I do have some prepared remarks, I apologize for that, but before doing so – I am very proud to be here again as a supporter of Innoteque. We were there at its creation in October 2016. I was very pleased to participate in the Cluj chapter of the 2016 event. I am also very very proud, actually privileged, to be associated with the two engines of today and tomorrow’s events – Abbvie, an American pharmaceutical company – you’ll be hearing more from them later – but then especially the Romanian-American Foundation, our best partner in Romania that has done a lot of work in a number of areas to support innovation in Romania.
And thanks to Oana, to Andrei, and to Alexandra for their invitation to be with you this morning.
I was asked to outline some aspects of the U.S. innovation and entrepreneurship ecosystem, to discuss some of the politicies and laws that have created an enabling environment for innovation and entrepreneurship in my country. You will be hearing more about that from my colleague from the National Science Foundation, who will be speaking in a few moments as well.
The American spirit of entrepreneurship is one of our most admired qualities. If you think about entrepreneurship in the United States, it is a reflection of our society – based on shared opportunity, quality education, and access to capital – supported by the rule of law and strengthened by high tolerance for risk-taking.
Together with entrepreneurship, in the United States we have a thriving environment of innovation. We have created this by protecting intellectual property rights, which are critical to spurring economic growth and strengthening an innovative economy. For example, in the pharmaceutical industry, the cost of researching, developing, and testing a new medicine can be astronomical. In the United States, only 12 percent of medicines in clinical trials actually make it to a patent. Companies can only afford this upfront investment if they can profit from those medicines that do make it to market, which can only happen through vigorous intellectual property rights protection.
Taxation has also played a role. In 1981, the United States introduced the Research and Experimentation Tax Credit, which allows companies to deduct some of the costs associated with research and development from their tax bills. In 2017, the U.S. Government gave tax credits equal to 13.5 billions of dollars to support R&D across the American economy.
Another important mechanism to moderate and control the risk associated with innovation is bankruptcy law. Not every endeavor will find success, but that does not mean companies should be forced into dissolution permanently. Bankruptcy laws provide transparency for investors and corporations alike, providing a fresh start for the honest but unfortunate debtor and ensuring equal treatment of creditors. For example, in 1996, comic book giant Marvel Comics filed for bankruptcy and underwent restructuring. Twenty years later, a resurgent Marvel, now known as Marvel Studios, is a multi-billion dollar subsidiary of Walt Disney Studios, regularly producing some of the world’s highest-grossing films.
And there are many, many examples of entrepreneurs, innovators, who have sought to bring a product to market and failed, but then using the bankruptcy laws in the United States, found a way to recreate either their companies or themselves and bring new products to market.
The United States also benefits from mature entrepreneurial ecosystems that are so critical for their support of individual startups. Healthy ecosystems include a vibrant mix of universities developing the latest technology; incubators and accelerators to nurture ideas and impart concrete business skills; advisors, mentors, and networks of past, present, and future business leaders; and, of course, funding organizations, including business angels, crowdfunding platforms, and investment and venture capital.
As hubs for collaborative design and interdisciplinary activity, universities are crucial to these ecosystems, particularly when they work in partnership with industry. These collaborations create mutually beneficial relationships by broadening the base for innovation funding, providing students with hands-on, practical experience, and allowing companies to commercialize cutting-edge technology.
The 2016 Innoteque Conference really tried to focus on this aspect of innovation ecosystem that is supporting the development of innovation in a university setting, but then also supporting the development of a legal framework that would allow the transfer or the transition of that R&D into operational applications.
The legal infrastructure does exactly that. It allows universities to benefit from turning groundbreaking academic research into market-ready products, thereby creating the right incentive system to spur innovation. Stanford University’s science park and the Research Triangle in North Carolina and many, many other locations in the U.S. offer examples of university-industry partnerships that foster innovative economic development. Great startups accumulate and thrive where these elements are present.
Again, this was the result of deliberate lawmaking. In the early 1980s, laws were put down to vote to foster this partnership between universities and industry. Again, in 2016 we tried to encourage the Romanian Government to undertake similar lawmaking, but that hasn’t happened yet.
Broader policy also plays a role. Economic policy that is transparent, stable, and predictable is the best way to create an economic environment where innovation and investment can thrive. Before undertaking policy changes, undertaking deliberate, genuine consultations with all stakeholders, applying basic cost-benefit analyses, are again key to good policy-making.
Public sector integrity and transparency, public administration efficiency, quality public services, and infrastructure are essential for creating a level playing field for all private sector actors. This is even more important for innovators seeking to create new paths where none existed before.
Healthcare organizations today face unprecedented challenges, and I thank the organizers for focusing on healthcare as one of the three key topics that we’re discussing in the course of the conference. Healthcare innovators must improve access to health services, and at the same time, improve the quality of these services. They must reduce costs and increase efficiency. The challenge of balancing these competing forces requires us to think creatively and find innovative solutions.
Scientists, researchers, and entrepreneurs are revolutionizing healthcare and health education through innovation. The pharmaceutical industry has delivered tremendous progress in the past years, providing new medicines that have changed the lives of millions of patients who suffer from HIV, certain cancers, and Hepatitis C, for just a couple examples. Artificial intelligence, 3D printing, telemedicine, remote monitoring, and use of virtual reality tools are changing the way we access health care.
Digitization is particularly promising because it creates a unique opportunity to design personalized care solutions for patients according to their specific needs. This helps create healthcare systems that are more efficient, sustainable, and transparent.
In conclusion, we must keep in mind that we do not pursue innovation for its own sake, but rather for the sake of its benefits. We pursue it for the medicines that extend our lives and improve our quality of life; for the cleaner fuels that power our lives without polluting our world; for the biotechnologies that feed us sustainably by reducing our environmental footprint; for the robotics, artificial intelligence, and other technologies that open up a world beyond our previous imaginings; and, for the economic growth that enables us to enjoy those fruits of our innovation.
Thank you all for your attention.