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A for American Innovation Creating Shared Prosperity National Economic Council and Office of Science and Technology Policy October 2015 A STRATEGY FOR AMERICAN INNOVATION National Economic Council and Office of Science and Technology Policy October 2015

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1 Table of Contents Executive Summary .. .. .. .. 2 Introduction .. .. .. .. 10 Investing in the Building Blocks of Innovation .. .. 20 Fueling the Engine of Private – Sector Innovation .. .. 39 Empowering a Nation of Innovators .. .. . 65 Creating Quality Jobs and Lasting Economic Growth .. . 74 Catalyzing Breakthroughs for National Priorities .. .. . 84 Delivering Innovative Government with and for the People .. . 107 New Horizons for 2015 and Beyond .. .. .. 117

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2 Executive Summary America has long been a nation of innovators. The United States is the birthplace of the Internet, which today connects three billion people around the world. American scientists and engineers sequenced the human genome, invented the semiconductor , and sent humankind to the moon. And America is not done yet. For an advanced economy such as the United States, innovation is a wellspring of economic growth. While many countries can grow by adopting existing technolog ies and business practices, America must continually innovate because our workers and firms are of ten operating at the technological frontier. Innovation is also a powerful tool for addressing our most pressing challenges as a nation , such as enabling more Americans to lead longer, healthier lives, and accelerating the transition to a low – carbon econom y. Last year, U.S. businesses created jobs faster than at any time since the 1990s. N ow is the time to renew our commitment to innovation to drive economic growth and shared prosperity for decades to come. Now is the time for the Federal Government to make the seed investments that will enable the private sector to creat e the industries and jobs of the future, and to ensure that all Americans are benefiting from the innovation economy. In 2009, President Obama first issued the Strategy for American Innovation , and it was updated in 2011. In th is final , the Administration has identified additional policies to sustain the innovation ecosystem that will deliver benefits to all Americans . A Strategy for American Innovation As the following graphic illustrates, t Strategy for American Innovation has six key elements. The Strategy recognizes the important role for the Federal G overnment to invest in the building blocks of innovation, to fuel the engine of private – sector innovation, and to empower a nation of innovators . The Strategy describes how the Obama Administration builds on these important ingredients for innovation through three sets of strategic initiatives that focus on creating quality jobs and lasting

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3 economic growth, catalyz ing breakthroughs for national priorities, and delivering innovative government with and for the people. Investing in the Building Blocks of Innovation The building blocks of the American innovation ecosystem are those areas where Federal investments provide the foundational inputs to the innovation process: Making World – Leading Investments in Fundamental Research The President has consistently called for sustaining America’s long – term economic comp etitiveness and growth through robust investments in fundamental research. Boosting Access to High – Quality STEM Education scientists, and innovators through s trong and sustained investment in science, technology, engineering , and math ematics (STEM) education t hat engage students from all backgrounds and underpin future economic competitiveness.

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4 Clearing a Path for Immigrants to Help Propel the Innovation Economy Recognizing the disproportionate role of immigrants in building an entrepreneurial society and pioneering world – changing discoveries , the President is helping to clear a path for them to continue making significant contributions to the American economy. Building a Leading 21 st Century Physical Infrastructure The Administration physical infrastructure that will not only create jobs now but also foster innovation and economic growth for the long term. Building a Next – Generation Digital Infrastructure The Administration is committed to sustaining investments to ensure widespread access to broadband and to support the adoption of next – generation digital infrastructure. Fueling the Engine of Private – Sector Innovation The Federal G overnment can empower private – sector innovators by addressing the market failures that stymie innovative activity and by ensuring framework conditions friendly to experimentation and innovation , including : Strengthening the R esearch and E xperimentation Tax Credit President Obama has propose d broadening, extending, and making permanent the Research and Experimentation Tax Credit, creating substantial and predictable incentives for U.S. businesses to innovate. Supporting Innovative Entrepreneurs enterprise , the Administration is working to ensure all Americans have a fair shot at entrepreneurial success. Ensuring the Right Framework Conditions for Innovation The Federal G overnment can enable a thriving innovation economy by taking steps to ensure that those who strive to introduce new ideas to the marketplace encounter market conditions and rules that facilitate and incentivize their efforts .

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5 Empowering Innovators with Open Federal Data President Obama has articulated a vision of Federal data as a national asset to be made publicly available wherever possible in order t o advance government efficiency , improve accountability , and fuel pr i vate – sector innovation, scientific discovery, and economic growth. The Administration has also worked to ensure that more digital data and publications resulting from Federally – funded research are freely accessible to innovators, scientists, and the general public . From Lab to Market : Commercializing Federally – Funded Research – to – Market Initiative is working to accelerate technology transfer for pr omising new innovations resulting from Federally – funded research that to o often face a slow and uncertain path to commercial viability . Support ing the Development of Regional Innovation Ecosystems The Federal G overnment is playing a critical role in supporting region al efforts to strengthen local and regional innovation ecosystems that sustain economic growth and job creation. Helping Innovative American Businesses Compete Abroad The Administration i s committed to a trade agenda that has significantly boosted exports, eliminated market – access barriers, and expanded intellectual property protections. E mpowering a Nation of Innovators The Federal Government can help empower more Americans to be innovators : Harnessing the Creativity of the American People through Incentive Prizes The Administration will continue to build on the important steps the Federal Government toolbox . Tapping the Talents of Innovators through Making, Crowdsourcing , and Citizen Science The Federal G overnment is finding new paths to tap the ingenuity of the public to address real – world problems , while also engaging more students in STEM

