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(originally published by Booz & Company)


Why the United States Needs an Innovation Strategy

But it’s not just little countries. It’s big countries like China. Beijing recently promulgated its 11th five-year plan, and this one names innovation as the top national priority. There’s plenty of money there, and China now produces significantly more Ph.D.s in science and technology than the United States does. Beijing has actually reframed the academic enterprise and the R&D enterprise as elements of the national agenda. They’ve established very ambitious scientific and technical goals, along with metrics for productivity. They’ve got a national vision.

S+B: How can the U.S. regain its innovation edge?
There are three ingredients for innovation — human capital, idea generation, and financing — each of which is in a state of erosion in the U.S. We have to understand that this isn’t just a one-note problem, such as “our schools aren’t working well” or “we should put more money into science.” Those are knee-jerk, politically expedient answers to a complex problem. We need to address the systemic nature of the problem with a strategy. And our nation’s leaders need a way of telling the story around that strategy to create alignment throughout the stakeholder groups in society.

We need a leader who can articulate the importance of this agenda and our ability to do something meaningful about it, and lay out a road map. This is what Dwight Eisenhower did in 1957. Eisenhower didn’t say, “We’re going to bomb the hell out of the Soviets.” He came up with the National Defense Education Act. He came up with NASA. He came up with the Defense Advanced Research Projects Agency [DARPA]. And when we finally launched a satellite into orbit, it contained a tape-recording of Eisenhower declaring that space would not be militarized and would be used for peaceful purposes for the benefit of all mankind. It was a very elegant piece of leadership. It made people feel empowered. It helped them conquer their fear. And it gave us hope. Today we need a new narrative. We need a sense of urgency. We need to reinject an awareness of the importance of science and technology into the government’s executive branch.

As a country, we need to place smart bets on technologies of the future. There are fields that require billions of dollars of coordinated investment over long periods of time. Energy, for example, is one of our most urgent challenges. I’m excited about the idea of an energy DARPA. We, as a country, could fund a new platform for large-scale innovation in energy, with government working to build knowledge and encourage collaboration by convening, creating policies, and of course channeling funding. Obviously the final result would depend on cooperation between the private and public sectors, the involvement of both entrepreneurs and policy makers, and efforts that are bottom-up as well as top-down.

S+B: Ultimately, Innovation Nation isn’t just about the U.S. You’re saying it’s good for the world to have many innovation nations.
I’m all for a world that, in general, is smarter about innovation. Ultimately, I think that’s going to be a good thing. The innovation capability, no matter what nation it belongs to, is key to addressing the greatest challenges of the day. The logic use to be that what’s good for America is good for the world. That was part of our “we’re number one” syndrome. In the 21st century we would do well to consider reversing that logic and say that what’s good for the world is good for America. Innovation can provide us with the means to reengage with the world in a positive manner.

Author Profiles:

Amy Bernstein ([email protected]) is executive editor of strategy+business.
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  1. Kevin Dehoff and Vikas Sehgal, “Innovators without Borders,” s+b, Autumn 2006: For companies that want to build a global growth engine, offshoring innovation is both a challenge and a necessity. Click here.
  2. John Kao, Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back (Free Press, 2007): The former Harvard Business School professor offers his proposal for developing a national innovation strategy. Click here.
  3. C.K. Prahalad, “The Innovation Sandbox,” s+b, Autumn 2006: To create an impossibly low-cost, high-quality new business model, start by cultivating constraints. Click here.
  4. AnnaLee Saxenian, The New Argonauts: Regional Advantage in a Global Economy (Harvard University Press, 2007): The University of California–Berkeley professor analyzes the growing prominence of informal entrepreneurial networks. Click here.
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