Back in October, I wrote about the contention of some experts that American manufacturers could regain at least some of their former market power if they focused on innovation as well as cost control. Logically, more of them might be willing to do so if the federal government would help defray their R&D investments.

That's the premise behind the suggestion of two prominent think tanks that the feds should create a National Innovation Foundation modeled on the National Science Foundation or the Corporation for Public Broadcasting. The Brookings Institute and the Information Technology and Innovation Foundation note in a recent report that the U.S. is losing ground in terms of the support it offers businesses, reports MercuryNews.com. America's R&D tax credit ranks 17th on a list of the top 30 industrialized nations. (A few clicks will take you to the full report, which can be accessed via both organizations' Web sites.)

Small businesses, in particular, have suffered from a lack of government support, as I wrote earlier this week.

The Information Technology and Innovation Foundation has been trying to get government leaders more interested in funding national innovation initiatives since at least last spring, when I wrote about its desire to make digital information a "fourth leg" of economic policy, along with fiscal, monetary and investment policy. In that blog, I noted that the U.S. had slipped to fifth on the World Economic Forum's Global Information Technology Report in 2007, down from the top spot in 2006. The WEF faulted America's "relative deterioration of the political and regulatory environment."

While President Bush and Congressional leaders have talked up legislation like last year's America Competes Act, such efforts remain underfunded as the government continues to steer much of its spending to defense and security initiatives, notes MercuryNews.com.

Several lawmakers are now working on legislation that would provide for the creation of such a National Innovation Foundation, according to the article. Robert Atkinson, president of the Information Technology and Innovation Foundation, believes that no matter who is elected president in November, he or she will be more amenable than Bush to earmarking funds for innovation.