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Justin R. Rattner

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Innovation in the 21st Century: Keeping the US Competitive

Posted: 11/16/09 01:40 PM ET

Today, Newsweek and Intel released the findings from a survey on innovation and the economy. The good news: despite one of the deepest recessions in history, Americans have an undiminished faith in technology and innovation as the primary engines of economic growth. The bad news: most Americans say that the downturn has hurt the U.S.'s ability to innovate and they have significant doubts about our ability to maintain leadership.

While pursuing game-changing technology innovation is my charge at Intel, I am acutely interested in supporting this undiminished faith of the American people and am working tirelessly to relieve their doubts about our ability to compete on the global stage.

Too often I find that organizations of all types are told by their management or their customers to be more innovative. They quickly embrace the idea, but then struggle to understand its true meaning and are clueless about how to achieve it.

Having spent my entire career in R&D, I've learned that innovation is a type of human endeavor, a process. If we as a nation fail to understand that innovation is this long, often torturous process, we will find ourselves taking a back seat to those countries that learned how to innovate by studying us in great detail, but then took the bold steps to make innovation their hallmark instead of ours. If we are not vigilant, the students will have become the masters.

Being an optimist, something essential to being a successful innovator, I believe we can return to our cultural roots and make innovation a process to be once again embraced and nurtured. Doing so will require the kind of investment environments, R&D strategies, and management know-how to keep us at the forefront of innovation and reassert our competitiveness in the rapidly changing, global economy.

A 21st Century Model of Cooperation between Government, Industry, and Academia

The old 20th century research model is all but dead. The big "think tank" labs that did research for the sake of doing research, such as Bell Labs (invented information theory and the transistor) and the Xerox Palo Alto Research Center (invented the Ethernet, laser printing, and the window-mouse user interface) are now just shadows of their former selves.

After World War II, much of what energized our economy was driven by industrial research and development organizations continuing the innovation process by taking the fundamental ideas from academia or the big think tanks and turning them into truly useful products and services. Indeed, the Internet may have been invented at UCLA and Stanford, with funding by the Defense Research Projects Agency, and the World Wide Web at CERN and the University of Illinois with funding from NSF, but it took industrial R&D at companies such as Cisco and Google to make the net and the web the global reality they are today.

In the 21st century, we advocate the adoption of a more contemporary research model, bringing together the best of world-class university research and industrial R&D with critical government support in a phased approach that yields the best outcome for all three sectors and drives a healthy pipeline of innovative American products and services to the global market well into the new century.

Can Government Alone Drive Innovation?

According to the survey, nearly half of Americans also want the government to offer incentives to spur innovation and a third think a national innovation initiative would be very effective. Where is the next invention on the level of the integrated circuit or the Internet going to come from, and how can we be sure it creates high paying jobs here at home?

For the 21st century R&D model to work we also must commit to increased funding for R&D in both the public and private sectors. While the call we often hear is for unilateral increases in government R&D funding and tax policy, I guarantee you that alone will not keep us competitive. The decreasing amount of industrial investment in R&D must be of equal concern.

A two-year old study by the Chinese government of its own electronics industry revealed that very few companies in China spend more than one percent on R&D. Are you surprised that most of those companies are not profitable? The few that spend ten percent or more on R&D, more typical of U.S. electronics companies such as Intel, do make money. There is a powerful lesson to be learned from this study. Government funding and tax policy must be matched by industrial R&D investments. One without the other is a recipe for failure.



Science & Engineering Education in the U.S. is Critical

The doubts that Americans expressed in the survey about the ability to maintain leadership in innovation is shared by Chinese respondents. To no one's surprise, the Chinese believe that the U.S. has a significant advantage today, but they expect to take the mantle of leadership over the next 30 years. In contrast, Americans say their doubts are largely based on a perceived gap with other nations in the quality of math and science education, with 82% thinking that the U.S. lags behind other countries. While it's true that we do lag, the good news is that the trend for American student is positive. The 2007 Trends in International Mathematics and Science Study (TIMSS) ranked U.S. fourth and eighth grade student 12th and 10th world-wide in mathematics, up dramatically from previous surveys. We need to do whatever it takes for as long as it takes until we're on par with the Chinese.

