EXECUTIVE OFFICE OF THE PRESIDENT
 

NATIONAL ECONOMIC COUNCIL
 

OFFICE OF SCIENCE AND TECHNOLOGY POLICY
 

A STRATEGY FOR AMERICAN INNOVATION:
 

DRIVING TOWARDS SUSTAINABLE GROWTH AND QUALITY JOBS
 

History should be our guide. The United States led the world’s economies in the 20th 

century because we led the world in innovation. Today, the competition is keener; the 

challenge is tougher; and that is why innovation is more important than ever. It is the 

key to good, new jobs for the 21st century. That’s how we will ensure a high quality of 

life for this generation and future generations. With these investments, we’re planting 

the seeds of progress for our country, and good-paying, private-sector jobs for the 

American people.” 

-President Barack Obama, August 5, 2009 

SEPTEMBER 2009 
EXECUTIVE SUMMARY 

Since taking office, President Obama has taken historic steps to lay the foundation for the 

innovation economy of the future. The Obama Innovation Strategy builds on well over $100 

billion of Recovery Act funds that support innovation, additional support for education, 

infrastructure and others in the Recovery Act and the President’s Budget, and novel regulatory 

and executive order initiatives. It seeks to harness the inherent ingenuity of the American people 

and a dynamic private sector to ensure that the next expansion is more solid, broad-based, and 

beneficial than previous ones. It focuses on critical areas where sensible, balanced government 

policies can lay the foundation for innovation that leads to quality jobs and shared prosperity. It 

has three parts: 

Innovation for Sustainable Growth and Quality Jobs 

Catalyze 

Breakthroughs for 

National Priorities 

• Unleash a clean energy 

revolution 

• Support advanced vehicle technology 

• Drive breakthroughs in health IT 

• Address the “grand challenges” of the 21st century 

Invest in the Building Blocks of American Innovation 

• Restore American leadership in fundamental research 

• Educate the next generation with 21st century knowledge and skills while 

creating a world-class workforce 

• Build a leading physical infrastructure 

• Develop an advanced information technology ecosystem 

Promote Competitive Markets that Spur 

Productive Entrepreneurship 

• Promote American exports • Encourage high-growth and 

• Support open capital markets that innovation-based entrepreneurship 

allocate resources to the most • Improve public sector innovation and 

promising ideas support community innovation 

1.	 Invest in the Building Blocks of American Innovation. We must first ensure that our 

economy is given all the necessary tools for successful innovation, from investments in 

research and development to the human, physical, and technological capital needed to 

perform that research and transfer those innovations. 

 Restore American leadership in fundamental research. President Obama implemented 

the largest increase in basic R&D in history, which will lay the foundation for new 

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discoveries and new technologies that will improve our lives and create the industries of 

the future. 

Educate the next generation with 21st century knowledge and skills while creating a 

world-class workforce. President Obama has proposed initiatives to dramatically 

improve teaching and learning in K-12 education, expand access to higher education and 

training, and promote student achievement and careers in STEM (Science, Technology, 

Engineering, and Mathematics) fields. 

Build a leading physical infrastructure. Through the Recovery Act, the President has 

committed to a historic investment in our nation’s roads, bridges, transit, and air 

transportation networks to connect our people and our businesses. 

Develop an advanced information technology ecosystem. For America to lead the 

world in the technologies of the future, President Obama believes that all Americans must 

have affordable 21st century access to the Internet. 

	 

	 

	 

2.	 Promote Competitive Markets that Spur Productive Entrepreneurship. It is imperative 

to create a national environment ripe for entrepreneurship and risk taking that allows U.S. 

companies to be internationally competitive in a global exchange of ideas and innovation. 

Through competitive markets, innovations diffuse and scale appropriately across industries 

and globally. 

 Promote American exports. Exports will play an increasingly critical role in the future 

of the American economy, and the President’s plans will ensure fair and open markets for 

American producers. 

 Support open capital markets that allocate resources to the most promising ideas. 

Open capital markets are one of the greatest strengths of the American economy, and the 

President is committed to making sure these markets work. 

	 Encourage high-growth and innovation-based entrepreneurship. The Obama 

Administration believes it is essential that entrepreneurs continue to create new and 

vibrant businesses that lead to new jobs and economic growth. 

	 Improve public sector innovation and support community innovation. Innovation 

must occur within all levels of society, including the government itself. The Obama 

Administration supports the broad adoption of community innovations that work and is 

committed to making government perform better and more efficiently, including by 

working more openly. 

3. Catalyze Breakthroughs for National Priorities. There are certain sectors of exceptional 

national importance where the market is unlikely to produce the desirable outcomes on its 

own. These include developing alternative energy sources, reducing costs and improving 

lives with health IT, and manufacturing advanced vehicles. In these industries where 

markets may fail on their own, government can be part of the solution. 

 Unleash a clean energy revolution. Historic investments in smart grid, energy 

efficiency, and renewable technologies like wind, solar, and biofuels will help unleash a 

wave of ingenuity and progress that creates jobs, grows our economy, and ends our 

dependence on oil. 

	 Support advanced vehicle technologies. Record battery grants announced last month 

are part of a concerted effort to place the U.S. on the cutting edge of advanced vehicle 

technology, from electric cars to biofuels to advanced combustion. 

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	 Drive innovations in health care technology. The President’s health IT initiative is 

designed to drive technological innovation that will help prevent medical errors, improve 

health care quality, reduce costs, and cement U.S. leadership of this emerging industry. 

Harness science and technology to address the “grand challenges” of the 21st 

century. The President’s commitment to science and technology will allow the United 

States to set and meet ambitious goals, such as educational software that is as effective as 

a personal tutor and smart anti-cancer therapeutics that deliver drugs only to tumor cells. 

	 

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I –PROBLEMS WITH THE BUBBLE-DRIVEN GROWTH OF THE PAST 

A strong economy, but too reliant on precarious, bubble-driven growth, is unsustainable 

Despite American economy’s historic strength, our economic growth has rested for too long on 

an unstable foundation. Explosive growth in one sector of the economy has provided a shortterm boost while masking long-term weaknesses. In the 1990s, the technology sector climbed to 

new heights. The tech-heavy NASDAQ composite index rose over 650 percent between 1995 

and 2000, but then lost two-thirds of its value in a single year, triggering a painful recession. 

After the tech bubble burst, a new one emerged in the housing and financial sectors. During the 

course of the decade, the formula for buying a house changed: instead of saving to buy their 

dream house, many Americans found they could take out loans that by traditional standards their 

incomes could not support. The financial sector willingly propped up real estate prices, 

funneling money into real estate and finding innovative ways to spread the credit risk throughout 

the economy. From 2000 through 2006, house prices doubled while the financial sector grew to 

account for fully 40 percent of all corporate profits. 

This too proved to be unsustainable. House prices lost a quarter of their value in two and a half 

years. The housing decline and accompanying stock market collapse wiped out over $13 trillion 

in wealth in 18 months. The bursting of the bubble based on inflated home prices, maxed-out 

credit cards, over-leveraged banks, and overvalued assets wreaked havoc on the real economy, 

triggering what is expected to be the longest and deepest recession since World War II and 

driving the unemployment rate to its highest level in a quarter century. 

