Amidst the recent clamor that the U.S. is “ Out of big idea[s]” and that “ Slightly Better iPhones Won’t Fix the U.S. Economy” there are growing concerns about the troubled state of the innovation ecosystem in the United States. To provide a more panoramic view, it is useful to take a slightly deeper dive into the basic question: “where do innovations come from.”

When Robert Solow and the other great economists of his time reasoned that the secret to growth can be construed mainly to Total Factor Productivity (TFP), the U.S. was already more than half-a-century into leading the world’s innovation capabilities and, in the process, racking up huge fortunes through innovation. Although having come under attack as being a form of “statism” over the past several decades, the role of the government in the U.S. has been essential in fostering the nation’s innovation eco-system. Daniel Drezner has argued that there are three functions of government in this regard: first, the government can provide a steady source of initial demand which could escort that particular innovative activity through the “death valley” of early-stage development. Second, the government’s investment in public goods related to innovative activity is indispensable, and this includes federal spending on education, basic science and R&D. The third function of government is to establish and supervise the rules of the game to ensure that innovation is rewarded and is profitable. Linda Weiss, further, has drawn attention to the puzzle which posits the (false) view of the superseding role of entrepreneurs. Actually, many of the critical technologies that today’s idolized corporations, such as Apple and Google own, have come from “costly and sustained state sponsorship” initially. However, hostility toward an affirmative role of government has diverted government involvement disproportionately towards a concentration on the ‘National Security State’, particularly in the form of “innovation hybrids.” Both the secrecy and inconsistency of government participation have given birth to a medley of social, economic and political contradictions in the U.S., which have further been aggravated as the horizon of innovation itself has evolved onto more volatile, uncertain, complex and ambiguous terrains. As such, the evolution of the U.S.’ innovation trajectory has led to the following paradoxes:

Lack of a consistent national innovation agenda. As was demonstrated by the U.S.’ retreat from the Paris Agreement a lack of consistency in the country’s priorities, both in the domestic and foreign policy arenas, has begun to leave a huge impact on the re-orientation of federal research-related funding. The “biggest loser from the decision could be the United States itself” as Katharine Hayhoe , director of the Climate Science Center at Texas Tech University, has presciently observed, given that the Agreement constitutes “a strong incentive for innovation in the energy and the economy of the future.”

Link missed in applied innovation. Democratic and Republican administrations and successive Congresses have serially approached innovation with different strategies and policies. This has led to a loss of direction in priorities and caused frequent administrative failures, as Brian Kahin and Christopher T. Hill have pointed out. Furthermore, the lack of a top-down administrative agency responsible for innovation programs and analysis tends to provide only fragmented and fragile support to the private sector from an innovation standpoint. In this regard, Daniel Drezner has argued that a decentralized state structure is a necessary but insufficient condition for the U.S. to maintain its leadership in technological innovation through the creation of an experimentation-friendly environment, while at the same time avoiding biased decisions that favor vested interest groups that stick to out-of-date policies. However, one of the more recent studies has argued to the contrary that it is precisely the absence of key institutions focused on applied research and process innovations that has led to the U.S.’ failure to compete (as well as cooperate) with its global competitors and partners in the area of manufacturing. And that’s exactly why James Pethokoukis of American Enterprise Institute (AEI) has called for the revival of the Congressional Office of Technology Assessment.

Limits to private funding for innovative activity. Federal spending on R&D is extremely important in areas that are less appealing to the private sector. And particularly where decades-long patient investment is required, one can hardly find enthusiasm within business circles, as a study of the gradual and excruciating evolution of the computer and internet industries in the U.S. shows. However, federal input in this critical research area has been declining over the past several decades. John F. Sargent Jr. of Congressional Research Service observed in a recent report that “two sectors—business and the federal government—have accounted for more than 90% of U.S. R&D funding since 1953. Federal R&D expenditures as a share of total U.S. R&D expenditures peaked in 1964 at 66.8%, the same year that business R&D expenditures reached a nadir of 30.8%. Between 1964 and 2000, the federal government’s share fell and business’ share rose. In 2000, business accounted for 69.4% of U.S. R&D expenditures and the federal government 25.1%. …In constant dollars, federal R&D declined for five consecutive years from 2009 to 2014, a total drop of 17.0%; a similar drop occurred from 1987 to 1994, when federal R&D fell by 15.8%.” What’s more, U.S. federal R&D budget as a percentage of GDP has declined from 1.23% in 1976 to 0.71% in 2018, as per AAAS. It is this very dynamic that has prompted Samuel Brannen to lament that expecting the private sector to drive innovation in national security is a “Bad Idea.”

Loss of vision in tackling post-industrial challenges. According to Daniel Bell, the coming of the post-industrial society has been the result of governmental and business’s concerted efforts in advancing scientific and technological innovation. The coming of the post-industrial society is also accompanied by the nationalization and even internationalization of social problems. Due to the revolution in communications and transportation, government has been required to perform a central role in financing scientific and technological research and maintaining innovation networks. As Bell has aptly noted, “the crucial decisions regarding the growth of the economy and its balance will come from government, but they will be based on the government’s sponsorship of research and development, of cost-effectiveness and cost-benefit analysis; the making of decisions, because of the intricately linked nature of their consequences, will have an increasingly technical character.”

Paraphrasing John Maynard Keynes’s wording, one can argue that just as the passage of the ideas of “defunct” economists and political philosophers on late-coming generations of “practical men and madmen in authority” demonstrates the strength – however inadvertently – of these ideas, so also these “defunct” economists and political philosophers could not have foreseen the consequences of their theoretical prowess. This is particularly germane when one comes to analyze the political dynamism and its impact on the U.S.’ political, economic and societal environment as has unfolded since the 1970s – a period when innovation was commonly recognized as the driving force behind growth and development among nations. Politically, the two Parties were locked in a constant fight from their distinctive poles, which contributed (or rather de-contributed) to the demonization of the mixed-economy and the welfare state. The results of this can be more clearly observed following the 2008-09 Great Recession. As Gross Domestic Productivity (GDP) growth recovered robustly, there was “ The World Class Poverty in America’s Booming Economy ” Exploring the relationship between voter partisanship and income from 1956 to 1996 Nolan McCarty, Keith T. Poole and Howard Rosenthal have uncovered a phenomenon of stratification of political partisanship by income, and argue that “this trend is the consequence both of polarization of the Parties on economic issues and increased economic inequality.” While we have entered the stage that C. Wright Mills depicted as “in so far as an economy is so arranged that slumps occur, the problem of unemployment becomes incapable of personal solution”, it is up to the federal government to rise to the challenge through its vision and leadership. Just as Galbraith in 1980 had warned against in his conception of “The No-Win Society” that would lead to a path of negative-sum game within the nation, we should also advise men-in-authority to guard against what Jeffrey D. Sachs has more recently termed as “foreign policy populism,” in addition to the disproportionately high defense budget and the deservedly-criticized tendency for unilateralism. This unfortunate but intimidating triad must be prevented from becoming “today’s greatest threat to the international rule of law, and therefore to global peace.”

Whither to, then, goes the U.S. innovation ecosystem? The answer to this question boomerangs to the very heart of the ultimate purpose of innovation itself: an inclusive development propagated through open innovation in cooperation with other international partners will enable the aggregation of social cohesiveness and political consensus, nationally and globally. And, in this context, it is imperative thus to foster an open ecosystem that is conductive to the promotion of innovation rather than to its prevention.

(Li Zhigang is a visiting scholar at Georgetown University)