Innovation policy making in a federalist system: Lessons from the states for U.S. federal innovation policy making

Abstract

Most observers argue that, in comparison with other advanced industrial nations, the U.S. has failed to develop a coherent and effective set of policies for industrial innovation. In contrast, in the 1980s, U.S. states forged ahead of the federal government in the development of technology policies. Yet, while some states have found the wherewithal to spend relatively large sums of money on an appropriate mix of well-designed policies; others, facing similar situations, have done little. Research conducted on the state policy-making process found that this variation was caused by a number of procedural factors. In fact, in the course of the research, two models of policy making were discovered. One was associated with well-funded and well-designed policies, the other was not. Significantly, the federal innovation policy-making process appears remarkably similar to the process of policy making followed in states doing the least. This article suggests that it is precisely because the federal policy-making process is so similar to the process in these latter states, that the U.S. has yet to develop a well-funded and well-designed innovation policy effort. This article outlines a reformulated federal policy-making process, closer to that used by the most successful states, which would significantly improve the innovation policy effort.