This type of growth isn’t just problematic when the bubble bursts, it is not entirely healthy even 

while it lasts. Between 2000 and 2007 the typical working-age household saw their income 

decline by nearly $2,000. As middle-class incomes sank, the incomes of the top one percent 

skyrocketed. This phenomenon has a number of causes, but among them were the rising asset 

prices and the proliferation of financial sector profits. 

A short-term focus has neglected essential fundamental investments 

A short-term view of the economy masks underinvestments in essential drivers of sustainable, 

broadly-shared growth. It promotes temporary fixes over lasting solutions. This is patently clear 

when looking at how education, infrastructure, healthcare, energy, and research – all pillars of 

lasting prosperity – were ignored during the last bubble. 

Too many children are not getting the world class education they deserve and need to thrive in 

this new innovative economy. 

	 Despite research documenting that quality matters greatly in early childhood education 

settings and that investments in high-quality early learning have the highest potential 

rates of return, the Federal government lacks the level of investment needed to transform 

the quality of, and enhance access to, early education for our youngest children. Studies 

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show a school readiness gap as early as kindergarten –and as wide as 60 points –between 

children from the highest socio-economic background and their less affluent peers. 

	 We have neglected to provide our children with the rigorous curriculum and instruction 

needed to prepare them for college and career. By the end of high school, African 

American and Latino students have math and reading skills equivalent to those of 8th 

grade white students. Across the nation, the students with the greatest need for a 

qualified and effective teacher are also exactly those students most likely to be taught by 

teachers who lack sufficient background in the subject they teach. 

	 The problems persist when students look toward continuing their education past high 

school. The average tuition and fees at public, four-year institutions rose 26 percent 

between the 2000-2001 school year and the 2008-2009 school year. As a result, while 94 

percent of high school students in the top quintile of socioeconomic status continue on to 

post-secondary education, barely half of those in the bottom quintile do so. 

	 Given rising costs of four-year institutions, many Americans are turning to community 

colleges for quality higher education. Yet the Federal government has historically underinvested in community colleges, giving them one-third the level of support per full-time 

equivalent student that it gives to public four-year colleges. 

Our physical and technological infrastructure has been neglected, threatening the ability of 

American businesses to compete with the rest of the world. 

	 The American Society of Civil Engineers grades our country’s physical infrastructure as 

a “D.” In 2007, drivers on our clogged highways and streets experienced over 4.2 billion 

hours of delay and wasted 2.8 billion gallons of fuel. 

	 The United States once led the world in broadband deployment, but now that leadership 

is in question. Wireless networks in many countries abroad are faster and more advanced 

than our own. 

	 Our electrical grid is still constructed around the same model employed immediately after 

World War II. Power interruptions and outages cost American individuals and 

businesses at least $80 billion each year. 

Health care costs have been allowed to spiral out of control, squeezing individuals and 

businesses at a time when they are feeling pressure on all sides. 

 Since 2000, health insurance premiums have increased about 60 percent, 20 times 

faster than the average worker’s wage. 

 At the same time, the number of uninsured Americans has jumped by 7 million to 46 

million. 

	 Overall, healthcare is consuming an increasing amount of our Nation’s resources. In 

1970, healthcare expenditures were 7 percent of GDP; now they are 16 percent of 

GDP; at this rate they will hit 20 percent of GDP by 2017. 

Our economy has remained dependent on fossil fuels, exposing consumers and businesses to 

harmful price shocks, threatening our economic and national security, and resulting in a missed 

opportunity to lead the clean energy economy of the future. 

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	 Between 1999 and 2004, the production tax credit for renewable energy was allowed 

to expire on three separate occasions. In each subsequent year (2000, 2003, and 

2004) new wind capacity additions in the U.S. fell by more than 75 percent from the 

year before. 

 Instead of focusing on finding ever more fossil fuels, other countries made 

aggressive investments in renewable energy, creating jobs and growing domestic 

energy sources. 

Furthermore, we have compounded the problem by ignoring essential investments in hightechnology research that will drive future growth. 

	 Over the last four decades, Federal funding for the physical, mathematical, and 

engineering sciences has declined by half as a percent of GDP (from 0.25 percent to 

0.13 percent) while other countries have substantially increased their research 

budgets. 

Despite this underinvestment in key drivers of growth, the American economy remains the most 

dynamic, innovative, and resilient in the world. We still have world-class research universities, 

flexible labor markets, deep capital markets, and an energetic entrepreneurial culture. Americans 

are twice as likely as adults in Europe and Japan to start a business with the intention of growing 

it rapidly. We must redouble our efforts to give our world-leading innovators every chance to 

succeed. We cannot rest on our laurels while other countries catch up. 

II –A VISION FOR INNOVATION, GROWTH, AND JOBS 

Innovation is Necessary to Fuel Our Recovery 

Amidst the worst recession since the great depression, the Administration’s initial economic 

objective has been to rescue our economy. We have taken – and will continue to take – bold and 

aggressive steps to stabilize the financial system, jumpstart job growth, and get credit flowing 

again. 

But as the economy begins to stabilize, we must move on from rescue to recovery. Reflecting on 

the lessons of the past, we must rebuild a new foundation for durable, sustainable economic 

growth. 

Innovation and investment must be a pillar of this new foundation. The basis of competition and 

the nature of the economy have changed, and we must change with them. Twenty years ago, the 

United States was losing domestic manufacturing firms and was competing with other countries 

to sell its goods. Now, manufacturing and services have merged, knowledge is a key factor of 

production, and services we thought could only be provided in particular countries are available 

anywhere. We need new ideas to provide Americans with new jobs, new services that take 

advantage of our globally interconnected world, and new skills that improve our manufacturing 

capabilities (See Box 1). Other countries understand that innovation is fundamental to their 

economic well-being and are finding new ways to advance their innovation agendas. We can be 

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even more ambitious, even more successful, and even more focused on building the essential 

sidewalks of innovation. 

Box 1. The Importance of a National Innovation Strategy 

Fundamentally, innovation is the development of new products, services, and processes. In our 

increasingly interconnected and globally competitive world economy, unleashing innovation is an 

essential component of a comprehensive economic strategy. As global competition erodes the return 

to traditional practices, the key to developing more jobs and more prosperity will be to create and 

deploy new products and processes. Put another way, the greatest job and value creators of the 

future will be activities, jobs, and even industries that don’t exist yet today. The countries that 

catalyze their development will reap the greatest rewards. 

Innovation is essential for creating new jobs in both high-tech and traditional sectors. In recent 

years, innovation has led to new jobs in high-tech and advanced manufacturing sectors as diverse as 

aerospace, nanotechnology, life sciences, and alternative energy. At the same time, innovations 

ripple through the economy, creating jobs for workers installing broadband networks, manufacturing 

biopharmaceuticals, and building advanced infrastructure. 

A more innovative economy is a more productive and faster growing economy, with higher returns 

to workers and increases in living standards. America’s average standard of living will double every 

23 years if innovation catalyzes annual productivity growth of three percent, but it will take 70 years 

if productivity growth is only one percent. Currently, the U.S. enjoys a significant productivity 

advantage: one study calculates that the average productivity advantage of the United States over all 

other OECD countries as a group accounted for a full three quarters of the per capita income 

advantage the U.S. enjoys. Continued innovation in products, business practices, and technology is 

essential for extending our productivity gains. 

