Mitt Romney's new economic plan, released yesterday, places him in the company of a growing club of conservative innovation hawks who support public investment in energy technology and an innovation agenda.
In an effort to distinguish themselves from the pack, and in anticipation of tonight's debate, the various Republican presidential candidates are stepping forward with their own well-tailored plans to spur economic recovery and "renew American greatness." In the process, Mitt Romney stands out in favor of federal investment in innovation, particularly in the clean tech sector, joining a growing cadre of influential conservative "innovation hawks" who advocate sensible and bipartisan policies for growing the economy.
Mitt Romney, former Massachusetts governor and leading Republican candidate for president, released his economic plan yesterday. The hefty report, "Believe in America," (PDF) comes in at 160 pages and describes Romney's 59-point plan to "revitalize our economy and to reignite the job-creating engine of the United States." One of his seven central areas of focus is energy, and his proposed policies go beyond the boilerplate "drill, baby, drill" and "cap-and-tax" GOP rhetoric. Indeed, Romney's energy plan adopts an encouraging agenda centered around innovation, R&D, and limited direct public investment.
From hybrid crops to blockbuster drugs, nuclear power to wind power, and microchips to the Internet, government support was critical to the productive public-private partnerships that spawned so many revolutionary American technologies.
This presentation was delivered by Jesse Jenkins (Director of Energy and Climate Policy, Breakthrough Institute) and Daniel Sarewitz (Director, Center for Science, Policy, and Outcomes, ASU; Breakthrough Institute Senior Fellow) at the Energy Innovation 2010 Conference, December 15th, 2010.
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Apple, Amgen and General Electric. Bill Gates, Thomas Edison, and Alexander Graham Bell.
We are all familiar with these genius inventors and titans of industry.
Yet most of us remain unaware of the almost constant presence of a silent partner in American innovation: the federal government.
We might recall something about microchips and the space race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of government support for technology innovation.
As we gather today to consider how to drive forward the dramatic innovation needed to deliver cheap, clean and massively scalable energy sources to power world, we would do well to pause and take a look back at the United State's long history of limited but energetic public investment in breakthrough technologies.
Where do good technologies come from? The history of American innovation shows that an active partnership between the public and private sectors has been key to developing breakthrough technologies, which have driven generations of economic prosperity. In an updated report, the Breakthrough Institute explores this partnership through a set of case studies in American innovation.
Driving directions from your iPhone. The cancer treatments that save countless lives. The seed hybrids that have slashed global hunger. A Skype conversation while flying on a Virgin Airlines jet across the continent in just five hours.
Where did these everyday miracles come from?
As soon as the question is asked we know to suspect that the answer is not as simple as Apple, Amgen, or General Electric. We might recall something about microchips and the Space Race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of American government support for technology and innovation. Our gratitude at being able to video chat with our children from halfway around the world (if we feel gratitude at all) is directed at Apple, not the Defense Department. When our mother's Neupogen works to fight her cancer, we thank Amgen, not NIH or NSF.
By Rob Atkinson, Ted Nordhaus, and Michael Shellenberger
For forty years, presidents and policymakers have promised and planned for a new energy future just over the horizon. While the rationales have varied - reducing dependence on imported oil, stopping global warming, reducing air pollution, creating clean energy jobs - the song has largely remained the same: America has most, if not all, of the technologies needed today to make a quick and relatively painless transition away from fossil fuels.
Yet America is more dependent upon fossil fuels than ever before. U.S. oil consumption rose from 15 to 20 million barrels a day between 1970 and today, while coal still provides about 50 percent of our electricity. U.S. carbon emissions continue to rise unabated, as efforts to cap them have repeatedly foundered in the face of daunting political, economic, and technological obstacles. And renewable technologies like wind and solar only meet a tiny fraction of America's energy needs despite several decades of efforts to subsidize their deployment.
When experts convene in Washington next week to discuss energy policy at the Energy Innovation 2010 conference, they will do so in the wake of yet another failed federal effort to pass legislation to support a transition away from fossil fuel-based energy.