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7 Tackling Grand Challenges The Administration is supporting targeted efforts to meet Grand Challenges, which are ambitious but achievable goals that harness science, technology, and innovation to solve important national or global problems and that have the . Targeting Disease with Precision Medicine The Administration is investing in a Precision Medicine Initiative to understand condition, and to predict better which treatments will be most effective. Accelerating the Development of New Neurotechnologies through t he BRAIN Initiative The BRAIN Initiative is develop ing new technologies that will enable a deeper understanding of brain functions , improving the ability of researchers and physicians to diagnose, treat , and prevent diseases of the brain. The BRAIN Initiative could also lead to breakthroughs in computing that are inspired by human perception and cognition . Driving Bre akthrough Innovations in Health Care Innovations in health care delivery, growing from collaboration across purchasers, providers, and patients, promise to help improve quality of care, prevent medical errors, and reduce costs. Through the Center for Medicare and Medicaid Innovation, the Admi nistration is testing new care delivery models that seek to deliver the same or better care at significantly lower cost. Dramatically Reducing Fatalities with Advanced Vehicles Accelerating the development and deployment of advanced vehicle technologies could save thousands of lives annually. The Administration is launching new efforts to accelerate the path to deployment for these promising technologies. Building Smart Cities the pressing problems that their citizens care most about. The Administration has launched a new research and deployment initiative that will invest over $160 million in Federal research and leverage the efforts of a broad network of cities, universities, companies , and nonprofits to achieve real results, such as urban

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8 traffic management systems that c an reduce commuting times by 25 percent or more. Promoting Clean Energy Technologies and Advancing Energy Efficiency The Federal G overnment is i nvesting in technologies to enable the development of renewable and other clean energy sources, make energy go further through energy efficiency, and reduce carbon pollution, while helping to improve Delivering a Revo lution in Educational Technology With t he technological conditions ripe for the development of advanced educational technologies that can transform teaching and learning , t he Federal Government is making critical invest ments in the development of next – generation edu cational software. Developing Breakthrough Space Capabilities The Federal Government is developing new space technologies and leveraging partnerships with the private sector to dramatically lower the cost of accessing and operating in space, while enabling ambitious new missions. Such technologies are helping to create a burgeoning U.S. private space sector. Pursuing New Frontiers in Computing Guided by the recently launched National Strategic Computing Initiative, Federal departments and agencies will work together to advance the state of high – performance computing in order to drive economic competitiveness, scientific discovery, and innovation . Harnessing Innovation to End Extreme Global Poverty by 2030 The Admi nistration is advancing a new model of development grounded in evidence – based evaluation, rapid iteration, country engagement, and partnership that catalyzes talent and innovation everywhere to accelerate efforts to end extreme poverty by 2030. Deliver ing Innovative Government with and for the People With the right combination of talent, innovative thinking, and technological tools, government can deliver better results with and for the American people :

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9 Adopting an Innovation Toolkit for Public – Sector Problem – Solving I nnovation T ability of agencies to deliver better results at lower costs for the American people. These approaches can increase the effectiveness and agility of the governme nt through improvements in its core processes and ability to solve problems. Fostering a Culture of Innovation through Innovation Labs at Federal Agencies A network of Innovation Labs can foster a culture of innovation at Federal agencies by empowering and equipping agency employees and members of the public to implement their promising ideas to more effectively serve the American people. Providing Better Government for the American People t hrough More Effective Digital Service Delivery It should be as easy and intuitive for American citizens and businesses to engage with government services online as it is for them to conduct online transaction s with the most IT – savvy businesses . The Administration is creating U.S. Digital Service teams across government to speed the adoption of private – sector best practices for designing, building , and deploying easy – to – use online services. Building and Using Evidence to Drive Social Innovation The Administration is committed to improving our ability to solve societal develop ing it where it does not. The Administration is also using Pay – For – Success approaches to pay for outcomes as opposed to inputs, and to scale – up evidence – based interventions.

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10 Introduction We know that the nation that goes all – in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. – President Barack Obama, January 28, 2014 America has long been a nation of innovators. American scientists, engineers and entrepreneurs invented the microchip, created the Internet, invented the smartphone , started the revolution in biotechnology, and sent astronauts to the Moon. And America is just getting started. Engineering white blood cells in cancer patients to destroy tumors while leaving healthy cells untouched; Eliminating barriers to global commerce and collaboration with real – time language translation; Creating the technological foundations for a civilization that goes to outer space not just to visit, but to stay; Developing solar energy technologies , with the goal of making solar energy as cheap as coal by the end of the decade; Democratizing the tools needed to design and make just about anything; and Enabling working Am ericans to acquire new skills that are a ticket to middle – class job s at t heir preferred time, place , and pace. The United States is in a strong position to lead the world in the development of these and countless other equally exciting innovations. This country has 16 of the top

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