Immigration Policy Helps Power U.S. Innovation

Since innovation begins with an idea in response to a need, the next big product or service idea will hopefully come from the mind of a current American or an American-trained student. Given that I'm responsible for six of Intel's international research labs, I can say first hand that the U.S. doesn't have an exclusive deal on smart people. They are everywhere on the planet and most of them don't live in the U.S. It doesn't help to chase them out of the U.S. once they finish their academic training. We should give them a job offer and a hiring bonus the day they get their PhDs.

Tuning Up for the Global Battle

With 75% of Americans believing that technological innovation is more important than ever in driving U.S. economic success, the significance of developing our innovators of tomorrow is more pronounced than ever. The space race was basically a dual between two countries. Now we are engaged in a truly global competition over who will have the best ideas and who will turn those ideas into products, services, and high-paying jobs.

It's amazing to think that with an enlightened combination of cutting edge academic research and industrial R&D, well-informed government policy and support, and continuous improvement of math and science outcomes, the next big thing is on the horizon -- something that will change our lives and better our world. In that: not just reason to have faith, but a reason to act and act quickly.

Motivating the Newsweek-Intel Survey

Intel sponsored this survey with Newsweek to highlight key areas of interest around innovation. In the current economy, there is nothing more important than driving change that will create jobs and build confidence among the American people. Intel is also sponsoring a conference in Washington, DC to explore what American business, governmental and academic institutions, NGOs, and private citizens can do to invigorate our culture of innovation that will drive economic recovery and ensure long-term, sustainable growth.

More information about the survey.

More information about the Innovation Economy conference.

 
Today, Newsweek and Intel released the findings from a survey on innovation and the economy. The good news: despite one of the deepest recessions in history, Americans have an undiminished faith in te...
Today, Newsweek and Intel released the findings from a survey on innovation and the economy. The good news: despite one of the deepest recessions in history, Americans have an undiminished faith in te...
 
 
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09:26 AM on 11/19/2009
The tech sector continues to help out the economy. A recent IDC study showed the tech sector is poised to continue significant growth through 2013 - creating new and high paying jobs.
06:28 PM on 11/18/2009
I am not in favor of relaxing US immigration laws just to import more upper-caste indians from India who, when eventually promoted into a management position, will exclusively hire only more upper-caste indians from India.
02:08 PM on 11/18/2009
Justin, We couldn't agree more. PARC today is no longer Xerox PARC or "a big think tank", but a commercial entity with multiple Fortune 500 and other clients.

While we're known for inventing the things you mention and more, we're building our own “contemporary research model” for innovation by positioning ourselves at the heart of industrial R&D, government contracts, and world-class university research.

But here’s the thing: two-thirds of our commercial income comes from abroad. Asia, in particular, is aggressively probing for new engines of innovation and understands the seriousness of what's at stake.

