A STRATEGY FOR AMERICAN INNOVATIONThe Administration’s Strategy for American Innovation is guided by the goal of achieving shared prosperity. This involves giving all Americans access to the tools and opportunities to contribute to and share in the prosperity created by the emerging sectors of the 21st century innovation economy. Creating a more innovative America will require investments to ensure that the opportunity to enjoy the fruits of the 21st century economy is broadly shared. This means: * Increasing the diversity of all aspects of the innovation ecosystem; * Supporting thriving regional innovation ecosystems across the United States; * Empowering more Americans to upgrade their skills, using new approaches such as online learning, advanced training technologies, competency-based assessment, and skill-based hiring; * Facilitating the ongoing rebound of advanced manufacturing in America, securing an important source of high-quality, well-paying jobs for American workers; and * Ensuring the framework conditions that facilitate the introduction of new innovations to the marketplace, boosting the prosperity of all American consumers through new products and services and lower prices.National Economic CouncilNEC_09e9e2be-7dd9-11e5-a6a0-a852f9773b4bAmericaAmerica has long been a nation of innovators. The United States is the birthplace of the Internet, which today connects three billion people around the world. American scientists and engineers sequenced the human genome, invented the semiconductor, and sent humankind to the moon. And America is not done yet. United StatesFor an advanced economy such as the United States, innovation is a wellspring of economic growth. While many countries can grow by adopting existing technologies and business practices, America must continually innovate because our workers and firms are often operating at the technological frontier. Innovation is also a powerful tool for addressing our most pressing challenges as a nation, such as enabling more Americans to lead longer, healthier lives, and accelerating the transition to a low-carbon economy.U.S. BusinessesLast year, U.S. businesses created jobs faster than at any time since the 1990s. Now is the time to renew our commitment to innovation to drive economic growth and shared prosperity for decades to come. Now is the time for the Federal Government to make the seed investments that will enable the private sector to create the industries and jobs of the future, and to ensure that all Americans are benefiting from the innovation economy. Federal GovernmentThe Federal Government’s Foundational Role -- When U.S. companies develop a breakthrough product like a smartphone, it is appropriate to celebrate American firms and workers. But it is also important to recognize the value of the decades of Federal investment in R&D that provided these new products’ scientific and technological foundations, such as the Internet, the Global Positioning System, speech recognition, electronic design automation for advanced microprocessors, and artificial intelligence for virtual assistants. Although companies must ultimately invest a great deal to commercialize emerging technologies, the new insights, early prototypes, and the first markets for them are often supported by the Federal Government. Absent Federal investment, many new products would not ever reach the market, let alone reach world-changing scale. The American innovation ecosystem requires not only the risk-taking and vision of the entrepreneur and the ability of the corporation to scale these innovations, but also the foundational “building blocks” of innovation in which the Federal Government invests. For instance, Federally-funded research at universities and Federal laboratories creates a stream of new insights and technological breakthroughs, some of which will ultimately be commercialized by the private sector. These investments also prepare the next generation of scientists and engineers, many of whom will pursue careers in private companies. Indeed, the Federal Government has an important role in ensuring the development of a skilled technical workforce crucial for innovation through supporting the widespread availability of high-quality STEM education. Moreover, Federal investments underpin the physical and digital infrastructure that is not only fundamental to economic activity but also enables new products and business models. For example, the Federal Government plays an essential role in ensuring widespread access to broadband and fostering the development and supporting the adoption of next-generation digital infrastructure. In addition, creating the right Federal policy and regulatory environment is essential to stimulating private-sector investment, whether it is providing patent protection for life-saving drugs, maintaining a free and open Internet, enforcing our antitrust laws, governing the commercial introduction of emerging technologies, or making it easier for startups and rapidly-growing firms to raise capital. Although the Federal Government’s role of creating the