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Articles by Luke Dascoli
The Cost of Data Localization Policies in Bangladesh, Hong Kong, Indonesia, Pakistan, and Vietnam
Acknowledgments This report was made possible in part by generous support from Meta. The authors also wish to thank Rob Atkinson and Stephen Ezell and the government officials, journalists, private sector representatives, trade associations, and others who helped build the list of data localization measures and to better understand the changing nature and impact of data localization in these countries and territories. Any errors or omissions are the authors’ responsibility alone.
Fact of the Week: Investing in AI Significantly Reduced Business Risk During the COVID-19 Pandemic
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Nick Drydakis, “Artificial Intelligence and Reduced SMEs’ Business Risks” (Institute of Labor Economics, February 2022). Commentary: As market conditions evolve, dynamic business capabilities are essential to remaining competitive.
Fact of the Week: Nearly 93 Percent of DRAM Chips Are Produced in South Korea, China, and Taiwan
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Will Hunt, “Sustaining U.S. Competitiveness in Semiconductor Manufacturing“ (Center for Security and Emerging Technology, January 2022). Commentary: The CHIPS for America Act shows important awareness from government that the United States needs a course correction in semiconductors.
The North American Subnational Innovation Competitiveness Index
Overview a Diversity of Innovation Ecosystems Overall Scores Indicator Scores Summary of Findings Knowledge Economy Globalization Cross-National Innovation Clusters Policy Recommendations Conclusion Appendix A: Composite Index Methodology Appendix B: Indicator Methodologies and Weights Endnotes With a population of 500 million, North America—Canada, Mexico, and the United States—represents one of the world’s most economically vibrant regions, accounting for 28 percent of global economic...
Fact of the Week: Teleworking Options Are Expected to Remain Available After COVID-19 for 70 Percent of Workforces Employed in Knowledge-Intensive Services
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Criscuolo et al., “The Role of Telework for Productivity During and Post Covid-19: Results from an OECD Survey Among Managers and Workers,” OECD Productivity Working Papers, December 2021.
Fact of the Week: In the First Year of the Pandemic, E-Commerce Leapt from 10.5 Percent of Retail Sales to 14.6 Percent
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Annual Retail Trade Survey, “Estimated Annual U.S. Retail Trade Sales - Total and E-commerce1: 1998-2019 (ecommerce.xlsx),” U.S. Census Bureau, January 2022. Commentary: In 1998, just 0.2 percent of retail purchases were made via e-commerce, whether through non-store retailers or other online orders.
Fact of the Week: Large Firms Implementing Artificial Intelligence Enjoyed Additional Productivity Growth Within Just Three Years
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Bäck et al., “Return of the Solow-paradox in AI? AI-adoption and firm productivity,” Center for Innovation Research, January 2022. Commentary: Previous research quantifying the relationship between AI adoption and firm productivity has been sparse.
Fact of the Week: The Number of Female STEM Graduates Has Grown 30 Percentage Points Faster in the Last Two Decades Than the Number of Male Grads
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: National Science Foundation, National Survey of College Graduates: 2019, Table 6-2: “Employed college graduates, by sex, ethnicity, race, and major occupation: 2003–19” (National Center for Science and Engineering Statistics, February 2022), 118–122.
Fact of the Week: Quantum Computers Don’t Require Quantum Advantage in Order to Maintain Their Economic Edge
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Bova et al., “Quantum Economic Advantage,” National Bureau of Economic Research, February 2022. Commentary: In quantum mechanics, subatomic particles can exist in two different states simultaneously. Quantum computers replicate this state of simultaneous being to create additional space to store information.
Fact of the Week: The Cold War Productivity Gap Between East and West Germany Would Have Been More Than 13 Percent Larger if the East Had Not Engaged in Industrial Espionage
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Albrecht Glitz and Erik Meyersson, “Industrial Espionage and Productivity,” American Economic Association, April 2020. Commentary: Cold War tensions fueled national concerns of falling behind in the race for new technology.
Fact of the Week: Developing Countries Are Leading Global Growth in Robot Adoption
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Efraim Benmelech and Michal Zator, “Robots and Firm Investment,” National Bureau of Economic Research (NBER) Working Paper Series, January 2022.
