Event Information

With ongoing crises in Ukraine, Syria, and other regions of the world, U.S. global leadership is arguably as critical now as it has ever been. However, many question how the United States should exercise its leadership, what foreign policy agenda it should pursue, and how it should configure its military and security agencies going forward. In a recent speech at West Point, President Obama laid out his foreign policy agenda for the remainder of his presidency. While the Obama Administration will pursue the president’s agenda as laid out at West Point, others in Washington have different views on how best to manage U.S. foreign policy going forward.

On June 11, the Foreign Policy Program at Brookings will host Senator John McCain (R-AZ), former presidential candidate and member of the Senate Committee on Foreign Relations, for an address on the future of U.S. foreign and security policy. The address will be introduced by Brookings Senior Fellow and Director of Research for Foreign Policy Michael O’Hanlon, and the discussion following the Senator’s address will be moderated by Senior Fellow Robert Kagan.

After the program, Senator McCain will take audience questions.

Join the conversation on Twitter using #McCain

In the year since we released “The Rise of Innovation Districts: A New Geography of Innovation in America,” Brookings has visited or interacted with dozens of leaders in burgeoning innovation districts in the United States and Europe. In so doing, we’ve sharpened our knowledge of what’s happening on the ground and gained some important insights into how cities and metros are embracing this new paradigm of economy-shaping, place-making, and network-building.

Innovation districts capture the remarkable spatial pattern underway in the innovation economy—the heightened clustering of anchor institutions, companies, and start-ups in small geographic areas of central cities across the United States, Europe, and other global-trading regions.

The rise of innovation districts has been situated against the familiar backdrop of suburban corporate campuses and science parks. Accessible only by car, these spatially isolated corridors place little emphasis on the quality of life or on integrating work, housing, and recreation.

By contrast, in our report we found the rise of urban innovation hubs to be the organic result of profound economic and demographic forces that are altering how we live and work. The growing application of “open innovation”—where companies work with other firms, inventors, and researchers to generate new ideas and bring them to market—has revalued proximity, density, and other attributes of cities. At the same time, the growing preference of young talented workers to congregate in vibrant neighborhoods that offer choices in housing, transportation, and amenities has made urban and urbanizing areas increasingly attractive.

We also found that innovation districts uniformly contain a mix of economic, physical, and networking assets. Economic assets are the firms, institutions, and organizations that drive, cultivate, or support an innovation-rich environment. Physical assets are the public and privately owned spaces—buildings, open spaces, streets, and other infrastructure—designed and organized to stimulate new and higher levels of connectivity, collaboration, and innovation. Lastly, networking assets are the relationships between actors—such as between individuals, firms, and institutions—that have the potential to generate, sharpen, and/or accelerate the advancement of ideas. These assets, taken together, create an innovation ecosystem—the synergistic relationship between people, firms, and place that facilitates idea generation and advances commercialization.

One year later, innovation districts continue to rise. What have we learned about how they are evolving?

A simple Google search will reveal the extent to which the language of “innovation districts” (or “innovation quarters,“ “innovation neighborhoods,” or “innovation corridors”) has rapidly permeated the field of urban and metropolitan economic development and place-making.

In some places, this labeling is being accurately used by globally recognized research institutions (e.g., Carnegie Mellon in Pittsburgh, Drexel University in Philadelphia) that are both experiencing extraordinary growth near their campuses as well as designing intentional efforts to build on their distinctive assets. In communities as diverse as Philadelphia, Pittsburgh, and St. Louis in the United States and Manchester and Sheffield in England, local leaders are conducting deep empirical analysis to understand their competitive advantages and existing weaknesses within their innovation ecosystem. They are exploring what it means to encourage greater collaboration and cooperation across their institutions, firms, and entrepreneurs. And they are exploring ways to better create “place” so as to increase overall vitality, facilitate innovation, and spur the growth of new businesses and jobs.

In other places, the nomenclature reflects an aspiration—and is spurring more deliberate efforts by local stakeholders to grow distinctive innovation ecosystems. In cities like Albuquerque, N.M., Chattanooga, Tenn., Chicago, Ill., Durham, N.C., and San Diego, Calif., local leaders are using the innovation district paradigm as a platform to measure their current conditions, develop strategies for addressing gaps and challenges, and build coalitions of stakeholders that can together help realize a unified vision for innovative growth. Some of these budding districts represent typologies not outlined in our report but that are ripe for future research, including “start-up” enclaves in or near downtowns of cities that lack a major anchor as well as “public markets” that blend locally produced food products and crafts with maker spaces, digital design, and other innovations in the creative arts.

There is one unfortunate trend in the rising use of the "innovation district" lexicon. In a number of cities, local stakeholders have applied the label to a project or area that lacks the minimum threshold of innovation-oriented firms, start-ups, institutions, or clusters needed to create an innovation ecosystem. This appears to result either from the chase to jump on the latest economic development bandwagon, the desire to drive up demand and real estate prices, or sometimes a true lack of understanding of what an innovation district actually is. The motivation for real estate developers to adopt the moniker seems clear: to achieve a price premium for their commercial, residential, and retail rents. Yet these sites are typically a collection of service-sector activities with little focus on the innovation economy. The lesson: labeling something innovative does not make it so.

From all these observations, it is clear that the field needs a routinized way to measure the starting assets of innovation districts—both to separate true districts from “in name only” ones as well as to give individual communities a platform for developing targeted strategies going forward. This means both running the numbers—conducting a quantitative audit—and undertaking a more qualitative assessment of strengths and weaknesses. Irrespective of their phase of development, innovation districts must evaluate the extent to which they have a critical mass of economic, physical, and networking assets to collectively generate the vitality that these districts demand. They need to evaluate the competitive advantages they have in certain economic sectors and learn how to cultivate them. And they need to ensure that they have the connectivity, diversity, and quality of place necessary to create a unique and vibrant environment in which innovation can thrive.

