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1. Is the supermultiplier nil? - A Replication Study of Deleidi and Mazzucato (2021)

Author:
Jens Boysen-Hogrefe
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Analyzing US macro data via a structural vector-autoregressive model, Deleidi and Mazzucato (2021) find strong positive spillover of mission-oriented government spending on private research and development activity and on overall economic dynamism ("crowding in"). However the result hinges on specific transformation of the data. Deleidi and Mazzucato deflate all variables in their model via the GDP deflator. Applying originally price adjusted data a spillover on GDP cannot be found. Estimating the model with data starting in 1984, the results point at “crowding out” of private research and development activity.
Topic:
Economics, Fiscal Policy, Innovation, and Fiscal Multipliers
Political Geography:
North America and United States of America

2. The path of economics research production: Insights into the seesaw between theory and empirics

Author:
João Ricardo Faria, Rajeev K. Goel, and Neela D. Manage
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper provides insights into the apparent seesaw between the generation of theoretical versus empirical economics research over time. A dynamic model considers the incentives of researchers to focus on empirical versus theoretical papers. It yields the main characteristics of the path-changing of economics research, from theoretical-intensive to empirical-focused. The model has two equilibria, one with a higher proportion of theoretical papers and another with a higher proportion of empirical papers. Curiously, the equilibrium with greater theoretical papers is stable, while the one with more empirical papers is a saddle point. This suggests that the current trend of increasing empirical research is unlikely to last.
Topic:
Economics, Research, and Innovation
Political Geography:
Europe, North America, and United States of America

3. Moonshot vs. Long March: Contrasting the United States’s and China’s Space Programs

Author:
Katherine Kurata and David Lin
Publication Date:
11-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
On the morning of November 2, 2023, the Gobi Desert’s silence was shattered: From a remote launchpad at the Jiuquan Satellite Launch Center (中国酒泉卫 星发射中心), the Hyperbola-2 (双曲线二号), a slender rocket bearing the iSpace emblem (星际荣耀), surged upwards, before gracefully alighting back on Earth (iSpace WeChat, November 2; CNSA, November 2). This suborbital hop marked a major achievement for iSpace as the company progresses towards developing reusable medium-lift rockets. The test demonstrated key technologies like the methalox engine and landing capabilities that will enable iSpace’s larger reusable rocket plans with Hyperbola-3. In China’s rapidly growing commercial space industry, iSpace, alongside other ambitious startups like Galactic Energy (星河动力), CAS Space (中科宇航探索技术), and Deep Blue Aerospace (深蓝航天), are striving to replicate the success of American pioneers such as SpaceX (Galactic Energy WeChat, July 24; CAS Space WeChat, April 4; Deep Blue Aerospace WeChat, May 7, 2022). Their goal: to revolutionize orbital access with reusable rocket technology. The success on November 2 was more than an engineering accomplishment; it was a testament to China’s emerging “innovation power”—its capacity to create, adopt, and seamlessly integrate new technologies (Foreign Affairs, February 28; US House of Representatives, May 17). This successful launch marks not just a step forward in technological capability but also a strategic shift in the global space race. With a unique mix of state guidance and entrepreneurial zeal, China is charting an alternate path in space exploration, contrasting sharply with the United States’s focus on private sector innovation. As the United States and China advance their respective space programs, their differing approaches are reshaping the landscape of space leadership. While America champions private sector innovation, China exerts centralized state control. Yet amidst an increasingly congested orbital environment, it is clear that the future trajectory of space exploration hinges not solely on innovation itself, but specifically on the capacity for nations to effectively combine government direction with commercial dynamism. The country that strikes this balance will harness the strengths of both its public and private sectors to accelerate advancement, and will be positioned to spearhead humanity’s future in the final frontier.
Topic:
Science and Technology, Space, Innovation, and Public-Private Partnership
Political Geography:
China, Asia, North America, and United States of America

