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Event: Regional Innovation Clusters: Advancing the Next Economy

Amid today’s stumbling economic recovery, policymakers are examining a variety of measures to help businesses compete and grow their workforces. As part of this effort, it is critical that they understand how regional economies across our country stitch themselves together from the bottom up—what makes them tick and what they need to grow and thrive in the 21st century. Alas, federal innovation policies aimed at boosting the competitiveness of our economy through investments in science and technology commercialization are often grounded in 20th-century economic development strategies that overlook the importance of regional economies and no longer match the needs of the 21st-century global economy.

Academics and policymakers alike understand the limitations of our current policies at the macroeconomic level. Federal funding for these commercialization programs, at less than 10 percent of the $150 billion a year we invest in basic scientific research, is “small beer”—a trivial amount given the challenges our nation faces from our global competitors. And federal programs designed to implement these policies are divided into a chaotic array of “silos”—policy speak for mutually unconnected programs— that make it exceedingly hard for the federal government to act upon any strategy designed to overcome our nation’s economic policy limitations.

At the regional level, however, many businesses and universities, state economic development agencies and community colleges, venture capitalists and commercial bankers all depend on current federal innovation policy funds to pay for or complement their own efforts to boost commercialization of game-changing discoveries, incremental manufacturing, and service innovation alike. Despite the clear limitations of existing federal innovation programs, they remain important to our national economic competitiveness. So understanding the efficacy of these federal innovation programs is the first step toward understanding how to improve them or replace them.

That is what we set out to do in this paper in one regional economy of our country—the eastern Midwest region that includes Pittsburgh in western Pennsylvania; and Cleveland, Akron, and Youngstown in northeast Ohio. The region, anchored by its major cities Pittsburgh and Cleveland, faces distinct challenges and opportunities. Regional economic growth, of course, is everywhere local and interconnected, but how much so depends on the vibrancy of each region’s innovative ecosystem. Silicon Valley in California, or the Route 128 corridor around Boston are famous “regional innovation clusters” in which businesses large and small, universities, federal labs, and financiers interact every day in a heady mix of creativity that powers our nation’s innovation economy. Places that have tried to copy their unique recipes, however, have not been very successful. And those places that succeeded at creating a high technology regional economy, such as North Carolina’s Research Triangle Park and San Diego’s Connect project, found that they needed to pave their own path.

In similar vein, Hollywood has a different mix of players who achieve the same thing in southern California for our entertainment industries. And Nashville serves the same purpose for country music. The upshot: Every successful regional innovation cluster defines itself idiosyncratically and specifically to its own context, depending on its own defining economic activity—be it entertainment, biotechnology, information technology, or advanced manufacturing.

But older industrial areas such as Pittsburgh, Cleveland, Akron, and Youngstown are places with substantial infrastructure and a proud industrial heritage that are struggling to redefine themselves in the global economy. The large corporations headquartered there that served as the backbone of the region’s 20th-century industrial economy are neither as numerous as they were 50 years ago nor as central to the region’s core economic competitiveness. In many different ways these companies have squandered their competitive advantages or watched as the forces of globalization overwhelmed those advantages.

This leaves entrepreneurship (defined as new firm formation and scale-up) and innovation (defined as the creation of value in an economy no matter the size of the company or the source of the idea) as the most viable strategies for the economic future of the region. Our study sought out these new players in this region’s innovation ecosystem to ask them not only about the efficacy of federal innovation programs but also about how they interact with each other—how much they felt they worked and lived in an emerging regional innovation cluster. Along the way, we also asked these players about the region in search of the strengths and weaknesses of this once-thriving, metal-bending region of our country in the 21st century.