Innovation is also crucial for maintaining the dynamism and resilience of our economy. Future 

challenges are impossible to predict, but what is certain is that an economy better able to switch 

gears, innovate solutions, and re-deploy old activities, jobs, and industries will be least susceptible 

to adversity. 

Finally, innovation is itself the key to meeting some of the greatest challenges facing our nation and 

the world. It will be pivotal to ending our dependence on fossil fuels, helping Americans live longer, 

healthier lives, and protecting our freedom and our troops both at home and abroad. 

Innovation is the key to global competitiveness, new and better jobs, a resilient economy, and the 

attainment of essential national goals. A strategy is clearly needed to direct our government’s 

funding and regulatory decisions in order to capture the innovation opportunity. 

Our Vision for American Innovation 

Our vision of America’s future is one where prosperity is built by skilled, productive workers 

and sound investments that will spread opportunity at home and allow this nation to lead the 

world in the technologies, innovation and discoveries that will shape the 21st century. 

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Innovation will create new jobs and catalyze broadly shared economic growth. The lives of 

every American will improve as innovations diffuse and scale throughout the economy, leading 

to breakthroughs in health, education, energy, transportation, information, and much more. We 

can set and meet grand challenges such as developing solar cells as cheap as paint, building anticancer drugs that spare healthy cells, and fitting the contents of the library of congress on a 

device the size of a sugar cube. 

Sustained innovation will drive a dynamic evolution in the nation’s workforce towards better 

paying jobs. American workers will continue to lead across a broad range of industries and 

sectors old and new, and will prosper accordingly. Workers making innovation-induced shifts to 

new jobs within and across industries will receive the transition and training support necessary to 

ensure no one is left behind. 

The American economy is and will remain highly diversified. To a large extent these jobs of the 

future will be spread across major industries in a similar distribution to today’s economy. As the 

Council of Economic Advisors described in a July report, one forecast that uses the most recent 

data available to project employment growth finds that the distribution of jobs across industries 

in the economy of 2020 will strongly resemble the distribution of 2008. Health and education 

services will see the most significant growth, while there will be proportionally fewer jobs in 

business and financial services as well as retail trade, in part because the growth in consumer 

spending is expected to slow. But by and large the picture is similar to today. 

Of course, such forecasts are necessarily 

imperfect. They cannot capture the growth in 

industries that may not yet exist. For example, 

in the late 1980s there were no models that 

predicted the rapid growth of Internet-based 

information and computing services that now 

employ several million workers. Innovation in 

this sector –initially catalyzed and 

continuously supported by government 

investment –has made key contributions to our 

economy. Some experts estimate that the 

Internet adds as much as $2 trillion to annual 

GDP, over $6,500 per person. 

Another shortcoming of these models is that 

they fail to capture many of the most 

important innovations and developments 

occurring in sub-industries. Yet the U.S. has a 

history of innovating towards higher-wage 

jobs within industries. The experience of industries as diverse as semi-conductors and 

boatbuilding illustrate this point amply (see Boxes 2 and 3). 

Box 2. The Transformation of the SemiConductor Industry 

In the 1980s, the U.S. semiconductor 

industry lost its market share to Japanese 

competitors. But then it innovated its way 

back, replacing the old jobs in the dynamicrandom-access-memory (DRAM) business 

with jobs producing microprocessors, digital 

signal processors, microcontrollers, and 

automotive semiconductors. Companies like 

Intel, Texas Instruments, and Motorola 

invested and succeeded, creating better jobs 

for hundreds of thousands of Americans. 

Throughout this shift to higher-value-added 

jobs, the total number of U.S. jobs in the 

industry held constant. 

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We see an American future where this process of innovation in next-generation technologies and 

Box 3. Boat Builders along Maine’s Eastern Coast 

The Maine boat building industry is an example where innovation-led transformations occur 

on a smaller, more local scale. Maine boat builders have a 400-year heritage of skilled 

craftsmanship, but technological change was threatening to leave them behind. Instead, the 

boat builders have enthusiastically embraced cutting edge innovation in advanced composite 

technologies, replacing old jobs with better jobs in the same industry. Today, the Maine boat 

building industry produces a highly regarded product line that includes racing yachts, pleasure 

craft, workboats, and military vessels. As a result, wages in Maine’s boat building industry 

have risen 19 in percent in real terms over the last decade while employment has risen 12 

percent. 

business ideas becomes pervasive, diffusing throughout the economy and generating better jobs 

and improved lives for all Americans. It is imperative that we turn this vision into a reality. 

III –THE APPROPRIATE ROLE FOR GOVERNMENT 

Framework for Government Involvement 

While it is clear that a new foundation for innovation and growth is needed, the appropriate 

framework for government involvement is still debated. Some claim that the laissez-faire 

policies of the last decade approach the right strategy, and that the recent crisis was the result of 

too much rather than too little government support. This view calls for cutting government 

regulation and gutting public programs, hoping the market will take care of the rest. 

However, the recent crisis illustrates that the free market itself does not promote the long-term 

benefit of society, and that certain fundamental investments and regulations are necessary to 

promote the social good. This is particularly true in the case of investments for research and 

development, where knowledge spillovers and other externalities ensure that the private sector 

will under-invest –especially in the most basic of research. 

Another view is that the government must dominate certain sectors, protecting and insulating 

those areas thought to be drivers of future growth. This view calls for massive, sustained 

government investment supported by stringent oversight, dictating the type and direction of both 

public and private investments through mandates and bans. 

But historical experience in this country and others clearly indicates that governments who try to 

pick winners and drive growth too often end up wasting resources and stifling rather than 

promoting innovation. This is in part due to the limited ability of the government to predict the 

future, but also because such exercises are distorted by lobbyists and rent seekers, which are 

more likely to favor backward looking industries than forward looking ones. In the United States 

such failures at picking winners and losers includes most prominently the Synthetic Fuel 

Corporation, a $20 billion Federal project in the 1980s that failed to provide the promised 

alternative to oil. 

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Therefore, we reject both sides of this unproductive and anachronistic debate. The true choice in 

innovation is not between government and no government, but about the right type of 

government involvement in support of innovation. A modern, practical approach recognizes 

both the need for fundamental support and the hazards of overzealous government intervention. 

The government should make sure individuals and businesses have the tools and support to take 

risks and innovate, but should not dictate what risks they take. 

We propose to strike a balance by investing in the building blocks that only the government can 

provide, setting an open and competitive environment for businesses and individuals to 

experiment and grow, and by providing extra catalysts to jumpstart innovation in sectors of 

national importance. In this way, we will harness the inherent ingenuity of the American people 

and a dynamic private sector to generate innovations that help ensure the next expansion is more 

solid, broad-based, and beneficial than previous ones. 

Examples of Successful Innovation Programs 

We have been successful in the past, and we can be successful in the future. Take the example 

of DARPA, the historically innovative central research and development organization of the 

Defense Department. DARPA is tasked with maintaining U.S. technological superiority, and has 

a history of creating new industries in information technology and advanced manufacturing (see 

Box 4). 

Government support has also helped push 

America to the cutting edge in emerging 

fields such as nanotechnology, which 

involves engineering materials and devices 

on the atomic and molecular level (see Box 

5). 