http://blogs.parc.com/blog/2009/11/on-keeping-u-s-innovation-competitive/
04:05 PM on 11/17/2009
I agree with this article very strongly, but I find the fact that it is written by an Intel exec very troubling. What is your view on Intel's many anti-innovative and anti-competitive practices, such as collusion with the MPAA in their bid for the power to approve any media technology/device (with the provision that all approved devices would use Intel chips)?
02:07 PM on 11/17/2009
The database would be at the telecom level to allow different versions of the workbooks. I thought the workbooks are better for three reasons:
1)The system needs to collect data as pathogens and treatments change in a systematic way.
2)Because medical procedures are changing all the time and need to updated across the country the workbooks would be easier to maintain.
3)The workbooks can be used on or offline.
4)Because each medical provider may have different equipment the workbooks with the registered steps are more easily customized.
Yes, I read the article and my process aligns with it perfectly. Because the telecoms are in the mix they could easily or a third-party could offer the ability provide the cost of treatment at multiple local hospitals or from around the world. Also because the system is audited bio-metrically medical providers would want to use the process as a protection against medical errors.
I worked in a factory for seven years it requires the same type of training, just a different tool set. You're right about work flows, I personally think every small business should have someone on staff that can create and maintain them.
04:50 PM on 11/17/2009
OOPS, this was supposed to be answer to a question raised on the next page.
03:24 PM on 11/18/2009
For the sake of argument, I think you missed the bigger picture. Doctors don't want ANYONE to tell them what to do, let alone a computer screen, no matter how well programmed. Sadly, hospital IT revolves around billing, not medical outcomes. And, should anyone get the contract to build such a system, the last people they would hire are fifty-year-old laid-off auto workers from Detroit. Most likely it would be outsourced to India....
04:24 PM on 11/18/2009
I know Doctor's don't want to be told what to do but the way it is setup if they didn't they would be in danger of losing their malpractice insurance. The system can't be outsourced because it a process run through HHS. The fifty-year-old would be hired to convert existing paper medical records into XML for the EHR's not create the workbooks.
12:43 PM on 11/17/2009
The Next Big Thing? Check this out: http://fadedmirror.wordpress.com/2009/04/22/the-next-big-thing/
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11:53 AM on 11/17/2009
What is the point of the US developing innovative technics when they will be given to China almost immediately? China doesn't need to be innovative, they can demand and get or BUY all the technology they want from all over the world.
11:24 AM on 11/17/2009
I’m presenting my response (re-presenting) to mad’s comment because I am tired of empty rhetoric not being backed up.

Because of my career, I can tell you that most basic, non-near product development research is government funded and HAS to be. The reason for this is that it is too hard to predict possible benefit from early (basic) research. This in turn causes the cost-benefit analysis for the early (basic) research to suggest that such research is unprofitable or not as profitable as other opportunities.

Simply put, rational market theory dictates that one invests his capital where he is most likely to receive the greatest benefit. Basic research is most often too far removed from any predictable and realizable product/service/development/discovery to make it rational to invest in.

One only has to look at history to see that the lack predictable benefit from basic research often has caused a lack of funding for that basic research. Also, one could easily review the balance sheets of any number of companies to see just how much money they pump into basic research as opposed to near development research (yes, there are a few counter examples but they are in the minority). Finally, when was the last time that you, as an investor, received a prospectus from a company proudly listing its spending of large amounts of capital into basic research without a known or predictable benefit?
11:36 AM on 11/17/2009
quick correction, please change rational market theory to rationality...sry if I caused any confusion.
09:06 AM on 11/17/2009
Sadly, the buisiness sector has been duped (along with most Americans) into believing that government investment is necessary for success. Nothing could be further from the truth. Innovation is the product of the good, old-fashioned, profit motive. Investment from the public sector, aside from being fundamentally unconstitutional, merely politicizes industry and consumer outcomes. Witness the government takeover of the American auto industry and the misdirected investment in so-called "green" energy that is stiffling, not expanding economic growth and opportunity in America. Of course, government has a regulatory role in managing the playng field and protecting private investors and consumers from corporate fraud and abuse, but government "partnership" in business is just a new name for old fashioned socialism and/or facisim. Return the power and the wealth to the people and industry and innovation will flourish.
11:11 AM on 11/17/2009
As a Patent attorney (2nd career, 1st was 20 years in Business) I can tell you that you are mostly wrong. The vast majority of non-near product research is publically funded. The reason for this is that it is too hard to predict possible benefit from early (basic) research. This in turn causes the cost-benefit analysis for the early (basic) research to suggest that such research is unprofitable or not as profitable as other opportunities.

Notice how 1) I am in a position to ACTUALLY KNOW and 2) I GAVE REASON supporting my statement.

While madvulcan only gave empty rhetoric
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Mom Taught me - Question Everything - Thanks Mom!
02:07 PM on 11/17/2009
Thanks for the informative post cybexg,... as a former 'basic' scientist turned applied post post-doc who has been at least part way through a patent process (The potential product was deemed uncommercializable - alas) the Universities, and the Semi-public laboratories are where the nuts & bolts of research are done.

The only time a Corporate Interest steps in is after at least base proof of concept has been established and there is a potential product, drug, or treatment to be tested.
08:44 AM on 11/17/2009
The only thing American companies are good at inventing anymore are ways of making their employees feel worthless.
08:41 AM on 11/17/2009
"Now we are engaged in a truly global competition over who will have the best ideas and who will turn those ideas into products, services, and high-paying jobs."