Our survey of these firms and players on these subjects is the first one ever conducted. And our one-on-one interviews with dozens of key players in this new ecosystem only buttressed what we learned from our survey. We found in the eastern Midwest of our country an ecosystem of innovation and entrepreneurship that is emerging and vibrant, but also fragile, requiring the sustained efforts of local, state, and federal agencies working together to help firms survive and thrive. Problem is, we also found that local innovation programs that connect well with entrepreneurs are limited in scale, and the handoff with federal programs can be problematic at best because these programs are also limited as well as disconnected from each other.

Within this one region, we find examples of companies that have worked well with the limited resources available to them. But many others still have a ways to go. We also find universities and state economic development agencies that thoroughly understand the role they need to play in developing a thriving regional innovation cluster. But we also learn about the limitations these institutions face.

In the pages that follow, we will detail the results of our survey then present our overarching analysis of this seminal and difficult data-gathering effort accompanied by our on-the-ground interviews. The information we gleaned is admittedly difficult to assemble into succinct categories. The complexity of the region’s rolling transformation from industrial heartland to a new innovation-driven ecosystem for the 21st century is very hard to capture in clean “snapshots.” Briefly, however, we discovered that:

• Financing is lacking both for young innovative companies and for established medium-sized companies as they try to carry promising new or incremental technologies to market.
• Accessing federal innovation funds is exceedingly time consuming, often self-defeating, and in the end usually too small to be of enduring use.
• State and local innovation funds are pursued to a greater degree than federal programs but are too small for the needs of the region’s firms.
• Federal, state, and local funding programs nonetheless can be useful in attracting private financing even though these programs are not well-coordinated.

These findings are troubling for a variety of reasons. Many entrepreneurial business ventures depend on these government programs as they discover, develop, and begin to move innovation toward the market. Without critical public support, these entrepreneurs may not be able to survive. For a long time, economic development policymakers have recognized that the infamous “valleys of death,” where good ideas lack the financing to become companies that hire well-paid workers, seriously threaten the creation of new firms and the expansion of existing firms. This debilitating financing gap is compounded by current economic conditions and a banking crisis. The result: The entire spectrum of small- and medium-sized firms and even larger firms in the region face a crisis in securing expansion and working capital.

But our survey turned up some promising news, too. Specifically:

• Finding management, engineering talent, and well-trained workers in the region is not a significant challenge for companies.
• Startup companies and established small- and medium-sized firms are building on the region’s historical strength in industrial activity to create new products and services in emerging industry clusters within the region.
• These companies recognize they operate in clusters and would welcome a regional innovation cluster coordinator who could bring together private sector companies; nonprofit organizations such as universities; and federal, state, and local government officials to better align economic policy with the needs of companies in the region.

These core findings underscore the need for the federal government to overhaul its innovation policies and to work more closely with state and local leaders in the public and private sectors to sort out what works and what does not. Our study also points to the need to completely rethink how we go about encouraging regional economic development in the 21st century.

Proposing specific policy proposals based on one survey of one regional economy would not be wise, but there is enough academic research and policymaking experience about innovation to support a set of policy principles that are buttressed significantly by the research we have just completed. We will detail these, too, in the pages that follow, but briefly we believe that:

• Bottom-up, locally organized innovation programs that stitch together federal, state, and local economic development programs would serve our national economy best in the 21st century. This should be financed through public-private partnerships that include all the players in a given regional innovation cluster.
• The federal government has a major facilitating role to play in this process— one that includes significant increases in financing without monopolizing decision making.
• Each locally organized cluster will be different and thus will need region-specific support from federal, state, and local governments.

We believe our survey and our analysis demonstrates the need for the Obama administration and especially Congress to embrace these principles as they go about reforming our economic development programs to meet the needs of the 21st-century innovation economy. Pittsburgh, Cleveland, Akron, Youngstown, and their surrounding communities are changing rapidly because of globalization and in reaction to globalization. Our policymakers in Washington, in statehouses, and in municipal town halls need to give them the tools they need to succeed.

