Since the election of Ronald Reagan in 1980, American politics has been dominated by the idea that “free markets” are the most effective way to organize economic activity. Private firms, disciplined by the competitive rigors of the market, are forced to innovate, adapt, and become more efficient in order to outpace rivals, continuously satisfy consumers, and meet new demands. Government, in this view, is “the problem”: regulation, taxation, and policy interventions disrupt open competition, stifle innovation, and breed inefficiency.
But the “dirty” secret behind the façade of the “Washington consensus” is that over the last four decades, government programs and policies have quietly become ever more central to the American economy. From “basic research” to commercialization, the fingerprints of government can be found in virtually every major industrial success story of the late twentieth and early twenty-first century and are central to American innovation and recovery.
This volume provides the first comprehensive account of the depth, magnitude, and structure of the U.S. government’s role in the innovation economy. A cross-disciplinary group of authors collectively document, theorize, and evaluate the decentralized set of agencies, programs, and policies at the core of the collaborative linkages between public agencies and the private industries at the forefront of the U.S. economy. Equally important, as the United States seeks to recover from the worst economic crisis since the Great Depression, this volume addresses issues critical to the construction of newly responsible, forward-looking public policies: how can we forge an innovation policy that is at once flexible, effective and efficient, as well as transparent and accountable?
- Provides new insights into “where innovations come from” and what government policies support a dynamic innovation economy, precisely as the U.S. seeks to recover from the deepest economic crisis since the Great Depression.
- Shows how government programs and policies have underpinned technological innovation in the U.S. economy over the last four decades, despite the strength of “free market” political rhetoric.
- Explores the strengths and weaknesses of different policies and strategies for strengthening the innovative dynamics that support economic growth and competitiveness.
- Offers a new vision for designing technology policies to fit a 21st century economy.
“. . . An array of case studies clearly illustrating that, contrary to the dominant rhetoric of market fundamentalism, the federal government is an essential actor in the innovation system. Recommended.”
“The term ‘industrial policy’ remains a bugaboo in the United States, even though as this book documents the federal government is one of the world's most activist when it comes to industrial support. The true value of this book resides in the case narratives it presents on a range of successful and unsuccessful public programs. The book is a treasure trove of ideas on how to make the strategic collaboration between private and public work better. It is a must-read for anyone interested in the state of the U.S.
economy and its future prospects.”
—Dani Rodrik, John F. Kennedy School of Government at Harvard University
"From blockbuster pharmaceutical drugs to jet turbines to microchips, the U.S. government has directly supported some of the key technological drivers of the global economy. The reality, illuminated by this superb collection of case studies, is that America's industrial might is in no small measure a consequence of sustained state investments. State of Innovation strikes a blow against our collective amnesia and free market nostalgias."
—Ted Nordhaus and Michael Shellenberger, co-authors, Break Through: From the Death of Environmentalism to the Politics of Possibility
"Block and Keller dispel the widespread fantasy that governments merely maintain markets as playing fields. This important collection gets inside the reality and leads us toward a sophisticated understanding of market dynamics."
—Nicole Woolsey Biggart, University of California--Davis
Foreword: Peter Evans
Chapter 1 Introduction: Innovation and the Invisible Hand of Government
Introduction to Part I Telling the Stories: What Are The Instruments and How Have They Been Deployed in Different Parts of the Economy?
Chapter 2 The Military's Hidden Hand: Examining the Dual-Use Origins of Biotechnology in the American Context, 1969-1972
Shelley L. Hurt
Chapter 3 Political Structures and the Making of U.S. Biotechnology
Steven P. Vallas, Daniel Lee Kleinman, and Dina Biscotti
Chapter 4 To Hide or Not to Hide? The Advanced Technology Program and the Future of U.S. Civilian Technology Policy
Chapter 5 Green Capitalists in a Purple State: Sandia National Laboratories and the Renewable Energy Industry in New Mexico
Chapter 6 The CIA’s Pioneering Role in Public Venture Capital Initiatives
Matthew R. Keller
Chapter 7 DARPA Does Moore’s Law: The Case of DARPA and Optoelectronic Interconnects
Introduction to Part II. Scale, Significance, and Implications
A Evaluating Impact
Chapter 8 Where do Innovations Come From? Transformations in the U.S. Economy, 1970-2006
Fred Block and Matthew R. Keller
Chapter 9 Failure to Deploy: Solar Photovoltaic Policy in the U.S.
Chris P. Knight
B The U.S. Case in Global Perspective
Chapter 10 From Developmental Network State to Market Managerialism in Ireland
Seán Ó Riain
Chapter 11 China's (Not-So-Hidden) Developmental State: Becoming a Leading Nanotechnology Innovator in the 21st Century
Richard P. Appelbaum, Rachel Parker, Cong Cao, and Gary Gereffi
C Towards an Innovation Society
Chapter 12 Everyone an Innovator
John A. Alic
Chapter 13 The Paradox of the Weak State Revisited: Industrial Policy, Network Governance, and Political Decentralization
Josh Whitford and Andrew Schrank
Chapter 14 Conclusion. Avoiding Network Failure: The Case of the National Nanotechnology Initiative