right “rules of the road” and investing in the building blocks of long-term economic growth is less visible than that of the entrepreneur, it is critical to America’s economic future.President ObamaIn 2009, President Obama first issued the Strategy for American Innovation, and it was updated in 2011. In this final refresh of the President’s Strategy, the Administration has identified additional policies to sustain the innovation ecosystem that will deliver benefits to all Americans.Office of Science and Technology PolicyOSTP_65d48f68-81c7-11e2-8283-c834b5585148American UniversitiesThe Innovation Ecosystem: Characteristics and Challenges -- The United States possesses strengths across all of the core components of the innovation ecosystem. For example, thanks in part to a legacy of public R&D expenditures, research at American universities leads the world: according to one recent ranking the United States is home to 16 of the world’s top 20 research universities. Meanwhile, America’s culture of entrepreneurial risk-taking drives a dynamic economy in which innovators consistently bring new ideas to the marketplace. In fact, in 2013, more than two-thirds of all venture capital investment in the world was invested in the United States.Knowledge-Intensive IndustriesThe U.S. economy also has the highest concentration of knowledge-intensive and technology-intensive industries as a share of total economic activity among major economies at 40 percent of U.S. gross domestic product. And in high-technology manufacturing, the United States leads the world with a global share of 27 percent.Technology-Intensive IndustriesAmerican ManufacturersYet the U.S. innovation ecosystem faces important challenges. These include the need to rebuild a “commons” for advanced manufacturing in the wake of decades of offshoring, and the challenge of incorporating all Americans and all regions of the country into the innovation process. Facilitating an Advanced Manufacturing Resurgence -- The nation’s innovation capacity is closely tied to a strong advanced manufacturing sector, as innovation spillovers in the manufacturing process across firms are critical for seeding the next generation of products and processes. After a decade of decline in the 2000s, American manufacturing is experiencing a new resurgence as companies re-shore to the United States and new factories open their doors. The significant rebound in American manufacturing since the trough of the recession is impressive under any circumstances, but even more so after decades of offshoring have made scarce some of the domestic R&D, engineering, and production capabilities on which manufacturing depends. This so-called “industrial commons” is provided by universities, large firms, industrial consortia, suppliers, manufacturers, and technical research centers. The industrial commons is critical to turn ideas and inventions into high-quality, cost-competitive products that are manufactured domestically. To fully recover the capacity for future innovation across a variety of industries including biotechnology, pharmaceuticals, advanced materials, and clean energy that comes from the unique knowledge gained in the process of manufacturing, the United States needs to rebuild its industrial commons. AmericansThe Need to Ensure that All Americans Can Participate in the Innovation Economy -- America’s innovation economy is the envy of the world, but the Nation is nowhere near tapping its full potential. The U.S. economy would benefit from even broader participation in the innovation process, giving everyone an opportunity to share in the fruits of the innovation economy. This country’s growing need for technology talent is an important opportunity to broaden access to the innovation economy. America has about 5.8 million open jobs today. Over half a million of those job openings are in information technology (IT) fields like software development, network administration, and cybersecurity—many of which did not even exist just a decade ago. The average salary in a job that requires IT skills— whether in manufacturing, advertising, retail or banking—is 50 percent higher than the average private-sector American job. And increasingly, the training required for these roles can be acquired not just through traditional university and community college curricula, but also through nontraditional means, such as coding boot camps and high-quality online courses that can rapidly train individuals for high-wage jobs.Venture-Backed StartupsYet the entrepreneurial ecosystem would benefit from broader participation. Venture-backed startups are concentrated in relatively few regions of the country, and women lead fewer than three percent of them, even though women currently earn nearly 60 percent of college and master’s degrees. Women are comparably underrepresented in the venture capital partnerships that invest in these firms. Further, according to surveys, 87 percent of U.S. venture capital-backed business founders are white, 12 percent are Asian, and less than one percent are African American. Venture