and private sector leaders should understand their federal research portfolio. Indeed, regions should value their portfolios as they would any other asset class. To do this, regional leaders must understand how the federal government funds research.

The government awards research and development through federal agencies. Although most agencies have some level of research and development budget, 84 percent of funding comes from the Department of Defense (DoD), the Department of Health and Human Services (DHHS), the Department of Energy (DoE), and the National Science Foundation (NSF). ). These agencies have different areas of investment and different ways of financing that affect local economies.

Department of Defense: With 49 percent of total federal research and development, the Department of Defense represents the largest federal investor in research. But the size of the Ministry of Defense is not the only reason why the department is important to local communities. No other federal agency has anything like it

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