Systemic features of innovation development in the USA

The progress of technology, focusing on the development of a green, low-carbon economy and alternative energy, has acquired special structural significance for growth. In the modern economy, a corresponding new trajectory of growth and development is emerging, the successful realization of which depends directly on innovations, which have become a determining factor for economic prospects [10]. Therefore, in the United States, attention has increased towards the modernization and improvement of the competitiveness level of high-tech industries, the transition to the new generation of production models in the context of the modern industrial revolution (Industry 4.0) [16], and the development of high- tech clusters, which are the main regional innovation centers [39]. The transformation of the economy, associated with the green transition and competition from China, has necessitated a reassessment of the innovation strategy in the United States and a greater focus on the development of innovations.

Aims and objectives. The primary aim of the research is to summarize and characterize the systemic features of innovation development in the United States and to identify the key factors intensifying innovative productivity in this country. In this case, the systemic approach at the level of the national economy encompasses the consideration of the specificities of:

Results

The transformation of the United States into a leading global power in the 20th century was largely based on innovation generation [19]. In the early 21st century, the United States remains a global superpower and strives to maintain global dominance through its advanced positions in technology and functioning innovative economy. The innovation industry in the United States began to actively develop after the World War II. In the 1950s and 1960s, the Departments of Defense and Intelligence aided the development of science in the university sector by funding R&D, contributing to the establishment of Silicon Valley (the first microwave devices and semiconductor components were used for military purposes). In the 1970s, with government support, the system of venture investment in innovation in the entrepreneurial sector began to actively develop. In the 1970s and 1980s, Japan emerged as a strong competitor to the United States in high-tech industries, necessitating the formulation of an innovation policy. This was marked by the adoption of acts such as Small Business Innovation Research, Small Business Technology Transfer, Small Business Innovation Development Act, The Bayh-Dole Act, Economic Tax Recovery Act, National Cooperative Research Act, Technology Transfer Act, Technology Innovation Act, the Omnibus Trade and Competitiveness Act, etc. To implement these acts, special federal agencies, programs, and institutes were created, and new rules for the protection of intellectual property were introduced, stimulating innovative activities in businesses, especially small businesses and universities. The innovation policy included direct (funding for R&D, technology, education; provision of business and technical services; venture financing; subsidies, etc.) and indirect (various preferential loans and credit guarantees for businesses conducting R&D; protection of intellectual property, etc.) methods, which significantly stimulated business activity and investment.

It should be noted that since the 1970s-1980s, the financial sector in the United States has been liberalized, and credit- monetary factors have been widely used to stimulate demand and investment, accompanying the rise of the emerging computer and telecommunications industry. This provided a powerful impetus for innovation in many sectors of the economy. In the 1990s, the so-called "New Economy" emerged, representing economic activity based on the use of computer and communication technologies, which was greatly influenced by government investments and the role of government research institutions and large corporations. The deployment of the "New Economy" was accompanied by intensive innovations related to the improvement and expansion of the range of computer and telecommunications-related products, as well as the development of markets for corresponding services. The scale of outsourcing increased, allowing companies to optimize costs and focus on the development and promotion of innovations. Improving access to capital through venture funding and lowering market entry barriers provided a new impetus for the development of small innovative businesses, which began actively generating innovations. Simultaneously, deindustrialization occurred, linked to significant foreign investments, technology transfer, and the relocation of final stages of production primarily to Asian countries, providing access to cheaper resources and new markets, contributing to global expansion.