capital investment is also concentrated in a small number of coastal regions, including Boston, Los Angeles, New York City, San Francisco, and Silicon Valley. In too many other parts of the country, access to capital is often a major challenge for aspiring entrepreneurs. By including more Americans in the innovation process, the United States can best sustain American innovation for the long-term while growing the economy.Shared prosperity_09e9e43a-7dd9-11e5-a6a0-a852f9773b4bTo deliver the immediate benefits of innovation [and] lay the groundwork for shared prosperity for decades to come._09e9e534-7dd9-11e5-a6a0-a852f9773b4bInnovationInnovation refers to an idea, embodied in a technology, product, or process, which is new and creates value. To be impactful, innovations must also be scalable, not merely one-off novelties. The President’s Strategy for American Innovation focuses on two broad categories of innovation: Economic GrowthInnovation to drive economic growth and address national priorities: New technologies, products, processes, and business models can drive economic growth, job creation, and increases in productivity. These innovations flow not only from the development of new technologies (e.g. cloud computing, the integration of IT with objects in the physical world through the “Internet of Things,” predictive data analytics, advanced materials, energy storage, life-saving drugs), but also from novel applications of these technologies and new business models that create economic and societal value. Job CreationProductivityInstitutionsInstitutional and public-sector innovation: Historically, some of the most important innovations have been institutional innovations, such as the creation of the patent system, the agricultural extension service, the modern research university, and the peer-review system for supporting basic research. Institutional innovation and experimentation are needed both to improve the performance of the Federal Government and to create a better environment for innovation for the private sector and civil society. Examples of public-sector innovations include paying for results as opposed to paying for inputs; tapping the ingenuity of the American people to solve problems using incentive prizes; using a “test-validate-scale” approach to find and fund what works; and bringing entrepreneurs and world-class technical experts into the Federal Government to transform digital services for the American people. Performance ImprovementResearchThe Research and Development Investment Imperative -- As the 2011 update to the Strategy for American Innovation detailed, government support for R&D is crucial because such research often produces large “spillover” benefits; that is, a portion of the returns to the investment accrues to parties other than the investor, diminishing the incentive for investment. In other words, R&D has the characteristics of a public good. Recent empirical analyses that measure spillover effects suggest that the socially optimal level of R&D investment—the amount that would produce the greatest rate of economic growth—is two to four times greater than our actual spending, and that underinvestment is particularly acute in the area of basic research. As a result, Federal funding for R&D and especially Federal support for basic research is more important than ever.DevelopmentInvestmentOpennessA Changing Innovation Process -- Even the innovation process is changing. Two trends in the innovation process that the Administration’s Strategy for American Innovation embraces are open innovation and declining barriers to entrepreneurship. Open Innovation Traditionally, corporate innovation has concentrated on internal R&D as the primary source of new ideas and products. But increasingly, companies are looking to co-create new products and services with startups, university researchers, and leading-edge users. They are sponsoring hackathons and accelerators, establishing venture capital units, and making it easier for other companies to license intellectual property that they have developed internally. Facilitating these efforts are online innovation marketplaces that reduce the costs of connecting “seekers” with a specific problem to “solvers” with a novel solution. These kinds of approaches have gained widespread acceptance: almost half of the manufacturing firms that created a new product between 2007 and 2009 reported that their most important new product was generated by an outside source.Barrier RemovalDeclining Barriers to Entrepreneurship -- Several trends in the IT industry, including cloud computing and open source software, have dramatically lowered the cost of starting an Internet or software-based business. Startups which might have previously required millions of dollars to launch can now be self-financed by founders. Incubators, accelerators, and business plan competitions are also making it easier for entrepreneurs to start new businesses. These organizations not only provide seed funding, they also enable first-time entrepreneurs to learn from peers and mentors. Online