1. July 19, 2011Atlantic Century II: BenchmarkingEU & U.S. Innovation andCompetitivenessRob Atkinson, President, ITIF

2. The Atlantic Century I The Study: compared innovation-based competiveness of 40 nations and regions. 16 indicators: including corp. R&D, government R&D, scientists and engineers, new firms, corp. tax, productivity growth and others. 3. This was the story: in rate of progress from 1999,the U.S. was behind.1. China 15. Latvia 28. UK2. Singapore 16. Austria29. EU-153. Estonia 17. S. Korea 30. Mexico4. Denmark 18. Ireland31. Netherlands5. Luxembourg19. EU-1032. Australia6. Slovenia20. Spain33. Finland7. Russia21. Sweden 34. Canada8. Lithuania 22. France 35. Germany9. Cyprus23. Portugal 36. Italy10. Japan 24. Malta37. NAFTA11. Hungary 25. Belgium38. Greece12. Slovakia 26. EU-2539. Brazil13. Czech Republic 27. Poland 40. United States14. India 4. The Atlantic Century II The Study: comparesinnovation-basedcompetiveness of 44nations and regions. (AddedArgentina, Chile, Malaysia,Indonesia, South Africa andTurkey and subtractedLuxemburg and Malta) 16 indicators: includingcorporate and governmentR&D, scientists andengineers, new firms, corp.tax, productivity growth andothers. 5. 0.010.0 20.030.0 40.050.0 60.070.0 80.0Singapore Finland SwedenU.S.S. KoreaUK Canada DenmarkNAFTANetherlandsJapanAustraliaBelgiumFranceIrelandGermanyAustria EU-15 EU-25 Czech Rep. EstoniaHungarySpainSloveniaPortugalSlovakia EU-10LatviaRussianItalyOverall Score: U.S. is 4th (unchanged)Malaysia LithuaniaChileChinaCyprusPolandGreece Brazil TurkeyMexicoSouth AfricaArgentina IndiaIndonesia5 6. 0.0 5.0 10.015.0 20.0 China25.0 S. KoreaCyprus Slovenia Estonia Czech Rep.LatviaSingaporeEU-10PortugalHungaryLithuaniaIndia Austria ChileGreece JapanSlovakia Finland DenmarkAustraliaIndonesia IrelandUKBrazil MexicoPolandEU-25NetherlandsTurkey SpainArgentina Russia Canada MalaysiaEU-15France GermanySweden Overall Change Score (1999-2011): U.S. is 43rdBelgiumNAFTASouth Africa U.S. Italy6 7. 10.012.0 14.016.0 18.020.0 0.0 2.0 4.0 6.0 8.0Portugal SloveniaIndonesiaSlovakia ChinaGreece S. KoreaEU-10AustraliaPoland Czech Rep.Hungary Malaysia Chile MexicoCyprusArgentinaTurkey FinlandIndia Austria EstoniaBrazilUK SpainNetherlands U.S.South Africa Japan RussiaEU-25 GermanyNAFTA CanadaEU-15Lithuania DenmarkBelgiumFranceSweden Overall Change Score (2009-2011): U.S. is 27th IrelandSingapore ItalyLatvia7 8. 0.010.0 20.030.0 40.050.0 60.070.0Massachusetts California Connecticut New Jersey Washington Delaware Maryland But Some U.S. States Lead the WorldColoradoNew Hampshire Finland8 9. 10.0%20.0%30.0%40.0%50.0%60.0%70.0% 0.0% S. Korea CanadaRussia Japan Ireland Denmark BelgiumLithuaniaAustralia U.S. SpainFranceNetherlandsSwedenUK Finland Singapore NAFTALatvia EstoniaEU-15PolandEU-25 SloveniaEU-10Greece Hungary GermanyPortugalCyprus Italy Mexico Austria Malaysia SlovakiaCzech Rep.Turkey ChinaIndonesiaBrazilIndiaArgentinaEducation (college-aged pop. with tertiary degree) Chile9 10. 100.0% 120.0%140.0% 160.0%180.0% 0.0%20.0%40.0%60.0%80.0%Poland EU-10 ItalyPortugalHungaryS. Korea Netherlands EU-25IrelandAustriaDenmark Czech Rep. AustraliaUK Education Change (1999-2008) EU-15FranceBelgiumSpainMexicoJapan Sweden Estonia CanadaNAFTA U.S.Greece Finland10 11. 