The OSTP Strategy for Innovation is one approach: grand plans; deadlines; quotas; let no trough go unfilled; government micromanagement.
In a fascinating article in City Journal, George Gilder describes a different route: how Israel's tech industry was in a decade transformed from a stagnant socialist backwater into a leader in invention:
Israel ha[s] achieved an economic miracle . . . . As late as the mid-1980s, Israel was a
basket case, with inflation rates spiking from 400 percent to nearly
1,000 percent by early 1985. As recently as 1990, Israel was a
relatively insignificant technology force, aside from a few military
and agricultural initiatives. Yet in little more than a decade, the
country has become an engine of global technology progress.
How? Read the article, or the longer version in Gilder's new book The Israel Test. Government policies were important, but not in the sense that the transition was micromanaged. It could occur only because policies that were blocking the creative genius of the society were reversed, largely through the efforts of Netanyahu abetted by U.S. Treasury Secretary John Snow.
It is a great story, and it has profound political implications. Who knew that:
Between 1967, when Israel took over the West Bank and Gaza Strip, and
1987, when the first intifada erupted, those two territories were one
of the fastest-growing economies on earth. GDP surged 30 percent a year
for a decade, the Arab population nearly tripled, six new universities
were launched, and Arab longevity jumped from 43 years to 74.
The article concludes:
[T]rue peace—and the promise of a decent life—lies waiting to be picked
up by those Palestinians and Israelis who are willing, and now
increasingly able, to invest in creation over destruction.
Comments