The Administration is committed to 

strengthening and focusing investments in 

our world-class nanotechnology research 

and development pipeline; targeting support 

for nanotechnology transfer and facilitating 

commercial start-ups; and cross-disciplinary 

training and education of scientists and 

engineers in the new-generation workforce. 

This will enable us to capitalize on our 

investments and stay at the cutting edge of 

this rapidly growing technology. 

This pattern of government support driving 

innovations that improve lives and catalyze 

Box 4. DARPA’s Successful Innovations 

Thirty years ago, DARPA supported the 

creation of the internet’s predecessor, 

ARPANET, despite discouragement from the 

private sector. Today, over 1.6 billion people 

use the Internet. DARPA’s innovative 

research has created entirely new capabilities 

for the U.S. military such as stealth aircraft, 

GPS, the M-16 assault rifle, and night vision 

goggles. It has provided the foundation for 

new industries like optical networking, 

supercomputers, and design tools for computer 

chips. DARPA’s commitment to high-risk, 

high-return research will help ensure America 

is prepared to meet the 21st century’s national 

defense challenges while also catalyzing 

breakthroughs in technological innovations 

that will create new industries and improve 

people’s lives. 

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industries is pervasive. Of the 88 U.S. entities that received “R&D 100 Awards” as the nation’s 

best innovations in 2006, 77 had received government support. We must build on this record of 

successful support to build a new foundation for innovation and growth. 

Box 5. The Growing Fields of Nanotechnology and Personalized Medicine 

A nanometer is a billionth of a meter – or one hundred thousand times smaller than the diameter 

of a human hair. Nanotechnology promises to transform multiple industries: capturing and 

storing clean energy, developing next-generation computer chips, early detection of diseases, 

smart anti-cancer therapeutics that deliver drugs only to tumor cells, and enabling all-new 

approaches to a wide range of manufacturing activities, among many other examples. While the 

commercial impact of nanotechnology to date has been limited primarily to nanomaterials 

applied to a range of consumer goods from healthcare and food products to textiles, automotive 

composites and industrial coatings, nanotechnology innovation is beginning to accelerate. The 

ten-year history of U.S. leadership in fundamental nanotechnology research and development 

under the National Nanotechnology Initiative has laid the crucial groundwork for developing 

commercial applications and scaling up production, creating demand for many new 

nanotechnology and manufacturing jobs in the near-term. 

Nanotechnology is being applied in the developing medical engineering and personalized 

medicine industries. The practice of tailoring medical treatment to an individual’s unique genetic 

make-up makes not only treatment, but early detection and prevention, more effective. It also 

reduces medical costs in cases where expensive treatments are unnecessary or futile. 

Researchers are currently experimenting with nanotechnology to develop drugs capable of 

targeting a disease without triggering the body’s natural immune response. 

The federal government’s support has been essential in the development of this technology and 

this industry. The NIH, a major supporter of medical research, saw its budget increase 163% 

from 1993 to 2003 before stagnating until this year. President Obama has reversed the recent 

trend with $10 billion in additional NIH funding in the Recovery Act and a pledge for more 

sustained increases going forward. This funding will help these emerging industries flourish. 

IV –A STRATEGY FOR AMERICAN INNOVATION 

For our communities and for our country to thrive in this new century, we need to harness the 

spirit of innovation and discovery that has always moved America forward. We must foster 

innovation that will lead to the technologies of the future – which will in turn lead to the 

industries and jobs of the future. 

President Obama has already taken historic steps to lay the foundation for the innovation 

economy of the future. In the Recovery Act alone the President committed over $100 billion to 

support groundbreaking innovation with investments in energy, basic research, education and 

training, advanced vehicle technology, innovative programs, health IT and health research, high 

speed rail, smart grid, and information technology (see Figure 1). His commitment also includes 

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broader support in the Recovery Act and in his FY2010 budget on initiatives from education to 

infrastructure. The President’s commitment is not just limited to more government funding, but 

extends to important regulatory and executive order initiatives such as patent reform, coordinated 

fuel efficiency standards, net neutrality, permit policy for offshore wind farms, and naming the 

first ever Chief Technology Officer of the U.S. Government. 

Figure 1. Innovation Funding in the Recovery Act 

These investments and initiatives are part of The Obama Innovation Strategy, which focuses on 

critical areas where sensible, balanced government policies can lay the foundation for innovation 

that leads to quality jobs and shared prosperity. It has three parts: 

1.	 Invest in the Building Blocks of American Innovation. We must first ensure that our 

economy is given all the necessary tools for successful innovation, from investments in 

research and development to the human, physical, and technological capital needed to 

perform that research and transfer those innovations. 

2.	 Promote Competitive Markets that Spur Productive Entrepreneurship. It is 

imperative to create a national environment ripe for entrepreneurship and risk taking that 

allows U.S. companies to be internationally competitive in a global exchange of ideas 

and innovation. Through competitive markets, innovations diffuse and scale 

appropriately across industries and globally. 

9 
 

3.	 Catalyze Breakthroughs for National Priorities. There are certain sectors of 

exceptional national importance where the market is unlikely to produce the desirable 

outcomes on its own. These include developing alternative energy sources, reducing 

costs and improving lives with health IT, and manufacturing advanced vehicles. In these 

industries where markets may fail on their own, government can be part of the solution. 

1. INVEST IN THE BUILDING BLOCKS OF AMERICAN INNOVATION 

A. Restore American Leadership in Fundamental Research 

President Obama recognizes the fundamental role of government in fostering groundbreaking 

scientific and technological breakthroughs, and has committed resources and energy to ensure 

America leads the world in the innovations of the future. 

	 Enact the Largest R&D increase in our nation’s history. With $18.3 billion in 

research funding, the Recovery Act is part of the largest annual increase in research and 

development in America’s history. 

	 Double the R&D budget of key science agencies. The President’s Budget proposed to 

double the research budgets of three key science agencies: the National Science 

Foundation, the Department of Energy's Office of Science, and the National Institutes of 

Standards and Technology. These investments will expand the frontiers of human 

knowledge and create the foundation for the industries and jobs of the future, such as the 

convergence of bio, info, and nanotechnologies. The Obama Administration will 

increase the impact of this investment by providing more support for high-risk, highreturn research, for multidisciplinary research, and for scientists and engineers at the 

beginning of their careers. 

	 Invest three percent of GDP in R&D. The President has proposed a goal that as a 

country, we invest more than three percent of our GDP in public and private research and 

development. This will exceed the level achieved at the height of the space race. 

	 Make the R&E tax credit permanent. The President’s Budget includes the full $75 

billion cost of making the research and experimentation tax credit permanent. This will 

provide businesses with the greater confidence they need to invest, innovate, and grow. 

B. Educate the Next Generation with 21st Century Knowledge and Skills While 

Creating a World-Class Workforce
 

America's high levels of education were an important contributor to rising living standards in 

recent years. For America to continue to lead the world in science and technology innovation, it 

must have the most knowledgeable and skilled workers in the world. 

