Yes, the U.S. Really Isn’t Contributing as Much to Global Innovation as Belgium

Stephen Ezell February 22, 2016
February 22, 2016

Stephen Ezell responds in Innovation Files to an AEI blog post criticizing certain elements of ITF's Contributors and Detractors: Ranking Countries’ Impact on Global Innovation report. Ezell reiterates that the report's objective is not to measure countries' absolute levels of innovation output or overall innovation performance, but rather to assess which countries’ economic, innovation, and trade policies—on a per-capita basis—are doing the most to contribute to and the least to detract from global innovation. In other words, to ascertain which countries are producing the most positive global innovation spillovers by investing in public goods such as scientific research or educational attainment while introducing the fewest negative externalities, such as through onerous trade barriers or by manipulating currencies.

For example, many countries are investing more in R&D as a share of their economies than the United States. For its part, Belgium has implemented a number of innovation-incenting tax policies, such as collaborative R&D tax incentives and innovation boxes, that the United States has not. Belgium also imposes fewer taxes on information and communications technology products, offers more generous R&D tax credits, invests more in education per student, and virtually ties the United States on per-capita government funding of university R&D and scientific researchers per capita. Put simply, on many measures of innovation policy, the United States does not beat Belgium, or the eight other countries ranked ahead of 10th-placed United States in ITIF's report.