Will Obama leave behind an innovation legacy?
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Historically, productivity enhancing innovations were responsible for spurring real economic growth that raises living standards. Today, governments are frequently not just partners but also critical initiators of the innovation process. Government support has contributed to the development of the semiconductor industry, telecommunication technology, the global positioning system (GPS), and famously, the internet.

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In the late 1980s, for example, a public-private partnership between the Department of Defense and 14 semiconductor manufacturers launched the Sematech Consortium, which helped the United States regain its edge in the global semiconductor industry. According to a 2008 study, most major innovations during the previous two decades were the result of coordinated efforts between government and private industry.

In assessing President Obama’s domestic record, emphasis has centered on his handling of the financial crisis, healthcare and trade policies. Less attention has been paid, however, to the administration’s notable research and development (R&D) initiatives. This includes public-private partnerships to create “innovation hubs” in three strategic areas: manufacturing, big data and energy. In this context, the term “innovation hub” refers generally to regional partnerships between research universities, industry leaders and government to provide sources of R&D, logistical support, human capital and creativity enhancing social environments.

The polestar of Obama’s innovation policy is the National Network for Manufacturing Innovation (NNMI), also known as Manufacturing USA. In addition to providing high-paying jobs, the manufacturing industry creates new and upgraded products, accounts for a significant portion of private sector R&D, spurs much needed exports, and stimulates other sectors of the economy. Modeled on Germany’s Fraunhofer Institutes, NNMI seeks to establish a network of regional public-private partnerships across the country that focus on specific manufacturing processes or technologies.

In 2012, a pilot institute focused on 3D printing called “America Makes” was launched in Youngstown, Ohio. It now has over 160 members. In December 2014, the program was formalized when the Revitalize American Manufacturing and Innovation Act was signed into law with overwhelming bipartisan support. Each institute receives federal startup funding with matching contributions from private sources, with the goal of becoming self-sufficient within five to seven years. To date, a total of nine regional institutes have been created with more planned for 2017.

In March 2012, Obama announced the National Big Data Research and Development Initiative resulting in a program to establish a network of Big Data Regional Innovation Hubs. “Big data” refers to large data sets from various sources that may be analyzed to reveal patterns or trends and is already widely used by social media and biomedical industries. The emerging field of data science is still in its infancy and its full potential is difficult to gauge. But it involves the identification, storage, analysis and usage of massive data sets to better predict behaviors and outcomes. Its potential applicability includes areas such as healthcare, energy usage, environmental policy, transportation, educational curricula and national security.

Last year, the National Science Foundation announced funding for the development of four data science regional hubs across the country each focusing on specific areas of data science. The hubs cover all fifty states and draw on the collaborative efforts of university data scientists, cities, foundations and corporations. For example, the South Hub covers 16 states and the District of Columbia. It is jointly coordinated by Georgia Institute of Technology and the University of North Carolina. It focuses on healthcare, coastal hazards, industrial big data, manufacturing and habitat planning.

The public-private “innovation hub” model is also being applied to energy. Inspired by the Manhattan Project, the Department of Energy has initiated energy hubs that focus respectively on artificial photosynthesis to create synthetic fuel, nuclear reactors, clean energy and critical materials. These hubs also bring together academia, industry and government. For example, the Joint Center for Artificial Photosynthesis, charged with developing solar energy, is led by the California Institute of Technology in partnership with Lawrence Berkeley National Laboratory, Stanford Linear Accelerator Center (SLAC) National Accelerator Laboratory and the University of California.

As the Obama administration has stressed, the purpose of these public-private partnerships is not to pick winners, but to provide industry coordination and support where market incentives alone are insufficient. These “infant industry” measures should be understood as complementing, not undermining, market based incentives. In order for these policies to be effective and sustain public support, they must avoid actual or perceived corporate cronyism.

Efforts should also focus on whether the public-private hub model can be applied to other strategic areas, such as aerospace technology and entrepreneurship. Launched in 2009, the Washington Aerospace Partnership works to support the growing industry in Washington State. In 2014, the United Kingdom inaugurated a pilot program creating four “University Enterprise Zones,” where select universities partner with technology start-ups to help them innovate and grow. There is an expanding list of similar projects, both domestic and foreign, worth examining and potentially replicating.

It is too early to discern the long term impact of Obama’s initiatives, but they will provide useful case studies to reveal the type of policies that best foster innovation. At a time when the economy seems anemic, the degree to which government policies can continue to cultivate innovation is being tested. To the extent that this plants the seed for future growth is part of Obama’s legacy.

Douglas Singleterry is counsel at Vasios, Kelly & Strollo and co-author of New Jersey Uniform Commercial Code. Zenon Christodoulou is a management consultant and adjunct professor at William Paterson University’s Cotsakos School of Business.


 The views expressed by contributors are their own and not the views of The Hill.