Description

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.

Author Info

Fred Block is an economic and political sociologist at the University of California, Davis. His books include, The Origins of International Economic Disorder (California) and Postindustrial Possibilities (California). He has been studying U.S. innovation policies since 2006 with support from the Ford Foundation.

Matthew R. Keller is an Assistant Professor at Southern Methodist University. His research explores shifts in dominant intellectual and political trends and their relation to government organization and policy. One strand of his current work investigates innovation policies and dynamics; a second explores how governments respond to episodes of collective violence.

Reviews

“. . . 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.”
—CHOICE

“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