Fact of the Week: Foreign Direct Investment Flowing Into the United States More Than Doubled in 2021
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: James Zhan, “Investment Trends Monitor, No.40,” United Nations Conference on Trade and Development, January 2022. Commentary: Despite the pandemic-induced shocks of 2020, investor confidence has since appeared to recover.
Fact of the Week: A 1% Increase in Local Biomedical Research Publications Reduces a Community’s Related Mortality by 0.35%
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Rebecca McKibbin and Bruce A. Weinberg, “Does Research Save Lives? The Local Spillovers of Biomedical Research on Mortality,” NBER Working Paper Series, October 2021.
The Looming Cost of a Patchwork of State Privacy Laws
Summary Introduction Brief Overview of Proposed U.S. Data Privacy Laws Methodology Findings Direct and Indirect Costs of State Privacy Laws Conclusion Appendix A: Detailed Methodology Appendix B: List of Passed State Privacy Laws Endnotes In the absence of a comprehensive federal law, a handful of large states, including California, Colorado, and Virginia, have passed or begun to enact data privacy legislation.
Fact of the Week: Increasing the Number of Markets a Firm Enters by 10 Percent Boosts Its Share of Employment in R&D by 0.35 Percentage Points
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Chang-Tai Hsieh and Esteban Rossi-Hansberg, “The Industrial Revolution in Services,” U.S. Census Bureau, Center for Economic Studies Discussion Papers, October 2021. Commentary: Thanks to ICT innovations and new management practices, service-sector firms can more easily scale by establishing multiple businesses in different locations.
No, Corporate Concentration Is Not Driving Inflation. Here’s the Data
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) “Never let a serious crisis go to waste,” Rahm Emanual famously declared during the great economic meltdown of 2008—“it’s the opportunity to do the big things you never thought possible and make ’em possible.” Progressives today are following that advice to a T.
AI Start-Ups Attracted Over 21 Percent of The World’s Venture Capital in 2020
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Roland Tricot, “Venture Capital Investments in Artificial Intelligence,” OECD Digital Economy Papers, September 2021. Commentary: Artificial intelligence (AI) is increasingly grabbing the attention of entrepreneurs.
Fact of the Week: Increased Government IT Usage Reduced India’s Workfare Costs by Nearly 20 Percent
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Banerjee, et al., “E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India,” American Economic Journal: Applied Economics, October 2020. Commentary: It can be expensive to administer public programs and reach eligible recipients.
Fact of the Week: A 1 Percentage Point Increase in Local Business Taxes Decreases R&D Spending 7 Percent After 8 Years
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Lichter et al., “Profit Taxation, R&D Spending, and Innovation,” IZA Institute of Labor Economics, November 2021. Commentary: Given the high social value of scientific innovation, policymakers should stimulate innovative activity from firms.
Fact of the Week: Each Dollar of R&D Investment in the United States Returns $5 in Social Gains
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Benjamin F. Jones and Lawrence H. Summers, “A Calculation of the Social Returns of Innovation,” NBER Working Paper 27863, September 2020.
Fact of the Week: Software Is the Best Capital Investment Low-Productivity Firms Can Make to Spur Labor Output
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Borowiecki et al., “The Impact of Digitalisation on Productivity: Firm-Level Evidence from the Netherlands,” OECD Economics Department Working Papers, September 2021. Commentary: Big businesses aren’t the only ones that benefit from implementing digital tools—small and low-productivity firms do, too.
Fact of the Week: China Sourced the Most STEM Articles in 2020, But the United States Had the Highest Share in the Top 1 Percent That Were Most Cited
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Karen White, “Publications Output: U.S. Trends and International Comparisons,” National Science Board, October 2021.
Fact of the Week: Subsidies Have Reduced China’s Overall Patent Quality to Just 19 Percent of What It Would Have Been Otherwise
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Putnam et al, “Innovative Output in China,” Competition Dynamics, March 2021. Commentary: Patenting is essential to secure returns from innovation, so the volume of patent applications in a country is a well-accepted measurement of its rate of knowledge creation.
