Over the last 20 years, the shape of the global political economy has shifted dramatically, but US science and technology policy is continuing as though nothing has changed since the Cold War. Military research and development are prominent, and policies are still oriented towards large firms in existing industries rather than small, dynamic ones in new industries. US scientists and engineers are still world leaders in Mode 2 learning, as indicated in their active collaborations with industry; but large US markets seem to be keeping the system from putting effort into developing partnerships in the emerging economies. While the capability exists, then, the directional arrow is not pointed towards continued prosperity through innovation in the US economy. Science and technology policies are themselves in need of innovation.