4. Pricing for Medicine Innovation: A Regulatory Approach to Support Drug Development and Patient Access

Author:
Rosie Collington and William Lazonick
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The United States represents the world’s largest market for pharmaceutical drugs. It is also the only advanced economy in the world that does not regulate drug prices. There is no upper threshold for the prices of medicines in the United States. List prices are instead set by manufacturers in negotiation with supply-chain intermediaries, though some federal programs have degrees of discretion in price determinations. In practice, this deregulated system means that drug prices in the United States are generally far higher than in other advanced economies, adversely affecting patient accessibility and system affordability. In this paper, we draw on the “theory of innovative enterprise” to develop a framework that provides both a critique of the existing pricing system in the United States and a foundation for developing a new model of pricing regulation to support safety and effectiveness through drug development as well as accessibility and affordability in the distribution of approved medicines to patients. We introduce a regulatory approach we term “Pricing for Medicine Innovation” (PMI), which departs dramatically from the market-equilibrium assumptions of conventional (neoclassical) economics. The PMI approach recognizes the centrality of collective investments by government agencies and business firms in the productive capabilities that underpin the drug development process. PMI specifies the conditions under which, at the firm level, drug pricing can support both sustained investment in these capabilities and improved patient access. PMI can advance both of these objectives simultaneously by regulating not just the level of corporate profit but also its allocation to reinvestment in the drug development process. PMI suggests that although price caps are likely to improve drug affordability, there remain two potential issues with this pricing approach. Firstly, in an innovation system where a company’s sales revenue is the source of its finance for further drug development, price caps may deprive a firm of the means to invest in innovation. Secondly, even with adequate profits available for investment in innovation, a firm that is run to maximize shareholder value will tend to use those profits to fund distributions to shareholders rather than for investment in drug innovation. We argue that, if implemented properly, PMI could both improve the affordability of medicines and enhance the innovative performance of pharmaceutical companies.
Topic:
Health Care Policy, Drugs, Innovation, Medicine, and Price
Political Geography:
North America and United States of America

5. Unreliable Data Have Infected the Policy Debates Over Drug Patents

Author:
Adam Mossoff
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The COVID-19 pandemic has vividly brought to the public’s attention the key role of medical innovation in saving lives and increasing the quality of daily life. The pandemic has also precipitated an international debate over the role of patents and other intellectual property rights in the discovery, manufacture, and distribution of drugs and vaccines to patients. Even before COVID-19, there has been an ongoing policy debate in Washington, D.C., over drug prices and patents with congressional hearings, proposed legislation, and antitrust enforcement actions. The pandemic has thus made apparent what reliable data have already shown: poorly crafted legislation or antitrust enforcement actions could have a tremendous negative impact on the innovation economy in general and on healthcare specifically by undermining the incentives that drive the billions invested annually in the research and development of life-saving drugs and other medical treatments. Congress and regulators should engage in evidence-based policymaking on these important issues, which have far-reaching implications for economic growth and quality of life. This policy memo identifies a serious concern about the data in these discussions.
Topic:
Science and Technology, Intellectual Property/Copyright, Innovation, Data, and Pharmaceuticals
Political Geography:
North America and United States of America

6. Learning to Win: Using Operational Innovation to Regain the Advantage at Sea against China

Author:
Bryan Clark, Timothy A. Walton, and Trent Hone
Publication Date:
07-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The US Navy has spent the last decade attempting to pivot from efficiently maintaining the post–Cold War peace to effectively preventing and fighting a war against China or Russia. The circa-2000 Navy faced pervasive low-end threats from terrorists, insurgents, and regional opponents; today it is up against great power adversaries who used the past twenty years of relative stability to modernize and expand their fleets. The People’s Liberation Army (PLA) Navy is now larger than its American counterpart and is narrowing the US Navy’s capability advantages.1 Russia’s Navy, while smaller than that of the United States or China, boasts some of the most capable submarines in the world and hypersonic missile-equipped frigates.2 Proliferation of computing, sensing, material, and countermeasure technologies has leveled the playing field for military capability development. Building faster, more precise, stealthier, or smarter ships, aircraft, and weapons than opponents⎯the US Navy’s playbook since the Cold War⎯will no longer yield substantial or persistent advantages. The Navy will need to continue pursuing improved capabilities, but regaining and maintaining an edge against Chinese and Russian forces will depend as much or more on the US fleet establishing new operational concepts and tactics that exploit its strengths and its enemies’ vulnerabilities.3
Topic:
Defense Policy, National Security, Navy, Maritime, and Innovation
Political Geography:
China, Asia, North America, and United States of America

