| On Tuesday, March 29, the Department of Energy introduced "America's Next Top Energy Innovator", a program to spur commercialization of federal research. This is a necessary - if overdue - step to improve the return on investment that taxpayers reap from federal research dollars. Building on this commercialization program will stimulate innovation, create jobs, and ensure that federal research dollars are deployed responsibly.
There is a strong history of government collaboration with private innovators and entrepreneurs. Government defines the playing field for innovators through intellectual property rights and sector-based regulation, and spurs small-scale innovation through initiatives like the Small Business Innovation Research (SBIR) program. Despite the critical role the government plays by funding basic research, recent studies estimate that only 10% of federally-owned patents are ever utilized by the private sector. In other words, almost all the federal government’s taxpayer-funded intellectual property is at best underutilized, and at worst simply gathering dust.
To complement the suite of existing efforts to spur innovation, the President and Congress must focus on one more priority: giving taxpayers a good return on their investment. We need an innovation policy that supports basic research while streamlining commercialization of R&D to maximize its commercial impact.
To achieve this goal, the President and Congress should take four steps:
• First, Streamline and Strengthen the Research Commercialization Process
The current commercialization system is an incomprehensible patchwork of programs. For entrepreneurs, navigating the process of partnering with federal entities is an exercise in red tape and dead-ends. In the January 18th issue of the Wall Street Journal, President Obama called for an end to regulation with “absurd and unnecessary paperwork requirements that waste time and money.” Federal policymakers should follow this streamlining spirit and the example of proactive state efforts such as Pennsylvania‘s Ben Franklin Technology Development Authority and Maryland’s Technology Development Corporation (TEDCO).
• Second, Develop Policy Principles Based On Market Realities
Basic principles, such as a predictable investment environment for business, should drive our innovation strategy. Entrepreneurs and investors deal with enough uncertainty; the last thing they need is a constantly changing policy environment. As the President has stated, the R&D tax credit is among the most “on-again, off-again” policies in recent memory. Another example of unstable incentives is the Small Business Technology Transfer Program (STTR), which works to expand useful partnerships between small businesses and nonprofit U.S. research institutions. This funding is set to expire on May 31, 2011, though Sen. Mary Landrieu (D-LA) has introduced legislation to reauthorize key Small Business Administration programs through FY2019 (an effort which was previously derailed during last Congress’ lame-duck session). Efforts to ensure long-term funding for incentives like the R&D tax credit and the STTR would reflect the consensus that businesses need a predictable investment environment.
• Third, Reward Innovators – Regardless of their Job Description
We should harness the creativity of federal employees by creating better incentive structures to reward the identification, development, and commercialization of underutilized, federally-funded innovations. Recent White House initiatives like "Race to the Top" and "Race to Green" reflect the Obama Administration’s awareness that market-based programs deliver the most efficient real-world results. As part of the President’s "Accountable Government Initiative", agencies should be pushed to identify and institute incentive programs for employees that help accelerate the commercialization of federally-funded intellectual property. Let’s harness the human capital in our bureaucracy and treat the whole system as an incubator for innovative ideas, practices, and products.
• Fourth, Measure Returns and Increase Transparency
Federal employees shouldn’t be the only stakeholders that can find new uses for old research. Creating online repositories of federal research (such as the DOE’s Energy Innovation Portal) and reporting on the status of their commercialization will open that process to all taxpayers, and will encourage an ROI-focused public discussion of what metrics are most relevant to the long-term value of federal research.
During his 2011 State of the Union speech, President Obama described the rise of international innovation as a “Sputnik moment”, a wake-up call that must rouse America off its laurels. This was reflected in the White House’s Strategy for American Innovation and the DOE’s America’s Next Top Energy Innovator program. These actions represent the efforts of a pragmatic and scie ... |
