Is it just me or does the idea of a Washington Think Tank addressing innovation seem more what the problem is than the solution? Look I'm in favor of academic studies and The Brookings Institution did some great work back in the day (like the period of time they talk about) but they seem really far away from where innovation is taking place from a cultural point of view.
I think the author is missing one of the key facts. Europe was hit hard by WW2 and Germany was in ruins. Other economies like China and Japan was also not comparable. It's easy to increase productivity and innovation when your competition is limited.