7. State Right-to-Repair Laws Need to Respect Federal Copyright Laws: A Constitutional, Legal, and Policy Assessment

Author:
Devlin Hartline and Adam Mossoff
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Various states are considering laws that would mandate that producers of electronic devices provide consumers and repair shops with all the tools and know-how necessary to repair these devices. Proponents of these “right-to-repair laws” argue that consumers should be able to do whatever they want with their devices, whether a smartphone, a smart TV, or a gaming console. Right-to-repair advocates, however, ignore inconvenient facts. These state laws conflict with federal copyright law and are unconstitutional, and they are bad policy as well. First, as a simple legal matter, the proposed right-to-repair laws are unconstitutional. These laws mandate the disclosure and distribution of the code in the computer programs that make our devices work, such as operating systems, apps, and the “digital locks” that protect these computer programs from unauthorized access and copying. Federal copyright law protects all these computer programs and “preempts” any conflicting state laws under the Constitution. Second, state right-to-repair laws are wrong as a matter of policy. These laws upset the long-standing balance of rights implemented by federal copyright law. For over 200 years, Congress has enacted copyright laws to secure to authors and innovators the fruits of their creative labors. These laws have properly balanced the rights of creators, the rights of companies that produce and distribute their copyrighted works, and the rights of consumers and the public. As a result, federal copyright law has been a launching pad for the economic and cultural revolutions in books, movies, music, and now digital games and the internet of things. Everyone values their electronic devices because copyright law provides the legal foundation for today’s thriving digital marketplace. Consumers have access to an incredible selection of movies, music, games, and many other previously unimagined digital goods and services. The same is true for products that consumers have long used and that have become “smart” today, such as phones, TVs, automobiles, and other devices. Overbroad right-to-repair laws fail to acknowledge the legal rights and the underlying policies in federal copyright law that have made all this possible.
Topic:
Economics, Science and Technology, Intellectual Property/Copyright, and Innovation
Political Geography:
North America and United States of America

8. Advancing the Quantum Advantage: Hybrid Quantum Systems and the Future of American High-Tech Leadership

Author:
Arthur Herman
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Quantum computers mark a transformational revolution in information technology. Whereas most computers process data using bits that consist of either a zero or one, quantum computers can use those digits simultaneously through superposition.1 The many resulting benefits will include the discovery of new drugs, new processes for carbon capture and advanced battery research, and a new exactitude in weather prediction, including in dealing with climate change.2 All in all, experts expect the global quantum computing industry to grow to $450–850 billion in value in the next 15 to 30 years.3 Yet because of the challenges of engineering qubits—the physical basis of quantum computing—most authorities push the timeline for full-scale quantum computer commercialization beyond 2040 and as far as 2050. Even some quantum experts do not expect any big breakthroughs until the 2030s at the earliest. The true path to the quantum future is the combination of quantum and classical digital technology, especially in computing, which will powerfully accelerate access to the potential benefits of quantum information science. While key players in the industry, including IBM and Microsoft, have recognized the potential synergy of hybrid architectures and applications, the federal government needs to expand its attention and resources devoted to this aspect of securing America’s quantum future and its leadership in the twenty-first century.
Topic:
Defense Policy, National Security, Science and Technology, Leadership, Innovation, and Quantum Computers
Political Geography:
North America and United States of America

