So just how should we inspire innovation?

We really would rather like to crack the secret of encouraging innovation. For it is the major determinant of how living standards are going to change in the long term. Thus having more innovation would be a good thing for the kiddies and thus we'd like to have more innovation. Yet the policies required to generate it are still a bit or an unknown. As James Pethokoukis over at AEI says:

Yet despite all that, the US still somehow creates more high-impact startups — innovative, disruptive new companies that grow big and make their founders superrich — than any other large economy. This is arguably a pretty good proxy for a nation’s innovative oomph and entrepreneurial spirit.

Sounds like a reasonable way to measure it to us. Although the people paid to ponder about innovation don't see it that way:

While the United States scores well in terms of refraining from using policies that detract from the global innovation system, its overall score is brought down by the fact that its contributions’ scores do not match those of leading innovation nations. The United States ranks just 17th on contributions. Most notably, the United States has weaker scores on tax policies that incentivize innovation (e.g., relatively weak R&D incentives, no innovation box, and no collaborative R&D tax credit), its lack of a national innovation foundation, and, in recent years, relatively faltering federal investment in scientific research. It speaks to America’s need to implement a more innovation-friendly corporate tax code, while at the same time increasing funding for science and technology.

Hmm, no, we think we'd probably read that the other way around. There's a currently trendy set of things that everyone is urged to have. Tax subsidies for innovation, federal scientific research and, obviously, a national innovation foundation where the people who recommend such things can sit and thing about foundational innovation. Nationally.

And it turns out that by far the largest rich economy on the planet does it just by allowing those who innovate successfully to keep their squillions. Seems simple enough to us, fire all the bureaucrats, lower the tax rate and watch that richer future approach at warp speed.