Today, the global dominance of the United States in high-tech sectors persists, with a focus on the most profitable areas with a high level of technological transformation. In the sphere of high technology and knowledge-intensive services, the United States has primarily concentrated on R&D, product and equipment development (e.g., fabless manufacturing/companies), and marketing, which yield the highest profit margins, and control of global production chains and distribution, encompassing digital platforms. The advent of the post-industrial era provided advantages in the global markets as the balance shifted from manufacturing towards the "knowledge economy" and innovation, allowing for strengthened global expansion. It is important to note that the United States has undergone a historical path from a production-based economy, subsequently transitioning to an economy of abundance (excess supply), and then moving to a stage of consumption, actively developing the service sector, which generated corresponding impulses for innovation development. This particularly pertains to the expansion of market capacity alongside the increase in the quality of requests. Stimulating demand primarily through credit-monetary methods (in the context of producing the "senior" world currency) transformed the United States into a vast market for the finest goods from around the world. On the other hand, with the collapse of the socialist system, the United States, as a hegemon, established its global order, promoting democracy and liberal ideology, and transforming into a leader of global progress. This facilitated the popularization and exportation of American culture and lifestyle, embedding their localization in various countries, setting trends, and largely creating external demand for American innovations (produced not only in the United States). The transformation into a significant importer and exporter of goods and services, an investor, and an innovative leader enabled the United States to advance its technological standards and influence international regulatory systems, setting its own "rules of the game". This fostered conditions for even greater advancement of innovations, particularly in the realm of technology transfer. The United States is largely oriented not only toward the global diffusion of innovations but also toward leveraging external resources for their creation, amalgamating top companies, researchers, and experts into a global innovation network, primarily generating ideas and knowledge. Consequently, innovations have become a cornerstone of economic prosperity and global expansion, complementing the blend of credit-monetary instruments and globalization.

Today, the United States remains the largest importer of goods and services, one of the largest exporters, a leading investor, and the world's financial hub, encompassing a significant portion of economic activity. The United States possesses the world's most robust stock market and financial system, having established a global superpower of assets with numerous major multinational corporations and financial structures. However, this article does not aim to cover all the components of the global expansion of the United States, which certainly deserves attention. Nor does it assess the threats of losing the country's global economic and technological leadership under the pressure of China, which requires specific research. Let us focus specifically on the systemic factors that have become sources and foundations for success in the field of innovation.

1. Civilizational factors. It is widely recognized that the economic success of the United States is largely based on its affiliation with Western civilization. The foundation of Western civilization includes freedom of will, rational self-interest, individualism, uniqueness of the individual, recognition of human rights and freedoms, particularly property rights, adherence to the rule of law, and values of development. Western civilization is characterized by an orientation towards existence, pragmatism, a consumerist attitude towards nature, practicality, concreteness, a tendency to change traditions, and an emphasis on improving living conditions and increasing the level of human prosperity, among others. Creativity (the act of creating something new) is attributed to individuals oriented towards innovation, changing the world, activity, initiative, and self-realization. In Western countries, the individual (citizen) rather than the state takes precedence, and the power and functions of the state are limited, with rights granted to individuals at birth, the most fundamental of which are formally guaranteed. Emphasis is placed on the protection of human rights and legal discipline in culture and law, which form the basis of social organization.

In Western civilization, liberalism dominated, giving rise to capitalism and market ideology, forming the corresponding economic worldview, motivation, and the phenomenon of entrepreneurship, the lifestyle of the population, based on the pursuit of prosperity and flourishing, as well as a distinct attitude towards labor (at the intersection of Protestant ethics and economic culture). Within the framework of formal norms and moral constraints, commercial socio-cultural orientations developed, fostering a readiness to compete and take risks for profit, thereby establishing a distinct business environment as the basis of economic relations. Based on these factors, entrepreneurship with an innovative focus emerged. Additionally, the influence of Western values on the improvement of demand (requests) quality cannot be overlooked, particularly against the backdrop of increasing levels of prosperity, which became more oriented towards novelty and the originality of products.