To facilitate this process, we are working in close collaboration with Mass Economics and the Project for Public Spaces to develop an audit template and tool. Over the next year, we intend to sharpen this tool in a subset of innovation districts across the country and then encourage others to employ it in their own established or burgeoning districts.

Second, the core economic assets of innovation districts are not fixed; in fact, many innovation districts are being created or enhanced by the relocation of major anchor facilities as institutions strive to achieve the highest return on investment.

The conventional notion of an “anchor” institution is that it is solidly weighted in a particular place. Yet over the past decade a substantial number of innovative companies and advanced educational and research institutions have moved key facilities and units as a means of generating greater innovation output. Examples of new locations include the University of California-San Francisco’s biotechnology campus in Mission Bay (2003); the University of Washington’s medical research hub in Seattle’s South Lake Union (2005); Brown University’s medical school in downtown Providence, R.I. (2011); Duke’s Clinical Research Institute in downtown Durham (2013); Carnegie Mellon University’s Integrative Media Program in the Brooklyn Navy Yard (2013); and, most famously, the new Cornell Tech campus on Roosevelt Island in New York City (2015).

These “first mover” relocations show how corporate and university leaders are departing from the tradition of building new facilities within their existing footprint and are willing to seek out new areas (and even new cities) to retain, or achieve, competitive advantage in their respective clusters and fields. As Cornell Professor Ronald Ehrenberg said about his school’s isolated Ithaca, N.Y. campus, “It is very, very difficult for us to do the kind of development through tech transfer that a place like Stanford or Berkeley can do in San Francisco or Harvard or MIT can do in Boston.” Our strong sense in talking with leaders around the country is that we are still at the early stage of corporate and university relocations given the extent to which urban areas have been revalued. The physical relocation of key innovation assets has now become a critical competitiveness strategy for companies, universities, and even states.

In some cases, the “unanchoring of anchors” is also compelling local leaders to rethink the traditional borders and boundaries of the innovation economy. In Philadelphia, for example, University City has always been recognized as a settled innovation hub, given the co-location of such anchor institutions as Drexel University, the University of Pennsylvania, the University City Science Center, and others. The recent decision of Comcast to consolidate its corporate presence in the downtown area and build its major new Innovation and Technology Center less than 10 blocks from 30th Street Station and the Drexel Campus is convincing some leaders to “stretch” Philadelphia’s University City district to incorporate this new corporate giant.

While our paper dissected various types of physical assets to help practitioners understand their individual roles and value, the more important message to convey now is the imperative to combine and activate physical assets in ways that create vibrant “places.” The Project for Public Spaces aptly describes place as “…environments in which people have invested meaning over time. A place has its own history—a unique cultural and social identity that is defined by the way it is used and the people who use it.”¹

Our review of innovation districts, including those cited in our paper, reveals that many have not yet maximized the potential for creating lively communities in which their residents and workers feel invested, reducing the potential innovation output of these communities. When designed and programmed well, a district’s public spaces—whether within buildings or outside of them—facilitate open innovation by offering numerous opportunities to meet, network, and brainstorm. Strong places entice residents and workers to remain in the area off hours, extending the opportunities for collaboration. Strong places create a culturally and educationally enriched environment that strengthens human interaction, knowledge, and motivation.

While some university-led districts have made some improvements over the years, districts anchored by medical campuses have significant work ahead. These spaces were designed as isolated fortresses that valued parking over walking (ironic given their health mission), with little or no attention paid to amenities, cultural activities, retail, or housing. Significantly, some medical campuses are often located in close proximity to downtowns, as part of universities, or near organic entrepreneurial communities (e.g., the proximity of Oklahoma City’s Health District to Automobile Alley). This raises the potential for smart (and related) place-making activities in a nearby area and reinforces the need to rethink traditional geographies and artificial boundaries when considering interventions.

The past year has seen substantial growth in multicity intermediaries along with scores of locally grown accelerators and incubators. It appears more than ever that intermediaries are increasingly the catalyst to growing innovation and entrepreneurial energy within local districts and across start-ups, small and medium-sized enterprises, and, even to some extent, large companies and research institutions. They are designed to think and act horizontally, encouraging people and firms to interact and work together in ways and at a scale previously unseen.

A growing and increasingly important role for intermediaries is helping innovation districts evolve from the traditional “research and development” model to a “search and development” one, where crucial answers to their innovation questions and technological challenges are discovered by finding and collaborating with other firms. Some districts immediately recognized this potential and have gone to great lengths to grow, lure, and fund the development of multiple intermediaries across their districts.

The Cortex Innovation Community in St. Louis has, in a short period, clustered new buildings owned and/or supported by a number of well-respected intermediaries. These development and programmatic moves are effectively creating a new focal point for Cortex innovation activities. The new Cambridge Innovation Center, which offers space for start-ups combined with access to venture capital firms, professional services, and a plug-and-play physical environment, is already at 85 percent occupancy. A newly constructed Tech Shop—a do-it-yourself “maker space” equipped with industrial tools, machinery, and technology to support entrepreneurs—is under construction nearby. The near complete renovation of the Center for Emerging Technologies, which provides training, specialized facilities, and technical support, adds yet another layer of support for entrepreneurs and start-ups. Adding more to this mix is a soon-to-be-constructed space for tech-commercial activities combined with new housing, which will exponentially increase the number of people in a very small radius.²

As one can imagine, this clustering was deeply intentional and viewed as a way to stimulate new relationships, new networks, and the cross-fertilization of ideas; Cortex refers to this deliberate process as “innovation engineering.” We anticipate more innovation districts to follow suit, pursuing, if not cultivating, such intermediaries in their own innovation ecosystems.