Maryann P. Feldman is the S.K. Heninger Distinguished Chair in Public Policy at the University of North Carolina, Chapel Hill, and Lauren Lanahan is a graduate student in the Department of Public Policy at the University of North Carolina, Chapel Hill.

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Event: Regional Innovation Clusters: Advancing the Next Economy

Many places search for a recipe for future prosperity, seeking to understand what the appropriate action is and what investments will yield the types of increasing returns that provide for economic growth. The key ingredients are a combination of entrepreneurs—individuals who see opportunity and go after it, and other individuals who are willing to invest in entrepreneurs’ ideas with their money or their labor. Organizing these ingredients successfully has proven elusive. Many places struggle to define an economic future, despite the advice of highly paid consultants and the willing participation of state and local government, local institutions of higher education, and others.

This essay will provide four simple facts about technology-based economic development, and it should certainly not be considered the final word. These simple facts:

• Economic growth is local, complex, and beyond anyone’s control
• Planning for the future is uncertain
• The role of universities is changing
• Innovation economies require preparation

The intention is to provide some guidance and to highlight some steps forward using these four facts as (contradictory but no less pertinent) policymaking guideposts. (The box below provides an introduction to the terms that we use in this essay and others contained in this edition of Science Progress).

Economic growth is local, complex, and beyond anyone’s control

All economic activity must be grounded somewhere. The idea of a flat world benefits corporations who move their operations to exploit wage differentials. But labor is less mobile, and people as physical beings provide the nexus for economic activity, either as workers or consumers. Even as the Internet eases long distance collaboration, creativity resides within individual people and that creativity is enhanced by local context and connections between people. Former Speaker of the House Tip O’Neil was fond of saying that all politics is local; by the same logic all economic growth is local.

Economic activity has a pronounced tendency to cluster spatially in locations rich in the factors that promote productivity and exchange. The 19th century British economist Alfred Marshall wrote about the spatial cluster of industries in 1890, noting that easy access to pools of skilled workers and specialized suppliers, localized competition, and the ability to benefit from knowledge externalities provided an advantage to local companies. This is well known today due to the prominence of modern technology-based clusters, such as Silicon Valley and Route 128 in Massachusetts. Manufacturing and productivity activity benefit from spatial concentration. Creativity and innovative activities, however, benefit most from the geographic concentration of resources due to increasing returns to the application of knowledge. The tendency of innovation to cluster both spatially and temporally is a regular occurrence. Consider Florence under the Medici family, Vienna during Mozart’s career, Manchester during the Industrial Revolution, or Paris in the 1920s—all places where creative activity flourished.

New technologies and new industries display similar tendencies even as they begin rather humbly as entrepreneurial ventures. Translating entrepreneurs’ dreams and realizing their economic potential involves building an appreciation of what is possible among potential investors, customers, and employees. Increasingly there is recognition that what matters for place-specific industrial development is not necessarily resources or initial conditions but the social dynamics that occur within a place and define a community of common interest around a nascent technology or emerging industry. Community building—as opposed to planning—can be essential to regional industrial development by constructing a shared understanding and appreciation of an emerging industrial activity.

Geography and place-specific interactions shape industries. If you enjoy coffee or fine wine, then you know that there is something about the soil, the climate, the angle of the sun, the age of the trees, and the growing and harvesting traditions that creates something very unique. Even the best vineyards experience different vintages, reflecting the myriad of variations that determine quality. While quality winemaking is diffusing around the world, with product now exported from Chile, Argentina, Australia, New Zealand, and South Africa, wines have become more complex and differentiated rather than homogenous. Connoisseurs talk about terroir, a French term used to denote the special characteristics that geography bestows. The term can be translated literally as “dirt” but more poetically as a “sense of place.” The term captures the total effect that the local environment has on the product, when the total effect is more than the sum of its parts.