	 Reform public schools to deliver a complete and competitive education. The 

President is committed to an education system that will prepare every child for success in 

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a new, global economy. The Obama Administration is supporting the improvement of 

teaching and learning to ensure that students master world-class knowledge and critical 

skills for the 21st century; enhance and reward success in the teaching profession; drive 

innovation in America’s classrooms; and expand successful models to improve outcomes 

for middle- and high-school students. The President’s Race to the Top in America’s 

schools will deliver a historic investment and challenge the states to design and enforce 

higher and clearer standards, attract and keep outstanding teachers in the classroom, and 

use effective approaches to turn America’s lowest-performing schools around. 

	 Restore America to first in the world in college graduates. Colleges, universities, and 

their students are bedrocks of American innovation. President Obama has called for 

restoring America to first in the world in the proportion of college graduates by 2020. 

Between the Recovery Act and the 2010 budget, the Administration is seeking nearly 

$200 billion over the next decade for scholarships and tax credits to help students 

complete college. The Obama Administration is investing in innovative strategies to 

support college persistence, simplify the student aid application and reform the student 

loan program to shift billions in wasteful spending toward greater help for students to 

reach and complete college. The Administration has been actively working with Congress 

to fund these priorities by eliminating waste in the student aid program. 

	 Improve America’s Science, Technology, Engineering and Math (STEM) education. 

STEM education is particularly important to America’s future scientific progress and 

economic growth. As part of his effort to promote innovation in K-12 education, the 

President has challenged governors, philanthropists, scientists, engineers, educators and 

the private sector to join with him to dramatically improve achievement in STEM 

subjects. The President’s Race to the Top fund aims to reinvigorate the teaching of 

STEM in America’s classrooms and support advanced learning in these subjects, 

especially for women, girls and other underrepresented groups. The President is also 

committed to using the $4 billion Race to the Top fund to encourage states to put STEM 

at the center of their reform efforts. Finally, the Recovery Act provided a down payment 

toward the goal of tripling the number of NSF Graduate Research Fellowships in science 

and engineering. 

	 Develop new career pathways in community college programs. Given the innovation 

and advances coming in future years, jobs requiring at least an associate’s degree are 

projected to grow twice as fast as those requiring no college experience. President Obama 

has proposed the American Graduation Initiative to produce 5 million more community 

college graduates by 2020, a key part of his college completion goal. The initiative 

would invest in promising reforms to raise graduation rates, tie courses to business needs, 

improve remedial education and strengthen transitions with high schools and four-year 

colleges. It would also leverage $10 billion in facilities modernization and repairs 

amongst other projects. 

	 Design world-class online courses for post-secondary students. The President is 

proposing to invest up to $500 million over the next 10 years to create world-class online 

courses available at community colleges for students to gain knowledge, skills and 

11 
credentials. These courses will be freely available, and enable students to extend learning 

opportunities and successfully complete their course work. Colleges, universities, 

publishers, and other groups will be invited to compete to create state-of-the-art online 

courses that combine high-quality subject matter expertise with the latest advances in 

cognitive and computer sciences. 

	 Improve the processing of high-tech visas. In order to maintain our role as a global 

leader and convener of scientific conferences and other gatherings, the Obama 

Administration has worked to ensure foreign scientists and technological leaders can visit 

the United States to participate in important events while continuing to protect sensitive 

technologies. 

C. Build a Leading Physical Infrastructure 

The President has committed to a historic investment in our nation’s roads, bridges, transit, and 

air networks to connect our people and our businesses. 

	 Invest in our nation’s roads, bridges, and mass transit. The Recovery act provides $36 

billion for infrastructure projects to improve our nation’s highways and mass transit 

systems. The Obama Administration has also proposed “investing for performance” 

reforms that will improve transparency and accountability in the transportation financing 

system. Specific reform measures include building state and metropolitan project 

evaluation capabilities, improving project assessment tools, and creating stronger public 

reporting requirements. These reforms will promote accountability in the transportation 

financing system and increase the return to transportation investments, thereby boosting 

long-term economic growth. 

	 Modernize the Electric Grid. Our current electricity transmission grid must be 

expanded and modernized to reduce congestion, maintain reliability, and accommodate 

the output from new sources of renewable energy. New technologies are being 

developed that present significant opportunities for consumers and businesses to control 

their energy use and costs, reducing the strain on the electric grid and improving 

performance. The Recovery Act provides $4.5 billion for the development of 

technologies to enable greater energy efficiency, customer demand response, energy 

storage, and other components of the “Smart Grid.” The Recovery Act increased the 

borrowing authority of the Bonneville Power Authority by $3.25 billion and provided 

new borrowing authority of $3.25 billion for the Western Area Power Authority, enabling 

both Authorities to invest in transmission lines that will increase the development of 

renewables in their regions. 

	 Fulfill a new transportation vision with high-speed rail. The President has proposed a 

long-term strategy to build an efficient, high-speed rail network of 100-600 mile intercity 

corridors, as one element of a modernized transportation system. The President made a 

down payment on this strategy with an $8 billion investment in the Recovery Act. This 

will be used to leverage other public and private funding to invest in infrastructure, 

equipment, and intermodal connections along three tracks. 

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First, the strategy will advance new express high-speed corridor services (operating at 

speeds above 150 mph in some areas) in select corridors of 200-600 miles. Second, the 

strategy will develop emerging and regional high-speed corridor services (operating at 

speeds between 90 and 150 mph) in corridors of 100 to 500 miles. And third, the strategy 

will upgrade the reliability and service on conventional intercity rail services (operating 

at speeds up to 79-90 mph). 

The President has also budgeted for another $1 billion per year to continue to develop the 

high-speed rail network. 

	 Develop the next generation of air traffic control. The FY2010 Budget provides $865 

million for the Next Generation Air Transportation System in the Federal Aviation 

Administration. The Administration supports moving from a ground-based radar 

surveillance system to a more accurate satellite-based surveillance system, the 

development of more efficient routes through the airspace, and improvements in aviation 

weather information. 

D. Develop an Advanced Information Technology Ecosystem 

For America to lead the world in the technologies of the future, President Obama believes that all 

Americans must have affordable 21st century access to the Internet. 

	 Expand access to broadband. The Recovery Act provides $7.2 billion for broadband 

expansion and the 2010 budget includes $1.3 billion in USDA loans and grants to 

increase broadband capacity and telecommunication service. This support is a kickstart 

towards ensuring that all Americans have affordable 21st century access to the Internet. 

Widespread high-speed Internet access is essential for economic growth, job creation, 

and global competitiveness, and will foster the next generation of innovators while 

enabling reductions in energy consumption through telework, making online distance 

education tools accessible to all, enhancing remote medical monitoring capabilities, 

facilitating civic engagement, and supporting enhanced communications networks for 

first responders. 

Increased broadband access is a key input for rural economic development. It will enable 

rural businesses to improve their efficiency and expand their market reach; enable rural 

populations to compete remotely for a wide range of service jobs; and allow rural 

communities to retain their populations while attracting new businesses. The farm sector, 

a pioneer in rural Internet use, is increasingly comprised of farm businesses that purchase 

inputs and make sales online. Only 46 percent of adults in rural households have 

broadband access, compared to 67 percent for non-rural adults. America should lead the 

world in broadband adoption and Internet access, and we should not leave rural 

populations behind. 