9. Digital Allies: Deepening U.S.–South Korea Cooperation on Technology and Innovation

Author:
Jacob Stokes, Alexander Sullivan, and Joshua Fitt
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
Rapid advances in digital and other emerging technologies have become a defining feature of international geopolitics and geoeconomics in the 21st century. This report explores how the United States and South Korea can broaden and deepen their alliance through expanded cooperation on issues related to technology and innovation. Despite the continued centrality of traditional security threats—especially those emanating from North Korea—both the United States and South Korea are seeking to deepen and broaden alliance cooperation to address a larger set of shared challenges and opportunities. To that end, both capitals have noted the increasing importance of key technologies for economic growth as well as for security and governance. The two countries are at the very beginning of defining how an augmented alliance will approach technology coordination, but they have decades of economic and trade ties on which to build. Technology issues are central to the policy platforms of both U.S. President Joe Biden’s and South Korean President Moon Jae-in’s administrations and will continue to be important under future administrations in both countries. In addition to examining general consultative frameworks, enhancing U.S.-South Korea technology cooperation requires assessing the state of bilateral interactions sector by sector and issue by issue. The two countries occupy leading roles in many foundational technology ecosystems within the evolving global economy, such as semiconductors, telecommunications, and advanced batteries. In emerging fields such as artificial intelligence and quantum computing, U.S.-Republic of Korea (ROK) collaboration harbors the potential not only to raise living standards through technological breakthroughs but also to promote governance norms in accordance with liberal democratic principles. Potential opportunities for Washington and Seoul to deepen cooperation extend beyond the bilateral context to regional and global affairs, through coordination of the U.S. Indo-Pacific Strategy and South Korea’s New Southern Policy or its successor under the new president-elect, Yoon Suk-yeol. Rapid technological growth and digitization in Indo-Pacific countries, particularly those of Southeast Asia, present both immense economic opportunity and a range of governance challenges. The United States and South Korea have an important opportunity to ensure that technological development promotes a free, open, secure, and prosperous region. Taken together, the strategic rationales for enhancing U.S.-South Korea cooperation on technology issues are strong. Meaningful efforts to that end are already underway, but more can and should be done to deepen alliance coordination. Policymakers in Washington and Seoul should consider recommendations spanning the areas of foreign policy and international organizations, coordination on key technologies, trade and investment, and digital governance and domestic policy. Doing so will enable the alliance to meet the challenges and seize the opportunities presented by the current regional and global landscape.
Topic:
International Cooperation, Science and Technology, Bilateral Relations, Alliance, and Innovation
Political Geography:
Asia, South Korea, North America, and United States of America

10. Operation Warp Speed, Encore: A Case for US Leadership to Drive Market-Based Global Health Innovation

Author:
Rachel Silverman
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
he experience of the COVID-19 pandemic—both in the US and around the world—has helped highlight the potential feasibility and importance of biomedical R&D for global health and welfare. In the midst of a very large, focused expansion of public expenditure for R&D on COVID-19—both direct (e.g. supporting trials) and indirect (e.g. promised revenue via advanced purchase agreements)—dramatic and rapid advancements in biomedical science took place, with very large commensurate social and health benefits. Drawing from this experience and momentum, this paper argues that the US should deepen its engagement and ambition in global health R&D to drive other similarly transformative improvements in global health outcomes and security—protecting American citizens from global health threats while also helping save and improve lives and livelihoods around the world. To provide illustrative evidence about the potential of such investment, it lays out three indicative case studies where US government investment, at least partially in the form of a pull mechanism, could help incentivize and drive high-value innovation: for new antimicrobials; a rapid, low-cost TB test; and for next-generation, accessible whole genome sequencing. Using clear and generally conservative assumptions, the case studies describe how such biomedical innovation could generate large returns on investment—in two of three cases exclusively from the perspective of US domestic welfare—while also saving and improving lives around the world. It concludes with a discussion of implications for research funders, emphasizing the need for large R&D investments to tackle commensurately large global health threats.
Topic:
Science and Technology, Hegemony, Leadership, Innovation, and COVID-19
Political Geography:
North America and United States of America

11. An Ambitious USG Advanced Commitment for Subscription-Based Purchasing of Novel Antimicrobials and Its Expected Return on Investment

