The Tribulations of Innovation Policy

A recent report issued by the Information Technology and Innovation Foundation entitled “The Good, the Bad, and the Ugly of Innovation Policy” evaluates the innovation policies of different countries and their impact on the global economic system, as well as the sectors in which most innovation policies are implemented.  The authors discuss how innovation, which they define as “the improvement of existing or the creation of entirely new products, processes, services, and business or organizational models”, has four possible outcomes for both the host country and the world: Good, Bad, Ugly and Self-Destructive.” According to the authors: “Good,” benefits the country and the world simultaneously; “Bad,” fails to benefit either the country or the world; “Ugly,” benefits the country at the expense of other nations;  “Self-destructive,” hurts the country while benefiting others.

The report finds that, “far too many countries place a dominant focus on exporting tradable goods as their path to economic growth, while neglecting the opportunity to spur economic growth by raising the productivity of the non-traded sectors of their economy.”  In fact, some argue that China best exemplifies this new trend.

In order to innovate successfully the authors of the report recommend that governments find an appropriate balance within the “Innovation Policy Triangle”: business, technology, and regulations.  The report concludes by arguing that countries must stop viewing unipolarity as the major goal, but rather, embrace the position that mutual global prosperity is the major goal.

Posted by: Wesley Milillo

Sources:, ITIF,,

Photo credit: Destination: Future courtesy of flickr user Gilderic


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