NYTimes.com's Dot Earth blog poses an interesting question: Should President-Elect Barack Obama launch a federal Department of Innovation?

Put aside any negative feelings about more government bureaucracy or intervention into business and look at the reality of today. Obama is talking extensively about a new New Deal-like projects to revive the nation's infrastructure and stimulate the economy and job growth. With that, he's preached a new wave of innovation, and technology plays a huge role, as any CIO will tell you (and as evidenced by his successful use of collaboration, Web 2.0, etc. in his campaign).

But a government department? I'm not sold, but I can see why some would be. So I asked Scott Anthony, president of the innovation consultancy Innosight.

"It is hard to argue with efforts involving improving the innovation infrastructure, making it easier for new companies to form and old companies to fail, and investing in underlying technological developments that might not make sense for any individual company," Anthony told me via e-mail. "Where people get legitimately nervous is when government tries to pick individual winners and losers through incentives and regulations. These kinds of actions can paradoxically stifle innovation."

He cites a pertinent example: in the mid 90s, the government forced local phone providers to share networks with rivals, thinking that would spur innovation in the industry. That backfired, for a number of reasons. "The intent was noble; the outcome was disappointing," he concluded.

That said, government can also be a huge driver of innovation. But understanding the impact it could have on business innovation--and IT innovation, specifically--is tougher to grasp.

What do you think: should Obama form an innovation department? What would that mean for your efforts?

Previously: The Right Recipe for Innovative Tech Investments