Although it may make the Wall Street Journal and Fortune magazine writers uncomfortable, the kinds of market failures that plague energy innovation, combined with a clear public imperative for transformative change, is a recipe demanding more active government engagement with innovation and industry, not less.
Marc Gunther, the excellent Fortune magazine and GreenBiz.com writer and fellow blogger at the Energy Collective, published a piece last week skeptical of the Obama Administration's new push to support the commercialization of advanced batteries in the United States and help accelerate the day when efficient plug-in hybrid electric vehicles are rolling off American assembly lines and parked in a driveway near you. At issue is $2.4 billion in new funding made available by the U.S. Department of Energy to support advanced battery commercialization and manufacturing.
Gunther quotes a Wall Street Journal article that shares his skepticism of this new funding, which will (in their words) "annoint" new technological and corporate "winners" -- something the Journal clearly sees as an unnecessary intrusion of government on free markets. Gunther agrees, writing:
"They've got a point, though, don't they? One unhappy result of all the bank bailouts of the fall is that $2.4 billion doesn't seem like much--hey, Citi alone has collected north of $45 billion, last time I checked--but a billion here, a billion there, and you're starting to talk real money. And if electric cars are going to be as big a business as a lot of people think, then why government investment should be needed at all? Particularly since we have a climate change bill making its way through Congress that will, at long last, if all goes well, put a price on carbon emissions--thereby giving low-carbon energy sources what they desperately need, which is a fighting chance to compete with fossil fuels on something resembling a level playing field. I thought the whole idea behind cap-and-trade (which I strongly favor) is to capture the externalized cost of global warming pollutants, and then let the market figure out how best to reduce greenhouse gas emissions: regulation that would have a light touch but a profound impact.
But no--with Waxman-Markey, CAFE standards, biofuels mandates, subsidies for "green jobs" and the like--the administration is giving us a belt and a couple of pairs of suspenders, too. Much as I admire Steven Chu, the energy secretary, do we really want to entrust him and his staff to decide which battery technologies are likely to succeed and which companies can most wisely spend that $2.4 billion?"
And as much as I respect Marc Gunther, I quickly took issue with this pretty classic set of objections to government involvement in technological development. I wrote this response, which Gunther dubbed "Defending Big Government," and was happy to post at his personal blog and at GreenBiz. It has now been syndicated at The Energy Collective and at Reuters as well. Here it is for Breakthrough readers:
Japan and Germany, two somewhat unlikely nations, are now world leaders in solar energy installations and are home to booming domestic solar industries. The secret of their success: sustained public investments in both the development and deployment of solar energy technology. Each nation took a distinct path, and lessons can be learned form both.
A solar array installed along a highway near Freiburg, Germany. Japan and Germany, two somewhat unlikely nations, are now world leaders in solar energy installations and are home to booming domestic solar industries. The secret of their success: sustained public investments in both the development and deployment of solar energy technology. Each nation took a distinct path, and lessons can be learned from both.
Two distinct paths led two very different nations--Germany and Japan--to become global leaders in the production and installation of solar photovoltaic technology. Motivated variously by concerns over security, health, climate change and high energy prices, these nations are now home to robust and growing solar industries and solar panels can be found on hundreds of thousands of rooftops across these nations. However, differences in the public policies employed by each nation led to different results: Germany's solar industry is still dependent on subsidized power production costs, while Japan's investments to drive down the costs of solar energy have successfully created a domestic industry that has been independent of federal subsidies since 2005.
Since 1979, the Danish government, through intelligent, sustained public investment, has mobilized the nation in the development of next-generation wind energy. Today, a third of all wind turbines produced in the world are made by Danish firms, and wind power provides twenty percent of the nation's electricity.