Fact of the Week: Increasing Mobile Broadband Speed 10 Percent Boosts Labor Productivity 0.2 Percent
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Edquist, Harald., “The Economic Impact of Mobile Broadband Speed,” International Telecommunications Society, June 2021. Commentary: The pandemic has seen more people telecommuting than ever before. As a result, high-speed Internet has become crucial in facilitating the needs of the present and future labor market.
Fact of the Week: When Companies Adopt Technological Innovations, Workers’ Actual and Perceived Job Security Improves
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Caselli et al., “The Reassuring Effect of Firms’ Technological Innovations on Workers’ Job Insecurity,” Global Labor Organization Discussion Paper, June 2021. Commentary: The increasing complexity of new innovations in technology may seem intimidating at first to workers who fear being “out-skilled” in a tech-heavy labor market.
Fact of the Week: Biopharma Innovations Shrank the Population Unable to Work or Go to School by 4.5 Percent Over 15 Years
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Lichtenberg, Frank. “The impact of biopharmaceutical innovation on disability, Social Security recipiency, and use of medical care of U.S. community residents, 1998-2015,” NBER: Research and Disability Research Center, June 2021.
The Digital Economy Accounts for 8 Percent of US GDP, but 86 Percent of Labor Productivity Growth
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: van Ark et al., “Productivity and Innovation Competencies in the Midst of the Digital Transformation Age: An EU-US Comparison,” European Commission, October 2019. Commentary: The adoption of information and communication technologies (ICT) by businesses and workers goes far beyond tech industries.
How an Information Technology Agreement 3.0 Would Bolster Economic Growth and Opportunity
Executive Summary Introduction How ICT Drives Economic Growth How ITA Participation Benefits Countries The Logic for Bringing Additional ICT Goods Under ITA-3 Coverage Analyzing the Economic Impacts of a Proposed ITA-3 Expansion Analyzing the Impact of ITA-3 Expansion on the United States Conclusion Appendix A: List of Countries by Current ITA Membership Appendix B: Growth-Revenue Estimates Methodology Appendix C: Methodology of Econometric Exercise Appendix D: ITA Product Codes (HS2017...
Fact of the Week: Outward Foreign Direct Investment Creates Domestic Jobs
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Crescenzi et al., “Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA,” Journal of Economic Geography, April 2021. Commentary: Outward foreign direct investment (FDI)—more commonly known as offshoring—is often maligned as detrimental to domestic labor markets.
Even After COVID-19, the U.S. Labor Market Remains More Stable Than People Think
Introduction Why Perceptions of Job Insecurity Are Important to Innovation Jobs Are More Secure Now Than They Have Been in Decades Conclusion Endnotes The prevailing narrative is that Americans now work in an economy of perpetual and growing job insecurity, one in which they frequently lose jobs and where new technologies such as artificial intelligence only make matters worse. On top of that, add in the economic and jobs devastation of COVID-19.
Fact of the Week: When a Federal Agency Employs an Additional Contract Officer, It Increases the Likelihood That Its Contracted Investments Will Generate New Patents by 2 Percentage Points
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Giuffrida, Leonardo & Raiteri, Emilio, “Buyers’ workload and R&D procurement outcomes: Evidence from the US Air Force Research Lab,” Leibniz Centre for European Economic Research, July 2021.
Fact of the Week: Average Pay for Job Postings Involving a New Technology Decreases 15 Percent in the First Decade, Showing How Technologies Spread From High-Skilled to Lower-Skilled Occupations
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Bloom, et. al, “The Diffusion of Disruptive Technologies,” NBER Working Paper Series, July 2021. Commentary: The complexity and speed by which new technologies emerge can create a false impression that only high-skilled highly educated workers use them.
Fact of the Week: The Pharmaceutical Industry Invested $83 Billion on R&D in 2019, a Tenfold Increase Since the 1980s
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Congressional Budget Office, “Research and Development in the Pharmaceutical Industry,” April 2021. Commentary: The U.S. life-sciences sector has long been a leader in domestic research investment.