Finally, the rise of innovation districts takes place in a national and urban political environment that demands inclusive growth and equitable outcomes.

The past year has seen the elevation of income inequality and social mobility as issues of national and urban significance. With the federal government mired in partisan gridlock, cities have become the vanguard of efforts to raise the minimum wage, expand affordable housing, and extend pre-K education, among other initiatives. These efforts come at a time when the civil unrest in Baltimore and Ferguson has refocused national attention on neighborhoods of high poverty.

Because of their location in the cores of central cities, many established and emerging innovation districts are located several blocks away from distressed communities. This proximity creates an enormous opportunity to show the positive impact that innovative growth can have on inclusive outcomes. Innovation districts create employment opportunities that can be filled by local residents and procurement and construction opportunities that can be fulfilled by local vendors and contractors. The districts generate tax revenues that can be used to fund neighborhood services and neighborhood regeneration. And they offer the potential to link the ample expertise and talent in anchor educational institutions with the needs of neighborhood schools and children.

Recognizing these benefits, local leaders are demonstrating a genuine commitment to growing more inclusive districts. In our work, we’ve seen several early models that could be built on and replicated. In the Barcelona 22@ district, for example, leaders are trying to quantify the growth in service jobs accessible to local and regional residents while, at the same time, connecting those residents to training that increases their skills in more innovation-oriented sectors. Last year, Drexel University opened a new “urban extension center” that offers career-building workshops, legal clinics, and other services to residents of the adjacent Mantua Promise Zone. The Evergreen Cooperative in Cleveland’s University Circle district has been working for several years to leverage local purchasing power to create business ownership and employment opportunities for low-income residents. And in Baltimore, the University of Maryland partnered with surrounding neighborhood organizations, residents, and institutions to develop a detailed new plan for building what the Baltimore Southwest Partnership envisions as a “diverse, cohesive community of choice built on mutual respect and shared responsibility.”

These examples represent concrete initiatives to ensure that nearby neighborhoods and their residents connect to and benefit from new growth opportunities in innovation districts and beyond. Scaling such efforts will be critical in the years to come, as the success of these districts will be defined in large part by their broader city and regional impacts.

As Brookings works this year to help unleash more innovation districts across the U.S. and Europe, we will continue to hone our observations and knowledge about trends, challenges, and strategies. We will compile and publish what we have learned for anchor leaders, policymakers, scholars, and practitioners, focusing on many of the issues—accelerating commercialization to improving inclusion—noted above. We will do this work in close collaboration with proven organizations like Mass Economics and Project for Public Spaces. We look forward to contributing to this rapidly changing space via empirical and on-the-ground research, strategy and policy development, convenings, and network building. Stay tuned.

Read The Rise of Innovation Districts: A New Geography of Innovation in America

Supporters of the Justice and Development Party (AKP) who often use the term “New Turkey” believe that the 12-year rule of Prime Minister Recep Tayyip Erdoğan has opened a new phase in Turkish history.

They are partially right. Even those who resent Erdoğan's autocratic discourse need to recognize that the country has come a long way in the last decade in areas such as health-care, infrastructure, fiscal discipline, inflation, municipal services and civil-military relations. The big question that continues to polarize Turkish politics, however, is whether the new Turkey is more democratic than the old one.

Again, the supporters of the AKP answer this question with a resounding “yes.” In their eyes, the AKP represents the will of the people and, for the first time in modern Turkish history, the military is unable to exert real influence behind the scenes. The critics of the AKP, however, strongly differ. They believe Erdoğan's understanding of democracy is based on a simplistic and populist notion of winning elections. To them, this is a majoritarian and electoral understanding that comes at the expense of pluralism and liberalism. Such electoral autocracy does not pay attention to freedom of speech, the rule of law and the separation of powers and, thus, condemns Turkey to a second-class category among democracies. For them, this is exactly why the new Turkey of Erdoğan resembles the old one, where the military used to call the shots. In other words, the old type of authoritarianism has been replaced by a new one.

It is important to note that the West -- mainly the United States and the European Union -- tend to agree with the critics of Erdoğan. In the wake of recent local elections, it was hard to find a single editorial in Western media praising the "new" Turkey's democratic standards. Instead, the focus was on corruption scandals and the bans imposed on social media like Twitter and YouTube. There is now a general consensus among Westerners that Erdoğan's growing authoritarian style has eroded the positive image of the Turkish model that was praised only a few years ago. Under such circumstances, the question that most Westerners ask is simple: Why is an increasingly authoritarian Erdoğan still winning elections? The answer to this question is equally as simple: “It's the economy, stupid!”

The AKP voters come from the largest segments of Turkish society: the urban-rural poor as well as the lower-middle classes aspiring to upper-middle class status. These masses amount to probably 60 to 70 percent of Turkish society. In their eyes, bread and butter problems take precedence over the Twitter ban, political freedoms, the independence of the media, crony capitalism or separation of powers. What really matters for most of these AKP voters are economic services and living standards. The fact that they come from conservative and nationalist backgrounds and share the patriarchal culture of the prime minister is the icing on the cake.

As a result, it should not be surprising that Erdoğan will keep winning elections as long as the economy performs reasonably well and adequate socioeconomic services are provided to these large segments of society. This is also why the real paradox of the new Turkey is to be found beyond the economy and elections.