Due to the aforementioned factors, Western civilization has conquered the entire world and, at least for now, continues to dominate in ideological, political, technological, and economic spheres. The West has become the leading force in the current stage of globalization, spreading its values, culture, and way of life, and exerting significant influence on other civilizations (Westernization) and overall global progress. However, the United States has certain distinctions from other countries in Western civilization in terms of ideology, institutions, and mass culture. The United States is a country where different national cultures have mixed and united around the ideas of prosperity and well-being for all, and a focus on maximum achievement in life, which gives rise to the "American Dream" as an ideal of freedom and fulfilment of opportunities. There has also emerged a unique mass culture, which, among other things, is oriented towards creating an "American style" in everything, striving to surpass the best models and achievements in the world. A strong aspect of American society is providing people with the opportunity to independently form their views, conceptions, set goals, and motivate themselves. Key to this is the freedom in aspirations and an orientation toward utilizing all available opportunities. Unique national principles such as "making it on your own", "do what you can", and "do your best" have become distinctive. This is complemented by the positive and constructive thinking inherent in Americans. All of this has had a positive impact on the formation of pro-innovation business orientations and has contributed to widespread innovation, creating external conditions for their acceptance by the population.

2. Institutional system. The USA is a democratic country with a liberal political ideology and well-developed institutions of a distributed type, possessing an efficient system of economic regulation. In its design, democracy unites a broad circle of citizens who are interested in effective governance, creates demand for advances, and stimulates personal responsibility and productivity. Generally, democracy is more receptive to change, fosters innovation, and has a positive influence on economic development [36].

The key features of the institutional system in the United States formed on the basis of Western culture, are the protection of property rights, including intellectual property, guaranteeing entrepreneurial rights, and promoting competition. The economic mechanism, as a set of specific institutions in the United States, is designed to ensure clear, transparent, and stable "rules of the game" in the economy, providing businesses with a long-term planning horizon and minimizing noncommercial risks. An important part of the institutional conditions for innovation is the rather unique patent system in the United States, which is utilized as a tool to protect rights and expand opportunities for inventors, and considering its sophistication, as a tool for global expansion in the context of achievements in science and technology. Based on the high quality of institutions and legal discipline, transparency, and the constancy of the rules of the game, a special business environment has been formed in the United States with a high level of trust, leading to the development of sophisticated contractual relationships and market interactions.

Largely due to the quality of its institutions, the United States has become the world's leading economy, having developed a powerful stock market and financial system that are crucial for an innovative economy (as will be demonstrated further). Thanks to the quality and political underpinnings, the institutional system of the United States supports the country's leading global positions described above. In particular, the federal authorities of the United States, along with government and independent agencies, have acquired a role as regulators at the international level, enabling the protection of national economic interests and security problem-solving. Institutional resources and technological leadership enable the establishment of global technological standards, influencing international trade, investments, and the competitive market environment.

In recent years, the United States has experienced a number of acute socio-political challenges that have diminished the quality of the institutional system, including political and ideological division of society, disunity of the political class, political conflicts, bureaucratization, corruption, excessive influence of large capital interests at the expense of public interests, short-term management within political and corporate cycles, and a prevailing orientation of individuals solely towards their own well-being. There is an intensifying debate that the United States is deviating from its origins in providing opportunities for human self-realization.

3. Economic system. The major technological innovations of the 20th century, not to mention mass consumer ones, primarily emerged in the United States. This confirms that capitalism as an economic system possesses a number of properties and features that stimulate innovation (Figure 1). The foundation of capitalism and business lies in the pursuit and activity at the edge of efficiency, which is pivotal for the improvement of management, organizational models, the search for better performers, and so forth.

Figure 1. Properties and characteristics of capitalism that stimulate innovation. (Sources: compiled by the authors based on [4; 5; 19-22])

Ensuring the normal manifestation of the aforementioned properties contributes to entrepreneurs' choosing:

- an innovative path of maximizing profit instead of rent-seeking (underpricing resources, overpricing final products, avoiding social costs);

- an innovative entrepreneurial orientation instead of replicative, conservative, or speculative.

The very nature of capitalism in real life is distorted (differences between countries are also evident in this), so for the normal functioning of the economy and the development of innovations, they must be purposefully supported, for example, in terms of the stability of the rules of the game, conditions of competition, minimization of bureaucracy, combating corruption, etc.