Fact of the Week: Despite Broad Business-Preservation Policies, COVID-19 Spurred Labor Reallocations That Have Raised Productivity
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Andrews et. al, “COVID-19, Productivity and Reallocation: Timely Evidence from Three OECD Countries,” OECD Economics Department Working Papers, July 2021. Commentary: The COVID-19 pandemic’s unique health challenges have prompted correspondingly unique crisis policies to protect economic welfare.
Fact of the Week: A 10-Point Increase in a Firm’s Share of High-Skilled Workers Correlates With a 2% Productivity Increase for Knowledge-Intensive Services and a 7% Increase for Other Services
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Bijnens, G., and Dhyne, E., “The return on human (STEM) capital in Belgium,” OECD Productivity Working Papers, July 2021. Commentary: A country’s stock of information and communication technology (ICT) increases overall economic productivity due to labor-saving innovations enabling people to work smarter rather than harder.
Fact of the Week: Long-Term Digitalization Policy in Kenya Has Accelerated Economic Growth, and It Brought Digital Payment Services to Over 40 Million People In 2020
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Fagerberg, et. al, “An Evolutionary Analysis of Transformative Change in LDCs: the cases of Kenya and Rwanda,” University of Oslo: Working Papers on Innovation Studies, June 2021.
Fact of the Week: Applications for New U.S. Businesses Reached an All-Time High in 2020 and are Increasing Stably in 2021
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: John Haltiwanger, “Entrepreneurship During the COVID-19 Pandemic: Evidence from the Business Formation Statistics,” National Bureau of Economic Research: Working Paper Series, June 2021. Commentary: The COVID-19 pandemic has undoubtedly been a massive economic disruption to big and small businesses alike.
How Barriers to Cross-Border Data Flows Are Spreading Globally, What They Cost, and How to Address Them
Explicit Data Localization 2021: Indonesia’s Ministry of Communication and Information Technology issued Ministerial Circular No. 3/2021 on the use of third-party cloud services for central government agencies for FY2021.
Fact of the Week: Intangible Capital Investments Increase Production More Than Twice as Much in Services as in the Product Sector
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Roth, et al., “Intangible Capital and Firm-Level Productivity – Evidence from Germany,” Hamburg Discussion Papers in International Economics, January 2021. Commentary: As advanced economies continue to digitalize systems of production and business operations, firms face wider ranges of investment opportunities beyond traditional capital.
Fact of the Week: Firms With Reduced Patent Protections Conduct 37 Percent Less Follow-on Research
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Arora, et al., “(When) Does Patent Protection Spur Cumulative Research Within Firms?,” NBER Working Paper Series, June 2021. Commentary: Intellectual property rights serve a vital purpose by protecting profits of firms’ expensive research and by incentivizing further research investments within firms.
Fact of the Week: Firms Adopting Digital Technologies Are Nearly 20 Percent More Likely to Implement a Change in Corporate Strategy
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: van Zeebroeck, et al., “Digital is Strategy: The Role of Digital Technology Adoption in Strategy Renewal,” ULB Institutional Repository, June 2021.
Fact of the Week: International Research Cooperation via Co-patenting Yields Greater Innovations Than Co-patenting Between Domestic Firms
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Iino, et al., “How Does the Global Network of Research Collaboration Affect the Quality of Innovation?” The Japanese Economic Review, June 2021.
Fact of the Week: A 1 Percent Increase in Low-Skill Wages Increases Automation Patents by More Than 2 Percent Domestically and 4 Percent Abroad
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Dechezleprêtre, et al., “Induced Automation: Evidence from Firm-level Patent Data,” University of Zurich Working Paper Series, April 2021. Commentary: Automation is one of the best responses firms may take when the cost of labor increases.
Fact of the Week: Consumer Preferences for Data Privacy Don’t Correlate With Data-Sharing Behavior
(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.) Source: Long Chen, et al., “The Data Privacy Paradox and Digital Demand,” NBER Working Paper Series, May 2021. Commentary: Policymakers seeking to increase data regulation often cite privacy concerns of consumers to justify harsher restrictions on the free flow of data.
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