	 Assure net neutrality to preserve the freedom and openness of Internet access. The 

Internet is the ultimate level playing field, making possible the widest and most lucrative 

13 
variety of entrepreneurial activity and innovation that the world has ever seen. FCC 

Chairman Julius Genachowski announced on September 21st that providers of Internet 

access should not discriminate against lawful applications or content. We want to make 

sure it remains possible for anyone to start a business in a garage that creates new jobs, 

new ideas, and new opportunities for Americans. Our nation’s economy is increasingly 

dependent on the Internet; the Internet is an essential infrastructure, like roads and 

electricity; and the global leadership that America provides today stems directly from 

historic policies that have ensured that telecommunications networks are open to all 

lawful uses by all users. That’s the way the Internet has always worked, and we want it 

to stay that way – not because we treasure our past, but because we care about our 

economic future. 

	 Support research for next-generation information and communications technology. 

The Administration is committed to supporting research that will foster the next wave of 

innovation in information and communications technologies, such as “cognitive radio” 

that allows for the efficient sharing of spectrum, quantum computing, efficient 

programming of parallel computers, cyber-physical systems, secure computers and 

networks, data-intensive supercomputers, and nanoelectronics that enables the 

continuation of Moore’s Law for decades to come. The President’s Budget supports this 

research through grants for the National Science Foundation, DARPA, and other public 

and private institutions. 

	 Appoint a Chief Technology Officer of the U.S. Government. In April, President 

Obama named the first ever Chief Technology Officer of the U.S. government. The CTO 

position was created to oversee the application of technology to create jobs and spur 

economic growth. The Administration is committed to recruiting high-level champions 

for innovation across the government. 

	 Secure cyberspace. The President has identified cybersecurity as a national priority to 

ensure that cyberspace – the globally-interconnected digital communications 

infrastructure - is sufficiently resilient and trustworthy to support U.S. goals of economic 

growth, civil liberties, privacy protections, national security, and the continued 

advancement of democratic institutions. Leadership in this effort has been anchored in 

the White House through the positions of the U.S. Chief Technology Officer, the U.S. 

Chief Information Officer, and the President’s coming Cybersecurity Coordinator. This 

leadership team is partnering across the public and private sectors to build capacity for a 

digital nation through education, training and awareness; enhance security through 

information sharing, effective incident response planning, and privacy-enhancing identity 

management strategies; and encourage innovation through game-changing research and 

development strategies. 

2.	 PROMOTE COMPETITIVE MARKETS THAT SPUR PRODUCTIVE 

ENTREPRENEURSHIP 

A. Promote American Exports 

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Exports will play an increasingly critical role in the future of the American economy, and the 

President’s plans will ensure fair and open markets for American producers. 

	 Open markets abroad. The Obama Administration is working with our trading partners 

to negotiate mutually beneficial trade agreements and to maintain the worldwide flow of 

goods, services, and capital. Only by keeping markets open can American producers sell 

to world markets and derive the benefits of participating in an open exchange of ideas 

and innovations. 

	 Promote American Exports. President Obama is committed to robust support for 

American exporters. The United States Trade Representative (USTR) and the 

Department of Commerce are proactively coordinating our support through programs 

such as the International Trade Administration and the Trade Promotion Coordinating 

Committee. 

	 Enforce our trade agreements to ensure access for American products abroad. Over 

the last eight years the enforcement of trade agreements slowed dramatically, with the 

United States bringing only an average of three WTO cases per year – as opposed to the 

approximately 11 annually from 1995 to 2001. In this era, the United States lost its focus 

on ensuring that other countries lived up to their promises to open their markets, not 

violate America’s intellectual property, and not use dumping or subsidies to penetrate 

America’s markets. Under President Obama, USTR and the Department of Commerce 

are committed to a new emphasis on enforcing our existing agreements. 

	 Protect intellectual property rights. Intellectual property is to the digital age what 

physical goods were to the industrial age. We must ensure that intellectual property is 

protected in foreign markets and promote greater cooperation on international standards 

that allow our technologies to compete everywhere. The Administration is committed to 

ensuring that the United States Patent and Trademark Office has the resources, authority, 

and flexibility to administer the patent system effectively and issue high-quality patents 

on innovative intellectual property, while rejecting claims that do not merit patent 

protection. 

	 Reform U.S. export controls. The President has directed that the National Economic 

Council and the National Security Council review the overall U.S. export control system, 

tasking them to consider reforms that enhance America’s national security, foreign 

policy, and economic security interests. While the U.S. has one of the most robust export 

control systems in the world, it remains rooted in the Cold War era of over 50 years ago. 

It must be updated to address the threats we face today and the changing economic and 

technological landscape. 

B. Support Open Capital Markets that Allocate Resources to the Most Promising Ideas 

Open capital markets are one of the greatest strengths of the American economy, and the 

President is committed to making sure these markets work. 

15 
 

	 Promote open capital markets. In our economic system, freely moving capital searchers 

for the most promising innovations to nurture and propel. Providing American leadership 

in well regulated, open markets will support global technology development, and the 

President is committed to this system. 

Ensure working financial markets. While free and open markets provide significant 

benefits, they must work for consumers and investors. The recent financial crisis 

highlighted the danger of managing a 21st century economy with a 20th century regulatory 

framework. We are committed to building a system where individuals and businesses can 

innovate and take chances without fearing that the system will pose untenable risks. Our 

plan: 

	 

o	 Requires that all financial firms that pose a significant risk to the financial system 

at large are subjected to consolidated supervision and regulation. 

Increases supervision of financial markets to help ensure that our markets are 

strong enough to withstand system-wide stress and the potential failure of one or 

more large financial institutions. 

Rebuilds trust in our markets by creating a Consumer Financial Protection 

Agency to focus exclusively on protecting consumers in credit, savings, and 

payment markets. 

Provides the government with the tools to cope with crises by ensuring the orderly 

unwinding of failing firms and avoiding the untenable choice between bailouts or 

damaging collapse. 

Raises international regulatory standards and improves international coordination. 

o	 

o	 

o	 

o	 

C. Encourage High-Growth and Innovation-Based Entrepreneurship 

Entrepreneurship has played, and will continue to play, an essential role in generating innovation 

and stimulating U.S. economic growth. Firms with fewer than 20 employees accounted for 

approximately 18 percent of private sector jobs in 2006, but nearly 25 percent of net employment 

growth from 1992 to 2005. Small businesses employ 30% of high tech workers such as 

scientists, engineers, and information technology workers. The Obama Administration is 

committed to helping entrepreneurs build new and vibrant businesses that lead to new jobs and 

economic growth. 

	 Increase access to capital for new businesses. Providing access to credit for 

entrepreneurs and small business owners is a foundational element of economic recovery 

and growth. The Recovery Act reduced fees and increased guarantee levels on small 

business loans, while the U.S. Small Business Administration (SBA) has increased small 

business lending by more than 61% from the depths of the recession while broadening the 

base of commercial SBA lenders. Growth capital is essential. The Small Business 

Investment Company (SBIC) Debentures program provides debt and mezzanine 

financing at a time when the equity markets have pulled back from providing capital to 

these companies. The President has also proposed eliminating the capital gains tax on 

small businesses. 