The real paradox of the new Turkey is the following: If Erdoğan is indeed becoming increasingly authoritarian, why is he the only hope of Turkey for solving the Kurdish problem? This paradox is even more puzzling, since solving the Kurdish problem requires the opposite of what Erdoğan seems to provide: democracy, freedom of speech, rule of law, separation of powers, liberalism, decentralization of decision-making and less patriarchal governing structures.

Can Erdoğan provide all these attributes with his more authoritarian style? If the answer is “no,” why do the Kurds seem ready to support him? To answer this paradox, we need to analyze the pragmatic and Machiavellian side of Erdoğan. We will do so next week.

This piece was originally published in Today's Zaman.

A review essay of “Governance of Socio-technical Systems: Explaining Change”, edited by Susana Borrás and Jakob Edler (Edward Elgar, 2014, 207 pages).

Phasing-out a useful and profitable technology

I own a Nokia 2330; it’s a small brick phone that fits comfortably in the palm of my hand. People have feelings about this: mostly, they marvel at my ability to survive without a smart-phone. Concerns go beyond my wellbeing; once a friend protested that I should be aware of the costs I impose onto my friends, for instance, by asking them for precise directions to their houses. Another suggested that I cease trying to be smarter than my phone. But my reason is simple: I don’t need a smart phone. Most of the time, I don’t even need a mobile phone. I can take and place calls from my home or my office. And who really needs a phone during their commute? Still, my device will meet an untimely end. My service provider has informed me via text message that it will phase out all 2G service and explicitly encouraged me to acquire a 3G or newer model. 

There is a correct if simplistic explanation for this announcement: my provider is not making enough money with my account and should I switch to a newer device, they will be able to sell me a data plan. The more accurate and more complex explanation is that my mobile device is part of a communications system that is integrated to other economic and social systems. As those other systems evolve, my device is becoming incompatible with them; my carrier has determined that I should be integrated.

The system integration is easy to understand from a business perspective. My carrier may very well be able to make a profit keeping my account as is, and the accounts of the legion of elderly and low-income customers who use similar devices, and still they may not find it advantageous in the long run to allow 2G devices in their network. To understand this business strategy, we need to go back no farther than the introduction of the iPhone, which in addition to being the most marketable mobile phone set a new standard platform for mobile devices. Its introduction accelerated a trend underway in the core business of carriers: the shift from voice communication to data streaming because smart phones can support layers of overlapping services that depend on fast and reliable data transfer. These services include sophisticated log capabilities, web search, geo-location, connectivity to other devices, and more recently added bio-monitoring. All those services are part of systems of their own, so it makes perfect business sense for carriers to seamlessly integrate mobile communications with all those other systems. Still, the economic rationale explains only a fraction of the systems integration underway.

The communication system of mobile telephony is also integrated with regulatory, social, and cultural systems. Consider the most mundane examples: It’s hard to imagine anyone who, having shifted from paper-and-pencil to an electronic agenda, decided to switch back afterwards. We are increasingly dependent of GPS services; while it may have once served tourists who did not wish to learn how to navigate a new city, it is now a necessity for many people who without it are lost in their home town. Not needing to remember phone numbers, the time of our next appointment, or how to go back to that restaurant we really liked, is a clear example of the integration of mobile devices into our value systems.

There are coordination efforts and mutual accommodation taking place: tech designers seek to adapt to changing values and we update our values to the new conveniences of slick gadgets. Government officials are engaged in the same mutual accommodation. They are asking how many phone booths must be left in public places, how to reach more people with public service announcements, and how to provide transit information in real-time when commuters need it. At the same time, tech designers are considering all existing regulations so their devices are compliant. Communication and regulatory systems are constantly being re-integrated.

The will behind systems integration

The integration of technical and social systems that results from innovation demands an enormous amount of planning, effort, and conflict resolution. The people involved in this process come from all quarters of the innovation ecology, including inventors, entrepreneurs, financiers, and government officials. Each of these agents may not be able to contemplate the totality of the system integration problem but they more or less understand how their respective system must evolve so as to be compatible with interrelated systems that are themselves evolving.  There is a visible willfulness in the integration task that scholars of innovation call the governance of socio-technical systems.

Introducing the term governance, I should emphasize that I do not mean merely the actions of governments or the actions of entrepreneurs. Rather, I mean the effort of all agents involved in the integration and re-integration of systems triggered by innovation; I mean all the coordination and mutual accommodation of agents from interrelated systems. And there is no single vehicle to transport all the relevant information for these agents. A classic representation of markets suggests that prices carry all the relevant information agents need to make optimal decisions. But it is impossible to project this model onto innovation because, as I suggested above, it does not adhere exclusively to economic logic; cultural and political values are also at stake. The governance task is therefore fragmented into pieces and assigned to each of the participants of the socio-technical systems involved, and they cannot resolve it as a profit-maximization problem. 

Instead, the participants must approach governance as a problem of design where the goal could be characterized as reflexive adaptation. By adaptation I mean seeking to achieve inter-system compatibility. By reflexive I mean that each actor must realize that their actions trigger adaption measures in other systems. Thus, they cannot passively adapt but rather they must anticipate the sequence of accommodations in the interaction with other agents. This is one of the most important aspects of the governance problem, because all too often neither technical nor economic criteria will suffice; quite regularly coordination must be negotiated, which is to say, innovation entails politics.