Author:
Rachel Silverman and Adrian Towse
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Antimicrobial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure to those same drugs, driving “antimicrobial resistance,” or AMR. Already, drug-resistant infections kill an estimated 35,000 Americans and 1.27 million global citizens every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. However, the R&D pipeline for new antimicrobials remains sparse, constrained by an array of market failures that prevent private companies from capturing a sufficient private return on investment (ROI) despite the very high social value of new antimicrobials. Widespread recognition of these market failures among experts and policymakers has driven a search for creative solutions, and generated enthusiasm for the use of pull mechanisms which could help incentivize antibiotic development. One particularly promising pull approach—so-called “subscription models”—would offer guaranteed annual payments to successful antibiotic developers delinked from sales volumes. A subscription approach is included in the pending PASTEUR Act, which is legislation introduced by lawmakers in the US House of Representatives and Senate and endorsed in President Biden’s 2023 budget request. In this paper, we consider the expected return on investment for such a program—that is, an ambitious new program to incentivize antibiotic development via a US government subscription-based pull mechanism (though not necessarily the PASTEUR Act, per se). We construct an illustrative subscription program from first principles, with parameters drawn (where possible) from the literature and some simplifying and deliberately conservative assumptions about program design and remuneration. We model the 10- and 30-year costs and benefits of such an initiative, both from the US domestic perspective and from a global welfare perspective. We find that the program is likely to generate a very high social ROI in both the short and long-term. From the US domestic perspective—considering both the value of averted death/disease and associated hospital costs—ROI is calculated at 6:1 over a 10-year time horizon and 28:1 over a 30-year time horizon. From the global perspective—exclusively considering the health value of DALYs (Disability Adjusted Life Years) averted—ROI grows to 27:1 over a 10-year time horizon and 125:1 over the full 30-year program duration. Sensitivity analysis suggests that the overall high returns are robust under a wide variety of alternative assumptions and scenarios. Based on these high social returns, we encourage the US Congress to urgently finance and authorize a subscription program for new antimicrobials, with particularly consideration for the PASTEUR Act.
Topic:
Health, Science and Technology, Innovation, and Medicine
Political Geography:
North America and United States of America

12. Securing Intellectual Property for Innovation and National Security

Author:
Sujai Shivakumar
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
The United States is engaged in a global competition for innovation, with critical implications for the nation’s continued technological leadership, competitiveness, and security. To win, the United States will need to leverage its advantages at home, including its robust intellectual property (IP) rights system and the innovative zeal of its entrepreneurs. It should also look abroad—setting the pace for scientific cooperation with allies and strategic partners, as well as developing shared international technical standards through the contributions of experts from around the globe. Most pressingly, the United States should not adopt policies that weaken protection of U.S.-owned patents—which would both disincentivize innovation in the United States and support Chinese efforts to dominate critical standards and other advanced technologies. Yet a recent proposal of the Antitrust Division of the U.S. Department of Justice (DOJ) does just that. Launched as a consultation, its Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments is promoted as an effort to encourage good-faith licensing negotiations and to address the scope of remedies available to patent owners who have agreed to license their essential technologies on fair, reasonable, and non-discriminatory (F/RAND) terms. While this draft policy seems like an innocuous administrative change, it has the potential to do significant damage to the United States’ innovation engine and, by extension, to its national security.
Topic:
Security, Intellectual Property/Copyright, Innovation, and Strategic Competition
Political Geography:
North America and United States of America

