Many business, academic, and scientific groups have recommended that the Congress substantially increase R&D spending in the near future. President Bush’s American Competitiveness Initiative calls for a doubling of spending over the next decade in selected agencies that deal with the physical...

If innovation is to be subsidized, a natural place to start is to increase the quantity and quality of human capital. Innovation, after all, begins with people. Simply stimulating the "demand side" through R&D subsidies and tax breaks may only drive up the price, rather than the volume of...