The idea of governance of socio-technical systems is daunting. How do we even begin to understand it? What kinds of modes of governance exist? What are the key dimensions to understand the integration of socio-technical systems? And perhaps more pressing, who prevails in disputes about coordination and accommodation? Fortunately, Susana Borrás, from the Copenhagen Business School, and Jakob Edler, from the University of Manchester, both distinguished professors of innovation, have collected a set of case studies that shed light on these problems in an edited volume entitled Governance of Socio-technical Change: Explaining Change. What is more, they offer a very useful conceptual framework of governance that is worth reviewing here. While this volume will be of great interest to scholars of innovation—and it is written in scholarly language—I think it has great value for policymakers, entrepreneurs, and all agents involved in a practical manner in the work of innovation.

Organizing our thinking on the governance of change

The first question that Borrás and Edler tackle is how to characterize the different modes of governance. They start out with a heuristic typology across the two central categories: what kinds of agents drive innovation and how the actions of these agents are coordinated. Agents can represent the state or civil society, and actions can be coordinated via dominant or non-dominant hierarchies.

Source: Adapted from Borrás and Adler (2015), Table 1.2, p. 13.

This typology is very useful to understand why different innovative industries have different dynamics; they are governed differently. For instance, we can readily understand why consumer software and pharmaceuticals are so at odds regarding patent law. The strict (and very necessary) regulation of drug production and commercialization coupled with the oligopolistic structure of that industry creates the need and opportunity to advocate for patent protection; which is equivalent to a government subsidy. In turn, the highly competitive environment of consumer software development and its low level of regulation foster an environment where patents hinder innovation. Government intervention is neither needed nor wanted; the industry wishes to regulate itself.

This typology is also useful to understand why open source applications have gained currency much faster in the consumer segment than the contractor segment of software producers. Examples of the latter is industry specific software (e.g. to operate machinery, the stock exchange, and ATMs) or software to support national security agencies. These contractors demand proprietary software and depend on the secrecy of the source code. The software industry is not monolithic, and while highly innovative in all its segments, the innovation taking place varies greatly by its mode of governance.

Furthermore, we can understand the inherent conflicts in the governance of science. In principle, scientists are led by curiosity and organize their work in a decentralized and organic fashion. In practice, most of science is driven by mission-oriented governmental agencies and is organized in a rigid hierarchical system. Consider the centrality of prestige in science and how it is awarded by peer-review; a system controlled by the top brass of each discipline. There is nearly an irreconcilable contrast between the self-image of science and its actual governance. Using the Borrás-Edler typology, we could say that scientists imagine themselves as citizens of the south-east quadrant while they really inhabit the north-west quadrant.

There are practical lessons from the application of this typology to current controversies. For instance, no policy instrument such as patents can have the same effect on all innovation sectors because the effect will depend on the mode of governance of the sector. This corollary may sound intuitive, yet it really is at variance with the current terms of the debate on patent protection, where assertions of its effect on innovation, in either direction, are rarely qualified.

The second question Borrás and Edler address is that of the key analytical dimensions to examine socio-technical change. To this end, they draw from an ample selection of social theories of change. First, economists and sociologists fruitfully debate the advantage of social inquiry focused on agency versus institutions. Here, the synthesis offered is reminiscent of Herbert Simon’s “bounded rationality”, where the focus turns to agent decisions constrained by institutions. Second, policy scholars as well as sociologists emphasize the engineering of change. Change can be accomplished with discreet instruments such as laws and regulations, or diffused instruments such as deliberation, political participation, and techniques of conflict resolution. Third, political scientists underscore the centrality of power in the adjudication of disputes produced by systems’ change and integration. Borrás and Edler have condensed these perspectives in an analytical framework that boils down to three clean questions: who drives change? (focus on agents bounded by institutions), how is change engineered? (focus on instrumentation), and why it is accepted by society? (focus on legitimacy). The case studies contained in this edited volume illustrate the deployment of this framework with empirical research.

Standards, sustainability, incremental innovation

Arthur Daemmrich (Chapter 3) tells the story of how the German chemical company BASF succeeded marketing the biodegradable polymer Ecoflex. It is worth noting the dependence of BASF on government funding to develop Ecoflex, and on the German Institute for Standardization (DIN), making a market by setting standards. With this technology, BASF capitalized on the growing demand in Germany for biodegradables, and with its intense cooperation with DIN helped establish a standard that differentiate Ecoflex from the competition. By focusing on the enterprise (the innovation agent) and its role in engineering the market for its product by setting standards that would favor them, this story reveals the process of legitimation of this new technology. In effect, the certification of DIN was accepted by agribusinesses that sought to utilize biodegradable products.

If BASF is an example of innovation by standards, Allison Loconto and Marc Barbier (Chapter 4) show the strategies of governing by standards. They take the case of the International Social and Environmental Accreditation and Labelling alliance (ISEAL). ISEAL, an advocate of sustainability, positions itself as a coordinating broker among standard developing organizations by offering “credibility tools” such as codes of conduct, best practices, impact assessment methods, and assurance codes. The organization advocates what is known as the tripartite system regime (TSR) around standards. TSR is a system of checks and balances to increase the credibility of producers complying with standards. The TSR regime assigns standard-setting, certification, and accreditation of the certifiers, to separate and independent bodies. The case illustrates how producers, their associations, and broker organizations work to bestow upon standards their most valuable attribute: credibility. The authors are cautious not to conflate credibility with legitimacy, but there is no question that credibility is part of the process of legitimizing technical change. In constructing credibility, these authors focus on the third question of the framework –legitimizing innovation—and from that vantage point, they illuminate the role of actors and instruments that will guide innovations in sustainability markets.