Alongside the mentioned properties, several important points should be noted. Firstly, the combination of liberal, market ideology and a number of social settings that have emerged in the history of the United States has led people to orient themselves toward improving their lives, which was also fostered by the Protestant work ethic. Simultaneously, consumer ideals were formed, along with views on the well-being of the population and the prosperity of the nation. By the late 19th and early 20th centuries, based on the internal characteristics of American culture itself, a certain "philosophy of innovation" emerged in the economic culture, which laid the foundation for success in entrepreneurship. This philosophy is characterized by an orientation toward breakthroughs, new opportunities, practicality, creating advantages, uniqueness, originality, progressiveness, and so on, which also shaped a corresponding culture of innovation. There was an emerging interest in inventors and a positive attitude toward entrepreneurial innovators, as well as support for talents. The new was deliberately created for profit and could be seen as a factor of economic efficiency. Moreover, within entrepreneurship itself, innovation gradually came to be understood as a factor for gaining competitive advantages and even as an opportunity for temporarily establishing a monopoly to significantly increase profit levels, as reflected in the well-known works of Western economists of that era. In the second half of the 20th century, innovative entrepreneurship fully emerged in the United States as a distinct type and productive variety of business [5; 20; 21]. At the national economic level, a dispersed network of entrepreneurs, especially small ones, operates, performing a special innovative function, as reflected in the theory of the innovative firm (enterprise) [5; 20]. In this regard, the dependencies of innovative entrepreneurship on the national features of capitalism, the institutions regulating the use of resources, social conditions, etc., are justified [22].

In addition to the mentioned properties, an important feature of American capitalism is the increase in the standard of living. Unlike the "deficit economy" that existed, for example, in the USSR, the United States developed an "economy of abundance" with an excess supply of goods in terms of volume and variety, along with a developed service sector. Abundance is a direct product and the foundation of capitalism, as it is associated with wealth accumulation (capital growth) and requires an increase in the well-being of the population, which serves as a stimulus for active labor and entrepreneurship, as well as a factor in increasing the demand for innovations. Abundance also fosters competition and raises the level of demand quality, which becomes more demanding, focused on novelty and originality. All of this gives impetus to the development of mass grassroots innovations. The promotion of the "economy of abundance" in the United States also contributed to the export of culture and lifestyle, expanding the markets for innovations abroad. At the same time, this process honed marketing skills and expanded distribution channels. Throughout the 20th century, the United States solidified its status as a country that experiments, generates, and pioneers new ideas (a "laboratory of innovation"), serving as a source of modernization for the world.

One of the prerequisites for the realization of many of the listed properties of capitalism in the United States and their influence on innovation is a well-established stock market and shareholder economy, which in particular create conditions for venture investment. In this context, it is necessary to mention the key characteristics of the shareholder culture in the United States that are directly related to innovation, namely:

- legislative separation of shareholder ownership and managerial activity, strengthening the autonomy of the latter in making business decisions;

- consolidation of officials exercising strategic control with structures of administrators and technical specialists involved in R&D management and production;

- inter- and intra-company organizational training, upskilling of managers;

- granting a share in the share capital to professional managers as a financial incentive.

The financial sector creates important prerequisites for innovation development by enabling the conversion of savings into investments, contributing to the reduction of non-commercial risks, and ensuring the efficient allocation of limited resources, particularly in favor of more profitable innovative sectors. It is crucial that entrepreneurs' access to capital is democratic, based on a differentiated financing system, allowing the use of various sources and the freedom to choose specific ones. Venture capital, which emerged as a phenomenon precisely in the United States, holds significant importance as a type of direct investment in terms of innovation.

As previously mentioned, the development of the innovation economy was accompanied by the emergence of a distinct culture of innovation. This was evident among large companies and in the capital market, and it reached small entrepreneurs and consumers, cultivating a more receptive demand for novelties. The active interaction of innovative enterprises with consumers became an integral part of this culture, for instance within the framework of the "open" innovation model, which today serves as a driving force for innovation development in many markets.

