Description: Class 2 will discuss how innovation is organized into a system, and the elements and actors in this system. It will also include a summary of indirect or implicit elements in this system. These include, on the governmental side, fiscal policy, tax policy, standards, technology transfer policies, trade policy, procurement, intellectual property, the legal system, regulation, antitrust, export controls, etc. On the private sector side, these include markets, management approaches including support for incremental verses radical innovation, accounting systems and information transparency, business models, and venture and angel capital, etc.

The class will also review innovation wave theory (“Kondratiev Waves”). The World Economic Forum’s latest national competitiveness rankings will be used to look at a range of competitiveness factors. Particular “indirect elements” will receive focus, including the ongoing debate over how the accounting system values innovation, the ramifications of current fiscal policy, and the role of venture and angel capital. The lack of innovation metrics will be reviewed. The class will also discuss policy justifications for governmental verses private sector roles, including the long-standing debate over industrial policy, and the “market failure” and the “public value” (as pursued by science and technology mission agencies) justifications for a public role. Part one of two.

Instructor: William Bonvillian