While standards are instruments of non-dominant hierarchies, the classical instrument of dominant hierarchies is regulation. David Barberá-Tomás and Jordi Molas-Gallart tell the tragic consequences of an innovation in hip-replacement prosthesis that went terribly wrong. It is estimated that about 30 thousand replaced hips failed. The FDA, under the 1976 Medical Device Act, allows incremental improvements in medical devices to go into the market after only laboratory trials, assuming that any substantive innovations have already being tested in regular clinical trials. This policy was designed as an incentive for innovation, a relief from high regulatory costs. However, the authors argue, when products have been constantly improved for a number of years after an original release, any marginal improvement comes at a higher cost or higher risk—a point they refer to as the late stage of the product life-cycle. This has tilted the balance in favor of risky improvements, as illustrated by the hip prosthesis case. The story speaks to the integration of technical and cultural systems: the policy that encourages incremental innovation may alter the way medical device companies assess the relative risk of their innovations, precisely because they focus on incremental improvements over radical ones. Returning to the analytical framework, the vantage point of regulation—instrumentation—elucidates the particular complexities and biases in agents’ decisions.

Two additional case studies discuss the discontinuation of the incandescent light bulb (ILB) and the emergence of translational research, both in Western Europe. The first study, authored by Peter Stegmaier, Stefan Kuhlmann and Vincent R. Visser (Chapter 6), focuses on a relatively smooth transition. There was wide support for replacing ILBs that translated in political will and a market willing to purchase new energy efficient bulbs. In effect, the new technical system was relatively easy to re-integrate to a social system in change—public values had shifted in Europe to favor sustainable consumption—and the authors are thus able to emphasize how agents make sense of the transition. Socio-technical change does not have a unique meaning: for citizens it means living in congruence with their values; for policy makers it means accruing political capital; for entrepreneurs it means new business opportunities. The case by Etienne Vignola-Gagné, Peter Biegelbauer and Daniel Lehner (Chapter 7) offers a similar lesson about governance. My reading of their multi-site study of the implementation of translational research—a management movement that seeks to bridge laboratory and clinical work in medical research—reveals how the different agents involved make sense of this organizational innovation. Entrepreneurs see a new market niche, researchers strive for increasing the impact of their work, and public officials align their advocacy for translation with the now regular calls for rendering publicly funded research more productive. Both chapters illuminate a lesson that is as old as it is useful to remember: technological innovation is interpreted in as many ways as the number of agents that participate in it.

Innovation for whom?

The framework and illustrations of this book are useful for those of us interested in the governance of system integration. The typology of different modes of governance and the three vantage points from which empirical analysis can be deployed are very useful indeed. Further development of this framework should include the question of how political power is redistributed by effect of innovation and the system integration and re-integration that it triggers. The question is pressing because the outcomes of innovation vary as power structures are reinforced or debilitated by the emergence of new technologies—not to mention ongoing destabilizing forces such as social movements. Put another way, the framework should be expanded to explain in which circumstances innovation exacerbates inequality. The expanded framework should probe whether the mutual accommodation is asymmetric across socio-economic groups, which is the same as asking: are poor people asked to do more adapting to new technologies? These questions have great relevance in contemporary debates about economic and political inequality. 

I believe that Borrás and Edler and their colleagues have done us a great service organizing a broad but dispersed literature and offering an intuitive and comprehensive framework to study the governance of innovation. The conceptual and empirical parts of the book are instructive and I look forward to the papers that will follow testing this framework. We need to better understand the governance of socio-technical change and the dynamics of systems integration. Without a unified framework of comparison, the ongoing efforts in various disciplines will not amount to a greater understanding of the big picture. 

I also have a selfish reason to like this book: it helps me make sense of my carrier’s push for integrating my value system to their technical system. If I decide to adapt to a newer phone, I could readily do so because I have time and other resources. But that may not be the case for many customers of 2G devices who have neither the resources nor the inclination to learn to use more complex devices. For that reason alone, I’d argue that this sort of innovation-led systems integration could be done more democratically. Still, I could meet the decision of my carrier with indifference: when the service is disconnected, I could simply try to get by without the darn toy.

Note: Thanks to Joseph Schuman for an engaging discussion of this book with me.

How has the Joint Comprehensive Plan of Action (JCPOA)—signed between the P5+1 and Iran one year ago—played out in practice? Several Brookings scholars, many of whom participated prominently in debates last year surrounding official congressional review, offered their views.

The eurozone has three problems: national debt obligations that cannot be met, medium-term imbalances in trade competitiveness, and long-term structural flaws.

The short-run problem requires more of the monetary easing that Germany has, with appalling shortsightedness, been resisting, and less of the near-term fiscal restraint that Germany has, with equally appalling shortsightedness, been seeking. To insist that Greece meet all of its near-term current debt service obligations makes about as much sense as did French and British insistence that Germany honor its reparations obligations after World War I. The latter could not be and were not honored. The former cannot and will not be honored either.

The medium-term problem is that, given a single currency, labor costs are too high in Greece and too low in Germany and some other northern European countries. Because adjustments in currency values cannot correct these imbalances, differences in growth of wages must do the job—either wage deflation and continued depression in Greece and other peripheral countries, wage inflation in Germany, or both. The former is a recipe for intense and sustained misery. The latter, however politically improbable it may now seem, is the better alternative.

The long-term problem is that the eurozone lacks the fiscal transfer mechanisms necessary to soften the effects of competitiveness imbalances while other forms of adjustment take effect. This lack places extraordinary demands on the willingness of individual nations to undertake internal policies to reduce such imbalances. Until such fiscal transfer mechanisms are created, crises such as the current one are bound to recur.

Present circumstances call for a combination of short-term expansionary policies that have to be led or accepted by the surplus nations, notably Germany, who will also have to recognize and accept that not all Greek debts will be paid or that debt service payments will not be made on time and at originally negotiated interest rates. The price for those concessions will be a current and credible commitment eventually to restore and maintain fiscal balance by the peripheral countries, notably Greece.

