The Next Innovation Revolution: Laying the Groundwork for the United States

late 1970s the United States experienced this: slipping competitive position compared to Japan convinced policy-makers that strategic adjustments to compete were necessary. In 1979, President Carter’s Domestic Policy Review on Industrial Innovation (DPR) provided a road map for optimizing U.S. society for innovation and for responding to Japan’s industrial policy. While the DPR benefited from earlier studies, it proved to be the right study at the right time. It championed cooperation among industry, universities, and the government, then a fresh idea, and promoted cooperative research among U.S. companies. And it systematically examined federal policies to see what changes in law and administration policy were needed to permit American researchers from all sectors to work together. The resulting changes were neither entirely new ideas nor immediate, and innovation policy had different emphases in each successive presidential administration. But, looking back, it is clear that the DPR proposals led to revolutionary changes, both within companies and in the ways they relate to other companies and universities —and thus provided the nation with a significant competitive advantage. But that advantage was temporary. Today, twenty-five years later, many in the United States again feel threatened by international competition. The edge the U.S. achieved through innovation policy changes in the 1980s and early 1990s has largely disappeared. Other nations have adopted, and in some cases improved upon, most of these policies. The U.S. is now experiencing record trade deficits and budget deficits and international competition is fierce. Once again, key American companies are on the ropes. Fortunately, the advent of the Internet and other key software developments provide a new set of potential revolutionary changes in the way people and organizations work together. Far-reaching opportunities are available to improve the James Turner