An Agenda for ActionGiven the tremendous importance of innovation to companies and countries alike, it is critical that they do all they can to encourage, support, and advance it. And while companies are the main drivers of innovation, national and local governments play a major role in enabling and supporting the innovation activities of the businesses within their borders. Although specific policy recommendations are beyond the scope of this report, countries and states can take concrete actions in six areas.Action in these areas is in the mutual interest of companies and governments, helping them to serve their constituents more effectively. It is time for all levels of government to make innovation a top priority and to prove their commitment with concrete action. The stakes couldn’t be higher -- nothing less than the global competitiveness of countries and companies, secure jobs, and a higher quality of life. Boston Consulting Group, Inc.BCG_ea60f656-e4f7-11e3-b92e-a9ea913a63b5James P. AndrewCo-Author -- James P. Andrew is a senior partner and managing director in the Chicago office of The Boston Consulting Group and the leader of BCG’s global innovation activities. Andrew TaylorCo-Author -- Andrew Taylor is a partner and managing director in BCG’s Chicago office. The Manufacturing InstituteTMI_ea60f926-e4f7-11e3-b92e-a9ea913a63b5Emily Stover DeRoccoCo-Author -- Emily Stover DeRocco is president of The Manufacturing Institute and a senior vice president of the National Association of Manufacturers. _ea60fad4-e4f7-11e3-b92e-a9ea913a63b5To identify actions countries and states can take to enable and support the innovation activities of the businesses within their borders_15856dce-e54a-11e3-ba06-d2b7913a63b5Work ForceStrengthen the work force._15856fae-e54a-11e3-ba06-d2b7913a63b51A skilled, educated workforce is the most critical element for innovation success, and countries and states with strong education systems do better in the global battle for innovation leadership. The United States has clear shortcomings in this area. In our survey, U.S. executives consistently highlighted a lack of high-quality talent as a major concern._1585712a-e54a-11e3-ba06-d2b7913a63b5LeadershipLead by example._158571de-e54a-11e3-ba06-d2b7913a63b52Vocal and visible support -- in the form of R&D funding, tax credits, and policy changes -- sends the message that innovation is important. Make innovation a common cause, for the greater good of all. Countries such as South Korea, China, and Singapore, whose governments publicly and actively support innovation, are attracting an increasing share of the world’s innovators and innovation._1585727e-e54a-11e3-ba06-d2b7913a63b5FacilitationMake innovation easier._15857328-e54a-11e3-ba06-d2b7913a63b53Governments can make the development and commercialization of ideas easier and more efficient. Although U.S. universities and government agencies fund a great deal of innovative science, business executives tell us that gaining access to these resources is very difficult. Governments should ask what companies need and how they can help -- and listen to the answers._158574d6-e54a-11e3-ba06-d2b7913a63b5Manufacturing BaseMaintain a strong manufacturing base._1585768e-e54a-11e3-ba06-d2b7913a63b54Process and product innovations happen in and around manufacturing plants. When factories disappear or move offshore, a major source of innovation goes with them. As one U.S. executive observed, “The media cheer when manufacturing leaves my state, but that is so shortsighted. What they don’t realize is that jobs and innovation leave with it.”_1585774c-e54a-11e3-ba06-d2b7913a63b5PaybackImprove the payback._158577f6-e54a-11e3-ba06-d2b7913a63b55A major frustration for executives is the failure of investments in new ideas to pay off. If companies can’t make a profit, they will either stop investing in innovation or relocate to a state or country where they can make more money. One executive we interviewed stated that “governments need to realize that we have options” when it comes to locating innovation activities and people. Governments can help companies lower costs and boost profits by providing strong intellectual-property protection, tax breaks, and skills training, among other policies._158578a0-e54a-11e3-ba06-d2b7913a63b5ConsistencyBe consistent._15857940-e54a-11e3-ba06-d2b7913a63b56Innovation takes time and careful planning. Companies will innovate more when they can count on government support in both the short and the long term. Because innovation investments can take up to a decade to bear fruit, tax policies and benefits must be consistent and reliable over the long haul. Similarly, governments must stay the course until education and work force policies deliver results. _158579ea-e54a-11e3-ba06-d2b7913a63b52009-03-312014-05-26http://www.themanufacturinginstitute.org/~/media/6731673D21A64259B081AC8E083AE091.ashxOwenAmburOwen.Ambur@verizon.net