Location is a geographic platform that provides a means to organize human activity and that is essential to the creation of innovation and the production of knowledge. Companies are one well-known way of organizing productive activity. Geography, spatial proximity, and collocation are another. As technology allows greater communication at long distance, we experiment with distant collaboration and knowledge sharing. But sometimes there is simply no substitute for just being there—being at the place where exciting work is taking place, where high-content unstructured conversations take place, and where the unexpected may be explored and spark something new.

The essence of strategic advantage is being able to do something well that will not be easily replicated by others. Companies understand this, but unfortunately places seem to try to attract and grow the same glamorous sectors. Unfortunately, by the time an industrial activity is well understood and appreciated and easy to target, it is too late. The first movers have already captured the market, and as the process become self-reinforcing it is impossible to catch up.

Consider the example of Boston’s biotech industry (see box on page 12), arguably the most successful biotech cluster in the world. It is most relevant that biotech was never an economic development target. The industry simply evolved organically, growing up at a time when few people understood biotech or its economic potential. By the time other communities jumped on this bandwagon, Boston was far ahead in its lead.

Planning for an uncertain future

Our difficulty comprehending the complexity of future growth underlies faith in market mechanisms. Recently this reliance on the market has diminished the role of government in many people’s minds. Yet government at its best is the vehicle for collective action. Government ensures that markets work well, that competition is fair, and that all citizens are able to participate in the economic future. When government works well, communities are viable.

Frequently, policy is based on a linear model of innovation whereby innovation emerges from increasingly practical applications of new fundamental knowledge. This type of policymaking is wrongheaded. On the contrary, technological change must be conceptualized as a process whose outcome is not determined but is rather open. It is impossible to discover a sequence of clearly delimited stages that have to be passed one after the other.

Instead innovation is more accurately described as a complex, self-organizing process that covers a much wider range of small- to medium-sized enterprises, large multinational corporations, universities, the public sector, competitors, and collaborators alike. Innovation policies need to provide the infrastructure so that creativity and innovation flourish.

There is an equal danger that places become too inward-looking, depending too much on local resources, local collaboration, and local markets. The most successful economic entities are also globally connected, benefiting from local buzz and global pipelines. Leaders, while certainly important, required dedicated followers. The most successful places forge a consensus or shared understanding about what is possible, what needs to be done, and even how to best organize an activity and realize value. The most successful places do not stop, but instead constantly look for improvement and new opportunities.

The changing role of universities

Universities are important actors in local economies. Their relationships with for-profit activities are becoming more direct and focused. Institutions of higher education seek to create effective transfer mechanisms that efficiently increase the stock of knowledge, promote social or economic development, and increasingly enhance economic competitiveness. Yet formal technology transfer is certainly less important than teaching, research, and public service­—the traditional activities of universities.

Universities exist for the very purpose of creating, augmenting, verifying, and diffusing knowledge—the most important resource in the modern economy. Knowledge is an ethereal concept that is perhaps best considered as embodied in what economists call human capital, or individuals who have received the benefit of education and who are able to appreciate, integrate, and augment knowledge and engage in innovative activity. In practice, education is a human cognitive activity, a relational process in which questions, answers, clarifications, and other information flow. Innovation is predicated on the creation and application of knowledge.

Appreciation of academic discoveries requires a shared vision of what the potential might be and how best to move the technology forward, and often requires devising a terminology and a conceptual schema even to talk about the discovery and its market potential. By constructing a common, shared meaning of the technology through frequent interaction with academia creates questioning, skepticism, and creative playfulness—what the literature describes as the transmission of tacit knowledge.

Places look to their local universities as driving forces in the knowledge economy, yet universities are part of a local context. The benefits of the university may be absorbed by the local community and take root or may simply slip away. Universities, like other economic entities, require complementary assets to realize their potential and supply chains to provide them with resources. The complementary assets are companies with absorptive capacity both to employ skilled labor and to use research findings. If receptor businesses do not exist locally, then anything a local university produces will become an export to other places: Graduates will leave for employment elsewhere and research results will benefit distant companies.

