Investing in the Innovation Economy

Harvard Business School professor Bill George has a Santa's Wish List for incoming President Barack Obama. You won't find a 3G iPhone or a Wii Fit on the list, but there are seven ideas that George believes can get the economy going again.

The idea is to build upon America's competitive advantage in three areas: entrepreneurship, innovation, and creativity, George writes in BusinessWeek.

"The Obama Administration should ignite new company formation as the vehicle to create tens of millions of new jobs. These new businesses should take on the nation's greatest challenges in renewable energy and the environment, health care, education, transportation, and global peace."

Here is a summary of his eight ideas -- see his article for his more detailed rationale.

Increase funding for scientific discovery.
Supplement college scholarships for science, math and engineering.
Negotiate free trade agreements with the Americas, Asia, Africa, and the Middle East.
Incent venture capital formation with tax policies favoring long-term capital gains.
Offer zero capital-gains tax to founders and original investors when new companies are sold.
Increase tenfold H-1B visas, and offer accelerated citizenship for foreign graduates who earn advanced technical degrees at U.S. institutions.
Creating retraining grants for people entering technical fields.

According to George, "These steps will jump-start the innovation economy by providing built-in long-term growth, redistributing wealth without punishing the wealthy, and creating millions of well-paying jobs."

Make sense to you? Is George overlooking other critical rebuilding ideas?

Sean Silverthorne

Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.

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