In accordance with the capitalist system, the U.S. economy is "geared" towards innovation, with the leading role of private business and a continuous process of "creative destruction" that fosters improvement, generates new capital, industries, and ultimately ensures economic growth.

In addition to the properties of capitalism and other factors conducive to innovation, it is necessary to mention the current problems in the U.S. economy, some of which are certainly offset by the high level of development, achievements, scale, and government support. Despite its advantages, the market capitalist system does not operate so swiftly and smoothly, harboring internal contradictions and fluctuations. In the context of democracy, alongside all its undeniable advantages, governance becomes more complex, with issues of uncertainty, instability, contradictions, such as changes in ownership structure, and so on. In this context, it is quite natural, considering the key factors of economic growth in recent decades, that a number of important problems and shortcomings have emerged, namely: high levels of indebtedness; excessive growth of the financial sector, its multiple dominance over the real sector; excessive accumulation of financial capital, the presence of financial "bubbles", fictitious assets; large-scale speculation; reduction in the scale of domestic production, and so on. The existing growth model was well suited for the relatively prosperous second half of the 20th century - an era of continuous market expansion. Currently, the economic situation is worse, largely supported artificially, and requires a profound correction of the financial sector. Moreover, American society is characterized by a low level of motivation for significant changes and strategic competition, especially from China. The excessive use of monetary factors has led to a decline in the effectiveness of the stock market as a mechanism for investment planning and has worsened the managerial thinking of policymakers in terms of stimulating growth, which has become more artificial. The surplus of financial capital has certainly expanded access to capital on the one hand, but on the other hand, it has reduced the competition for it, which has affected the quality of mass-level innovation projects. The over-indebtedness of the economy has naturally led to a decrease in long-term consumer demand and the marginal efficiency of debt utilization by businesses. All of this has a negative impact on the state of the economy and innovation productivity, necessitating profound corrections and new "model" solutions, the emergence of which could lead to an economic reboot and a new wave of innovations.

4. National innovation system. The propensity of capitalism towards innovation, along with favorable socio-economic conditions, has contributed to sustainable, dynamic, and large-scale innovation development. In the United States, a powerful NIS has been formed, the main elements of which include: 1) large private technology companies from various sectors, including the military sector; 2) small and medium-sized innovative enterprises; 3) the venture capital market; 4) universities combining research and educational training; 5) a diverse infrastructure supporting innovative enterprises, particularly startups, including business incubators and accelerators, providing various professional services such as consulting, legal, computer, engineering, architectural, and others; 6) a system of budgetary funding for R&D in both the civilian and military sectors. On the government side, there are also independent federal agencies and offices for R&D, both independent (National Science Foundation; National Aeronautics and Space Administration; Environmental Protection Agency Office of Research and Development, etc.) and belonging to various Departments (agriculture, energy, health and human services, etc.).

In overall R&D expenditure, the private sector unequivocally dominates, accounting for 77.34% by performers and 74.22% by financial resources (Table 1).

In the structure of the total federal R&D obligations by performers in 2021 (in millions of constant (financial year 2022) USD) intramural performers (agencies of the Federal Government) account for 35.78%; industry - 28.99%; universities - 21.03%; federally funded research and development centers, government-owned, contractor-operated laboratories - 7.57%, all other - 6.63% [1].

Table 1

The U.S. R&D expenditures, by performing sector and source of funds: 2017-2021, USD million. (Source: [25])

Although the main bulk of innovations in the United States is concentrated in the entrepreneurial sector, the role of the military sector cannot be overlooked. This sector is represented by large private corporations that initiate, finance and develop innovations. Private companies operate in this sector, maintaining special relationships with the government, which sets tasks and priorities, aiming to achieve global technological advantages as established by the Department of Defense. innovative performance venture investing america

Accordingly, resources are concentrated in specific directions, and a selection system of performers (prototypes) is in place, performing a specific innovative function and generating competition for securing government contracts. As history shows, many innovations that originate in the military sector subsequently find profitable use in the civilian sphere. A significant portion (45%) of federal obligations for funding R&D across various Departments and Agencies pertains to defense-related issues (Table 2).