Wind turbines, like those deployed across Denmark. Since 1979, the Danish government, through intelligent, sustained public investment, has mobilized the nation in the development of next-generation wind energy. Today, a third of all wind turbines produced in the world are made by Danish firms, and wind power provides twenty percent of the nation's electricity.
At the mouth of Copenhagen harbor, twenty giant wind turbines, arranged in a graceful arc, turn in the coastal breeze. This is Middelgrunden, Denmark's first cooperative wind farm and a symbol of that tiny country's impressive wind energy industry. Middelgrunden's turbines, installed in the late 1990s, were designed by Danish engineers, built and installed by Danish technicians, and generate enough electricity to power 40,000 Danish homes. Perhaps most impressively, the project is owned by over 8,500 cooperative members who share the profits of clean energy generation.
Middelgrunden is a result of Denmark's long and successful collaboration between private industry, individual citizens and, most importantly, strong government support. Since 1979, the Danish government, through intelligent, sustained investment, has mobilized the nation in the development of next-generation wind energy, and the results have been impressive. Today, Danish firms account for one third of the global wind power market and have driven the creation of a booming multi-billion dollar industry. In Denmark alone, 6,300 wind turbines pump energy into the regional grid today, providing roughly twenty percent of the nation's electricity. Wind power accounts for some 25,000 Danish jobs, and in 2007, the industry exported 4.7 billion euros worth of energy technology. Without a doubt, government involvement in the wind sector enabled this Danish success story.
The story of the PC is usually a romantic tribute to the unrestrained genius of lone inventors tinkering in garage workshops. Yet history shows that the active support of the federal government, particularly the U.S. military and space programs, was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
An antique Apple II, one of the first commercial personal computers. The story of the PC is usually a romantic tribute to the unrestrained genius of lone inventors tinkering in garage workshops. Yet history shows that the active support of the federal government, particularly the U.S. military and space programs, was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
The legend of the personal computer (PC), as it's normally told, emphasizes individual brilliance and initiative. The origins of today's industry titans like Microsoft and Apple are surrounded by romantic images of college dropouts tinkering away in garage workshops. This story is one of independence, of genius allowed to run free and inventions flourishing in the open market. Of course, the government is conspicuously absent here; as Bill Gates has said, "the amazing thing is that all this happened without any government involvement."
The PC legend may be compelling, but like all legends, it has more to do with fiction than fact. While the role of individual innovators can hardly be understated, the active involvement of the federal government - especially the military - was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
The purchasing power of the federal government made the microchip an affordable and ubiquitous technology. Government procurement drove the price of microchips down by a factor of fifty in just a matter of years. Consider this: without these public investments in the semiconductor revolution, your iPod would cost $10,000 and be the size of a room!
A modern microprocessor. The purchasing power of the federal government made the microchip an affordable and ubiquitous technology. Government procurement drove the price of microchips down by a factor of fifty in just a matter of years. Consider this: without these public investments in the semiconductor revolution, your iPod would cost $10,000 and be the size of a room!
In 1958, a truly groundbreaking idea was finally realized in the laboratories of Texas Instruments (TI). For years prior, engineers had struggled to design circuits that could drive the increasingly sophisticated electronics of the time. Complex electronic processes required circuits involving many transistors, which had to be painstakingly soldered together, and the connections were unreliable and difficult to produce.
Jack Kilby, a TI engineer, realized that this connection problem - known to the electronics industry as the "tyranny of numbers" - could be solved by making all the transistors in a circuit, as well as their connections, out of a single piece of material. In the late summer of 1958, Kilby carved a complex circuit out of a single piece of germanium metal, and the "integrated circuit" - also known as the microchip - was born.
Other engineers, most notably Robert Noyce of Fairchild Semiconductor, quickly improved on Kilby's design, turning a prototype into a promising new innovation. But the future of the microchip was by no means certain. It took the buying power of the U.S. government to make the microchip into a mass-produced, affordable and ubiquitous piece of technology.
