Over the past decade, the United States (U.S.) innovation ecosystem has repeatedly been subjected to system-wide shocks. These shocks have ranged from the dot-com bubble burst, to new waves of off-shoring to the recent meltdowns in the automotive and financial sectors. While past research has looked at the impact of such crises on jobs or discrete sections of the U.S. economy, it has failed to look at how such shocks may change the global locus of productive activity, technology trajectories, and the comparative advantage of nations.
Intellectual Merit: This research demonstrates how the burst of the telecommunications bubble in March 2000 affected the quantity, direction, and locus of innovation both in the U.S. and internationally. The research focuses on innovation in photonics, a general purpose technology central to growth not only in the telecommunication industry, but also in energy, biotechnology, sensing, imaging, computing and military applications. This research answers five questions: (1) How does off-shoring impact the research and development (R&D) trajectories of U.S. firms? (2) If off-shoring firms abandon R&D in new technologies, do individual inventors continue their research efforts in those new technologies in other institutions still in the U.S.? (3) Do alternative national innovation systems, such as Japan's, have greater resilience to such shocks? (4) Do the alternative production economics and institutional environments in the developing nations hosting the off-shoring firms lead to new technology trajectories in those nations? (5) How do the characteristics of individual U.S. inventors affect their career trajectories during economic downturns? The education plan develops a new curriculum to train a new generation of university graduates and policy analysts in analytic tools.
Broader Impact: During times of financial and industrial crisis, policies often focus on responding to job loss or providing firm or industrial bailouts, rather than the long-term impact on the broader innovation ecosystem. This integrated research and education plan provides policy-makers with insights into what aspects of the U.S. innovation ecosystem are most affected by economic downturns, what technologies are most susceptible to off-shoring, and how to bolster national comparative advantage during such crises.