13. Data Protection or Data Utility?

Author:
Alexander Kersten and Issac A. Robinson
Publication Date:
02-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Despite the economic upheaval wrought by the Covid-19 pandemic, the United States is now poised to enter a new period of productivity growth with the widespread deployment of artificial intelligence (AI) technologies. And just as past eras’ technologies have been driven entirely by the consumption of resources such as steam, coal, oil, and natural gas, this AI-driven period will rely on data. Yet, while this data-driven economic growth model has proven benefits to both individuals and firms, it also raises serious concerns over individuals’ data privacy. A key challenge in this regard is to ensure that data is handled securely and that the privacy of American citizens is protected. Because of the regard paid to data protection and privacy over the past decade, the proliferation of digitization has made privacy policy a part of innovation policy. However, until now, policymakers have viewed data use and data protection as trade-offs, with some nations adopting strict control of data flows. These measures have not been effective in practice; strict curbs have stifled innovation while doing relatively little to protect privacy. An alternative is to deploy promising cryptographic software solutions that can enhance privacy while still allowing access to data. This solution not only unlocks the commercial potential of data for use by firms, law enforcement, nonprofits, and researchers but also protects individuals’ privacy. Realizing the benefits of this win-win solution will require further development and widespread adoption of emerging cryptographic software solutions.
Topic:
Science and Technology, Innovation, Cyberspace, and Encryption
Political Geography:
North America and United States of America

14. Cybersecurity for innovative small and medium enterprises and academia

Author:
Franklin D. Kramer, Melanie J. Teplinsky, and Robert J Butler
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
Innovation is fundamental to United States global leadership, critical both for the economy and for national security. Yet the resilience of the US innovation ecosystem against adversary cyber espionage and attack—most specifically from China—has not received the attention required, particularly given the essential innovation roles played by small and medium-sized enterprises (SMEs) and by academia. In response to that challenge, this report sets forth a proposal for expert-provided cybersecurity resilient architectures for SMEs and academia that are engaged in the development and operation of key emerging and advanced technologies. Such cybersecurity resilient architectures would be operated by the private sector and funded through the establishment of transferable cybersecurity investment tax credits. The use of such architectures for the protection of emerging and advanced technologies would play a key role in ensuring that the United States maintains its worldwide innovation leadership.
Topic:
Cybersecurity, Innovation, Academia, and Resilience
Political Geography:
China, Asia, North America, and United States of America

15. Global Value Chains, Risk Perception, and Economic Statecraft

Author:
Phoebe Moon
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
Many countries, including the United States and China, have come to see economic statecraft as superior to armed conflict. Faced with a trading partner’s economic sanctions, some countries try to avoid risk by complying with or ignoring the coercer’s demands, but others retaliate and escalate conflict. In recent years, sanctions have been applied, not only to “rogue” states, but against trading partners. The United States and China, but also Japan, Australia, and Canada, were either the target or purveyor of economic coercion by or against trading partners in the last five years. However, not all resulted in trade wars. When, then, do economic sanctions lead to trade wars? This policy brief examines the ongoing Japan-South Korea trade dispute with a focus on how policymakers’ risk perceptions regarding global value chains (GVCs) can influence when trade wars take shape.
Topic:
Industrial Policy, National Security, Economy, Innovation, Global Value Chains, and Geoeconomics
Political Geography:
China, United States of America, and Indo-Pacific

16. Opening Up Military Innovation: Effects of Bottom‐​Up Reforms to U.S. Defense Research

Author:
Sabrina Howell, Jason Rathje, John Van Reenen, and Jun Wong
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The U.S. economy’s productivity growth has slowed down in recent decades. This slowdown appears due in part to declining innovation, especially among high‐​growth new firms, making the design of innovation incentives particularly important. One overlooked but crucial decision a government or private‐​sector research funder must consider is whether to take a centralized top‐​down approach, tightly specifying the desired innovation, or a more open bottom‐​up approach, giving more latitude to firms to define their research proposals. The bottom‐​up approach may be useful if the research funder is uncertain about what opportunities exist. We compare these two strategies by studying a major reform to the Small Business Innovation Research (SBIR) program at the U.S. Air Force.
Topic:
Reform, Economy, Research, Innovation, Defense Industry, and Military
Political Geography:
North America and United States of America

