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Reviving American Innovation

by Adam Segal
January 4, 2011

US Flag in Front of Cooling Towers

A U.S. flag flutters in front of cooling towers at the Limerick Generating Station in Pottstown, Pennsylvania. (Kevin Lamarque/Courtesy Reuters)

It is only the fourth day of the new year and I suspect we are at the beginning of what will be a mini-boom in articles on the future of American power.  As you can imagine, the picture painted by most does not look bright.  The United States is overspent and overstretched.  Domestically, policymakers cannot seem to get anything done, and they seem particularly paralyzed when it comes to making difficult decisions necessary for immigration or tax reform.  To be fair,  despite the presence of “decline” in their article titles, Paul Kennedy in the New Republic and Gideon Rachman in Foreign Policy are really talking about relative power; a return to a more “normal” time when the United States, though still very powerful, must confront real limits to its own resources and the rise of new powers, China in particular.

Usually in these types of articles, technology and innovation are the sole bright spotsRachman, for example, describes a “combination of entrepreneurial flair and technological prowess” that has allowed the United States to lead the technological revolution.  But as Rachman notes, this is also no longer guaranteed.  If the economy remains stagnant, the best and the brightest may no longer put down roots in Silicon Valley after they graduate and instead will move (or return) to Shenzhen or Bangalore to start new companies.  Last week, Vivek Wadhwa described a new generation of Chinese and Indian entrepreneurs that are going to eat our lunch.  Of course, the concern about American science and research and development goes back until at least 2007, when the National Academies published Rising Above the Gathering Storm, which warned that “U.S. advantages in the marketplace and in science and technology have begun to erode.”

My new book, Advantage, enters right into this debate.  Over the next several blog posts I will lay out some of my main arguments, but unlike most out there, I am cautiously optimistic.  The United States still has great strengths which will become even more important in a world of globalized innovation.  And these strengths match up very well against China and India, despite everything you’ve read.  In fact, China and India face real barriers to moving to the next stage of development.

Yes, there is much that the United States needs to do.  And the policy suggestions I will offer are meant to be the beginning, not the end of the conversation.  In his last press conference before heading off to Hawaii, President Obama mentioned “innovation” and “investment in education and research and development” five times in thirty-five minutes.  Hopefully, this will be a discussion we will continue to have at a national level.

Post a Comment 2 Comments

  • Posted by Arun

    The new Republican Congress is said to be planning huge cuts in the discretionary part of the budget minus defence. What effect will this have on government funded research; and ultimately on American innovation?

  • Posted by Mellisa Tavolacci

    Due to the fixed pattern in rising costs and the financial meltdown, individuals are beginning to pay extra attention to their finances and spending. Everywhere around us, we observe this pattern in the changing world.

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