courses and “boot camps” covering topics such as programming, app development, and data science are making it easier for individuals to gain the skills they need to perform important functions at new firms. Barriers to entrepreneurship are declining in other sectors as well. For example, in manufacturing, the tools that are necessary to design and make just about anything, such as computer-aided design software, computer numerically-controlled machine tools, laser cutters, and 3D printers, are becoming more affordable and easier to use. Many communities now have a “maker space,” which offer affordable access to these tools and the skills needed to use them. Crowdfunding websites have provided a funding platform for entrepreneurs developing innovations such as intelligent light bulbs, electric bikes, and wearable devices. In the life sciences, companies have created web-based automated laboratories that allow anyone with a laptop to run experiments remotely. This has the potential to reduce the cost of launching a life sciences startup, to give life scientists the freedom to design experiments without being constrained by the equipment to which they currently have access, and to increase the reproducibility of their results.Building BlocksInvest in the Building Blocks of Innovation_09e9e78c-7dd9-11e5-a6a0-a852f9773b4b1The building blocks of the American innovation ecosystem are those areas where Federal investments provide the foundational inputs to the innovation process:Fundamental ResearchMake World-Leading Investments in Fundamental Research_09e9e890-7dd9-11e5-a6a0-a852f9773b4b1.1The President has consistently called for sustaining America's long-term economic competitiveness and growth through robust investments in fundamental research.STEM EducationBoost Access to High-Quality STEM Education_09e9e9a8-7dd9-11e5-a6a0-a852f9773b4b1.2The President’s plan calls for cultivating the minds of tomorrow’s engineers, scientists, and innovators through strong and sustained investment in science, technology, engineering, and mathematics (STEM) education that engage students from all backgrounds and underpin future economic competitiveness. ImmigrantsClear a Path for Immigrants to Help Propel the Innovation Economy_09e9ead4-7dd9-11e5-a6a0-a852f9773b4b1.3ImmigrantsRecognizing the disproportionate role of immigrants in building an entrepreneurial society and pioneering world-changing discoveries, the President is helping to clear a path for them to continue making significant contributions to the American economy.Physical InfrastructureBuild a Leading 21st Century Physical Infrastructure_09e9ebec-7dd9-11e5-a6a0-a852f9773b4b1.4The Administration is committed to making investments in our nation’s physical infrastructure that will not only create jobs now but also foster innovation and economic growth for the long term.Building a Next-Generation Digital InfrastructureBuild a Next-Generation Digital Infrastructure_09e9ed0e-7dd9-11e5-a6a0-a852f9773b4b1.5The Administration is committed to sustaining investments to ensure widespread access to broadband and to support the adoption of next-generation digital infrastructure.Private-SectorFuel the Engine of Private-Sector Innovation_09e9ee30-7dd9-11e5-a6a0-a852f9773b4b2Private-SectorThe Federal Government can empower private-sector innovators by addressing the market failures that stymie innovative activity and by ensuring framework conditions friendly to experimentation and innovation, including:Tax CreditStrengthen the Research and Experimentation Tax Credit_09e9ef20-7dd9-11e5-a6a0-a852f9773b4b2.1President Obama has proposed broadening, extending, and making permanent the Research and Experimentation Tax Credit, creating substantial and predictable incentives for U.S. businesses to innovate.EntrepreneursSupport Innovative Entrepreneurs_09e9f024-7dd9-11e5-a6a0-a852f9773b4b2.2EntrepreneursTo keep America’s lead as the best place in the world to start and scale a great enterprise, the Administration is working to ensure all Americans have a fair shot at entrepreneurial success. Framework ConditionsEnsure the Right Framework Conditions for Innovation_09e9f182-7dd9-11e5-a6a0-a852f9773b4b2.3The Federal Government can enable a thriving innovation economy by taking steps to ensure that those who strive to introduce new ideas to the marketplace encounter market conditions and rules that facilitate and incentivize their efforts. Federal DataEmpower Innovators with Open Federal Data_09e9f29a-7dd9-11e5-a6a0-a852f9773b4b2.4President Obama has articulated a vision of Federal data as a national asset to be made publicly available wherever possible in order to advance government efficiency, improve accountability, and fuel private-sector innovation, scientific discovery, and economic growth. The Administration has also worked to ensure that more digital data and publications resulting from Federally-funded research are freely accessible to innovators, scientists, and the general public.Federally-Funded ResearchCommercialize Federally-Funded Research_09e9f3a8-7dd9-11e5-a6a0-a852f9773b4b2.5From Lab to