The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

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.

Continue reading "Soaking Up the Sun: Solar Power in Germany and Japan" »

The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

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.

Continue reading "Inheriting the Wind: Danish Wind Power" »

The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

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.

Continue reading "Silicon Valley Garage or Government Lab: Personal Computing" »

The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

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.

Continue reading "The Semiconductor Revolution: Microchips" »

The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

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.

Continue reading "From Kitty Hawk to Boeing Field: the Aviation Industry" »

The following is the introduction to the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

"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."

Summary

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.

Continue reading "An Introduction to Case Studies in American Innovation" »

In a new report released today, 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 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.

The new Breakthrough Institute report, 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.

You can download the full document here or read the following excerpts from the new report on our blog here:

• Introduction to Case Studies in American Innovation
  
• From Kitty Hawk to Boeing Field: the Aviation Industry
  
• The Semiconductor Revolution: Microchips
  
• Silicon Valley Garage or Government Lab: Personal Computing
  
• Inheriting the Wind: Danish Wind Power
  
• Soaking Up the Sun: Solar Power in Germany and Japan
  

See the report's full table of contents below the fold...

Continue reading "BREAKTHROUGH REPORT: Case Studies in American Innovation" »

The opportunity to advance transformative, progressive change has never been greater. Now, in the wake of the 2008 election and the historic Power Shift summit, young progressives have a unique opportunity to take a step back and look at the big picture: How can the we continue advancing bold solutions on energy and climate? What can young people do beyond energy and climate? And if national climate legislation succeeds, what's the next "Big Idea" for the progressive youth movement?

These are just some of the ideas we're exploring in a Special Breakthrough Issue - "After Power Shift: What's Next?" - to examine the next steps for the progressive youth movement. The issue will include contributions from some of the country's top young leaders throughout the week, and we hope you'll join the discussion. Here's our first piece to kick it off.

---------------------------------------------

Want to Save the World? Make Clean Energy Cheap.

By Teryn Norris & Jesse Jenkins
The Huffington Post

Over 12,000 young adults attended the recent Power Shift 2009 summit in Washington, DC. Their goal? Building the largest youth movement in decades to save the world from global warming.

Largely missing from Power Shift, however, was a critical group: young scientists, engineers, and entrepreneurs. Maybe it was mid-terms. Perhaps the event seemed too political. Or maybe the summit recruited too many traditionally-defined "activists."

Whatever the cause, we have very little chance of overcoming climate change without enlisting young innovators at a drastically greater scale. Simply put, they represent one of the most important catalysts for creating a clean energy economy and achieving long-term prosperity.

The reason is this: at its core, climate change is a challenge of technology innovation. Over the next four decades, global energy demand will approximately double. Most of this growth will happen in developing nations as they continue lifting their citizens out of poverty and building modern societies. But over the same period, global greenhouse gas emissions must fall dramatically to avert the worst consequences of climate change.

Continue reading "Want to Save the World? Make Clean Energy Cheap." »

The Huffington Post has featured an op-ed by me and Jesse Jenkins, "The Danger of Green Stimulus," which issues a cautionary note about losing sight of climate objectives amidst all the fervor about green jobs and green stimulus:

The Danger of Green Stimulus
By Teryn Norris and Jesse Jenkins
The Huffington Post
January 5th, 2009

Barack Obama's final appointments in December indicate a strong commitment to action on climate change. Steven Chu as Energy Secretary, Carol Browner as Energy & Climate Czar, John Holdren as Assistant for Science and Technology -- just to name a few recent selections -- are all proponents of vigorous action to cut U.S. global warming pollution and take leadership on a new international climate treaty. And Hilda Solis, Obama's new Labor Secretary, is a champion of "green jobs."

All is well on the climate front, it seems. Except that it's not.

Carbon cap and trade regulation remains the top federal policy priority for the majority of environmental groups. But in June, cap and trade legislation failed in the Senate, and sixteen Democratic Senators from coal and manufacturing-heavy states voiced their opposition to high carbon pricing. The policy faces even greater obstacles in today's economic climate, since it would increase the energy bills of the American public.

Continue reading "The Danger of Green Stimulus" »

By John Alic

Throwing money at R&D can be a good thing. Indeed, it may sometimes be the only thing to do. But not for energy and climate change.

Energy analysts sometimes urge dramatic increases in government R&D spending while at the same time pointing to "barriers" that seemingly impede applications of existing, cost-effective technologies. Supposedly, if the impediments could be somehow removed, these technologies would wash through the economy, saving energy, reducing dependence on oil imports, and cutting carbon dioxide emissions. In fact, R&D seldom leads in any simple and direct way to applications. Diffusion is almost always and everywhere slow, even for breakthrough technologies. And there is nothing very special about energy technologies except the reluctance of advocates to recognize parallels with the slow pace of diffusion elsewhere in the economy.

