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February 1, 2005
The State of U.S. Innovation
Is the U.S. in danger of losing its edge in innovation? Get the facts that expose our vulnerabilities and trace the course of action that a leading coalition recommends:
In recent years, we've been barraged with facts that seem to indicate that U.S. capacity to innovate is being eroded. Consider the following:
* Today, government spending on research and development is only around 0.75% of gross domestic product--significantly down from nearly 2% of GDP in 1965.
* R&D spending in the U.S. now trails many countries, including Japan and Germany.
* U.S. companies are spending less and less on research and development. In fact, R&D spending dropped by 3.9% in 2002--its most substantial decline since the National Science Foundation started tracking it in 1953.
* Faced with a costly war in the Middle East and massive budget deficits, the current administration has placed little emphasis on fostering the country's scientific competitiveness. This issue was hardly talked about during the recent presidential campaign.
* Not only is manufacturing being outsourced but also design--the start of a longer-term trend toward diminished innovation and competitiveness among U.S. companies, say some economists.
* For the past 12 years, the percentage of R&D money being spent on innovation (the "R" in R&D) has been declining, points out Gregory Tassey, senior economist at the National Institute of Standards and Technology (NIST). More and more is being directed to product development, which can expand existing product categories but does little to generate new opportunities for revenue.
So what does all this mean for the state of U.S. innovation? Quite simply, our lead is in danger, says the Washington, D.C.-based Council on Competitiveness, a group composed of business, academic, government and labor leaders. The coalition recently released a report called "Innovate America: Thriving in a World of Challenge and Change," warning that we could be conceding our edge in economy, science and technology to countries such as China and India. Among the coalition's members are Stanford University president John Hennessy, AMD founder Jerry Sanders and IBM CEO Samuel Palmisano.
To preserve the U.S. lead in innovation, the group recommends forming a new partnership between government, industry and academia. Among its many ideas for making sure innovation flourishes in the U.S. are a tax policy that supports risk-taking, immigration reform, and improving the patent system so fewer dubious patents are granted. Moreover, the group suggests creating a cabinet-level head of innovation, a National Innovation Prize, and 5,000 new fellowships a year to back the ventures of graduate students. Additionally, federal research funding should support high-risk, long-term projects, says the group. In particular, the coalition suggests shifting 20% of the Defense Department research budget to long-term basic science research and directing 3% of overall government R&D funding to risky and multi-disciplinary projects.
It remains to be seen how the U.S. will respond to such pleas for action without the wake-up call provided by the Soviet Union's launch of Sputnik in 1957--a development that prompted America to create the National Aeronautics & Space Administration (NASA) and pursue innovation with unprecedented vigor. Though less blatant, the challenges confronting our lead in innovation today are just as pressing as they were decades ago.
Sources:
Bright Ideas for Boosting Innovation
Steve Hamm
Business Week, December 15, 2004
www.businessweek.com/technology/content/dec2004/tc20041215_9674.htm
A Sputnik America Fails to See
The Mercury News, December 28, 2004
www.mercurynews.com/mld/mercurynews
Innovation Ships Out
Christopher Koch
CIO.com, January 15, 2005
www.cio.com/archive/011505/outsourcing.html
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Comment
8 Commentsi concure with the implications of this story---but how to get this administration to do something positive in this regard???
February 3, 2005 10:27 AMFolks, a person wanting to create an innovative prototype and searching for government funding to do so first faces a mountain of paperwork. No administration in history has gotten a handle on the bureaucrats. Cut their ranks by half and innovation will double. It has never been done, but it would be a good thing to try.
February 3, 2005 10:03 PM02.0602005
THE CHINESE ARE COMING!
THE INDIANS ARE COMING!
February 6, 2005 1:54 PMI have some comments on innovation and manufacturing. The invention and development process can be managed with reasonable efficiency but efforts to shorten the time and reduce the cost are often misapplied in ignorance.
More importantly the recent trend has been to introduce products because "we can" rather than because they are needed. The market place has been flooded with gadgets and gizmos that are awkward, cumbersome, and of questionable utility. In general, the potential customers and their perceived values have been left out of the loop. More options, available because of computerized augmentation, are becoming a liability rather than an asset. The programmer approach and the MBA approach both have significant weaknessses in development. In addition, the destruction of the manufacturing sector in the US has also depleted and undermined the technical capacity of the country. The "know how" has been lost and there is little incentive for individuals to expand their knowledge base. How things work and how they are made are not topics of interest for the younger generation - and therefore the talent available is extremely limited. Furthermore, the prior pattern of teaming older and younger engineers has been dumped in the process of "downsizing" and age/wage discrimination. Doing well in product development is partly an art as well as a developed skill. Although we have an elite corps of engineers working in defense, they are generally not easily retrained for the cost based product manufacturing sector. Although we have some elite scientists working at universities, they are generally not capable of dealing with the practical realities of manufacturing. How can we compete when we have crippled ourselves and dissipated our technical foundations?
In addition, the one thing that promotes technical education are good jobs in the market. We keep talking about pushing education, not pulling. The motivation for tackling the math, physics, chemistry, and engineering disciplines is the promise of good well-paid jobs with stability and security. We have almost completely destroyed that incentive. We have a society that seems to be oriented toward "get rich quick" schemes and the carrot of stardom mega-wealth rather than the more modest rewards for hard work. Our basic problem is that greed, corruption, and crime have begun to dominate the economy. We need a fundamental attitude adjustment. It appears that among the many assets that have been lost to greed, socially productive creativity has suffered the most. We seem to applaud the con-artists (such as Enron) as creative, despite the fact that their impact has been socially destructive. Pottersville, from the film classic "A
Wonderful Life" is not a pleasant prospect for our future.
best regards, rudy
