U.S. Losing Its Innovation Edge – Not So Fast!

In these economic times when the US economy continues to sputter, the role of innovation in promoting long-term economic growth finally comes to mind.  The big stimulus was necessary to stabilize the economy before heading into a free fall.  Now, we need to look at the long-term mechanisms to help the economy come back from the abyss.

But all is not well in the land of U.S. innovation according to many articles written lately.  Many have reported that the number of patents registered at the U.S. Patent and Trademark Office has been increasing for countries other than the United States.  In fact, in 2009, more patents were awarded to non-Americans.  As if volume of patents is an indication of a country’s innovation.  One issue with this measure is that a patent filed by IBM’s India office will be treated as a non-American patent, not as a patent awarded to an American company.  Another issue is the quality of the patents.  Getting a patent for making a new toy is certainly not easy but does it really prove that a country is more innovative than another?  Did that patent create a new industry?  Did that patent create more jobs?  Did that patent improve the lives of people?  Somehow, the simple measure of patent volume doesn’t seem to quite do the concept of innovation justice.
Recently, President Obama appointed Paul Otellini to the President’s Council on Jobs and Competitiveness to find a way to make America more innovative and get people back to work.  Mr. Otellini points to the fact that “key measures spell trouble for maintaining that [technical and innovation] lead: the number of graduates, the number of companies being formed and the number of patents inside the country versus outside of the country.”  With the B.R.I.C. countries (Brazil, Russia, India, and China) modernizing their economies to evolve from low-wage economies to value-added economies, they are naturally going to improve their education systems and more companies are going to be formed.  For one thing, comparing the rate of company creation in the United States to that of a modernizing economy such as China’s seems to be lopsided.  How much profit are these new companies really creating?  How long are they profitable?  It somehow reminds me of the Wild West and the Gold Rush.

As for the number of graduates, there are certainly more of them in other countries than there are here.  For one thing, the population of the B.R.I.C. countries is far larger than America’s – that is a given.  So there is bound to be more graduates there than here.  But somehow we are back to the issue of volume vs. quality.  Or maybe it is a number’s game?  The more engineers, mathematicians, scientists, etc. will naturally create better innovation?


I have lived and worked in China and I can tell you that the education system there is based on memorization, top-down learning and book learning.

Innovation is NOT about knowing the basics.

Innovation is about questioning the status-quo.

Innovation is about taking risks.

Innovation is about thinking outside the [name the field] box.

Innovation is about creativity.

Innovation is about having the right “software” as author Adam Segal of the Council of foreign Relations explains in his recent book Advantage: How American Innovation Can Overcome the Asian Challenge.  He argues that “software” is about “social capital, tolerance for risk, willingness to leave jobs, ability to criticize superiors, the regulatory environments.”  And that is not taught well abroad.

But this is not to say that America is immune to a decline in its innovation lead.  In fact, what most articles have been saying is merely a harbinger of what’s to come.  Today’s education needs to reinforce critical thinking, multi-disciplinary problem solving, and risk-taking.  Yet in today’s education where standardization is the name of the game and where multiple-choice exams (where the answer is given to you) grade your “knowledge” (of taking tests), how can we continue to be innovative?  It is this push for sameness in the quest for making things easier to manage that will overcome the necessary skills to be innovative, create breakthrough technology, file more patents, launch new companies and create more jobs…..

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