Market: The Administration’s Lab-to-Market Initiative is working to accelerate technology transfer for promising new innovations resulting from Federally-funded research that too often face a slow and uncertain path to commercial viability.Regional InnovationSupport the Development of Regional Innovation Ecosystems_09e9f4d4-7dd9-11e5-a6a0-a852f9773b4b2.6The Federal Government is playing a critical role in supporting regional efforts to strengthen local and regional innovation ecosystems that sustain economic growth and job creation.Global CompetitionHelping Innovative American Businesses Compete Abroad_09e9f5ec-7dd9-11e5-a6a0-a852f9773b4b2.7American BusinessesThe Administration is committed to a trade agenda that has significantly boosted exports, eliminated market-access barriers, and expanded intellectual property protections. EmpowermentEmpower a Nation of Innovators_09e9f70e-7dd9-11e5-a6a0-a852f9773b4b3InnovatorsThe Federal Government can help empower more Americans to be innovators:Incentive PrizesHarnessing the Creativity of the American People through Incentive Prizes_09e9f844-7dd9-11e5-a6a0-a852f9773b4b3.1The Administration will continue to build on the important steps the Federal Government has taken to make incentive prizes a standard tool in every agency’s toolbox.Making, Crowdsourcing & Citizen ScienceTap the Talents of Innovators through Making, Crowdsourcing, and Citizen Science_09e9f95c-7dd9-11e5-a6a0-a852f9773b4b3.2The PublicStudentsThe Federal Government is finding new paths to tap the ingenuity of the public to address real-world problems, while also engaging more students in STEM learning and entrepreneurship. These efforts include making, crowdsourcing, and citizen science, among other initiatives.Jobs & Economic GrowthCreate Quality Jobs and Lasting Economic Growth_09e9fa7e-7dd9-11e5-a6a0-a852f9773b4b4Technological innovation is the key source of economic growth for the United States. Coordinated Federal efforts can have large impacts on jobs and economic growth in the following priority areas:Advanced ManufacturingSharpen America’s Edge in Advanced Manufacturing_09e9fbbe-7dd9-11e5-a6a0-a852f9773b4b4.1Leading in manufacturing will strengthen America’s edge in both traditional and high-tech products, and ensure that if it is invented in the United States, it can be made in the United States. The Administration will launch new efforts to support manufacturing startups and to increase the innovative potential of America’s small manufacturers and manufacturing supply chains. The Administration has also set a goal of creating a network of 45 Manufacturing Innovation Institutes within ten years, and has already provided funding for ten.Industries of the FutureInvest in the Industries of the Future_09e9fcea-7dd9-11e5-a6a0-a852f9773b4b4.2Emerging technologies today promise to enable a wide range of transformative products with broad economic impact, just like path-breaking innovations of the past, such as the steam engine and the Internet, transformed the U.S. economy in earlier times. The President is committed to investing in these emerging technologies.Innovation EconomyBuild an Inclusive Innovation Economy_09e9fe0c-7dd9-11e5-a6a0-a852f9773b4b4.3The Administration is taking action to ensure that Americans from all backgrounds can participate in the 21st century innovation economy.National PrioritiesCatalyze Breakthroughs for National Priorities_09e9ff56-7dd9-11e5-a6a0-a852f9773b4b5Maximizing the impact of innovation on national priorities means identifying those areas where focused investment can achieve transformative results to meet the challenges facing our nation and the world: Grand ChallengesTackle Grand Challenges_09ea0082-7dd9-11e5-a6a0-a852f9773b4b5.1The Administration is supporting targeted efforts to meet Grand Challenges, which are ambitious but achievable goals that harness science, technology, and innovation to solve important national or global problems and that have the potential to capture the public’s imagination.Precision MedicineTarget Disease with Precision Medicine_09ea01ae-7dd9-11e5-a6a0-a852f9773b4b5.2The Administration is investing in a Precision Medicine Initiative to understand better the complex mechanisms underlying a patient’s health, disease, or condition, and to predict better which treatments will be most effective.BRAIN InitiativeAccelerate the Development of New Neurotechnologies through the BRAIN Initiative_09ea0302-7dd9-11e5-a6a0-a852f9773b4b5.3The BRAIN Initiative is developing new technologies that will enable a deeper understanding of brain functions, improving the ability of researchers and physicians to diagnose, treat, and prevent diseases of the brain. The BRAIN Initiative could also lead to breakthroughs in computing that are inspired by human perception and cognition.Health CareDrive Breakthrough Innovations in Health Care_09ea042e-7dd9-11e5-a6a0-a852f9773b4b5.4Innovations in health care delivery, growing from collaboration across purchasers, providers, and patients, promise to help improve quality of care, prevent medical errors, and reduce costs. Through