The Supreme Court today decided that Congress meant what it said when it enacted the Affordable Care Act (ACA). The ACA requires people in all 50 states to carry health insurance and provided tax credits to help them afford it. To have offered such credits only in the dozen states that set up their own exchanges would have been cruel and unsustainable because premiums for many people would have been unaffordable.

But the law said that such credits could be paid in exchanges ‘established by a state,’ which led some to claim that the credits could not be paid to people enrolled by the federally operated exchange. In his opinion, Chief Justice Roberts euphemistically calls that wording ‘inartful.’ Six Supreme Court justices decided that, read in its entirety, the law provides tax credits in every state, whether the state manages the exchange itself or lets the federal government do it for them.

That decision is unsurprising. More surprising is that the Court agreed to hear the case. When it did so, cases on the same issue were making their ways through four federal circuits. In only one of the four circuits was there a standing decision, and it found that tax credits were available everywhere. It is customary for the Supreme Court to wait to take a case until action in lower courts is complete or two circuits have disagreed. In this situation, the justices, eyeing the electoral calendar, may have preferred to hear the case sooner rather than later to avoid confronting it in the middle of a presidential election.

Whatever the Court’s motives for taking the case, their willingness to hear the case caused supporters of the Affordable Care Act enormous unease. Were the more conservative members of the Court poised to accept an interpretation of the law that ACA supporters found ridiculous but that inartful legislative drafting gave the gloss of plausibility? Judicial demeanor at oral argument was not comforting. A 5-4 decision disallowing payment of tax credits seemed ominously plausible.

The Court’s 6-3 decision ended those fears. The existential threat to health reform from litigation is over. But efforts to undo the Affordable Care Act are not at an end. They will continue in the political sphere. And that is where they should be. ACA opponents know that there is little chance for them to roll back the Affordable Care Act in any fundamental way as long as a Democrat is in the White House. To dismantle the law, they must win the presidency in 2016.

But winning the presidency will not be enough. It would be mid 2017 before ACA opponents could draft and enact legislation to curb the Affordable Care Act and months more before it could take effect. To borrow a metaphor from the military, even if those opposed to the ACA win the presidency, they will have to deal with ‘facts on the ground.’

Employment among lower-income men has declined by 11 percent since 1980 and has remained flat among lower-income women. Men and women in the top and middle of the income distribution, on the other hand, have been working as much or more since 1980, creating a growing “work gap” in labor market income between haves and have-nots.   

This paper simulates the effect of five labor market interventions (higher high school graduation rate, minimum wage increases, maintaining full employment, seeing all household heads work full time, and virtual marriages between single mothers and unattached men) on the average incomes of the poorest one-third of American households. They find that the most effective way to increase average incomes of the poorest Americans would be for household heads to work full time, whereas the least effective intervention would be increasing education.

In terms of actual impact on incomes, the simulation of all household heads working full time at their expected wage increased average household earnings by 54 percent from a baseline of $12,415 to $19,163. The research also suggests that even if all household heads worked just some—at expected wages or hours—average earnings would still increase by 16 percent.

The least effective simulation was increasing the high school graduation rate to 90 percent and having half of those “newly” graduated go on to receive some form of post-secondary education. The authors note that the low impact of increasing education on mobility is likely because only one in six of bottom-third adults live in a household in which someone gains a high school degree via the intervention.

Because single parents are disproportionately represented among low-income families, Sawhill and coauthors also explored the impact of adding a second earner to single-parent families through a simulation that pairs low-income, single-mother household heads with demographically similar but unrelated men. That simulation increased the average household earnings of the bottom-third only modestly, by $508, or about 4 percent.

Efforts to increase employment among heads of the poorest households must take into consideration why those household heads aren’t working, they note. According to data from the 2015 Census, the most cited reason for women not working is “taking care of home and family” and for men it is being “ill or disabled.”  

Downloads

• Download "One third of a nation: Strategies for helping working families"

The idea of a universal basic income (UBI) is certainly an intriguing one, and has been gaining traction. Swiss voters just turned it down. But it is still alive in Finland, in the Netherlands, in Alaska, in Oakland, CA, and in parts of Canada. 

Advocates of a UBI include Charles Murray on the right and Anthony Atkinson on the left. This surprising alliance alone makes it interesting, and it is a reasonable response to a growing pool of Americans made jobless by the march of technology and a safety net that is overly complex and bureaucratic. A comprehensive and excellent analysis in The Economist points out that while fears about technological unemployment have previously proved misleading, “the past is not always a good guide to the future.”

Robert Greenstein argues, however, that a UBI would actually hurt the poor by reallocating support up the income scale. His logic is inescapable: either we have to spend additional trillions providing income grants to all Americans or we have to limit assistance to those who need it most. 

One option is to provide unconditional payments along the lines of a UBI, but to phase it out as income rises. Libertarians like this approach since it gets rid of bureaucracies and leaves the poor free to spend the money on whatever they choose, rather than providing specific funds for particular needs. Liberals fear that such unconditional assistance would be unpopular and would be an easy target for elimination in the face of budget pressures. Right now most of our social programs are conditional. With the exception of the aged and the disabled, assistance is tied to work or to the consumption of necessities such as food, housing, or medical care, and our two largest means-tested programs are Food Stamps and the Earned Income Tax Credit.

Liberals have been less willing to openly acknowledge that a little paternalism in social policy may not be such a bad thing. In fact, progressives and libertarians alike are loath to admit that many of the poor and jobless are lacking more than just cash. They may be addicted to drugs or alcohol, suffer from mental health issues, have criminal records, or have difficulty functioning in a complex society. Money may be needed but money by itself does not cure such ills. 

