Spring 2012

Stimulating Energy Technology Innovation

Author
Ernest J. Moniz
Abstract

The innovation system has interrelated components of invention, translation, adoption, and diffusion. Energy technology innovation has lagged that in other domains, and there is a compelling public interest in picking up the pace through appropriate government action. Government and universities are creating new approaches in the invention and translation stages. The Department of Energy (DOE) has implemented novel programs such as ARPA-E. Research universities have moved closer to the marketplace through more diversified industry collaboration models, such as convening research-sponsoring companies both horizontally in a sector and vertically across the innovation chain. Much more needs to be done to expand public-private partnerships and to define a broadly accepted government role in the adoption and diffusion stages. An administration-wide Quadrennial Energy Review process, informed by technical analysis and social science research, offers the best opportunity in this regard.

ERNEST J. MONIZ is the Cecil and Ida Green Professor of Physics and Engineering Systems and Director of the Energy Initiative at the Massachusetts Institute of Technology. He served as Under Secretary of the Department of Energy and as Associate Director for Science in the Office of Science and Technology Policy in the Executive Office of the President during the Clinton administration. He currently serves on the President's Council of Advisors on Science and Technology.

The U.S. economy was the engine for twentieth-century global development. The key role of R&D in driving productivity growth has been documented extensively, and American serial innovation was instrumental in producing not just improved products but new technology-based industries. The world’s preeminent research university system, a magnet for attracting top talent globally, proved central to these developments. A recent study1 of the entrepreneurial impact of MIT alone found more than twenty-five thousand alumni-founded companies generating $2 trillion in sales and more than three million jobs worldwide. The local effect is strong, with Massachusetts-based firms producing more than $150 billion in sales and nearly a million jobs worldwide.

Societal features such as a mobile workforce and acceptance of business and investment risk support a culture of innovation. Natural advantages, including a continental scale, an immense natural resource base, the world’s third-largest population, and the biggest market for new products and services, are also important for U.S. performance. Together, all of these factors facilitate the capture of invention for domestic economic activity and for building an export base.

While this U.S. model remains strong, its very success is changing the game in an age of globalization. Many countries have invested heavily in their research universities, stemming the loss of scientific and engineering talent to other nations and encouraging start-up companies. Further, the fastest-growing markets are in the large emerging economies, which attract not only manufacturing but also global industry R&D. With the largest markets for new energy infrastructure located outside the United States, concerns about the competitiveness of the American economy over time have elevated the importance of retaining an innovation edge.

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Endnotes

  • 1Edward B. Roberts and Charles Eesley, Entrepreneurial Impact: The Role of MIT (Kansas City, Mo.: Kauffman Foundation, 2009).
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