Chapter 5 Entrepreneurship and Government in U . S . High - Tech Policy

The U.S. has long been considered a leader in high-tech industries. Among the factors identified as creating favourable circumstances for innovation are: a culture supportive of risk-taking and entrepreneurship, abundant availability of venture capital, low costs of starting a business, and diverse forms of government support despite the absence of an overarching high-tech policy. Comparative studies in the national innovation systems (NIS) and the varieties of capitalism (VoC) literature (see Werle, Chap. 2) often describe the U.S. as the prototype of a laissez-faire economy that is particularly apt to spawn radical innovations. A closer look reveals, however, historical variations in the relative importance of market forces and government intervention. This flexible and differentiated interaction is seen as one of the distinct features of the U.S. innovation system and its success. The decisive American lead over other industrialised nations in the post-World War II era has weakened recently. Not only has the U.S. lost a large number of manufacturing jobs during the past decade, it also suffers from a trade deficit in advanced technology products, amounting to $81.8 billion in 2010 (U.S. Census Bureau 2011). The deficit was particularly high in information and communications, as well as opto-electronics and life sciences. In 2008, six OECD member states spent a higher share of their GDP on R&D than the U.S., whose gross expenditures on research and development were 2.8% of its GDP (OECD 2010). And in a recent report benchmarking the global innovation-based competitiveness of the EU and the U.S., the Information Technology and Innovation Foundation (ITIF) asserted that the U.S., while still ahead of the EU overall, was ranked sixth behind Singapore, Sweden, Luxembourg, Denmark and South Korea. Alas, during