innovation infrastructure. The left-hand side of Fig. 3
portrays some of its elements. Endogenous growth
theory highlights two important determinations of the
production of ideas in an economy: an economy’s aggregate
level of technological sophistication (A) and
the size of the available pool of scientists and engineers
who may be dedicated to the production of new
technologies (HA). We expand on this conception to
include other cross-cutting factors that impact innovative
activity denoted by XINF, including the extent
to which an economy invests in higher education and
public policy choices such as patent and copyright
laws, the extent of R&D tax credits, the nature of antitrust
laws, the rate of taxation of capital gains, and
the openness of the economy to international competition.
7 It is important to note that the common innovation
infrastructure incorporates both the overall
scale of innovation inputs within an economy (HA, the
size of R&D employment and spending) as well as
economy-wide sources of R&D productivity (A and
XINF)