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We are all innovators
now
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Editor’s Note: This article was written
2007. Several changes have taken place over this period of time. For instance, by
traditional measures, like spending on research and the number of patents
registered, or less tangible but more important ones, like the number of
entrepreneurial start-ups, levels of venture-capital funding or the payback from
new inventions, America is no longer at the presumptive top of the league. And Elon
Musk has made much stride with his investment at Tesla, producing electric car,
dominating a niche market in the US. Yet this article, rather prescient on the
evolution of mass innovation, has relevance in the present development.
"Innovation is no longer about money, it’s about the climate: are individuals allowed to flourish and take risks?"
John Kao is an innovation guru described as "Mr Creativity" by this newspaper a decade ago. Now he is concerned about America losing its global lead and becoming "the fat, complacent Detroit of nations". In his new book, "Innovation Nation", he points to warning signs, such as America’s underinvestment in physical infrastructure, its slow start on broadband, its pitiful public schools and its frostiness toward immigrants since September 11th 2001 even though immigrants provided much of America’s creativity. The rise of Asia’s innovators is a "silent Sputnik", he argues, invoking a cold war analogy. What America needs, he reckons, is a big push by federal government to promote innovation, akin to the Apollo space project that put a man on the moon.
Curtis Carlson puts it in starker terms: "India
and China are a tsunami about to overwhelm us." As head of California’s Stanford
Research Institute, Mr Carlson knows the strengths of Silicon Valley from first-hand
experience. And yet here he is insisting that America’s information technology,
services and medical-devices industries are about to be lost. "I predict that
millions of jobs will be destroyed in our country, like in the 1980s when
American firms refused to adopt total-quality management techniques while the
Japanese surged ahead." The only way out, he insists, is "to learn
the tools of innovation" and forge entirely new, knowledge-based industries
in energy technology, biotechnology and other science-based sectors.
It is natural to be sceptical of such dour arguments
and calls for government action. After all, the United States still leads in
innovation. Whether it is by traditional measures, like spending on research
and the number of patents registered, or less tangible but more important ones,
like the number of entrepreneurial start-ups, levels of venture-capital funding
or the payback from new inventions, America is invariably at the top of the
league. Indeed, the Council on Competitiveness recently concluded in a report
that, by and large, the outlook is bright for America.
Yet the same council’s innovation task force also
gave warning that other countries are making heavy investments that threaten to
erode America’s position. It would like a big push in four areas: improving
science, engineering and maths education; welcoming skilled immigrants; beefing
up government spending on basic research; and offering tax incentives to spur
"US-based innovation."
These are mostly sensible recommendations because
they focus on those framework conditions and bits of infrastructure that the market
would not provide on its own. Where such prescriptions tend to go awry is when
they argue for specific subsidies or tax breaks for favoured industries (like
supporting only "US-based" innovation in today’s world of global creative
networks). After all, the Schumpeterian forces of creative destruction must be
allowed to work their magic.
Resilience in the face of those disruptive forces
gave Silicon Valley the edge over its nearest high-tech rival, Boston’s Route 128
technology corridor. Both clusters were riding high until the personal computer
and distributed-computing changed the market. Firms went through wrenching change,
but those in northern California, like Hewlett-Packard and Xerox, emerged stronger
than those near Boston, like Digital Equipment and Wang_which no longer exist.
As Berkeley’s AnnaLee Saxenian has shown, Silicon Valley’s champions were
nimble and networked but those on Route 128 were brittle, topdown bureaucracies.
Where the magic happens Sergey Brin, who co-founded
Google with Mr Page, insists that "Silicon Valley doesn’t have better
ideas and isn’t smarter than the rest of the world" but it has the edge in
filtering ideas and executing them. That magic still happens and attracts
people from around the world who are "bold, ambitious, determined to scale
up and able to raise money here actually to do it." Mr Brin points to Elon
Musk as an example.
Mr Musk moved from South Africa to eventually settle
in California to make his fortune. His equation for success is: "talent times
drive times opportunity". Unlike many countries, America is never satisfied
with the status quo. "There is a culture here that celebrates the
achievements of individuals and it is too often forgotten in history that it is
individuals, not governments or economic systems, that are responsible for
extraordinary breakthroughs," he says.
That explains why the best innovation policy is
probably one that does the least. Liberty is a powerful force. In the past, as Mr
Brin notes, innovation was dominated by elites --- the "wealthy gentlemen
tinkerers", for example who had privileged access to information, money
and markets.
He is right. The history of innovation is filled
with elites and centralized processes.
But look closer and you find that ordinary people
have always silently played a role. In "A Culture of Improvement:
Technology and the Western Millennium", Robert Friedel shows how countless
small efforts by individuals, from all rungs on society’s ladder, contributed to
the astonishing advances that we enjoy in today’s post-modern, post-industrial
societies.
Imagine how much better firms and countries could
innovate if they could harness the distributed creative potential of all these innovators-in-waiting.
The key, Mr Friedel observes, is freedom: "Technology and the pursuit of
improvement are ultimate expressions of freedom; of the capacity of humans to
reject the limitations of their past and their experience, to transcend the
boundaries of their biological capacities and their social traditions."
To put it the other way round, domineering bosses
and governments may notch up some success, but history shows that it will at best
be limited and may stagnate. "You can ordain the money but not the brilliance
and free-thinking," says Ideo’s Mr Brown. "Creative people like to challenge
constraints and authority."
As industries become more knowledge- based and
more firms turn to open and user-led innovation models to keep a step ahead of
disruptive innovators, governments will have to think more carefully about
what, if anything, they can do to keep their economies competitive. Often that
will mean a lighter touch. As William Weldon, chairman of Johnson &
Johnson, a health-care giant, observes: "Innovation is no longer about money,
it’s about the climate: are individuals allowed to flourish and take risks?"
Stewart Brand, an internet pioneer, has famously
argued that "information wants to be free." So surely the knowledge worker,
the creator of that information, also needs the same freedom. Companies and
governments can find an innovator inside everyone; they just need to liberate them.
Moreover, the rising tide of inventions that make one country wealthy benefits
others that bring those clever ideas to market or simply make use of those
products, processes and services.
In an age of mass innovation the world may even find profitable ways to deliver solutions to the 21st century’s greatest needs, including sustainable clean energy, affordable and universal healthcare for ageing populations and quite possibly entirely new industries. The one natural resource that the world has left in infinite quantity is human ingenuity.
Originally published by THE ECONOMIST
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