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Research and development drives innovation and innovation drives long-run economic growth, creating jobs and improving living standards in the process. University-based research is of particular importance to innovation, as the early-stage research that is typically performed at universities serves to expand the knowledge pool from which the private sector draws ideas and innovation. As such, it is troubling that in 2008 the United States ranked 22nd out of 30 countries in government-funded university research and 21st in business-funded university research. Moreover, the nation is falling even farther behind. From 2000 to 2008, the United States ranked 18th in the growth of government-funded university research, with countries like China, Korea and the United Kingdom significantly outperforming the United States. Worse still, the United States ranked 23rd in the growth of business-funded research, with it actually declining as a share of GDP. In contrast, collaboration between universities and business grew dramatically in nations like Austria, China, Israel and Taiwan. Given the importance of university research to the U.S. innovation system, and the primary role that innovation plays in economic growth, competitiveness, and job creation, the data presented in this report should serve as a wakeup call for U.S. policymakers. The United States can no longer rest on its laurels and assume that its universities will continue to lead the world, just because they once did. It is up to policymakers to recognize the existence of the problem, and then to implement policies that target the specific areas of deficiency, such as the underfunding of university research. Then, and only then, will the United States be able to restore its position as the global innovation leader. (Contains 4 figures, 7 tables, and 42 endnotes.)

While every state continues to experience the impacts of the economic downturn and resulting recession, it will be many years before people understand the full nature and causes of the financial crisis. But it appears that one of the contributing factors to both the crisis and the anemic nature of the recovery has been the weakened position of the U.S. economy in global markets. This relatively untold story of the recession and recovery is, in fact, perhaps one of the major developments in the U.S. economy, one that will have significant impacts on state economies for decades into the future--particularly if the nation continues to ignore the issue. Some have argued that, given the economic downturn, now is not the time to focus on innovation; rather, everyone's chief concern should be job creation. Yet, fostering innovation and creating jobs are by no means mutually exclusive. To be well positioned to drive innovation-based growth, state economies need to be firmly grounded in "New Economy" success factors. This report uses twenty-six indicators to assess states' fundamental capacity to successfully navigate the shoals of economic change. It measures the extent to which state economies are structured and operate according to the tenets of the New Economy. In other words, it examines the degree to which state economies are knowledge-based, globalized, entrepreneurial, IT-driven, and innovation-based. With these indicators as a frame of reference, the report then outlines a new approach to state economic development based on the need to move to "win-win" strategies that help both states and the overall U.S. economy better compete in the new global economy. Weighting Methodology is appended. (Contains 1 box, 26 data sources and 102 endnotes.)

Legislation introduced in Congress last month (the "Combating Online Infringement and Counterfeits Act") would take an aggressive and needed stand against online piracy, a growing problem that hurts American consumers and costs Americans jobs. Critics of the legislation argue that this bill would hurt free speech, encourage censorship in foreign countries, and cripple the technological infrastructure on which the Internet runs. Not only is this criticism unfounded, but more robust enforcement of digital copyrights would likely lead to a stronger Internet ecosystem and more innovative content and services for consumers. This paper does the following: discusses the problem of digital piracy; provides an overview of the "Combating Online Infringement and Counterfeits Act; provides a response to the critics of the legislation; and explains what's really behind these criticisms. (Contains 13 endnotes.)

For many years, debates over telecommunications network policy were marked by a relative lack of partisan and ideological conflict. In the last decade, this has changed markedly. Today, debates over a whole set of issues, including broadband competition, net neutrality, copyright, privacy, and others, have become more contentious. These disagreements don't stem just from politics, in the sense of conflicts between interests. They also reflect differences over doctrine--differences in deeply held views about appropriate kinds of network policy. Based on these views, different people stress different goals and values and work under different assumptions about how networks and economies work. While many network policy issues have an engineering basis, with disagreements revolving around technical matters, much of network policy is based in economics. And despite what many economists claim, economic approaches to the Internet differ substantially. These approaches reflect differences of economic doctrine among economists, policy makers and others. This paper postulates and describes four competing economic doctrines: conservative neoclassical, liberal neoclassical, neo-Keynesian, and innovation economics. It explains how each doctrine leads to different views of appropriate network policy and explores the influence of doctrine on four controversial network policy issues: broadband competition, net neutrality, copyright, and privacy. (Contains 89 endnotes.)

In recent years, the information technology (IT) revolution has transformed American industry--leading to new types of work processes and business organizations, and increased productivity and consumer innovations--but by and large, this game-changer has bypassed America's schools. Virtually all K-12 schools in the country are connected to the Internet, and the student-to-personal computer ratio has declined steadily. Unfortunately, however, IT has been limited to reinforcing--albeit improving--existing modes of teacher instruction rather than transforming them. This is not good enough. America's K-12 education system not only is failing to educate most students well, contributing to a decline in U.S. economic competitiveness, but is increasingly not financially viable. Fortunately, IT has the power to dramatically remake American schooling, raising performance while potentially simultaneously cutting costs. This report discusses why the existing school reform movement has stalled, how IT can enable the emergence of fundamentally new kinds of schools, particularly middle and high schools, and what the states and the federal government need to do to drive the emergence of these new ways of educating our nation's future generations. In particular, we believe that IT is enabling the emergence of a new kind of pedagogy that is focused on meeting the needs of individual students ("mass customization"). This IT-enabled approach would mark a departure from current pedagogy in which all students are treated more or less alike ("mass production"). To drive this kind of fundamental pedagogical reform in the direction of "mass customization," IT believes that the federal government and states should do the following: (1) Each state should establish a state-level "New-Schools" entity for innovation, with the power and authority to realize a program of school innovation enabled by IT; (2) The Obama Administration should become a champion for school redesign and the creation of "NewSchools" authorities; (3) Congress should create a "NewSchoolsAmerica" Fund; and (4) Congress should allow new innovative schools to be evaluated outside the framework of the federal No Child Left Behind Act (NCLB). (Contains 2 figures and 28 endnotes.)

If America is to succeed in the innovation-powered global economy, boosting math and science skills will be critical. This is why a wide array of task forces and organizations has recently raised the clarion call for more and better scientists and engineers. While the policy proposals offered are wide ranging, one key policy innovation has surprisingly been largely ignored: the role of specialty math and science high schools. Today, there are well over 100 of these high schools throughout the nation. And evidence shows that these schools are a powerful tool for producing high school graduates with a deep knowledge and strong passion for science and math that translates into much higher rates of college attendance and graduation in scientific fields. As a result, any solution to the scientist, technician, engineer, and mathematician (STEM) shortage must include a national commitment to expand the number of specialty math and science high schools. To do this, Congress should allocate $180 million a year for five years to the National Science Foundation to be matched by states and local school districts and industry with the goal of tripling enrollment in math and science high schools to around 140,000 by 2012. (Contains 3 figures, 1 table and 27 endnotes.)