the Center for Medicare and Medicaid Innovation, the Administration is testing new care delivery models that seek to deliver the same or better care at significantly lower cost.Vehicle FatalitiesDramatically Reduce Fatalities with Advanced Vehicles_09ea056e-7dd9-11e5-a6a0-a852f9773b4b5.5Accelerating the development and deployment of advanced vehicle technologies could save thousands of lives annually. The Administration is launching new efforts to accelerate the path to deployment for these promising technologies.Smart CitiesBuild Smart Cities_09ea06cc-7dd9-11e5-a6a0-a852f9773b4b5.6CitiesMaking our cities “smarter” means equipping them with the tools to address the pressing problems that their citizens care most about. The Administration has launched a new research and deployment initiative that will invest over $160 million in Federal research and leverage the efforts of a broad network of cities, universities, companies, and nonprofits to achieve real results, such as urban traffic management systems that can reduce commuting times by 25 percent or more.Energy Technologies & EfficiencyPromote Clean Energy Technologies and Advancing Energy Efficiency_09ea0802-7dd9-11e5-a6a0-a852f9773b4b5.7The Federal Government is investing in technologies to enable the development of renewable and other clean energy sources, make energy go further through energy efficiency, and reduce carbon pollution, while helping to improve America’s energy security.Educational TechnologyDeliver a Revolution in Educational Technology_09ea09d8-7dd9-11e5-a6a0-a852f9773b4b5.8With the technological conditions ripe for the development of advanced educational technologies that can transform teaching and learning, the Federal Government is making critical investments in the development of next-generation educational software.Space CapabilitiesDevelop Breakthrough Space Capabilities_09ea0b40-7dd9-11e5-a6a0-a852f9773b4b5.9The Federal Government is developing new space technologies and leveraging partnerships with the private sector to dramatically lower the cost of accessing and operating in space, while enabling ambitious new missions. Such technologies are helping to create a burgeoning U.S. private space sector.ComputingPursue New Frontiers in Computing_09ea0c8a-7dd9-11e5-a6a0-a852f9773b4b5.10Guided by the recently launched National Strategic Computing Initiative, Federal departments and agencies will work together to advance the state of high-performance computing in order to drive economic competitiveness, scientific discovery, and innovation.Global PovertyHarness Innovation to End Extreme Global Poverty by 2030_09ea0dd4-7dd9-11e5-a6a0-a852f9773b4b5.11The Administration is advancing a new model of development grounded in evidence-based evaluation, rapid iteration, country engagement, and partnership that catalyzes talent and innovation everywhere to accelerate efforts to end extreme poverty by 2030.GovernmentDeliver Innovative Government with and for the People_09ea0f46-7dd9-11e5-a6a0-a852f9773b4b6With the right combination of talent, innovative thinking, and technological tools, government can deliver better results with and for the American people: Innovation ToolkitAdopt an Innovation Toolkit for Public-Sector Problem-Solving_09ea109a-7dd9-11e5-a6a0-a852f9773b4b6.1The Administration is creating an “Innovation Toolkit” that will increase the ability of agencies to deliver better results at lower costs for the American people. These approaches can increase the effectiveness and agility of the government through improvements in its core processes and ability to solve problems.Innovation LabsFoster a Culture of Innovation through Innovation Labs at Federal Agencies_09ea11e4-7dd9-11e5-a6a0-a852f9773b4b6.2Federal AgenciesA network of Innovation Labs can foster a culture of innovation at Federal agencies by empowering and equipping agency employees and members of the public to implement their promising ideas to more effectively serve the American people.Digital ServiceProvide Better Government for the American People through More Effective Digital Service Delivery_09ea1356-7dd9-11e5-a6a0-a852f9773b4b6.3It should be as easy and intuitive for American citizens and businesses to engage with government services online as it is for them to conduct online transactions with the most IT-savvy businesses. The Administration is creating U.S. Digital Service teams across government to speed the adoption of private-sector best practices for designing, building, and deploying easy-to-use online services.Social InnovationBuild and Use Evidence to Drive Social Innovation_09ea14aa-7dd9-11e5-a6a0-a852f9773b4b6.4The Administration is committed to improving our ability to solve societal problems by using evidence about “what works” where it exists and developing it where it does not. The Administration is also using Pay-For-Success approaches to pay for outcomes as opposed to inputs, and to scale-up evidence-based interventions.2015-10-28https://www.whitehouse.gov/sites/default/files/strategy_for_american_innovation_october_2015.pdfOwenAmburOwen.Ambur@verizon.net