Three new Economic and Policy Analysis summaries from the National Institute of Standards and Technology (NIST) explore technology's impact on economic growth, policy options for increasing industrial productivity, and the federal role in fostering the formation of technology clusters.
In Beyond the Business Cycle: The Need for a Technology-Based Growth Strategy, a summary of a larger paper, NIST senior economist Gregory Tassey discusses the central role of technology in long-term productivity and economic growth. He assesses the approaches that the United States and foreign governments are taking to encourage technology development and commercialization in an increasingly competitive global economy.
"An economy cannot attain long-term growth without substantial investment in 'productivity-enhancing assets,'" Tassey concludes. These assets include technology, and also, capital formation, education, and investment in technical infrastructure.
Making these investments efficiently requires, he says, a "public-private partnership strategy because, for example, even the largest R&D-intensive companies no longer have the total complement of internal research and production assets nor the market scope to capture the full benefits of investment in new technology platforms."
In a companion brief, Some Evidence of Technology's Impacts on Economic Growth, Tassey reviews several decades' worth of economics studies that have investigated the size and nature of technology's contributions to economic and productivity growth. Among the key findings highlighted in this review: technology is the single-most important driver of long-term growth, the development of new technologies drives both new products and services and overall productivity, technology-based industries provide higher-paying jobs than average, and government and industry roles in the development of technology are complementary—rather than substitutes, as is sometimes argued.
The third new report, by economist Gary Anderson, distills research on the federal government's role in encouraging the formation and growth of technology clusters—"regional concentrations of private and public R&D and production capabilities, including pools of skilled labor, research facilities, and partnership mechanisms for research and production scale-up."
Anderson concludes that "there is substantial evidence that clusters have a strong and positive impact on innovation and economic performance."
"Public-private partnerships, in general, and government/industry/university cooperation, in particular," he writes, "have demonstrated the capability of delivering these positive economic impacts." These cluster-oriented partnerships, Anderson adds, can "leverage the widely recognized federal role in supporting research, knowledge creation and human capital development."
"When these activities are clearly tied to industry's research needs, the potential for benefit is substantial," he writes.
The new NIST Economic and Policy Analysis Briefs are available from the Science and Technology Support page.