Table 2

Total R&D funding by Agency (budget authority in millions of constant USD (financial year 2022)). Note: Request. (Source: [1])

Universities in the United States are powerful and quite specific participants in the innovation system, compared to other countries. They conduct large-scale research and development, patent their innovations, and collaborate with private companies, government agencies, and laboratories, utilizing various technology transfer mechanisms. The country has established sophisticated mechanisms for collaboration between universities and businesses. University research is commercialized through academic entrepreneurship, the creation of spin-offs and spin-outs, cooperation with existing companies, obtaining venture investments, and the establishment of new enterprises. The advantage of the United States is undoubtedly the leading position that national universities hold in global rankings (Table 3).

Table 3

QS World University Rankings - the United States. (Source: [29])

National research laboratories and independent research institutes also make a significant contribution by conducting research and development in various fields. The outcomes of their work can be the subject of technology transfer and commercialization through innovations, including the creation of spin-off companies. Unlike other countries, the United States sees significant involvement in innovation generation from non-profit (non-governmental) organizations that possess significant socio-political influence and financial capabilities. These organizations initiate, fund, and promote innovations primarily aimed at addressing social issues, particularly in the fields of healthcare and environmental protection. It is important to highlight the key factors intensifying innovation productivity in the American economy. Firstly, this involves a combination of entrepreneurial and large-scale corporate capitalism. This implies a combination of the roles of small and large enterprises in innovation development. Their contributions are somewhat different but significant. The specificity of small businesses creates a number of natural advantages in the field of innovation (speed of reorientation, low costs, risktaking, lack of bureaucracy, high owner motivation, and much more), yet their limited potential does not allow for scaling up the results. On the other hand, large companies possess corresponding attributes that often complicate innovation, but they have significant volumes of resources, production, and marketing capabilities. Therefore, these two types of businesses complement each other in innovation development, taking on different forms. In the United States, there has been a long evolution of coexistence between small and large businesses, and mechanisms for their interaction (mergers, acquisition of developments, venture investments, etc.) have been developed.

Secondly, venture capital investment, primarily focused on new small innovative enterprises (startups), plays one of the leading roles in innovation development, distinguishing the United States from other countries. This is the result of the unique evolution of the capital market in the context of the formation of an innovation economy. Venture capital is complemented by other forms of support for startups (for example, business incubators), which have formed an entire industry with its own characteristics (environment, competition, culture, channels for attracting capital, etc.).

Venture investment amounts have been growing in recent years, except for 2022, which was a natural market correction after the COVID-19 pandemic and other economic changes. Importantly, about half of the venture investments are directed toward companies in the early stages of development, especially the Seed and Start-up stages (Table 4).

Table 4

The amounts of venture investments in the United States by types of companies at different stages of development. (Source: [27])

Startups have become a widespread form of performing innovative projects and commercializing innovations, and the practice of accelerated initial public offering has become widely adopted. As of 2023, the United States leads in the number of startups (approximately 72.560 registered), involving 15.4% of the total population. The substantial number of projects and new enterprises contributes to the enhancement of quality. The U.S. economy harbors the world's largest technological market, which was valued at USD 1.8 trillion in 2022, and is also home to the highest number of "unicorns", signifying startups valued at USD 1 billion or more. Despite the emergence of large Chinese "unicorns", the number of such companies in the United States has continued to grow: in 2018 - 266; 2019 - 394; 2020 - 495; 2021 - 963; 2022 - 1.170; 2023 - 1.205 [8]. This has resulted from the creation of arguably the most favorable climate for startups in the world, offering early idea validation, diverse support, rapid market access, and funding. According to Startu...