0246810 1214 1618Finland SingaporeJapanDenmark SwedenU.S.S. KoreaUKAustria France Belgium AustraliaCanadaGermany EU-15 NAFTASlovenia EU-25SpainIreland RussiaEstonia NetherlandsCzech Rep. Lithuania Researchers, per 1,000 employed PortugalSlovakia EU-10 Greece HungaryItaly Latvia Poland Argentina TurkeyChile CyprusChina Brazil South AfricaMalaysiaMexico India11 12. 100% 150%200% 250%300% 350% 0%-50%50%MalaysiaCyprus TurkeyChina Czech Rep.ChileS. KoreaSingapore BrazilPortugalAustriaSpainDenmarkMexicoSloveniaLatviaUKHungaryIrelandItaly EU-15 EU-25Greece EU-10Researchers Change (1999-2008) Estonia Canada ArgentinaFrance India Slovakia Netherlands Australia FinlandBelgiumGermanyJapan SwedenNAFTAU.S.Poland LithuaniaRussia12 13. 0.0%0.5% 1.0%1.5% 2.0%2.5% Japan 3.0%Finland S. KoreaSweden U.S. GermanyDenmark NAFTA Singapore Austria Belgium Australia China SloveniaEU-15 FranceEU-25 UKCanada NetherlandsBusiness R&D (% of GDP)Czech Rep. Ireland Portugal Spain ItalyEstoniaBrazil Malaysia HungaryEU-10 South AfricaTurkey Chile RussiaIndia Poland GreeceLithuania Mexico LatviaSlovakia Argentina Cyprus13 14. 100% 150%200% 250%300% 0%-50%50%ChileChina EstoniaLatviaCyprusMexicoAustria Australia TurkeyHungaryGreeceS. KoreaSingaporeSpainSloveniaDenmark Czech Rep.JapanMalaysiaNAFTA IndiaEU-10 Brazil Finland Canada Business R&D Change(1999-2008)GermanyU.S. EU-25 ArgentinaUKItaly EU-15 Sweden NetherlandsBelgiumFranceIrelandPolandRussia Slovakia14 15. 0.0%0.2% 0.4%0.6% 0.8%1.0% 1.2% AustriaFinland Singapore Australia FranceSweden S. Korea U.S. NAFTADenmarkGermany RussiaEstoniaEU-15CanadaCzech Rep.EU-25 NetherlandsUK Japan Spain Portugal Slovenia ItalyBrazilGovernment R&D (% of GDP)IndiaLithuania IrelandEU-10 Hungary Belgium South Africa Malaysia PolandTurkey Chile Mexico China Latvia Greece Argentina CyprusSlovakia Indonesia15 16. 0% -40%-20%20%40%60%80% CyprusIrelandSpain Brazil LatviaEstonia LithuaniaAustria TurkeyS. Korea Russia Czech Rep. AustraliaMexico Hungary GreeceCanada Portugal EU-15 EU-25 EU-10 UKDenmarkSingaporeSlovenia FranceChinaU.S. NAFTAGovernment R&D Change(1999-2008)Japan PolandBelgiumFinlandGermany Argentina Sweden Netherlands IndiaChileSlovakia Indonesia16 17. 0.00%0.05%0.10%0.15%0.20%0.25%0.30%Singapore Finland SwedenUKDenmark AustraliaIrelandFranceSpain EU-15U.S. Czech Rep. EU-25NAFTAVenture Capital (% GDP) Brazil NetherlandsBelgiumGermany CanadaS. KoreaJapan EU-10HungaryItalyMexicoPortugalAustriaPolandGreece IndiaChinaChileRussian17 18. -100% 100%150% 200%0% -50% 50%Japan Czech Rep.HungaryDenmarkIreland FinlandFrance Australia EU-10 EU-25Spain EU-15Belgium UK SwedenGermanyVenture Capital Change (1999-2008) Netherlands ItalyAustriaPortugalPolandNAFTA U.S. CanadaGreece18 19. 0 1 2 3 4 5 6 7 8Estonia9 UKCanada Singapore Australia Hungary Ireland NAFTA LatviaDenmark U.S. Belgium SloveniaSwedenSlovakia PortugalFinlandEU-15EU-25 Netherlands FranceCzech Rep. Spain New Firms (per 1,000 workers)RussiaEU-10 MalaysiaBrazilLithuania Chile Italy S. Korea Japan Germany GreeceTurkey South Africa Mexico Austria Poland Argentina IndonesiaIndia19 20. 