Another iteration of the 'winner takes all' economic philosophy.

If it takes 10 people to make a robot that puts 50 people out of work, what happens to the 50 job losers? In the winner take all world, the movers and shakers don't care.
08:03 AM on 11/17/2009
>> Immigration Policy Helps Power U.S. Innovation

Is is possible for an American technology executive to talk about innovation without using it as a way to justify more offshoring and outsourcing through the use of H1-B and L1 Visas? The people who run Intel and most major tech companies are more focused on cost reduction and holding the line on labor costs then they are on true R&D and innovation. Many tech companies are moving their R&D to India as quickly as possible. They want favorable US government tax and immigration policies and courts favorable to corporate interests and intellectual property and they in turn are displacing and growing their offshore and work visa workers more then their US talent pool. When companies like Intel announce layoffs they are always higher in the US while they continue to grow the offshore contingency and import more H1-B workers. Thanks to your tax dollars and government's inability to create pro-worker laws and immigration policy, guys like the author of this article can become millionaires while the majority of us struggle to pay our bills. Great system!
10:46 AM on 11/17/2009
You are so right. Most of the hiring in companies like Intel, Cisco, Oracle, and the like are now done in Asia. There may be small R&D centers in the US but going forward, while still having US-based campuses, expansion is happening elsewhere.

Not to mention that in the state of CA the public school and university system is crumbling because the rich, including the Silicon Valley executive class, do not want to pay their fair share of taxes. Silicon Valley got off the ground with the talent from UC Berkeley, Stanford, San Jose State, and other local schools and universities. Yes, people come from all over, but the core of past expansion was the local talent. That era has ended as you have stated. It is all about the H1-B and the outsourcing of America.
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04:43 AM on 11/17/2009
“I've learned that innovation is a type of human endeavor, a process.”

If necessity is the mother of invention, perhaps innovation is the father?
I have observed that when specialists in one field have the opportunity to experience the investigations occurring in other, perhaps unrelated fields of enquiry, a cross-pollination process often takes place. Simply because the approach currently being attempted may be limited by the structure of the mind being used. Another mind functioning within a different discipline, often presents a whole new, and possibly practical and novel angle of approach to problem solving. For example, a mechanical processes may be better achieved through an electrical processes. And an electrical process improved, if replaced by an electronic process.
12:30 AM on 11/17/2009
If we really want to be competitive we will elect someone else for president and balance out congress so both sides of the aisle actually have a voice. Everytime its onesided we suffer as a country. I say just vote NO for every single incumbant.
08:08 AM on 11/17/2009
Have you written to your reps and sens to let them know how and why you are disappointed and to tell them what you want them to do in the future? If not, your suggestion is premature.
02:31 PM on 11/17/2009
And who would you suggest we elect as the next President? You may not be a fan of Obama's, but there certainly isn't anyone out there who would do any better!!!! We've had 43 presidents and none of them were as successful as they wanted to be! Why? Because the President has to deal with all of these stupid a$$es in the senate and congress. He can't make a decision about anything without having to send it through them and most of them don't give damn about this country. they care about the bottom line and we've allowed it! Some of these fools haven't done anything for their constituents in years, but we continue to elect them and now they feel that they don't owe us anything.
03:15 PM on 11/18/2009
Who would I suggest? Anyone not from Chicago or Washington, for starters....
11:22 PM on 11/16/2009
"In the 21st century, we advocate the adoption of a more contemporary research model, bringing together the best of world-class university research and industrial R&D with critical government support in a phased approach that yields the best outcome for all three sectors and drives a healthy pipeline of innovative American products and services to the global market well into the new century."

Response: The problem of research and marketing today compared to prior centuries is poor ethics at the highest levels of corporations. Today's corporate leaders are interested in making not just profits but massive profits. The greed for quick and massive profits kills long-term growth and viability of the corporations.

There are a few good ideas in the above article. But there is a lot of spin, with lack of frank admission of our current weakness.