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	 Provide training and mentoring to entrepreneurs. Entrepreneurs with access to a 

network of trainers, mentors, and counselors can improve their chances for success in 

building high-growth businesses. The SBA has 68 district offices and over a thousand 

nonprofit “resource partners” that offer 14,000 counselors who serve about 1.5 million 

entrepreneurs and small business owners each year. The Administration is partnering 

with community colleges, universities, and the philanthropic sector to deliver more 

training and mentoring resources to aspiring entrepreneurs to promote the creation of new 

businesses, particularly among women and minorities. 

	 Create competitive communities by promoting regional innovation clusters. In 

various regions of the U.S., entrepreneurs are collaborating with local researchers, 

educators and industry leaders to foster specialized knowledge, technical expertise, and 

cutting-edge products. This will help American businesses retain and achieve new levels 

of competitiveness. The President’s Budget provides $50 million in regional planning and 

matching grants within the Economic Development Administration (EDA) to support the 

creation of regional innovation clusters that leverage regions’ existing competitive 

strengths to boost job creation and economic growth. The Budget also launches a $50 

million initiative in EDA that will create a national network of business incubators to 

encourage entrepreneurial activity in economically distressed areas. 

	 Stimulate entrepreneurship through increased access to government data. The 

Administration launched Data.gov, a one-stop shop for free access to data generated 

across all Federal agencies. By empowering the American people to find, use, and 

repackage data, Data.gov will give rise to new businesses (like the GPS and genomics 

industries that grew from increased access to public information) and empower 

entrepreneurs to evaluate opportunities. 

	 Protect small businesses from unfair business practices. In many industries, small 

companies are critical innovators, bringing enormous benefits to consumers while putting 

competitive pressure on incumbent firms. The Obama Administration is committed to 

enforcing the antitrust laws to insure that innovative entrepreneurs are not excluded from 

the market by anti-competitive conduct. The Department of Justice actively investigates 

allegations of exclusionary conduct as part of its law enforcement mission to keep 

markets open and competitive. 

D. Improve Public Sector Innovation and Support Community Innovation 

Innovation must occur within all levels of society, including the government and civil society. 

The Obama Administration is committed to increasing the ability of government to promote and 

harness innovation. The Administration is encouraging departments and agencies to experiment 

with new technologies that have the potential to increase efficiency and reduce expenditures, 

such as cloud computing. The Federal government should take advantage of the expertise and 

insight of people both inside and outside the Federal government, use high-risk, high-reward 

policy tools such as prizes and challenges to solve tough problems, support the broad adoption of 

17 
 

community solutions that work, and form high-impact collaborations with researchers, the 

private sector, and civil society. 

	 Make the government more transparent, participatory, and collaborative. On his 

first day in office, the President signed the Memorandum on Transparency and Open 

Government, thereby placing government accountability and civic engagement at the 

forefront of the Administration’s governing philosophy. The President’s Memorandum 

urged agencies to promote three principles for bringing innovation to government: 

transparency, participation, and collaboration. Transparency promotes accountability by 

providing citizens with information about what their Government is doing. Public 

participation in decision-making strengthens democracy and ensures that Government 

makes policies with the benefit of information that is widely dispersed in society. 

Collaboration improves the effectiveness of Government by encouraging cooperation and 

knowledge-sharing within the Federal Government, across levels of Government and 

between the Government and private institutions. 

	 Promote Open Government. The Administration created the White House Open 

Government Initiative to coordinate Open Government policy, projects, and design 

technology platforms that foster openness across the Executive branch. The Initiative has 

achieved many important milestones, including: 

o	 Publishing government data online to make it easy for anyone to remix and reuse, 

thus involving the American people in the development of public policy, 

Challenging thousands of Federal employees to propose ideas for slashing the 

time required to process veterans’ disability benefits, 

Releasing information on Executive branch personnel and salaries, and 

Launching the IT dashboard, a one-stop clearinghouse of information that allows 

anyone with a web browser to track government spending on technology and hold 

the government accountable. 

o	 

o	 

o	 

	 Use innovation to improve government programs. President Obama is committed to 

using novel techniques and research support to improve the efficiency and effectiveness 

of government programs. For example, the Recovery Act includes a $7 billion fund to 

incentivize innovative reforms in states’ Unemployment Insurance programs. States that 

use the most recent wage data and commit to cover more groups of job seekers get 

rewarded with higher payments. Already 32 states have qualified, and of these 24 of 

them changed their laws to do so. Another example is support for patient-centered health 

research in the Recovery Act. This research will lead to higher quality and more effective 

ways to deliver healthcare. The results will stimulate action across the health system to 

incorporate these findings into programs. 

	 Commit White House Resources to scaling and promoting community innovations. 

The President created the White House Office of Social Innovation and Civic 

Participation to grow the marketplace for community innovations and provide the 

technology and tools for greater civic participation to help tackle our nation’s toughest 

problems. The office will build upon efforts across the agencies, such as the Department 

18 
of Education’s $650 million Invest in Innovation (i3) Fund, to create new models of 

Federal grant-making that focus on encouraging, testing and scaling the most promising 

ideas and programs. The office uses its convening power to coordinate and partner with 

citizens, philanthropists, and the private sector to create a supportive environment for ongoing innovations in communities. Part of the effort will include using innovative tools 

such as prizes and challenges. The President’s Budget includes $50 million in seed 

capital for the nation’s first Social Innovation Fund, which will identify the most 

promising, results-oriented non-profit programs and provide the capital needed to 

replicate their success in communities around the country. 

3.	 CATALYZE BREAKTHROUGHS FOR NATIONAL PRIORITIES 

A. Unleash a Clean Energy Revolution 

President Obama is committed to U.S. leadership in the new clean energy economy of the future. 

The Administration’s investments will put American innovators ahead of the curve, creating new 

jobs in cutting edge industries while tackling the threat posed by climate change. 

	 Double the nation’s supply of renewable energy in the next three years. The 

President has set a goal to double the generation of renewable energy in the next three 

years, unleashing a wave of innovation in the clean energy industries of the future. To 

accomplish this vision, the Recovery Act included billions of dollars to support loan 

guarantees and the extension of the Production Tax Credit for electricity production from 

renewable energy sources, leveraging tens of billions of dollars in private investment. 

The Recovery Act and the President’s 2010 Budget also include significant increases for 

renewable energy technology R&D. In addition, the President pursued regulatory reform 

to ease the transition to a clean energy economy. In April the Department of the Interior 

released final regulations that will govern the development of renewable energy in 

offshore waters. These rules will enable our Nation to tap into the ocean’s vast 

sustainable resources to generate clean, green energy in an environmentally sound and 

safe manner. 

	 Promote energy efficient industries. The Recovery Act and national energy policy will 

generate a proliferation of new technologies, processes, and jobs relating to improving 

energy efficiency. The Recovery Act alone provided $5 billion in funding for 

weatherization assistance to low-income residents, $4.5 billion for greening Federal 

buildings, and $6.3 billion for state and local government renewable energy and energy 

efficiency and conservation efforts. 

	 Invest in Clean energy innovation. The President has proposed a 10 year, $150 billion 

investment in the research, development and demonstration of clean energy technologies, 

such as solar, wind, green buildings, efficient lighting, next-generation biofuels, 

proliferation-resistant nuclear reactors, energy storage, and carbon capture and storage. 