Continue reading "Throwing Money at R&D" »

By Michael J. Piore
David W. Skinner Professor of Political Economy, Massachusetts Institute of Technology

This post is the prepared paper for a lecture Professor Piore delivered on December 1st as part of a conference entitled, "How Will a New Administration and Congress Support Innovation in an Economic Crisis?"

This conference, and more particularly the background papers around which it is organized, constitutes a radical shift in the tenor of the technology policy debate. That shift is away from what Fred Block calls "market fundamentalism" and toward a call for active government involvement in the management of the economy. This shift is rapidly becoming pervasive in all areas of government and all aspects of economic activity. Indeed, it is actually less dramatic in technology policy than in many other areas, the tone of the paper not withstanding. The real message of the background papers is that the government has been much more actively involved not only in promoting technological innovation but also in giving it particular direction than the rhetoric surrounding the policy debate has admitted. So the paper framing the discussion here is less a call for new activity than for a more deliberate and self-conscious approach to the activities in which government is already engaged. But while in this case the tone may belie the substance, that tone heralds the emergence of a very general shift, one which is taking place across the policy spectrum, in areas ranging from social policy to credit policy, and even in the minutia of wage setting and compensation. And it is to the general problems posed by this shift that I want to speak here, although I will try to illustrate my remarks by reference to technology.

Continue reading "Learning on the Fly: Reviving Active Governmental Policy in an Economic Crisis" »

By Ron Hira
Assistant Professor of Public Policy, Rochester Institute of Technology

In introducing Bill Richardson as his Administration's Commerce Secretary, President-elect Barack Obama declared that Richardson would lead the charge to "create millions of new jobs that can never be outsourced." This kind of rhetoric shouldn't surprise anyone since Mr. Obama criticized the practice of companies moving jobs offshore often during the campaign and used it to his political advantage.

Alas, the reality is that Mr. Obama has not backed up his rhetoric with a plan to create and retain jobs here. His proposals on tax deferment and a 1% tax credit for so-called "Patriot Employers" would have an insignificant impact on what is a major structural shift in how the economy operates. And early indications are that Mr. Obama is not going to make either of these proposals, which would face fierce political opposition from companies, a priority. There are no other specific proposals from Mr. Obama that address outsourcing, and it's doubtful that any are forthcoming. His economic advisors are either involved in shipping jobs overseas as CEOs or have supported the practice in policy, think tank or academic positions.

Continue reading "Offshoring, Innovation & Economic Stimulus: Creating Sticky Jobs Through Policy" »

By Sunil Paul
Founder, Spring Ventures

Experience is a wonderful thing, but sometimes it leads to the wrong conclusion. We've all heard the chestnut about generals fighting the last war. Today in the cleantech world, the rules of government engagement that we learned from our proving grounds in information technology and biotech are hurting us. We have to reform our strategy if we're to build the clean-energy Googles, the green-business Amgens, and green-job Dells of the future.

When many of us built successful internet and computer companies we we avoided active government engagement. We didn't particularly want government as a partner or customer and certainly not as a regulatory agent. We thought government support was the kiss of death. When we did engage it was usually after our companies were large and profitable and then only after we perceived assaults like regulation, internet sales tax, export controls, intellectual property, and stock option accounting. Even today, if you are a software, computer, or internet startup, you can largely ignore the government other than obeying the law.

Continue reading "Forget What You Know: Why Cleantech Entrepreneurs Need to Forget the Lessons from the IT Revolution" »

By Victor W. Hwang
Managing Director, T2 Venture Capital

There is much talk today about the need to invest in innovation. Saying this will not make me many friends, but I'll say it anyway: you really shouldn't listen to venture capitalists. Asking a typical venture capitalist to tell you how to enhance innovation is like asking a football player how to manufacture modern athletic footwear. The truth is that most venture capitalists don't really know why the American innovation system works the way it does; they just think they're really smart.

Smart government policy generally tries to smooth out inefficiencies, but venture capitalists like inefficient markets. Inefficiency means there is imbalance in a system, which means someone can make a profit by "arbitraging" that inefficiency (in simple terms, "buying low and selling high"). Thus, when you hear most venture capitalists opining about how to stimulate innovation, their ideas generally emphasize subsidies for existing market leaders: tax credits for R&D or infrastructure development or investing, government as a major customer, government risk-sharing for private capital, etc. What is not being discussed, however, is more important: what policies will create a level playing field for all innovators, not just help the large players win bigger? The stereotype of innovation in America, after all, is about the little "garage startup" that competes with and ultimately brings down the entrenched old boys.

Continue reading "How to Really Spur Innovation (Or Why You Shouldn't Listen to Venture Capitalists)" »

By Robert Atkinson
President, Information Technology and Innovation Foundation

Global warming may finally get the political attention and action it deserves. Indeed, it's hard to go a single day without reading something about the crisis and what we should do about it. But if we are going to effectively respond it is critical that public policy focus on the right thing, which is spurring radical technological innovation.

