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So many innovation strategies …
The annual State of the Union (SoU) message is carefully crafted performance art. These evening winter chats are scoured for quotable phrases to be employed in derisive or affirming ways. While it appears we may be losing the future in a muddle of high unemployment, stagnant wages and declining spirits, the most recent SoU instructed the American people to innovate: "The first step in winning the future is encouraging American innovation. What we can do—what America does better than anyone—is spark the creativity and imagination of our people."
In the last month or so, I've read white papers, CEO speeches, editorials and op-eds in response to what some now call a crisis in innovation, perhaps to mirror the purported crisis in education. The two are frequently united hand-in-glove. The desired response to many a crisis is "send us money and send it now."
Professional societies of the scientists and engineers have recently assembled task forces of strategic thinkers to respond to the crisis. They've now put forth proposals. The BIO organization, led by James C. Greenwood, in June issued "Unleashing the Promise of Biotechnology: Advancing American Innovation to Cure Disease and Save Lives."
Early in 2010, the American Chemical Society (ACS) assembled a task force at the request of its then president, and my Purdue colleague, Prof. Joseph S. Francisco. Prof. George Whitesides, a Harvard professor and entrepreneur of note, led the effort. The report was released this summer as "Innovation, Chemistry and Jobs," touting benefits of "New Technologies for Society; New Jobs for Chemists."
I highly recommend these two reports in that both are very relevant to readers of ddn and are especially well done. The long appendix of the ACS paper is a treasure chest of fine information such as business performance statistics, employment demographics, a list of successful young firms started by chemist-entrepreneurs and license agreement templates from academic tech transfer offices.
The senior citizen in this area of opining is the Council on Competitiveness, which celebrates its 25th anniversary this year; let me remind you, it's also the International Year of Chemistry (IYC2011). The council's website is a wealth of thoughts on policy from this unique egalitarian organization in which business, labor and academia collaborate.
There are common recommendations that run through most opinion pieces on the innovation topic. These typically include: (1) liberalizing visas for technically educated immigrants because they have a track record for positively changing our world through entrepreneurship (i.e., stop the xenophobia and get a return on our investment in these great people); (2) providing an aggressive R/D tax credit; (3) reducing capital gains (0 percent is ideal) to encourage investment in small, high-risk, innovative firms, many of which will have no sales for years; (4) reforming and funding the patent system, making it more responsive with fewer interminable delays; (5) encouraging public-private partnerships whereby academics, government units and industry can work together on major challenges—for example, by incentivizing matching of research support from government (Small Business Innovation Research grants), venture firms and large, established companies; (6) expanding entrepreneurship programs in academia, especially for science and engineering students; (7) networking prodigiously because chance favors the prepared encounter; (8) reforming the U.S. Food and Drug Administration (FDA) to allow for a more balanced assessment of risk-benefit for patients; and (9) reforming education, especially in the STEM subjects.
I have an essay in my head on each of these topics, but I will spare you. I do see wisdom in each of them, but I believe the problem is far more spiritual. I describe it as a crisis of confidence rather than one of rules and incentives. But please go to the sources I've referenced above. They are well-reasoned.
As an entrepreneur, at the end of the day, I have several problems with our trajectory as we kick the can down the road, move the goal posts and look outside of various boxes of black tea for flowery phrases de jour. I take the liberty here of rewriting the win-the-future phrases from the SoU quoted back up top: "The first step in winning the future is to stop discouraging American innovation, stop distrusting business and stop the class warfare rhetoric. What we can do—what America in the past has done better than anyone—is not extinguish the sparks of creativity and imagination of our people."
Mr. President, you and your team don't get it. The uncertain direction of government—the "deer in the headlights" feel Congress engenders—has sapped our spirits and kept capital out of the innovation arena. You are driving corporate earnings overseas to high-growth economies. You are not helping, but you could. There still is time. You have said some very smart things, but your actions have not delivered the change we hoped to believe in. The same is true of a long line of your predecessors of both parties. One of them from your tribe famously said, "the era of big government is over," while another from your opposition said, "government is not the solution to the problem, government is the problem." These are indisputable facts proven by experiment over centuries. Were you not listening? If you want to keep the big airplane, stop shooting at those who take flight in smaller aircraft.
Free-market capitalism is hard enough to defend against statists without having to justify absurd compensation schemes for top executives and hedge fund managers. Enough already! We have a new set of robber barons and we may need a new Teddy Roosevelt to help bring them to their senses. Some of them have worked for pharmaceutical firms who have let 120,000 people go since 2009.
It's not a pretty picture, but more government is not the only answer. Greed seems to have no bounds in some quarters and it wreaks havoc on the industries where it abounds. A little more discipline and self-restraint can restore capitalism's good name. Both government and industry need to step up, wise up and do what is known to work.