Powered human flight was invented in the United States, but by the First World War, America lagged behind in the emerging field of aviation. By mid-century, government support, ranging from R&D programs to deployment contracts, had restored U.S. expertise in aeronautics and laid the foundations for the modern aviation industry
The Wright Flyer on display in the National Air and Space Museum. Powered human flight was invented in the United States, but by the First World War, America lagged behind in the emerging field of aviation. By mid-century, government support, ranging from R&D programs to deployment contracts, had restored U.S. expertise in aeronautics and laid the foundations for the modern aviation industry.
American names like Samuel Langley and the Wright brothers loom large in the history of early flight. But just a few years after Kitty Hawk, America was already lagging behind other nations in the mastery of aviation. European governments poured resources into aeronautics over the early 20th century, compelled by the military needs of the First World War. In 1913, America ranked 14th in government spending on aircraft development, languishing in the company of Brazil and Denmark. Even as Britain, France and Germany made leaps and bounds in aviation design, Langley's "Aerodrome" lay dusty and abandoned in a Smithsonian lab.
By mid-century, however, the U.S. was well on its way to restoring its place at the forefront of civil and military aviation. U.S. factories were churning out better planes, ever faster and cheaper, and American researchers were pioneering radical improvements in aircraft design. Government involvement, from research support to deployment initiatives, was the critical catalyst for this remarkable turnaround, laying the foundations for America's modern aviation industry.
The single greatest solution to the world's interlinking energy, economic and climate crises is to once again harness America's forces of innovation to make clean energy technology both cheap and abundant. To harness this solution we must take a new look at the process of innovation and determine the best mechanisms to catalyze and accelerate technology development.
"It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply."
Technology is a cornerstone of American prosperity, the primary source of our economic competitiveness, and a constant presence in our everyday lives. From the 19th century's advances in manufacturing and transportation to today's cutting-edge developments in biotechnology and computer science, Americans have been world leaders in creating, producing, and deploying innovative technology. Nobel Laureate Robert Solow's classic 1956 economic model of productivity growth demonstrated that technological progress drove at least 80% of economic growth in the United States between 1909 to 19491, and innovation continues to be perhaps the most powerful engine of our prosperity.
Today, America and the world are in energy crisis. Energy prices are escalating, foreign energy dependency is increasing, global warming continues unabated, and all across the world there are billions of people who continue to live without access to energy. The single greatest solution to these crises is to once again harness America's forces of innovation to make clean energy technology both cheap and abundant.
But to harness this solution we must take a new look at the process of innovation and determine the best mechanisms to catalyze and accelerate technology development. This requires looking beyond both the mythos of the lone American inventor and the market fundamentalist ideology that has dominated American politics in recent decades. Instead, we must look closely at several key American technologies and unearth the historic and seemingly ubiquitous government investments that fueled their development.
In a 2009 report, the Breakthrough Institute illuminates the stories behind the invention and diffusion of ten technologies that are everyday facets of our modern lives and offers a new look at government involvement in technological development.
In a report released in 2009, the Breakthrough Institute illuminates the stories behind the invention and diffusion of ten technologies that are everyday facets of our modern lives and offers a new look at government involvement in technological development.
The conventional wisdom on climate change -- from Thomas Friedman to the country's largest environmental organizations -- is that cap and trade regulation and carbon pricing is the best way to promote clean energy innovation. However, a growing number of experts, including Newsweek's Fareed Zakaria, are challenging this assumption, recognizing the importance of direct, large-scale public investment to achieve developments in clean energy technology. The outcome of this debate and the correct emphasis on public investment and regulation may determine the course of U.S. and global climate policy.
Case Studies in American Innovation presents ten case studies showing that public investment and active government support has been one of the greatest forces behind the nation's technology development and economic growth. Indeed, public investment in the U.S. was largely responsible for railroads, airplanes, microchips, personal computers, and the birth of the Internet -- all of which drove long-term economic development. This evidence not only challenges conventional wisdom on climate policy, but also on national economic policy, which has been dominated for three decades by neoclassical economists.
