Fostering an innovation-based economyIn the last articles of Innovation Models, we addressed micro issues concerninginnova...
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Post brooking's study

  1. 1. Fostering an innovation-based economyIn the last articles of Innovation Models, we addressed micro issues concerninginnovations in a specific industry and theory on innovation as a whole. Brooking’s Study on“Building an Innovation-Based Economy” by Darrell West, Allan Friedman, and WalterValdiviaapproaches the issue of innovation more broadly, with various suggestions andrecommendations not only in the private but also in the public level in order to create aneffective innovation-based economy. The most general ideas of the study are policyrecommendations for government: In their recommendations, theyargue that the primary goalsof policymakers should be: ensuring conditions that promote innovation and entrepreneurship inthe private sector, leveraging the digital economy in a way that boosts government services andmakes agencies more efficient and effective, enhance digital infrastructure and provide data thatallows the proper measurement of economic figures and laying the foundation for a strong,educated, and innovative workforce. More specifically the study reveals that policymakersshould fosterthe improvement of metrics that value worker productivity; invest on the mating ofentrepreneurial skills and academic life and the expansion and create conditions for start-ups toevolve, to encourage entrepreneurship early on, which encourages government to get moreinvolved in entrepreneurial activity by providing credit and/or tax breaks to new businesses;legislate the improvement of infrastructures that enable the evolution and widespread ofcommunications which facilitates business everywhere; improve the harmonization of cross-border laws that facilitate communication and freedom of expression; improve technologicaltransfer and commercialization of knowledge from universities to public and private companiesso that both public and private investments translate into jobs and economic activity as well asbetter health, security, and well-being.This study focuses on turning the US economy into a more innovation-based economyby appealing to policymakers to create legislation and programs that facilitate the creation ofnew businesses. Even though it is primarily directed to the US economy and it’s issues with thelack of innovation in some sectors, the study presents more general examples and guidelines ofimportant policy that can be applied outside the US. One of the most impressive statements inaddressing this issue is the concern for the improvement of infrastructures that facilitatecommunications, since it is normally not a big issue in most developed economies but it isextremely important in the US. Another issue in fostering an innovation-based economy thatcan be applied outside the US is building an educated and innovative workforce, and reducingbottlenecks in the dissemination and commercialization of knowledge, which is crucial for astarting point in building a strong and ever so innovative business environment in the long-run.Brooking’s study focuses on the US economy, however some of the policies andstructural reforms that the authors suggest were already implemented in some countries andmost of them are now an example of groundbreaking sustainable innovations. Such is theexample of Japan and Finland. The source for this claim is the Global Competitiveness Index ofthe World Economic Forum; a complete and thorough index that measures the competitivenessof OECD countries, comprised of 12 pillars that formulate macro-economic and business datainto a competitiveness ranking. We will be using the last pillar, and one of the most importantones to formulate the point we are making above. Below are the matrices of these 3 countries,the US, Finland and Japan. Upon analyzing the matrices, the level of innovation in both Finlandand Japan top the list, however, in other pillars that compose the competitiveness index there issome evidence of their difference to the US. Japan is on average with innovation-driveneconomies while Finland is above average on most pillars except market size and infrastructure.Both these economies have higher levels of business sophistication and institutions which arepillars fundamental for the fostering of innovations in any country.