'Innovation' is commonly cited as an American economic strength. At the same time, there is disturbingly powerful evidence that too many Americans lack a clear understanding of the innovation process. Although in America there has been a remarkable confluence of innovation and industrial economic growth, the process itself is in no way haphazard. Today, the American model of industrial innovation is being deployed very effectively in Europe and Asia, just as the system atrophies in the U.S. I know this to be true first hand as a corporate manager for a Fortune 500 U.S. company, a doctoral researcher for a university in Sweden, and someone competing largely against Asian researchers in my study of discontinuous innovation. Sweden is second only to Israel in its public funding of R&D per capita, and China has doubled its investment in its university system over the past ten years while at the same time, the U.S. has declined in both measures. I see firsthand how innovation is stimulated by a necessary set of interactive factors, and that it is simply not possible to specialize in R&D.
It is misguided for anyone to believe that America can position itself as the world's expert and specialist in R&D for the global economy; there is no historical evidence to justify this viewpoint for any nation. Instead, America's industrial domination was built upon a model that tightly linked R&D and production, in the public and private sectors. After World War II, research was linked between the public sector (government and academic institutions) who were largely responsible for pure science , and the private sector that was often responsible for the applications effort that we often define today as 'research and development'. Pure science is often misunderstood, but is a most critical initiative, leading to radical or discontinuous innovation - true drivers of economic growth. After World War II, noted scientists as Vannevar Bush helped to establish a model linking the usefulness of science to socioeconomic progress through the consortium of private firm, academic, and government institutions. One of Bush's students, Frederick Terman, is largely credited for being the Father of Silicon Valley, an example of the benefits of linking the private sector, government, and academia in the development of innovation.
Today, this American innovation model has been repackaged and is now being called the triple helix model of innovation. Lack of American understanding of this triple helix approach is illustrated by the dot-com boom of the late 1990's. While most Americans would associate the free market heyday as an illustration of American innovation, most of us would struggle in believing that it was collaboration between government, academia, and the private sector that actually originated it. I believe this is due to our generalization that anything related to the private sector can lead to innovation, even the outsourcing of production and R&D, while anything associated with the government and/or academic institutions cannot. As a result, America's unbalanced model of R&D and production is actually moving us away from innovation instead of closer to it. With academic research finding that it takes 3,000 raw ideas, 100 exploratory projects, 10 well funded projects, and 2 product launches to create one successful innovation, few corporations will put itself through this process due to a lack of positive return on investment. However, it's in the best interest of the public sector enable private sector research within its national boundaries to become a possible engine of economic growth. Countries such as Sweden, Norway, and Denmark are utilizing this model of innovation successfully, while Americans commonly consider these countries to be less innovative. Asian economies are beginning to understand this public - private approach as well - the old American innovation process, not the new.
Through outsourcing production and ignoring the role of the public sector in the innovation process, America is misappropriating something of its own invention. The evidence is overwhelming that America is heading in the wrong direction: our history tells us we are misguided, and the rest of the world is following a different course. I see this first-hand in conducting innovation research in Europe and in competition with increasingly competent Asian researchers. Politics aside, failing to see that the rest of the world has adopted an approach that American pioneered, and from which we have veered, will without question reduce the likelihood of the next Silicon Valley being in California rather than Stockholm, Bangalore or Shanghai. In my mind, there is no more critical issue facing the U.S. economy than the need to fix our approach to innovation.
Until it isn't any more... then their heads will be on pikes, as so often happens to landed gentry that lose their edge.
We no longer innovate because real innovation represents risk to Wall Street, rather than the rigged-game casino that they prefer. It's the only possible outcome when you allow the financial sector to dominate all business activity in your economy. None of this will change until Wall Street is again properly regulated to serve a useful, rather than a parasitic role in our economy.
Our society does not seem to clamor for any substantial reversing of course; finding itself increasingly immersed with pettiness and polarization rather than a dialogue and action toward establishing a reinvigorated economic base, that is far more important to our well-being than "the war on terror". The ultimate terror (not to trivialize secuirty threats) will evolve from quite a different source than we presume - and of our own making through complacency and inaction.
I would also add to the part about our petty and polarized populous (say that 3 times fast!) that is only the part that is engaged at all. Most are so wrapped up in paying the bills, taking Johnny to soccer practice and Mary to dance class (If you can get them to stop texting) in the 10mpg SUV while stopping for a $5 coffee and rushing home because they can't wait to see who gets eliminated from Dancing with the Last Idol Standing.
It would appear that Wine and Circus was replaced with Latte and TV.
Is a course-correction possible at this point? It would be HARD WORK, and require that Wall Street only make handsome profits, instead of obscene profits. I won't hold my breath right now.
Perhaps in 2012.....
I'm in I.T. and I've watched a ton of jobs be outsourced. They used to say that it was just "grunt coding work" so "no problem, we'll still own all the project management and high-falutin' system analysis and architecture and design work".
BULL. There are plenty of super-smart people in countries like India and China and Russia and South Korea that are just as good as we are at all that kind of stuff too.
It's a B.S. meme as a whole.
They don't seem to care that the people at the top had to start somewhere below and gain the experience and skills to get to that level. When American business eliminates the lower levels, the skills of the higher levels will eventually suffer.
To FoonTheElder. I am sorry to say, I get the impression many big American corporations do not believe investing in people is profitable. That's probably why small businesses create many of the new jobs, they really couldn't afford to outsource but that's changing too. In any case, during the nascent stages of the downturn, one of the first departments to be gutted was R&D. Primarily because R & D is a huge expense that does not provide immediate returns and often can be found elsewhere cheaper. SeriousBlack is correct, there are a lot of smart and talented people in the world. Yet, you make a salient point about gaining skills and levels of expertise. Sadly, you don't really find a lot of sagacious thinkers in corporate America these days. The whole corporate attitude creates a circular effect where no one expects to be around that long, especially, if they are not producing short-term results. Other than for PR purposes, there is little room for loyalty to country and countrymen in the multi-national corporate paradigm of today-the bottom line rules. Sure,there are exceptions but fewer and fewer. I do wonder what will become of a country that does not believe in investing in its citizens.
Yes - I have long been saying that innivation and production go hand in hand, neither can exist in any meaningful way without the other.
The obvious link to the broader economy is that in order to maximise the benefit of a new technology you must also produce it - this is the way that prosperity is shared