100%120%0% -60%-40% -20% 20% 40% 60% 80%India Hungary S. Korea Greece SloveniaCzech Rep.EU-10Finland SingaporeBrazilSlovakiaLithuania NetherlandsEstoniaSweden Indonesia Belgium Mexico Poland France PortugalCanada Malaysia New Firms Change (2005-2009) Chile Australia Germany UK JapanEU-25EU-15 Italy NAFTA Austria U.S.Turkey Argentina LatviaDenmark Ireland Spain South Africa Russian20 21. 0.0 2.0 4.0 6.0 8.0 10.012.0 S. Korea JapanSweden NetherlandsDenmarkFinland LatviaGermany France Belgium U.S.LithuaniaEU-15CanadaUKEU-25Estonia Singapore NAFTA Slovenia Portugal Hungary Austria Australia Spain IrelandSlovakiaCzech Rep.EU-10 Greece Broadband (Quality and Subscription) Italy Cyprus PolandRussia ChileTurkey Argentina Mexico Malaysia ChinaBrazil South AfricaIndia Indonesia21 22. 0.0%5.0% 10.0% 15.0% 20.0% 25.0% 30.0%Denmark35.0% France NetherlandsUK S. KoreaGermanyCanada JapanEU-15Finland Australia SingaporeEU-25Sweden Belgium Ireland Slovenia CyprusEstonia Italy U.S.Lithuania Spain Latvia Broadband Change (2002-2009) Hungary Greece NAFTA Austria PortugalEU-10 SlovakiaCzech Rep. Poland Argentina MexicoTurkey Chile China MalaysiaBrazil South Africa IndonesiaIndia22 23. 3% 4%5% 6%7% 8% Czech Rep. 9%SlovakiaS. KoreaChinaU.S.NAFTA UKHungaryCanada EU-10FinlandSingaporeJapan Portugal Netherlands Sweden Poland EU-25 IT Investments (% of GDP) EU-15Germany IndiaAustria BrazilChileBelgium Greece ArgentinaIreland FranceSloveniaMexicoDenmarkSpain AustraliaItaly Turkey Russia Indonesia23 24. 0%-30% -20%-10%10%20%30%40%50% Indonesia60% IndiaSloveniaMexico EU-10Finland ArgentinaSlovakiaChile NAFTACanada Greece Czech Rep. Portugal Hungary PolandS. KoreaChinaJapanUKU.S. Brazil Netherlands EU-25AustriaGermanyIT investments, Change (2003-2010) EU-15 Turkey BelgiumIreland Russia SwedenSingapore FranceMalaysiaDenmarkSpainItaly Australia24 25. 0% 5%10%15%20%25%30%35%40%45% Latvia 50% HungarySlovakiaChile SingaporeSlovenia EU-10 Turkey Portugal Netherlands PolandBelgiumAustriaChinaCanadaSpain SwedenIrelandMalaysia FranceUKEffective Corporate Tax Rates BrazilFinlandS. Korea EU-25Denmark NAFTA India EU-15 Greece Russia South Africa AustraliaMexicoU.S.Germany IndonesiaItalyJapan Argentina25 26. -5 -30 -25 -20 -15 -100510 1520 Singapore UK Australia U.S.Canada Ireland NAFTAFinlandLithuania JapanDenmarkSweden S. Korea Netherlands Germany Portugal Malayasia Ease of Doing Business Latvia AustriaEU-15 BelgiumEU-25Estonia FranceSlovakia Hungary Cyprus Spain South Africa MexicoCzech Rep.TurkeyEU-10 Russian Chile Argentina Slovenia China Italy Poland GreeceBrazil IndonesiaIndia26 27. -6.0-4.0 -2.00.02.04.06.08.0 China IndonesiaCzech Rep. Latvia Slovenia Portugal Hungary S. Korea FranceSlovakiaLithuaniaEU-10Denmark Russian MalayasiaUKEstonia Japan Singapore Cyprus Mexico PolandBrazil Ireland South Africa GreeceEU-25 SpainCanadaEU-15Turkey Australia NetherlandsSwedenFinland NAFTA ChileEase of Doing Business Change (2005-2010) Belgium U.S. Germany AustriaIndia Argentina Italy27 28. 