US Government and Technological Innovation

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Table of Contents

Introduction
Funding programs
Advanced Technology Program (ATP)
Technology Innovation Program (TIP)
Effects of non-government support
References

Introduction

The United States government plays a key role in the development of the technological innovation in the private and public sector. Due to the government, many projects, such as IPHONE, Internet and GPS, were researched on and developed by the US military and defense departments, and later on commercialized.

According to Wendy Schacht (2010), the US government supports, promotes and accelerates technological innovations by funding high risk, and high reward research projects that are crucial to the national requirements. The government has adopted a diversified approach to technological advancement and stimulation which includes development and adoption of innovation support programs, legislation and policies, incentives, such as experimental tax credit, modification of antitrust laws to encourage collaboration, revision of patent laws, promotion of technology transfer and fostering university – industry interactions.

Funding programs

The government has various bodies that support innovations; these include an advanced technology program (ATP) and Technology Innovation Program (TIP), both funded by the National Institute of Standards and Technology (NIST).

Advanced Technology Program (ATP)

This program was established under the Omnibus Trade and Competitiveness Act, title five. The program was intended to serve as a focal point for development of industry technology by public and private sector. ATP provided seed funding for business, government laboratories and universities to develop competitive technologies that would have a far reaching implication in the industry.

By 2007, a total of 824 projects had been funded by ATP. $1.6 billion for development of these programs was provided by the government, while $1.5 billion came from the private sectors. 28% of the projects were joint venture while 68% of the awarded projects were from large firms (Schacht, 2010).

Among the technologies funded by ATP, there were manufacturing, biotechnology, bioinformatics, aircraft industry, advance materials, computer hardware, energy, computer aided design, environmental technologies, material science, nanotechnology, etc.

Technology Innovation Program (TIP)

The technology innovation program (TIP) was formed to replace the advanced technology program. TIP rules and policies were published in June, 2008. TIP provides opportunities for small and medium sized firms. Through this program, these companies directly benefit from funding provided by the government, thus they are the principle beneficiaries of the funds. The major projects funded by this program include:

projects that have the ability to yield transformation results with far reaching implications;
researches that address critical national needs;
innovative studies that are connected with wide disciplines.

There are many projects funded by the government due to this program. The field of the researches ranges from manufacturing, civil infrastructure, energy, healthcare, sustainability, complex systems and networks to water supply.

In 2009, TIP funded 20 new projects with a total sum of $ 71 million, with the private sector contributing $74.6 million. The program holds competitions every year and the study which wins is awarded funds. Through TIP, the state can support projects from any organization (Schacht, 2010). The main funding available includes:

Individual projects for small and medium sized organizations. They can be given up to $3 million for 3 years
Collaborative projects as firms can be awarded $9 million for 5 years.

Effects of non-government support

For innovation to take place, there must be requisite capital, time and other resources. Most of the projects require huge amount of money for the research and development (R&D) phase. This puts a company in high risk venture which they certainly can predict with the probable return on investment. When the government invests in these innovations, it enables the companies to develop and maintain a pipeline of new products.

Research requires a lot of time, capital and expertise. Small companies may not be able to hire experts on full time basis. However, through collaborations with universities, fostered by TIP and ATP, the private sector and universities can team up and develop new products (Atkinson, 2010).

The US is also keen on formulation policies that favor innovations. This comes in form of tax credits, welcoming new foreign engineers and scientists and improving patent laws. The US policy on new products is “light regulatory” allowing novelties to be brought into the market. This is better as compared to the European “precautionary principle” which limits innovation until all the consequences are known (Atkinson, 2010).

However, with no funding, several factors may propel the growth of innovation, they include:

adequate financial system (the US financial system allows the small firms to enter to agreement, acquisition and mergers with large companies which can provide funds for innovation);
competition (the global and domestic market requires the firms to be innovate and develop new products in order to remain competitive);
need to lower production costs (reduction in production cost necessitates innovation despite the outcomes);
large market (the large and constantly growing domestic market in the US can also drive innovation as large companies in the US enjoy economies of scale and have large capital base which propel innovation (Atkinson, 2010)).

In conclusion, innovation is a continuous process. It develops with or without government intervention. The US government has been active in supporting and encouraging new developments. This has motivated firms to change, resulted in cost sharing in R&D and created a link between the private, public and education sectors.

References

Atkinson, R.D. (2010). Role the U.S. Government Can Play in Restoring U.S Innovation

Leadership. In Information Technology and Innovation Foundation: Proceeding of a conference held 24 March 2010.. Web.

Schacht, W.H. (2010). The Technology Innovation Program. (CRS Report for Congress, RS22815). Web.

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