The supply chain for higher education certainly involves significant continuing investment in physical plant and equipment. While it is possible to conduct some activities virtually, thus saving the cost of a physical plant, universities are important social spaces, and a university’s infrastructure has important symbolic value. Moreover, universities require a steady supply of students who have the requisite background to be able to engage in higher education.

Preparing for innovative economies

Innovation has become recognized as the foundation for all types of places to succeed. The ability to create economic value by exploiting technological progress, introducing new products to the market, redesigning production processes, or reconfiguring organizational practices is critical to productivity for companies, industries, and places. Innovation, however, is not limited to new science-based or high-technology industries. Innovation is equally transformative in existing mature industries and provides a means for competitive advantage.

When considering the development of industrial clusters there are two broad and diametrically opposing models. One model, practiced in East Asia, relies on government dictating the growth of designated science cities. This is a very top-down approach to economic development that has been successful in Singapore and Taiwan: The central government dictates that a specific location will have a concentration of R&D and it accomplishes this in a relatively short period of time. The verdict is still out as to whether these locations will be successful at creating a sustained competitive advantage given that innovation is more complex than simply conducting R&D.

The other model occurs in the United States, and to varying degrees in other market economies, and it relies on self-organization and local initiative. In market economies the central government cannot dictate the actions of private companies, but may only offer incentives to encourage companies to locate and invest in local research and development. The closest the United States has to a government-induced cluster is Research Triangle Park in North Carolina, which was the result of state and local government actions. Research Triangle Park, however, was a very long undertaking beginning in the 1920s, and it is now the largest and most successful research park in the world. While there are many other examples of government trying to build clusters in market economies (see article on page 35), the results typically look very different from what was originally intended.

While economic development officials and government planners want to define long-term strategies, it is difficult—if not impossible—to predict scientific discoveries, new technologies, and new opportunities. IBM, Inc., a mainframe computer industry leader in the second half of the 20th century, famously underestimated the potential of the personal computer industry, creating an opportunity for new companies to create entirely new information technology hardware and software industries and companies—think Dell Inc., Apple Computer Corp., and Microsoft Corp. But then these and other industries and companies largely failed to predict the potential of the Internet and how it would change the way we access information and communicate—something IBM used to its advantage to reinvent itself as a largely Internet-driven IT services company. Policymakers couldn’t possibly have predicted any of this, but they could and did till the soil that allowed all this innovation to flourish.

Successful entrepreneurs make and remake their own luck, adjusting and adapting to survive. Instead of wisely considered, far-sighted solutions, entrepreneurial activity is by necessity messy, adaptive, and unpredictable. Economic development strategies need to be equally adaptive.

Maryann Feldman is S.K. Heninger Distinguished Professor of Public Policy at the University of North Carolina, Chapel Hill.

Juran, who died on February 28 at the age of 103, was a giant in the quality movement that revolutionized manufacturing, first in Japan and then in the United States and the rest of the industrialized world. Juran and those who followed him extended quality principles across the entire business sector and into other aspects of society. It is now clear that Juran’s views on teamwork and his ideas about continuous improvement and quality assurance management techniques are even more important today to the United States’ position as an intellectual and practical world leader in innovation.

Juran’s key insight is that process matters.

But first, a bit more on Juran’s critical legacy. Born in a primitive East European village, Juran immigrated to the United States as a child, and at age 21 was one of the first engineers to apply statistical methods to quality inspection in manufacturing. Ultimately, he became Western Electric’s corporate Head of Industrial Engineering and then went on to re-engineer military logistics during World War II. On loan from Western Electric to the federal government, Juran led a multi-agency team that redesigned the U.S. armed forces’ shipping processes, reducing the amount of paperwork, significantly cutting costs, and aiding the war effort.

