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Sustaining the Nation’s Innovation Ecosystems, Information Technology Manufacturing and Competitiveness

18 August 2014 by NCCMMS

Here is an interesting report from 2004 prepared by the President's Council of Advisors on Science and Technology (PCAST).  The report is titled Sustaining the Nation’s Innovation Ecosystems, Information Technology Manufacturing and Competitiveness and can be downloaded from this link:  pcast-04-itreport.pdf


Executive Summary


This Report contains PCAST’s recommendations to the President on sustaining the nation’s innovation ecosystems. PCAST submits the Report to help maintain the United States’ global high technology preeminence, and our associated economic prosperity and high standards of living, for years to come.

Almost sixty years ago, Vannevar Bush’s letter to President Truman helped set the United States on a course that not only launched the National Science Foundation, but also established the basic underpinnings of the Nation’s modern research and development (R&D) enterprise. His words were prescient and still ring true today:

“The pioneer spirit is still vigorous within this Nation. Science offers a largely unexplored hinterland for the pioneer who has the tools for his task. The rewards for such exploration both for the Nation and the individual are great. Scientific progress is one essential key to our security as a nation, to our better health, to more jobs, to a higher standard of living, and to our cultural progress” (July 5, 1945)

The Nation’s scientific and pioneering spirits remain strong, but we confront new challenges from new economic realities and tough-minded foreign competitors. PCAST undertook a review of these trends in order to understand them better, and to assess their potential threat to our innovation leadership and continued economic prosperity. We found that U.S. innovative strengths remain sound, but that certain pressures are very real. We also found, disconcertingly, that considerable anxiety exists within the S&T community over the Nation’s future prospects for continued high tech preeminence. Accordingly, PCAST submits this Report to the President as a means to help strengthen our considerable national assets, and also to
reinvigorate the basic sense of optimism and confidence, and mission, as captured by Vannevar Bush.

One comment received by PCAST while conducting this study, from the leadership of the National Science Foundation, crystallizes well the current state of affairs and carries the Vannever Bush vision forward to today’s competitive global environment:

Civilization is on the brink of a new industrial world order. The big winners in the increasingly fierce global scramble for supremacy will not be those who simply make commodities faster and cheaper than the competition. They will be those who develop talent, techniques and tools so advanced that there is no competition. That means securing unquestioned superiority in nanotechnology, biotechnology, and information science and engineering. And it means upgrading and protecting the investments that have given us our present national stature and unsurpassed standard of living.

Through this Report, PCAST notes that the Nation’s technological and innovation leadership depends upon dynamic “innovation ecosystems,” rather than mechanical end-to-end processes. We believe that basic R&D and manufacturing constitute the ecosystems’ primary pillars, but that other components support the health of the overall system as well. Accordingly, while key aspects can and should be strengthened, it would be a mistake to view individual pieces separately, as if operating in a vacuum.

In that regard, in today’s global environment, a highly successful innovation and technological leader will have the following attributes:

  • 1. A strong basic R&D investment;
    2. A large body of skilled scientists and engineers;
    3. A flexible and skilled work force;
    4. Reliable utilities and other infrastructure;
    5. Federal and state laws and regulations that do not inhibit high tech manufacturers from locating facilities at home;
    6. A competitive investor and tax environment; and
    7. A level playing field, with enforcement of trade agreements and intellectual property (IP) rights.

  • This Report notes that other nations are catching up to our leadership in these areas. They are increasingly replicating our basic innovation platforms, rather than merely manufacturing commoditized products on an outsourced basis. These trends mean the United States has begun confronting a new level of global competition. The Report is therefore intended to provide information to strengthen the United States’ own “innovation ecosystems” in order to buttress our technological leadership, continue our economic prosperity, and maintain rising standards of living for the Nation’s people.
  • Recommendations

  • In light of these trends and considerations, the Report recommends two fundamental courses of action: (1) maximizing our advantages, and (2) assessing foreign competition and responding appropriately with policies for the future.

    • 1. Maximizing Our Advantages
      The United States has considerable economic and innovative advantages, including the world’s leading market. The Nation also leads the world in the attributes discussed above – on an overall basis if no longer on each individually. To maintain these strengths, and improve them where needed, PCAST recommends:

  • The Nation’s R&D base should continue to be strengthened;
    This recommendation includes Federal funding for basic research in promising areas (such as nanotechnology, information technology, and manufacturing R&D), and the creation of a task force to study Federal-state R&D cooperation.Our S&T education and related workforce skills should be improved;
  • Our entrepreneurial climate should be enhanced; and
  • Our underlying infrastructures should be rejuvenated.

  • 2. Assessing Foreign Competition and Establishing Policies for the Futur
  • Foreign governments are pursuing policies not only to build their own innovation ecosystems, but also to attract U.S. companies and individuals to locate their plants and skills outside of U.S. borders. These programs are largely tax oriented, and are having real impacts upon corporate and individual decision-making. In light of these trends, PCAST recommends:

  • The U.S. R&D tax credit should be made permanent;
  • The President should form a task force to assess foreign tax programs and their impact on investment practices, and report back on how the United States should appropriately respond; and
  • Given the swift nature of technological obsolescence, the Administration should pursue an expedited WTO process to resolve IP and market access violations.


With these recommendations, PCAST believes the United States will be well-positioned to sustain its innovation ecosystems, maintain its technological preeminence, and lead “the next, critically decisive stage of industrial development.

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