17. The Effect of Tax Avoidance Crackdown on Corporate Innovation

Author:
Qin Li, Mark (Shuai) Ma, and Terry Shevlin
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The past three decades have witnessed significant increases in corporate tax avoidance at both the state and federal levels. U.S. firms utilize one of the most important tax avoidance strategies, which involves extensively using intangible assets to shift taxable income from high‐​tax areas to low‐​tax areas to reduce income taxes. To combat such income‐​shifting behavior and crack down on tax avoidance, more than 20 U.S. state governments have adopted addback statutes that specifically target tax‐​motivated income‐​shifting transactions that use intangibles. These statutes require firms within the adopting state to add back intangible‐​related expenses paid to related parties in other states to their state taxable income. For example, Connecticut adopted an addback statute in 1999. That means if a firm’s subsidiary in Connecticut pays royalty fees for using patents held by a subsidiary in another state that does not tax intangible income, the firm needs to add the royalty fees to the taxable income reported in Connecticut. Thus, these provisions are expected to effectively limit firms’ ability to avoid paying state income taxes by preventing them from using intangible assets to shift income across states. Different state governments adopted the addback statutes at different times, providing a powerful setting for examining the economic consequence of this tax policy.
Topic:
Economic Policy, Innovation, Corporations, and Tax Evasion
Political Geography:
North America and United States of America

18. The Race to Electric Vehicles: Technology, US-China Rivalry, and Big Money

Author:
Ariel Sobelman
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
In recent years Israel has become a leading player in auto tech, and China is interested in Israeli developments in a field that is expected to assume a significant role in the rivalry between Washington and Beijing. Therefore, it is important for Israel to define a national strategy on the issue, in order to avoid unnecessary involvement in the inter-bloc clash
Topic:
Green Technology, Innovation, Rivalry, and Electric Vehicles
Political Geography:
China, Asia, North America, and United States of America

19. Introducing Third Way’s US-China Digital World Order Initiative

Author:
Valerie Shen and Jayson Browder
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Third Way
Abstract:
If it wasn’t clear three months ago, it is clear now: the next global era will be defined by democracy versus autocracy. In this competition, a new and decisive divide pits America’s approach of “digital democracy” against China’s approach of “digital autocracy.” This great divide places the US and allies on one side and China's unfettered access to sensitive data on the other. China’s digital authoritarianism has been described as "one giant QAnon" and is ubiquitous among the 1.4 billion inhabitants of the country. Moreover, one of the greatest threats to American national security interests is if China prevails in exporting and normalizing its model of digital supremacy. China’s global network of surveillance systems is antithetical to liberal democratic values, as it monitors, punishes, and conditions citizens, as well as influences them through automated disinformation campaigns. China’s ambition for global digital supremacy is real and supported by aggressive diplomatic efforts and massive financial investments. The effort by the United States and like nations to maintain a peaceful and prosperous world order will require a level of sophistication and commitment unrivaled in our history. China is not only an adversary. It is sometimes a partner whose massive economy is deeply entwined with that of the US and other friendly nations. This is not the zero-sum game of the Cold War conflict, and the hope is that it never becomes so. Will liberal democracies strengthen and proliferate or weaken and dwindle in the 21st century? The Chinese state intends to shape the global digital order in its image by redrawing technological norms and standards. Ultimately, the US-China national security competition may hinge on who sets the digital world order.
Topic:
Science and Technology, Authoritarianism, Democracy, Digital Economy, Innovation, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

20. Three Reasons Why CHIPS-plus is a Big Win for US National Security

Author:
Tom Klein
Publication Date:
08-2022
Content Type:
Commentary and Analysis
Institution:
Third Way
Abstract:
On August 9th, 2022, President Biden signed vital bipartisan legislation to compete with China. H.R. 4346, called the CHIPS and Science Act or “CHIPS-plus,” would pave the way for nearly $280 billion in incentives to boost US-based chip manufacturing, scientific research, technology standards setting, and STEM education. These initiatives directly protect our immediate security vulnerabilities in the US military and support our long-term national security competition with China by promoting democratic norms and spurring critical defense innovations.
Topic:
Security, National Security, Science and Technology, Military Strategy, Innovation, and CHIPS
Political Geography:
China, Asia, North America, and United States of America