A humane and wealthy society should provide the disadvantaged with adequate services and support. But there is nothing wrong with making assistance conditional on individuals fulfilling some obligation whether it is work, training, getting treatment, or living in a supportive but supervised environment.

In the end, the biggest problem with a universal basic income may not be its costs or its distributive implications, but the flawed assumption that money cures all ills.  

Editors' Note: Brookings Nonresident Senior Fellow Richard Feinberg reports from Havana on President Obama's historic visit to the island. 

Havana is abuzz at the sheer weight of the president of the United States arriving in Cuba. In the hours before President Obama’s arrival, astonished Cubans told tales of planeloads of black limousines and massive Suburbans, of heavily armed security personnel, of sunglass-sporting secret service officers arriving at the airport and making their way through the city.

Cubans have anticipated the arrival of the Obama family with considerable joyfulness, but the festive mood is colored by a certain reticence, a deep-seated fear of, once again, being overwhelmed by the Colossus from the North. 

The government has bargained hard with Obama’s advance team to hem him in, to limit his direct contact with the Cuban people. There will be no large outdoor speech—rather on Tuesday morning Obama will address a hand-picked audience in the newly renovated Grand Theatre with its limited seating capacity—although the Cuban government agreed to live television coverage. The U.S. president will also meet with local entrepreneurs, but in a constricted venue, and ditto for his meeting with independent civil society and political dissidents.

On Tuesday afternoon the president will be the guest of honor at an exhibition game between the visiting Tampa Bay Rays (their chance selection was by lottery) and the Cuban national team. The White House has hinted that he will throw out the first ball, but this could not be confirmed. On a prior occasion, Jimmy Carter did indeed throw out the first ball, but that was during a visit long after his presidency.

Putting the lanky, athletic Obama on the mound would run a certain risk for the Cubans. Suppose the excited crowd begins to cheer, “Obama, Obama…” Even more dangerous, imagine if the exuberant Cubans follow with, “USA, USA, USA…”

Back home, critics of the Obama administration say he’s made too many concessions to the Cuban government without reciprocity. Cuba is no closer to a liberal democracy, they argue, than it was on December 17, 2014, when Barack Obama and Raúl Castro announced their decision to normalize diplomatic relations. But these skeptics miss this vital point: By befriending the president of the United States, the president of Cuba and first secretary of the Cuban Communist Party (PCC) has exploded his regime’s long-standing national security paradigm organized around the imminent danger posed by a hostile empire. The rationale for the state-of-siege mentality, the explanation for the poor economic performance, no longer resonates. The ruling political bureau of the PCC stands exposed before the Cuban people.

Hence, the government is working hard to persuade the people that it has not forsaken its nationalist credentials: the PCC’s daily newspaper, Gramna, ran a fierce editorial warning for Obama not to try to step on their little island, not to intervene in its internal affairs; rather, he must arrive as a classic Greek suitor bearing gifts. But no Trojan horses, the Cubans are too wary to be fooled so easily.

Venezuelan President Nicolás Maduro, passing through Havana this week, pointedly remarked: “The hearts of the Cuban and Venezuelan people are warm and true. Not like others who come with smiles but hide a clenched fist.”

In truth, most Cubans very much want the trip to succeed. They want more tourists, more remittances from Cuban-Americans living in Florida and New Jersey. They would welcome more trade, more access to famous U.S. consumer brands. Many would even welcome U.S. investment—with the promise of good jobs and better wages. All would love to be able to travel freely between their island and the outside world, especially to the nearby United States. In short, they yearn for normality.

And savvy Cubans sense the link between the more relaxed diplomatic atmosphere and the gradual opening of political space so evident on the island. While not yet living in a fully open society, Cubans are now more willing to express their views openly, to foreigners and among themselves. Some are even forming proto-civil society groupings, to advance gender equality, environmental stewardship, religious freedom, and human rights.

Bathing in these new liberties, Cubans worry that something, anything, could go wrong during the visit. In such a highly scrutinized setting, one misstep, one awkward phrase, one misinterpretation of Cuban history, would give ammunition to hardliners to set the clock back and to restore the old national security paradigm.

Raúl Castro has pinned his own legacy too closely to the young U.S. president to allow any stumbles during this historic visit, to stand idly by while the visit was twisted by his internal opponents. And Raúl and his confidants retain control over the mass media in Cuba, and the PCC will loyally pass along the party line, as set by the political bureau and echoed all along the chain of command, down to the district and village level.

So the visit will be declared a success. Most likely, it will truly be a marvelous moment, because Obama is just the right person to stretch out the U.S. hand to the long-aggrieved Cuban people. The very traits for which Obama is so often criticized at home will serve him well in Cuba: his humility, his respectfulness, his sense of irony—these are just what Cubans have been harking for from the United States for so many decades.

The Cubans will also love Michelle Obama and the two teenage Obama daughters, especially if Sasha and Malia are freed to wander forth and meet their contemporaries at one of Havana’s clubs where young people gather—the Cuban media and public will bask in the respect being paid to Cuban music and dance, to “Cubanismo.”

Obama and Castro share some goals, and conflict on others. Both wish for a peaceful transition to a more prosperous Cuba, more open to the world and to global commerce. But they differ on the endgame: Obama would like to see a more liberal, pluralistic polity, while Castro presumably wants to see his Communist Party retain its grip on power. But that chess match will be waged later, by their successors. 

For Barack Obama and Raúl Castro, today their interests are convergent. Hence, we can predict that, most likely, the visit will be a great success, a historic legacy for which both statesmen will be justly proud.