Unfortunately, too many environmental groups are actively encouraging Americans to believe that this problem can be solved if we all just change our behavior a bit: if we just take the bus a bit more; or install compact fluorescents; or even have a green Christmas by giving fewer gifts and reusing wrapping paper. The Sierra Club, for example, states that "We can make simple decisions on national, state, local, and personal levels that will reduce global warming pollution. The Sierra Club's network of activists and volunteers are dedicated to cleaning up our vehicles, buildings, and electricity grid to drastically cut carbon emissions and curb global warming."

Continue reading "Going Green Means Going R&D" »

By Daniel Sarewitz
Director, Center for Science, Policy, and Outcomes
Arizona State University

The world, it almost goes without saying, is a mess. Or perhaps better put, it is a bunch of messes. The incipient collapse of the global economy, the rise of global terrorism, the proliferation of dangerous weapons, the continued spread of AIDS, the oligarchy in Russia, the endless conflict between Israel and Palestine, the decline of global fisheries and tropical forests, choose your favorite mess. My own interest has been in messes that implicate, in one way or another, science and technology, for example climate change, a depressing mess if there ever was one.

Continue reading "Progress for Progressives: Technology and Effectiveness in Human Affairs" »

It's hard to believe that we have to pay Detroit with massive government bailout money to get them to innovate the kind of green, high tech cars that could save their own companies. But that's the case. Tom Friedman opined recently that Steve Jobs might make a good CEO for General Motors -- Apple being a poster child for an entrepreneurial company whose business model is based on continued high-tech innovation.

Long enough have US auto companies locked in the paradigm of large SUVs and trucks subsidized by multinational oil companies and sheikdoms. Rather than go to the government, the automakers should seek financial help from the oil companies they have enriched for years. Only fair that US car makers, who profited by addicting us to petroleum gas-guzzlers (don't tell me it was consumer demand when they manipulated demand by advertising those sexy Hummers) and now face bankruptcy, should ask Big Oil for a bailout. What's $30 billion to Exxon-Mobil?

Continue reading "Energy Innovation for a Better World" »

By Daniel M. Kammen

The scientifically established need to adopt and accelerate a low-carbon, more sustainable future has finally been put squarely in the center of U. S. policy. President Elect Obama has taken the courageous and necessary step to announce that not only will this become a federal priority, but the U. S. will also take an active international leadership role in developing a workable and global approach to this issue. At Schwarzenegger's climate conference last month, these words brought a bi-partisan crowd of lawmakers to their feet for a standing ovation.

To accomplish these goals, the New Administration will need a diverse set of tools to address global warming. Despite years of under-investment [1], thankfully a diverse and growing set of science and engineering tools do already exist, as do a number of public policy and pollution market mechanisms that can be brought to bear to reward efficient and clean energy development, and to monetize pollution.

Beyond these efforts, however, additional tools are needed, namely those that mobilize novel financing opportunities to bring capital into the clean energy arena. There are many barriers to reducing energy consumption and increasing the use of renewable energy. One major barrier is high first cost ("upfront cost"), which is both a psychological and financial barrier for many people, institutions, and industries. How many of us would have cell phones, if we had to pay for 20 years of minutes up front?

Continue reading "The Financing Revolution for a Low-Carbon Economy" »

By Fred L. Block

It's hard to find a silver lining in the historic financial crisis we now face. But the crisis offers a unique opportunity for President-elect Obama to rebuild the foundation of the economy by revitalizing one of our greatest assets - our ability to innovate by mobilizing science and technology for production.

We desperately need a massive economic stimulus package to put people back to work and provide relief to those hardest hit. But an opportunity would be lost if the package simply restored things as they were. Instead, we should work to build a stronger, more sustainable economy by developing and deploying key technological innovations, such as wind and solar power, into widespread use quickly. This is not just a matter of spending money. We also have to create new institutions and new ways of doing business. We need not just stimulus, but "stim-novation," a combination of stimulus and innovation, and government must play a major leadership role in promoting that.

Continue reading "Innovating the Way to Economic Recovery" »

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 study in The Economic Record demonstrated that technological progress drove at least 80% of economic growth in the United States between 1909 to 1949, and innovation continues to be the most powerful engine of our prosperity.

Today, President Obama and the new Congress face a historic opportunity to promote new technology innovation, particularly in the clean energy sector. Innovation is essential to driving down the price of clean energy technologies, which is a prerequisite to achieving mass commercialization and a rapid transformation of the global energy system. But to harness this solution we must take a new look at the process of innovation and determine the best mechanisms for public policy to catalyze and accelerate technology development.

The Breakthrough Institute is committed to fostering a discussion on these questions and is therefore hosting a "Special Innovation Issue" on our website to feature contributions from some of the country's top innovation experts, exploring the role of innovation policy and how public policy can best promote innovation. Stay tuned.