After the war, Juran became a full-time quality consultant, and is credited with transforming the Japanese post-war economy. He popularized the Pareto Principle—the idea that 80 percent of potential improvements are due to 20 percent of operations—teaching that the most successful organizations optimize that vital 20 percent first.

Juran’s key insight is that process matters. He stressed the importance of empowering individual workers, the reinforcing nature of teamwork and quality circles, and the importance of extending quality management techniques to suppliers and customers. And he taught the importance of benchmarking to understand and meet the challenge of competitors. Japan’s embrace of quality management placed it on the road to world manufacturing leadership, as documented in The Machine that Changed the World. Japan’s recognition of his contribution led to the award by the Emperor of Japan of the Order of the Sacred Treasure Award, that nation’s highest honor. This is why the Japanese were so amused when, in the 1970s, American companies wanted to learn Japanese management techniques. The Japanese believed that they were practicing American management as taught by Juran and his colleague Dr. Edwards Deming.

Juran’s book, Total Quality Management, is the bible on this topic. At age 82, Juran was the star witness in the Congressional hearings that led to the creation of the Malcolm Baldrige National Quality Award, which honors superior performance in organizations that function at the highest quality level.

Juran’s Lessons For America Today

Management guru Peter Drucker stated in a 1996 PBS documentary that “whatever advances American manufacturing has made in the last thirty to forty years, we owe to Joe Juran.” Indeed most of the large companies worldwide have embraced his ideas, including U.S. quality award-winning manufacturers Boeing Co., General Motors Corp.’s Cadillac unit, high-end textile and chemicals company Milliken & Co., and Texas Instruments Inc., and quality award-winning service companies The Ritz Carlton Co. and Federal Express Corp.

Yet, U.S. manufacturing today accounts for only 15 percent of our Gross Domestic Product. This is less than Japan, Germany, and other high-wage economies. Why? The reason is that services now dominate our economy. Americans, however, often wonder where the service is in our service economy.

Quality principles apply in services as strongly as they do in manufacturing, but the problem is that much of our service and manufacturing sectors still cling to the rigid industrial efficiency production models of Frederick Taylor, the turn-of-the-last-century’s most famous efficiency management expert. The high throughput, Taylorist model that treats workers as automatons, quality as an after-the-fact consideration, and customers as uninformed and undemanding still appears to dominate.

Taiwan’s industrial parks now often bundle leading research universities and government agencies to provide research and policy expertise for integrated solutions.

Nor are we as a nation aware of how fast our competition is moving. Other countries are taking quality a step further by considering how their governments and educational institutions need to restructure to better accomplish their national goals. Taiwan’s industrial parks now often bundle leading research universities and government agencies to provide research and policy expertise for integrated solutions. The result is a nation that has moved from a underdeveloped country famous for cheap goods to the world’s largest manufacturer of all manner of computer peripherals—and increasingly the inventor, designer, and manufacturer of cutting-edge electronic technologies.

Or consider Finland, which has coupled its emphasis on quality in business with application of quality principles to its schools with the goal of empowering its students and teachers. Despite deemphasizing standardized tests, they have raised performance levels to the point where students are among the best in the world, both in standardized tests and adaptability in the workforce upon graduation.

Countries across the globe are aggressively modernizing, and once again, as in the 1970s, the United States is not keeping up. That’s why Science Progress is preparing policy positions for the next presidential Administration, among them a commitment to reengineer government through quality management. This begins with recognition that public welfare and the health of our private sector are intertwined.

Public Policy Quality Management

Ten years ago in the book The Death of Common Sense, legal scholar Philip K. Howard documented the rise of rules in American government. We were then and still are a society in which rules and procedures often inhibit creativity and problem solving. Much of government is driven by the same bureaucratic approach that Joe Juran spent a lifetime working to replace.

When people say that they dislike government, they highlight the maze of rules and regulations, the lengthy and seemingly illogical processes, and the difficulty in getting governments to make decisions. Too often, government acts after the fact when something goes wrong—the analog of old-fashioned quality control—rather than working with its constituencies to avoid problems, an approach that lies at the heart of today’s quality assurance programs in the private sector.

