Innovation has always been a hot topic, and it is more so in the United States. There are many think tanks that have done extensive research on the subject and have produced numerous books and reports on the subject. In fact there is a whole industry of consultants who have been created to help businesses and government agencies implement innovation policy. One thing that has always been apparent in these think tanks is the need for a better way to gather information on innovation.
The problem is that much of the information that is collected does not make it into the innovation pipeline. One of the most obvious places for information to be used is in the business innovation process. Businesses spend large amounts of time coming up with new products or innovative processes to sell their products to customers. It is important for this process to be a dynamic one that is constantly being refined. Otherwise, the innovation process will be much like a stagnant pond where nothing evolves. Without a viable product or a way to market existing products, innovation becomes a slow and arduous process.
Another important factor in the innovation process that should be carefully studied is the impact that corporate tax rates have on the rate of innovation. A recent study showed that corporations with high corporate tax rates were far less likely to use new technology as a means of increasing their overall gross domestic product (GDP). The authors of this study suggested that the lack of corporate innovation was a result of the fact that these highly profitable corporations did not need to worry about decreasing their current tax structure since they would still be able to earn enough money from existing sales to support themselves.
An increase in the level of government regulation is another area that should be examined closely. There are many arguments concerning whether increased regulation is actually good for economic growth. Proponents of regulation argue that it will prevent inefficient businesses from becoming large corporations and preventing innovation from occurring. Proponents of decreased regulation argue that it will prevent the free market from providing goods and services that consumers demand.
Currently, the United States has both a low corporate tax rate and an excessively high rate of taxation on individual income-earners. Both conditions obviously hinder the ability of businesses to innovate. In order to remedy this problem, a national business incubator should be developed. By partnering with other venture capital groups and/or local governments, a group of innovative business leaders can be provided the assistance they need in order to address these issues. Such an incubator could provide startup capital, and the experience of having mentors who can provide them with the knowledge, skills, and guidance they need in order to make a business success.
The United States currently has one of the highest levels of taxation in the world. Many people believe that this heavy-handed approach is necessary in order to spur innovation. The solution, according to the proponents of a more unregulated corporate tax rates and a more unregulated market, is to reform the tax code in order to lower corporate tax rates. The European Union and other international countries have recently implemented measures that will reduce their own corporate tax rates, thus increasing competitiveness around the world. In Europe, the addition of a Yozma program, which provide European start-ups with advice and funding, as well as protection from excessive taxation by the European Union’s Competitiveness Commission, is encouraging new ventures to start operating within the European Union.