0%2%4%6%8% 10% 12% 14% 16% 18% Hungary 20% Cyprus ChileEstonia Singapore Ireland BelgiumSwedenEU-10 Russian AustraliaIndia South AfricaCanada Spain Netherlands ChinaUKLithuania FranceCzech Rep.EU-25Brazil Latvia Argentina Malayasia PolandEU-15 Austria MexicoTurkey NAFTASlovakia Foreign Direct Investment (% of GDP) U.S. Portugal Indonesia Slovenia Greece ItalyGermanyDenmark Japan S. KoreaFinland28 29. -100%100% 200%300% 400%500% 0%TurkeyIndia South Africa Hungary Russian Greece Slovenia Cyprus Australia JapanEstonia Italy ChileSwedenEU-25 China France Austria Belgium Indonesia MexicoLithuania NAFTA Spain U.S. Portugal MalayasiaBrazil Latvia PolandCanada Singapore ArgentinaUK Ireland NetherlandsSlovakiaCzech Rep. Foreign Direct Investment Change (1999-2009)Germany S. KoreaDenmarkFinland29 30. -5% -15%-10% 0%5% 10% 15% 20% 25% Malayasia Singapore Russian Netherlands IrelandSweden China ChileGermany AustriaCzech Rep. ArgentinaDenmarkFinland Indonesia Belgium S. Korea HungaryEU-15Estonia Trade Balance (% of GDP)EU-25 JapanBrazilCanada Italy SloveniaEU-10 Australia Mexico South Africa Poland FranceUKTurkeySlovakia NAFTA U.S. SpainIndia Latvia Portugal CyprusLithuania Greece30 31. -5% -20%-15% -10%0% 5%10%Estonia ArgentinaCzech Rep. GermanySlovakia Latvia Chile AustriaEU-10 Poland Hungary Netherlands Singapore China SloveniaBrazilSweden Portugal MexicoDenmarkEU-25 AustraliaEU-15Lithuania Ireland UK NAFTA JapanTrade Balance, Change (1999-2009) U.S. Spain Belgium Greece MalayasiaCanada ItalyIndia Russian France South Africa IndonesiaFinland S. Korea CyprusTurkey31 32. $-$10.00 $20.00$30.00 $40.00$50.00 $60.00 Netherlands Belgium U.S. Ireland France Germany NAFTA AustriaEU-15SwedenEU-25 UKDenmarkFinland AustraliaCanada Italy SpainTurkey Japan Greece SloveniaSlovakia PortugalCzech Rep. Hungary S. KoreaEU-10 PolandProductivity (GDP per Hour Worked)LithuaniaEstonia Argentina Malaysia Mexico Latvia Russian Chile South AfricaBrazil China IndonesiaIndia32 33. 100% 120%140% 160%180% 200% 0%20%40%60%80% ChinaLithuania RussianIndia LatviaEU-10EstoniaSlovakia S. KoreaCzech Rep. Hungary Indonesia Malaysia Poland Slovenia Argentina Chile South Africa Greece SingaporeFinland IrelandUKBrazil JapanProductivity, Change (1999-2009) U.S. NAFTA AustriaSweden AustraliaEU-25TurkeyGermanyEU-15Canada Netherlands Portugal Mexico France BelgiumDenmark Spain Italy33 34. So Whats Americas Future? 35. Buffalo? 36. Or Boston? 37. So Whats Europes Future? 38. Rome? 39. Or Helsinki 40. Becoming Boston and Helsinki Means: 1) For Europe and America, establish a Trans-AtlanticPartnership to form a united front against innovation-basedmercantilism in the rest of the world. 40 41. Becoming Boston and Helsinki Means: 1) For Europe and America, establish a Trans-Atlantic Partnershipto form a united front against innovation-based mercantilism in therest of the world. 2) For Europe, embrace the creative destruction of innovation.41 42. Becoming Boston and Helsinki Means: 1) For Europe and America, establish a Trans-Atlantic Partnershipto form a united front against innovation-based mercantilism in therest of the world. 2) For Europe, embrace the creative destruction of innovation. 3) For America, wake up to the fact that we are no longer theleader and need an aggressive national innovation andcompetitiveness strategy.42 43. Thank Youratkinson@itif.orgwww.itif.orgFollow ITIF:Twitter: @robatkinsonitif or @itifdc/itifFacebook: facebook.com/innovationpolicyBlog: www.innovationpolicy.orgWebsite: www.itif.org