Once something goes wrong, too often our government embraces an overbroad rule to prevent it from happening again. One shoe bomber and thousands of Americans take off their shoes to comply with a rule that does not make us more secure and does not anticipate the next event.

Why not solve the problems in situ and work for much smaller recalls well before failure occurs?

Joe Juran and his colleagues have shown us the way out. It is now time for the government at all levels, and wherever feasible, to replace end-of-the-line regulation with active participation. A re-engineered regulatory agency should be able to deliver a higher level of public safety by working with companies and all other interested parties on setting commonly acceptable standards that guarantee a high level of public good in a cost-effective manner.

For instance, state auto inspections could be redesigned to increase public safety. Data that they routinely collect could be targeted to that 20 percent of components that cause 80 percent of the safety problems—the 80/20 rule again. Faulty components could be traced back to a manufacturing lot and allow auto companies and their suppliers to correct unusual patterns of wear. Currently wide-ranging recalls happen only after significant and catastrophic failure. Why not solve the problems in situ and work for much smaller recalls well before failure occurs?

Critics will claim that the active participation of government agencies and industries in solving problems will result in what’s known as “regulatory capture,” in which the industry being regulated commandeers the agency policing it. But that’s what happens when regulations are rules-based; companies work hard to change the rules. It also assumes we are still in an international environment where the competition is much slower than it is today. In contrast, quality assurance management, if properly implemented, replaces regulatory capture with cooperation, and brings public officials, private industry, and consumer and workers groups together to achieve maximum efficiency, innovation, and speed in getting the product or service right the first time.

A government operating on its own priorities at a bureaucratic pace does not deliver timely solutions—just when U.S. international economic competitiveness demands timely action. To be effective in the 21^st century, governments need to switch to a quality approach in conducting government business. This means going digital wherever possible, which in turn will necessitate setting privacy-protection for the mining of that data, working with manufacturing and services industries on developing common language, and setting standards to make government/industry interactions as seamless as possible.

We need to realize that government services are part of the international competitiveness of private companies.

In short, it will require a government commitment to excellence in forcing out waste and maximizing efficiency in its functions, and in committing to what is best for private sector entities and the common good. Just imagine a government that continuously reviews how it is serving public health and safety, works cooperatively with business to do so in a business-friendly manner, and measures failure to achieve their combined goals at the industry standard of six sigma—a commitment to achieve highly capable processes with an almost perfect level of quality.

We need to realize that government services are part of the international competitiveness of private companies. Joe Juran championed international benchmarking for companies. We need to benchmark government delivery of services against the most efficient governments in the world. We need to get over assuming that everything in the United States is above average.

Finally, we must recognize our nation’s inherent advantages and work to strengthen them as well. We have one of the world’s longest traditions of democracy and of productively working together. The Internet has greatly increased the efficiency of democracy by rewarding open systems and by making distributive work and decision-making easier. Premium services from government are one of the offsets we can offer to low wages from other countries.

Quality and ingenuity can reclaim our nation’s competitive edge. We have every reason to believe that the United States can once again emerge as a world leader in productivity and quality of life if we focus on the vital issues where we can make the greatest improvements; if we err on the side of an open and free society; if we reorganize to empower our entire workforce; and if we update Joe Juran’s gift of quality through a commitment on focused, continuous improvement.

Jim Turner is Chief Counsel, Committee on Science and Technology, U.S. House of Representatives. Maryann Feldman is the Miller Distinguished Professor of Higher Education at the University of Georgia. Both are writing as individuals and not in their official capacities.

While we debate the merits of innovation policy, they invest heavily in government labs on applied research of importance to their industries.