	 Enact a cap-and-trade program to curb oil dependence and greenhouse gas 

emissions while spurring renewable energy technologies. President Obama supports a 

19 
comprehensive cap-and-trade program that will provide a clear signal that the current 

energy mix is unacceptable and that low-carbon energy sources are the way of the future. 

The program will provide the certainty necessary for businesses to make transformative 

investments in renewable alternatives and energy efficiency. 

	 RE-ENERGYSE the American workforce. The President has proposed REENERGYSE, a joint educational campaign from the Department of Energy and the 

National Science Foundation to inspire tens of thousands of young Americans to pursue 

careers in clean energy. RE-ENERGYSE will support fellowships, interdisciplinary 

graduate programs, and partnerships between academic institutions and innovative 

companies to prepare a generation of Americans to meet the energy challenge. 

B. Support Advanced Vehicle Technologies 

For the sake of our national security, economy, and environment, it is crucial to diversify away 

from oil as the sole source of transportation fuel. Today, oil accounts for 96 percent of the fuel 

that powers our country’s vehicle fleet. The lack of widespread, affordable alternatives to oil 

makes us vulnerable to market disruptions and dependent on oil producers. Oil is also 

responsible for one third of our carbon dioxide emissions and is a significant source of local air 

pollution, threatening our climate security and the health of our local communities. 

The President’s strategy is to put the U.S. at the cutting edge of the advanced vehicle technology 

industry, which will not only reduce our dependence on oil, but will also create jobs, strengthen 

our manufacturing base, improve the quality of the air we breathe, and offer consumers greater 

safety, performance, and choice. 

	 Make the largest investment in technology for electric vehicles and transportation 

electrification in U.S. history. In early August the Administration announced $2 billion 

in grants which will catalyze private sector investment to build a globally competitive 

domestic battery and electric drive component industry. With this support, American 

factories will produce the lightest, cheapest, longest-lasting, and most powerful vehicle 

batteries in the world. American batteries and components will power affordable electric 

cars that can travel over hundred miles on a single charge and offer customers superb 

performance. These vehicles will be even more attractive thanks to the tax credit of up 

to $7,500 offered for electric and plug-in electric vehicles in the Recovery Act. 

The Administration is also making a $400 million holistic investment in transportation 

electrification as a system. Beyond batteries, vehicles, and components, this includes 

demonstrating pilot systems that put the pieces together – testing the infrastructure to 

plug the cars, training the workers to build and service them, and educating the 

consumers who will buy them. The lessons from these projects will help the private 

sector more quickly develop profitable electric vehicles that meet the needs of drivers. 

	 Deploy up to $25 billion in loans to support American manufacturing of advanced 

vehicle technologies. Through the $25 billion Advanced Technology Vehicles 

Manufacturing Loan Program, the Administration is supporting competition within the 

20 
marketplace to produce the most cost-effective solutions to reduce oil dependence. The 

Administration awarded the first $8 billion in conditional loan commitments in June. 

These included $5.9 billion for Ford Motor Company to transform factories across 

Illinois, Kentucky, Michigan, Missouri, and Ohio to produce 13 more fuel efficient 

models; $1.6 billion to Nissan North America, Inc. to retool their Smyrna, Tennessee 

factory to build advanced electric automobiles and to build an advanced battery 

manufacturing facility; and $465 million to Tesla Motors to manufacture electric drive 

trains and electric vehicles in California. Up to an additional $17 billion in loans will be 

made under this program over the next several years. 

	 Support the next generation of American biofuels. The Administration is investing in 

next generation biofuels that displace oil consumption and reduce greenhouse gas 

emissions. Through $800 million in Recovery Act grants as well as up to $500 million to 

support loan guarantees, the Administration is accelerating the development of clean 

technologies like cellulosic and algae-based biofuels –harnessing recent advances in 

synthetic biology. 

	 Improve vehicle fuel efficiency to reduce oil dependence and spark innovation. In 

May, President Obama announced a groundbreaking national autos program that put us 

on a path to adopting uniform Federal standards to regulate both fuel economy and 

greenhouse gas emissions. The result will be a projected reduction in oil consumption of 

approximately 1.8 billion barrels over the life of the program and a projected total 

reduction in greenhouse gas emissions of approximately 950 million metric tons. This 

landmark policy will spark innovation in more fuel-efficient vehicles, reduce pollution, 

and promote energy security. 

C. Drive Innovations in Health Care Technology 

The inefficiencies in our health care system raise costs and reduce the quality of care. New 

advances in health information technology will increase efficiency while broad reform will free 

businesses and individuals to innovate and grow. 

	 Expand the use of health IT. Expanded use of advanced health information technology 

(e.g. electronic medical records, mobile health applications, sensors for monitoring 

chronic diseases) will help prevent medical errors, improve health care quality, begin to 

modernize the American health care system and reduce costs. The Recovery Act provides 

over $19 billion in investments to modernize health information technology. 

	 Renew our commitment to medical research. The Recovery act included a $10 billion 

expansion in health research. This will fund projects such as an initiative to identify all 

of the genetic changes involved in 20 types of cancer, clinical trials of medicines that 

could help stop the HIV/AIDS pandemic, the largest infusion of funding to discover the 

causes and treatment for autism, and using DNA sequencing to discover how to prevent 

and treat heart, lung, and blood diseases 

21 
	 Slow the growth of health care costs. The President is committed to comprehensive 

reform for a health care system that makes it possible to improve the quality of care while 

slowing the growth rate of costs. Doing this will free up resources that can be used to 

invest in American businesses and improve the living standards for all Americans. 

D. Harness Science and Technology to Address the “Grand Challenges” of the 21st 

Century 

The President’s renewed commitment to science, technology and innovation will allow the 

nation to set and meet ambitious goals that will improve our quality of life and establish the 

foundation for the industries and jobs of the future. Examples include: 

	 Complete DNA sequencing of every case of cancer; smart anti-cancer therapeutics 

that kill cancer cells and leave their normal neighbors untouched; early detection of 

dozens of diseases from a saliva sample; nanotechnology that delivers drugs precisely 

to the desired tissue; personalized medicine that enables the prescription of the right 

dose of the right drug for the right person; a universal vaccine for influenza that will 

protect against all future strains; and regenerative medicine that can end the agonizing 

wait for an organ transplant. 

	 Solar cells as cheap as paint, and green buildings that produce all of the energy they 

consume. 

	 A light-weight vest for soldiers and police officers that can stop an armor-piercing 

bullet. 

	 Educational software that is as compelling as the best video game and as effective as 

a personal tutor; online courses that improve the more students use them; and a rich, 

interactive digital library at the fingertips of every child. 

	 Intelligent prosthetics that will allow a veteran who has lost both of his arms to play 

the piano again. 

	 Biological systems that can turn sunlight into carbon-neutral fuel, reduce the costs of 

producing anti-malarial drugs by a factor of 10, and quickly and inexpensively 

dispose of radioactive wastes and toxic chemicals. 

	 An “exascale” supercomputer capable of a million trillion calculations per second – 

dramatically increasing our ability to understand the world around us through 

simulation and slashing the time needed to design complex products such as 

therapeutics, advanced materials, and highly-efficient autos and aircraft. 

	 Automatic, highly accurate and real-time translation between the major languages of 

the world – greatly lowering the barriers to international commerce and collaboration. 

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