No matter if you believe that the world is flat or spiky, it is simply true that the world order is changing. This is occurring at a time when the U.S. government is diminished due to almost three decades of distrust, downsizing, and outsourcing. Democracy suffers when government becomes an object of ridicule rather than a vehicle for collective action. Democracy thrives when government delivers for the common good.

Globally, other governments that are attuned to the changing world order are working to build competitive advantage, advancing all aspects of their societies to boost the economic prosperity of their citizens. While we debate the merits of innovation policy, they invest heavily in government labs on applied research of importance to their industries, co-locating with research universities and industrial parks to work on focused technologies. While Congress each year debates whether to extend the research and development tax credit, other countries provide generous and lengthy tax holidays and greatly subsidized manufacturing facilities to attract companies from around the world.

Unfortunately, these same governments have sometimes looked the other way as air and water quality decline. And they have been less than rigorous in health and labor inspections and quality control—sometimes alarmingly lax. These governments contend that they will catch up on these problems once they have lifted the prosperity of their citizens sufficiently, but in the meantime their industries threaten our planet’s health. At the same time, they are all aggressively climbing the high-tech ladder, claiming more and more competitive 21^st century industries as their own.

In contrast, our country is not competing as aggressively. Certainly, there is no need to enumerate the problems here that have been laid out eloquently in Rising Above the Gathering Storm by the National Academies, in Innovate America by the Council on Competitiveness and in numerous other studies, including A National Innovation Agenda, by two advisory board members of Science Progress. Yet there are a host of questions these reports cannot answer.

The reason: We as a nation badly need to update our view to include the role of government in science and technology in the radically new environment of 21^st century communications technologies, and to debate new ways of working together on open innovation. With this first posting, we start that conversation on what must be done if we are to retain our position among the most innovative and productive countries in the world.

We and others on Science Progress seek a dialog on the following overarching questions:

• How can the United States, its regions, and its localities turn the communications and computer revolution to their advantage?

• What is the role of government in assuring the competitiveness of industries, companies and individual work? Is it possible that to develop “lean government,” characterized by just-in-time, unobtrusive supplier of services to industry, that still protects the public interest?

• Is there a new Federalism? How is the relationship among federal, state and local government changing?

• Can goods be manufactured in America? How must our policies change to stop further decline? What is the role of human capital in a manufacturing renaissance?

The devil is also in the details. We also seek the best available ideas on the more detailed science and technology policies that will be at heart of any new, effective national policies to foster broad economic prosperity. Among these questions:

• As Federal, State and Local governments digitize, what are the benefits and what are the risks of mining that data for public health and safety or for competitive purposes?

• Given that the United States is the only major country to develop its technical standards in a distributive, inclusive fashion, does that give us any advantages in this new era?

• Without government incentives and coordination, are we in danger of becoming a “gadget economy,” where innovation is focused on incremental improvements while larger concerns are unaddressed?

• Is it too late to establish level playing fields through standards or international agreements regarding environment, labor, and other quality of life issues related to companies and the workforce?

• Does the distributive nature of work in an Internet era increase the importance of state and local government?

• At the Federal level, how can the Office of Information and Regulatory Affairs in the White House and quality standards be used to allow the government to function in a real-time, lean manner?

• What changes must occur at universities for them to be real-time suppliers of knowledge and solutions to industry?

• What tradeoffs would this require and under what circumstances should universities make the changes?

• What is the responsibility of companies to local communities in constructing competitive advantage?

Over the course of this year, at Science Progress, we and others will begin to develop detailed answers to these questions, in prelude to the arrival of a new President and a new Congress in Washington and to the election of new state and local officials around the country. This is a debate we as a people need to have about our government and our future. We and others at Science Progress plan to put forward our best ideas on these topics. We hope you will join us.

Jim Turner is Chief Counsel, Committee on Science and Technology, U.S. House of Representatives. Maryann Feldman is the Miller Distinguished Professor of Higher Education at the University of Georgia. Both are writing as individuals and not in their official capacities.